Exim India

This presentation is present by F.Y.BFM to

SANJAY RODE SIR related to EFS.
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GROUP MEMBER:- Exim India
MAHEK CHHEDA(04)
SMIT BAGADIA(02)
PARIN SAVLA(37)
POOJA SAVLA(39)
JIGAR DEDHIA(69)
PRATIK SHAH(40)
ASHISH THAKKAR(53)
DRUVESH GUDHKA(77)
RUSHABH SHETH(45)
AAKASH HINDOCHA(17)
PREM SONI(49)

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INDEX:- Exim India
EXIM BANK
ROLE OF INSTITUTION
WHERE DOES INDIA STAND GLOBALLY?
INDIA’S EXPORT PERFORMANCE
INDIA’S IMPORT PERFORMANCE
TRADE POLICY
FOREIGN TRADE POLICY
EXIM BANK AS A CONSULTANT
INSTITUTIONAL LINKAGE
EXIM BANK: PARTNER IN GLOBALIZATION
FDI & EXPORT

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 EXIM BANK:- Exim India

 act of parliament in September, 1981

 Wholly owned by Government of India
 Commenced operations in march, 1982
 Established “for providing financial assistance
to exporters and importers, and for functioning
as the principal financial institution for
coordinating the working of institutions
engaged in financing export and import of goods
and services with a view to promoting the
country’s international trade…”

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 ROLE OF INSTITUTIONS:- Exim India

 Institutions dedicated for promoting

foreign trade have played an important
role towards enhancing the process of
internationalisation of Indian companies,
viz.
 Export-Import Bank of India,
 Export Credit Guarantee Corporation,
 Indian Institute of Foreign Trade

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WHERE DOES INDIA STAND
GLOBALLY ? Exim India

International Trade of Select Countries in 2003

Country Exports Imports GDP Trade as % of GDP
(US$ bn.) (US$ bn.) (US$ bn.)
Korea 197.6 175.5 605.0 61.7
China 438.3 393.6 1446.9 57.5
Mexico 165.4 171.0 626.1 53.7
Russia 135.9 75.4 433.5 48.7
South Africa 38.7 35.0 160.1 46.0
Argentina 29.4 13.1 129.7 32.8
Brazil 73.1 48.3 492.1 24.7
India 57.0 74.3 588.8 22.3
Source: Economist Intelligence Unit

 India’s share in global merchandise exports: 0.8% (2003)

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INDIA’S EXPORT PERFORMANCE:-
Exim India

India's Export Performance (1999-2000 to 2003-04)

70000
52856 63623
60000
44147 43976
50000 47742
36760
US$ million

40000
30000
29751
20000
10000

0
1999-2000 2000-01 2001-02 2002-03 2003-04
All Commodities Years Agricultural & allied products
Ores & minerals Manufactured goods
Petroleum & crude products

Source: DGCIS, MOC&I

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INDIA’S IMPORT PERFORMANCE:-
Exim India

India's Import Performance (1999-2000 to 2003-04)

90000
80000
77237
70000 61572
60000 51588
49799 50056 56613
US$ million

50000
40000
30000 37172

20000
10000
0
1999-2000 2000-01 2001-02 2002-03 2003-04

All Commodities Years

Petroleum crude & products Non-POL items

Source: DGCIS, MOC&I

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TRADE POLICY IN INDIA:- Exim India

 Exim Policies
 Streamlined trade procedures

 Liberalised import regime

 Thrust on export orientation

 Medium Term Export Strategy, 2002

 1% share in global exports by 2007

 Foreign Trade Policy 2004-2009

 To double India’s share in global merchandise trade
by 2009

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FOREIGN TRADE POLICY (2004 – 2009)
Exim India

Quantum Jump in Merchandise Exports

Required:
 Enhance exports of major export

commodities
 Identify potential export commodities

 Diversify export destinations

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FOREIGN TRADE POLICY (2004 – 2009)
Exim India

Exim Bank Study “Strategy for Quantum Jump in Exports:

Focus on Africa, Latin America and China”
India could aim to achieve:
 US$ 18 billion in Africa’s Imports by 2007
from US$ 3.8 bn in 2003-04
 US$ 4 bn in China’s imports by 2007 (in 64
identified groups) from US$ 0.86 bn in 2000
 US$ 1.8 bn in LAC’s imports by 2007 (in 100
identified groups) from US$ 0.6 bn in 2000
 Share in India’s Exports in 2003-04: Africa (6%); Latin
America (1.8%); China (4.7)

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FOREIGN TRADE POLICY (2004 – 2009)
Exim India

Simplifying procedures and bringing down

transaction costs
 Transaction costs are incurred at the pre and post-
production stages, and arise out from several
procedural complexities associated with
administrative processes, availability of finance
and transportation problems.
 For enhancing the growth of exports it is
important to reduce the transaction costs involved.
 Exim Bank Study on Transaction Costs of Indian
Exports
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FOREIGN TRADE POLICY (2004 – 2009)
Exim India
Findings of Exim Bank’s Study
Sector No. of Transaction costs as % Transaction costs as
Firms of export revenue (2003 % of export revenue
Survey) (1998 Survey)
 
Textile/Garments 23 3-10 15

Engineering goods 18 <5 10

Pharmaceuticals 9 8 10

Chemicals 7 <5 14

Computer software 9 1-5 10

Agro-Industries 2 1-2 7-8.5

Electronic & Electrical 3 5 -

machinery
Plastic components 2 5-10 -

Paper Industry 2 5-7 -

Others 7 1-2  

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FOREIGN TRADE POLICY (2004 – 2009)
Exim India

Transaction Costs: International Experience

 Simplified and less stringent bureaucratic
procedures like single window clearance and
business friendly approach
 Better technology due to higher levels of foreign
investment, faster loading/unloading methods
 Flexible labour laws
 Cheap availability of power and raw materials,
 Freight incentives by the Government,
 Lower ocean freight rates due to greater
availability of vessels
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FOREIGN TRADE POLICY (2004 – 2009)
Exim India

Special package for agriculture

 Duty free imports of capital goods
 Will lower production cost and hence improve
profitability.
 Exports of medicinal plants & herbal products
facilitated
 Global imports of medicinal plants: US$ 1 bn
(2001)
 India second largest exporter after China
 Ppotential to increase export to Rs. 1750 crore
by 2006-07 and more than Rs. 2500 crore by
2009-10.
 Global market for Herbal products: US$ 80 bn
 India’s exports of Herbal products: US$ 280 mn
(2002-03)
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FOREIGN TRADE POLICY (2004 – 2009) Exim India

Textile sector incentives

 Duty free entitlement for garments &
handicrafts increased from 3% to 5%
 Will help exporters to move up the value
chain
 However, further incentives required to
consolidate India’s position in the post-
MFA era
 Handicraft Special Economic Zone to be
established
 Will contribute to strong growth in
handicraft exports
 Will generate employment opportunities

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FOREIGN TRADE POLICY (2004 – 2009)
Exim India

Export Promotion Schemes

 Target Plus scheme introduced
 Will further boost exports from the successful
exporters
 Vishesh Krishi Upaj Yojana to boost horticulture
exports
 Global trade in horticulture: US$ 79 bn (1999)
 India’s exports: US$ Rs. 1830 cr (1999-2000)
 Ssuccess of AEZs for horticulture depend on
“the ability of the states to overcome existing
shortcomings in infrastructure, institutional
mechanism and policy and programme support
to achieve desired export orientation”

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FOREIGN TRADE POLICY (2004 – 2009)
Exim India

Final Observations
 Import of second hand capital goods allowed
without age restrictions.
 No outdated technology should be
imported.
 “Special Focus Initiatives”
 Could be extended to other sectors of high
export orientation like chemicals &
pharmaceuticals.
 Export orientation of FDI should be increased.

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 Exim India
Multilateral Agencies
 World Bank
 Asian Development Bank
 African Development Bank
 European Bank for Reconstruction & Development
 Multilateral Investment Guarantee Agency (MIGA)
 International Finance Corporation (IFC)
 UNIDO - Industrial Promotion Offices
 Afrexim Bank
 Eastern & Southern African Trade &
 Development Bank (PTA Bank)

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 INSTITUTIONAL LINKAGES :-
Exim India
Trade & Investment Promotion Agencies

 Board of Investment of Sri Lanka

 Hatton National Bank, Sri Lanka

 China National Technical Import & Export Corporation

 Polish Agency for Foreign Investment (PAIZ).

 Hungarian Investment and Trade Development Agency

 UNIDO Industrial Cooperation & Investment Promotion Service, Poland.

 Economic Development Board, Bahrain

 Investment & Trade Promotion Centre, Vietnam

Centero Estero Vineto, Italy 20

FDI & EXPORT:- Exim India

Low share of FDI in major export sectors

Sector Share in FDI (%)
Transportation industry 7.50
Computer software industry 6.46
Chemicals & pharmaceuticals 5.70
Textiles 1.20
Leather & leather goods 0.20
Services (incl. Hotels & Tourism) 8.37

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