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Greenfield Investment

The ‘Greenfield Investment’ name comes from the idea of building a facility literally on a “green” field, such as farmland or a forest. Over time the term has become more metaphoric.

In Greenfield Investment a parent company starts a new venture in a foreign country by constructing new operational facilities from the scratch or this is the investment in a manufacturing plant, office, or other physical company-related structure or group of structures in an area where no previous facilities exist.In addition to building new facilities, most parent companies also create new long-term jobs in the foreign country by hiring new employees.   

This is opposite to a brown field investment where a site previously used for a “dirty” business purpose, such as a steel mill or oil refinery, is cleaned up and used for a less polluting purpose, such as commercial office space or a residential area. When a company or government entity purchases or leases existing production facilities to launch a new production activity. This is one strategy used in foreign-direct investment. 
 
Green field investments occur when multinational corporations enter into developing countries to build new factories and/or stores.

Developing countries generally offer prospective companies tax-breaks, subsidies and other types of incentives to set up green field investments. Governments often see that losing corporate tax revenue is a small price to pay if jobs are created and knowledge and technology is gained to boost the country’s human capital.

Add comment May 29th, 2007

Foreign Direct Investment

Foreign direct investment (FDI) is a long-term investment by a foreign investor in an enterprise resident in an economy other than that in which the foreign investor is based. The FDI relationship, consists of a parent enterprise and a foreign affiliate which together form a transnational corporation (TNC).

Foreign direct investment plays an crucial and growing role in global business. It can provide a firm with new markets and marketing channels, cheaper production facilities and labour, access to new technology, products, skills and financing. Host country or the foreign firm receiving investment, can be benefited with a source of new technologies, capital, processes, products, organizational technologies and management skills, and as such FDI can provide a strong impetus to economic development of both countries.

Foreign direct investment may takes many forms, such as a direct acquisition of a foreign firm, construction of a  facility, or investment in a joint venture or strategic alliance with a local firm with attendant input of technology, licensing of intellectual property. Now a days, FDI has come to play a important role in the internationalization of business.

Changes in technology, increasing liberalization of the national regulatory framework governing investment in enterprises, and changes in capital markets have accelerated the changes in the size, scope and methods of FDI. New information technology systems and reduction in global communication costs have made management of foreign investments far easier than in the past. In the past decade, the sea change in trade and investment policies and the regulatory environment globally including trade policy and tariff liberalization, easing of restrictions on foreign investment and acquisition in many nations and the deregulation and privitazation of many industries has been the most significant catalyst for FDI’s expanded role.

The most profound effect has been seen in developing countries, where yearly foreign direct investment flows have increased from an average of less than $10 billion in the 1970’s to a yearly average of less than $20 billion in the 1980’s, to explode in the 1990s from $26.7billion in 1990 to $179 billion in 1998 and $208 billion in 1999 and now comprise a large portion of global FDI..   Driven by mergers and acquisitions and internationalization of production in a range of industries, FDI into developed countries last year rose to $636 billion, from $481 billion in 1998 (Source: UNCTAD)

Foreign Direct Investment benefits both the home country (the country from which the investment originates) and the host country (the destination of the investment).

Foreign Direct Investment may takes many forms i.e.  Greenfield Investment, Merger & Acquistion, joint ventures, or licensing agreements.

Add comment May 25th, 2007

Special Economic Zones

SEZ (Special Economic Zone) is one or more areas of a country where the tariffs and quotas are eliminated and bureaucratic requirements are lowered so that more companies are attracted to the area or in other words, economic laws are more liberal than a country’s typical economic laws . The companies establishing in the area also gets extra benefits for doing business.

In India the policy for setting up SEZ was announced on April 1, 2000 with a view to provide an internationally competitive and hassle free environment for exports and overcome the shortcomings experienced on account of the multiplicity of controls and clearances; absence of world-class infrastructure, and an unstable fiscal regime and with a view to attract larger foreign investments in India. The policy offered setting up of SEZ in the public, private, joint sector or by State Governments.

SEZs allow the government to experiment with radical (in the Indian context) economic reform in a sufficiently large geographical area (minimum size 1,000 hectares) but on a localized basis, without the difficulty of introducing such reforms at the national level.

This policy intended to make SEZs an engine for economic growth supported by quality infrastructure complemented by an attractive fiscal package, both at the Centre and the State level, with the minimum possible regulations. SEZs in India functioned from 1.11.2000 to 09.02.2006 under the provisions of the Foreign Trade Policy and fiscal incentives were made effective through the provisions of relevant statutes.

To instill confidence in investors and signal the Government’s commitment to a stable SEZ policy regime and with a view to impart stability to the SEZ regime thereby generating greater economic activity and employment through the establishment of SEZs, a comprehensive draft SEZ Bill prepared after extensive discussions with the stakeholders. A number of meetings were held in various parts of the country both by the Minister for Commerce and Industry as well as senior officials for this purpose. The Special Economic Zones Act, 2005, was passed by Parliament in May, 2005 which received Presidential assent on the 23rd of June, 2005. The draft SEZ Rules were widely discussed and put on the website of the Department of Commerce offering suggestions/comments. Around 800 suggestions were received on the draft rules. After consultations, the SEZ Act, 2005, supported by SEZ Rules, came into effect on 10th February, 2006, providing for drastic simplification of procedures and for single window clearance on matters relating to central as well as state governments.

objectives of the SEZ Act

(a) generation of additional economic activity
(b) promotion of exports of goods and services;
(c) promotion of investment from domestic and foreign sources;
(d) creation of employment opportunities;
(e) development of infrastructure facilities;

The SEZ Act 2005 is key role for the State Governments in Export Promotion and creation of related infrastructure. A 19 member inter-ministerial SEZ Board of Approval (BoA) has provided a Single Window SEZ approval mechanism. The applications duly recommended by the respective State Governments/UT Administration are considered by this BoA periodically. All decisions of the Board of approvals are with consensus.

The SEZ Rules provide for :

1. Simplified procedures for development, operation, and maintenance of the Special Economic Zones     and for setting up units and conducting business in SEZs;
2. Single window clearance for setting up of an SEZ;
3. Single window clearance for setting up a unit in a Special Economic Zone;
4. Single Window clearance on matters relating to Central as well as State Governments;
5. Simplified compliance procedures and documentation with an emphasis on self certification

The SEZ Rules provide for different minimum land requirement for different class of SEZs. Every SEZ is divided into a processing area where alone the SEZ units would come up and the non-processing area where the supporting infrastructure is to be created.

Lists of SEZ in India

The following are the list of SEZ in India. Out of these, Noida (Uttar Pradesh), Falta (West Bengal), Chennai (Tamil Nadu) and Vishakapatnam (Andhra Pradesh) SEZ were Export Processing Zone (EPZ) before April 1, 2003.

SEEPZ Special Economic Zone
SEEPZ, Andheri (East)
Mumbai - 400096
Tel.: +(91)-(22)-28290856/ 1388/ 0046/ 2147/ 2144
Fax: +(91)-(22)-28291385/ 22829175
E-mail: dc@seepz.com
Website: www.seepz.com

Kandla Special Economic Zone
KSEZ, Gandhidham, Kachchh
Tel.: +(91)-(2836)-252194/ 273/ 194/ 475/ 281
Fax: +(91)-(2836)-252250
E-mail: dc@kasez.com
Website: www.kasez.com

Add comment May 18th, 2007

Internet Marketing

Internet marketing is a part of electronic commerce. Sometimes information management, public relations, customer service, and sales are included in Internet marketing. Electronic commerce and Internet marketing have become popular because of today’s technology-centric business world.

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Business Models

Internet marketing is associated with several business models. The main models are business-to-business (B2B) and business-to-consumer (B2C). B2B involves companies doing business with each other, whereas B2C relates to interaction between company and consumers for selling goods.When Internet marketing first began, the B2C model was first to emerge. B2B transactions came about later and were more complex. A third business model is peer-to-per (P2P), where individuals exchange goods between themselves. This model is less common.

Internet marketing is the method of using all facets of online advertising to generate a response from your audience. It involves both the creative and technical aspects of the internet, with design, development, advertising and marketing.

The three pillers of successful Online Marketing

In online marketing, being ‘niche’ is the key to success. This includes marketing directed towards only the genuine prospective customers. This focus is important as majority of online visitors are ‘window shoppers’. Measuring the result of an online marketing endeavor is equally important. It charts the way for future strategic moves. Last but not the least successful online marketing requires expansion through leverage. This includes formation of strategic alliances and joint ventures. (source:kaiser communication)

Smart Marketing Tips

To remain in online market you must maximise you web presence. It means leveraging one’s Web site, integrating online and offline marketing efforts, and communicating effectively and efficiently online.

Benefits

Internet marketing is mainly for the availability of information. Consumers can log onto the Internet and learn about products, as well as buy them, at any time. Companies can save the money by using Internet marketing and reducing the sales force. Thus, Internet marketing can help expand from a local market to both national and international marketplaces. And, in a way, it levels the playing field for big and small players. Unlike traditional marketing media (like print and TV etc.), entry into the realm of Internet marketing can be a lot less expensive.

Internet marketing is growing very fast Compared to the other media marketing (like print, TV etc.). It’s also becoming popular among small businesses and even consumers when trying to monetize their blog or website. The measurability of the internet as a media makes it easier to experience innovative e-marketing tactics that will prove a better Cost of Acquisition than other media.

Lastly, since exposure, response and overall efficiency of digital media is much easier to track than that of traditional “offline” media, Internet marketing offers a greater sense of accountability for advertisers.

Limitations

Sometimes slow Internet connections show difficulties. If companies build overly large or complicated web pages, Internet users may struggle to download the information.

Shoppers are not allowed to touch, smell, taste or try-on tangible goods before purchasing product online. Some e-commerce vendors implement liberal return policies to reassure customers.This policies allows any buyer of a new product over the internet to return the product on a no-questions-asked basis and get a full return. This is one of the main reasons Interrnet shopping became so popular.

Another limiting factor, particularly with respect to actual buying and selling, is related with security features of electronic payment methods like e-checks, credit cards, etc.

1 comment May 16th, 2007

Manufacturers Associations

Alkali Manufacturers Association of India
3rd Floor, Pankaj                                  
Chambers, Preet Vihar                      
Commercial Complex,
Vikas Marg, Delhi-110092
India
E-mail: amai.yrsingh@axcess.net.in

All India Bread Manufacturers’ Association,
New Delhi
India
Phone: +(91)-(11)-3327421
Commercial Complex,
Fax: +(91)-(11)-3324483

Add comment May 15th, 2007

Payment Methods

The selection of the most suitable method of payment is a key factor of a successful export sale. Importer can make payments to exporter in many ways but there are four basic mode of payment :

1. Documentry Credits/Letter of Credit

Payment under letter of Credit is a universally accepted mode of payment. A Letter of Credit is a Signed instrument and an undertaking by the banker of the buyer to pay the seller a certain sum of money on presentation of documents evidencing shipment of specified goods subject to compliance with the stipulated terms and conditions.

A letter of credit differs from a bank guarantee and  by its nature it is separate from the sale contract.

Following persons are generally included for a letter of Credit (L/C):

Benificiary : The exporter of goods in whose favour the L/C has been established.

Customer/importer : The person who intends to import the goods and instructs bank to established Letter of Credit.

Issuing Bank: The Banker in the importers Country who opened the L/C.

Correspondent Bank or Advising Bank: The banker in the exporters country, who is authorised by the issuing bank to advise the beneficiary of the Credit and to effect such payment or to accept and pay such bills of exchange or to negotiate against Stipulated documents and on Compliance of Stipulated terms and condition specified by the importer on the exporter.

Confirming Bank: The banker in the exporters(beneficiary) country, who at the desire of the beneficiary adds confirmation to the letter of Credit so that beneficiary can get payment without recourse from the Confirming bank. The Confirming bank may be correspondent bank itself or some other bank.

Generally following types of Letter of Credit are in operation.

• Revocable or Irrevocable Letters of Credit
• Confirmed Credit
• Transferable Credit
• With or without Recourse Credit
• Revolving Letter of Credit
• Transit Credit
• Back to Back Credit
• The Sight Credit
• The Credit available against Time Draft (Usance Credit)
• The Deferred payment Credit

The buyer’s bank undertakes to pay the seller when the terms and conditions have been met. The bank issues documentary credits to a customer according to his creditworthiness.

2. Documentry Collection

This method is useful for both importer and exporter.In this method, the exporter initiates through the banking system, the collection of money due to him from the importer. Payment will be made against a Bill of Exchange and Documents of title. Documents can be released against acceptance of the Bill of Exchange or against payment at sight.

3. Open Account Method

Usually, when either the importer has a strong credit history or is well-known to the seller this method takes place.

According to this method the importer can make payments to the exporter at some specific date in the future without issuing any negotiable instrument, only evidencing his legal commitment to pay at the committed time. 

This mechanism helps exporter to minimise the risk of non payment.

4. Advance payment

The importer makes full payment to the supplier before the shipment of goods are done. This method accepted in some specific conditions like if importer are not estabilished or product is in high demand etc.

This method involves the high risk for importers.

Add comment May 15th, 2007

Import Procedure

With the globalisation of Indian economy and consequent upon comfortable balance of payment position Government of India has liberalised the Import Policy and practically all Controls on imports have been lifted.Imports may be made freely except to the extent they are regulated by the provisions of Import Policy or by any other law for the time being in force.

Tthe process of finding suppliers has become more easier and more dynamic with B2B websites which are offering supplier company profiles, and also online catalogs and other necessary details with the help of internet.

Foreign Trade (Development & Regulation) Act 1992 governs the import in to India. Under this Act, imports of all goods is Free except for the items regulated by the policy or any other law for the time being in force.

Import Export Policy

The present import policy and procedures regarding various commodities/category of importers, are, inter alia, contained in the following publications issued by the Ministry of Commerce and revised from time to time:

Import - Export Policy, 1997-2002 as modified upto 31.03.1999
Handbook of Import - Export Procedures(Volume 1), 1997-2002 as modified upto 31.03.2000.

Handbook of Import - Export Procedures: (Volume 2) Duty Exemption Scheme:
Input - Output and Value Addition Norms, 1997-2002.
ITC(HS) Classification of Import and Export Items.

Select the product to be imported

Always check out the commercial viability and imort potential of product before importing it.

Be aware of Restricted list of ITC(HS) Classifications of Exports & Imports items. For example some items are strictly prohibited to import like

Tallow, Fat or Oils rendered, unrendered or otherwise of any animal origin, animal rennet and wild animals including their parts and products and ivory any part and products, including ivory.

Registration

1.Registration with regional licensing authority

Registration with Regional Licensing Authority is a pre-requisite for import of goods. The Customs will not allow clearance of goods unless:

The importer has obtained IE Code Number from Regional Licensing Authority. However, no such registration is necessary for persons importing goods from/ to Nepal provided Value of a single Consignment does not exceed Rs. 25000/=

2.Having IEC code number

An application for grant of IEC Code Number should be made with Bank Receipt (in duplicate)/demand draft for payment of the fee of Rs.1000/- Certificate from the Banker of the applicant firm and A copy of Permanent Account Number issued by Income Tax Authorities, if PAN has not been allotted, a copy of the letter of legal authority may be furnished and

Declaration by the applicant that the proprietors/partners/directors of the applicant firm/company, as the case may be, are not associated as proprietor/partners/directors with any other firm/company the IEC No. is allotted with a condition that be can export only with the prior approval of the RBI.

Selecting the supplier

Imports can be made from any country of the world except Fiji and Iraq. The detailed information regarding overseas supplier can be obtained from the trade directories, trade shows, advertisements in foreign papers, Internet etc.

For seleting the right supplier some following tips will help you:

• If possible, buy goods from those suppliers who have been certified by the International Standardization Organization (ISO) criteria or by any renowned certification organisation.
• Make it mandatory of asking for and checking business references from the supplier.
• Check out the financial strength and infrastructure so that the supplier can handle the bulk order easily.
• Payment mode which suits your comfortablility.

Finalizing the terms of Import

It is advisable that before finalising the terms of Import Order, you should call for the samples or catalogue and other relevant literatures and the specification of the items to be imported. Quality sampling of the products made during the production runs, or the final random product inspections are frequently used tools of the quality control. It can be easily undertaken by an independent third party.

Once you are satisfied with the samples and the creditworthiness of the overseas supplier, you can proceed to finalise the term of the contract to be entered into.The different aspects of an import contract are enumerated as follows:

Product, Standards and specifications.
Quantity.
Inspection.
Total value of the Contract.
Terms of Delivery.
Taxes, Duties and Charges payable at Exporting Country and payable in India on importation.
Period of Delivery/Shipment.
Packing, Labelling and Marking.
Terms of Payment-Amount, Mode & Currency.
Discounts and Commissions.
Licenses and Permits.
Insurance.
Documentary Requirements.
Guarantee.
Force Majeure or Excuse for Non-performance of Contract.
Remedies.
Arbitration.

Customs Clearance of imported goods

All goods imported into India have to pass through the procedure of Customs clearance as they cross Indian border. The goods are examined, appraised, assessed, evaluated and then allowed to be taken out of charge of the Customs for use by the importer.

Warehousing of Imported goods

An importer may not like to clear or may have certain problems in clearing the imported goods immediately on payment of duty for home consumption. In that case the importer can deposit the goods in a Public or Private Bonded Warehouse, provided he is satisfied with the arrangement. Thus, the importer can avail the facility of deferring payment of duty on imported goods pending their actual clearance. Towards this the importer should file a set of yellow coloured B/E known as warehousing B/E.

And lastly maintaining the good relationship with suppliers is very important.
 

Add comment May 14th, 2007

Indian Ports

India has more than 5,000 kilometers of coastline lined with about 150 working ports including 11 major ports. Just a few of the major ones are listed here in addition to links to more than 100 ports throughout the world.

Mumbai Port Trust                                                                  

Port House                                       
Shoorji Vallabhdas Marg
Mumbai - 400 001, India
Tel: (91 22) 2262 1234
Fax: (91 222) 2261 1011
E-mail: mbpt@vsnl.com
Website: www.mumbaiporttrust.com

Kolkata Port Trust
15, Strand Road
Kolkata - 700 001, India
Tel: (91 33) 2220 3451 (16 Lines)
Fax: (91 33) 2220 4901
Telex: 021-7336 CALPIN
E-mail: calport@vsnl.com,
portofcalcutta@portofcalcutta.com,
webmaster@portofcalcutta.com
Website: www.portofcalcutta.com
 

Add comment May 12th, 2007

World Trade Organization

The WTO established in 1995, is governed by a Ministerial Conference, which meets every two years; a General Council, which implements the conference’s policy decisions and is responsible for day-to-day administration; and a director-general, who is appointed by the Ministerial Conference. The WTO’s headquarters are in Geneva, Switzerland.

The World Trade Organization (WTO) deals with the rules of trade between nations at a global or near-global level. It is a powerful new global commerce agency, which transformed the General Agreement on Tariffs and Trade (GATT) into an enforceable global commerce code.The WTO is one of the crucial mechanisms of corporate globalization.

The WTO deals with the rules of trade between nations at a global or near-global level; it is responsible for negotiating and implementing new trade agreements, and is in charge of policing member countries’ adherence to all the WTO agreements, signed by the bulk of the world’s trading nations and ratified in their parliaments. Most of the WTO’s current work comes from the 1986-94 negotiations called the Uruguay Round and earlier negotiations under the General Agreement on Tariffs and Trade (GATT). The organization is currently the host to new negotiations, under the Doha Development Agenda (DDA) launched in 2001.

WTO agreements are negotiated and signed by the bulk of the world’s trading nations. These documents provide the legal ground-rules for international business. They are essentially contracts, binding governments to keep their trade policies within agreed limits. Although negotiated and signed by governments, the goal is to help producers of goods and services, exporters, and importers conduct their business, while allowing governments to meet social and environmental objectives.Thw WTO system, rules and procedures are undemocratic, un-transparent and non-accountable and have operated to marginalize the majority of the world’s pepole.

The WTO’s mian purpose is to help trade flow as freely as possible  because these are important for economic development and well being. It also means ensuring that individuals, companies and governments know what the trade rules are around the world. It also helps to settle disputes between parties involving in international trade. The best way to remove these differences is through some neutral procedure based on an agreed legal foundation.

WTO Organization Chart

Member List

The WTO has 150 members (almost all of the 123 nations participating in the Uruguay Round signed on at its foundation, and the rest had to get membership).

Albania  8 September 2000
Angola  23 November 1996
Antigua and Barbuda  1 January 1995
Argentina  1 January 1995
Armenia  5 February 2003
Australia  1 January 1995
Austria  1 January 1995
Bahrain, Kingdom of  1 January 1995
Bangladesh  1 January 1995
Barbados  1 January 1995
Belgium  1 January 1995
Belize  1 January 1995
Benin  22 February 1996
Bolivia  12 September 1995
Botswana  31 May 1995
Brazil  1 January 1995
Brunei Darussalam  1 January 1995
Bulgaria  1 December 1996
Burkina Faso  3 June 1995
Burundi  23 July 1995
Cambodia 13 October 2004
Cameroon  13 December 1995
Canada  1 January 1995
Central African Republic  31 May 1995
Chad  19 October 1996
Chile  1 January 1995
China  11 December 2001
Colombia  30 April 1995
Congo  27 March 1997
Costa Rica  1 January 1995
Côte d’Ivoire  1 January 1995
Croatia    30 November 2000
Cuba  20 April 1995
Cyprus  30 July 1995
Czech Republic  1 January 1995
Democratic Republic of the Congo  1 January 1997
Denmark  1 January 1995
Djibouti  31 May 1995
Dominica  1 January 1995
Dominican Republic  9 March 1995
Ecuador  21 January 1996
Egypt  30 June 1995
El Salvador  7 May 1995
Estonia  13 November 1999
European Communities  1 January 1995
Fiji  14 January 1996
Finland  1 January 1995
Former Yugoslav Republic of Macedonia (FYROM)  4 April 2003
France  1 January 1995
Gabon  1 January 1995
The Gambia    23 October 1996
Georgia  14 June 2000
Germany  1 January 1995
Ghana  1 January 1995
Greece  1 January 1995
Grenada  22 February 1996
Guatemala  21 July 1995
Guinea  25 October 1995
Guinea Bissau  31 May 1995
Guyana  1 January 1995
Haiti  30 January 1996
Honduras  1 January 1995
Hong Kong, China  1 January 1995
Hungary  1 January 1995
Iceland  1 January 1995
India  1 January 1995
Indonesia  1 January 1995
Ireland  1 January 1995
Israel  21 April 1995
Italy  1 January 1995
Jamaica  9 March 1995
Japan  1 January 1995
Jordan  11 April 2000
Kenya  1 January 1995
Korea, Republic of  1 January 1995
Kuwait  1 January 1995
Kyrgyz Republic  20 December 1998
Latvia  10 February 1999
Lesotho  31 May 1995
Liechtenstein  1 September 1995
Lithuania  31 May 2001
Luxembourg  1 January 1995
Macao, China  1 January 1995
Madagascar  17 November 1995
Malawi  31 May 1995
Malaysia  1 January 1995
Maldives  31 May 1995
Mali  31 May 1995
Malta  1 January 1995
Mauritania  31 May 1995
Mauritius  1 January 1995
Mexico  1 January 1995
Moldova  26 July 2001
Mongolia  29 January 1997
Morocco  1 January 1995
Mozambique  26 August 1995
Myanmar  1 January 1995
Namibia  1 January 1995
Nepal  23 April 2004
Netherlands — For the Kingdom in Europe and for the Netherlands Antilles  1 January 1995
New Zealand  1 January 1995
Nicaragua  3 September 1995
Niger  13 December 1996
Nigeria  1 January 1995
Norway  1 January 1995
Oman  9 November 2000
Pakistan  1 January 1995
Panama  6 September 1997
Papua New Guinea  9 June 1996
Paraguay  1 January 1995
Peru  1 January 1995
Philippines  1 January 1995
Poland  1 July 1995
Portugal  1 January 1995
Qatar  13 January 1996
Romania  1 January 1995
Rwanda  22 May 1996
Saint Kitts and Nevis  21 February 1996
Saint Lucia  1 January 1995
Saint Vincent & the Grenadines  1 January 1995
Saudi Arabia  11 December 2005
Senegal  1 January 1995
Sierra Leone  23 July 1995
Singapore  1 January 1995
Slovak Republic  1 January 1995
Slovenia  30 July 1995
Solomon Islands  26 July 1996
South Africa  1 January 1995
Spain  1 January 1995
Sri Lanka  1 January 1995
Suriname  1 January 1995
Swaziland  1 January 1995
Sweden  1 January 1995
Switzerland  1 July 1995
Chinese Taipei 1 January 2002
Tanzania  1 January 1995
Thailand  1 January 1995
Togo  31 May 1995
Trinidad and Tobago  1 March 1995
Tunisia  29 March 1995
Turkey  26 March 1995
Uganda  1 January 1995
United Arab Emirates  10 April 1996
United Kingdom  1 January 1995
United States of America  1 January 1995
Uruguay  1 January 1995
Venezuela (Bolivarian Republic of)  1 January 1995
Viet Nam  11 January 2007
Zambia  1 January 1995
Zimbabwe  5 March 1995

The WTO’s main functions are to do with trade negotiations and the enforcement of negotiated multilateral trade rules

Add comment May 12th, 2007

Export Procedure

Exportes should always mentain the data regarding queries of a buyer, either online buyer or a physical one. Take some extra time and let your buyers know about the product, manufacturing duration, mode of payment, the shipping details, and other related information.

In order to be successful in exporting one must fully research its markets. No one should ever try to tackle every market at once.

In today’s competitive world, the customer always has a choice of suppliers. Selling is an honorable profession, and you have to be an expert salesman.

Communication internal and external must be comprehensive and immediate. Good communication is vital in export.

Market research can minimize the risk of failure in export markets. Before committing to a large-scale operation overseas, try out on a small scale.  

Essentials for Export Business:

The first and the foremost question you as a prospective exporter has to decide is about the kind of business organisation needed for the purpose. You have to take a crucial decision as to whether a business will be run as a sole proprietary concern or a partnership firm or a company. The proper selection of organisation will depend upon

• Your ability to raise finance
• Your capacity to bear the risk
• Your desire to exercise control over the business
• Nature of regulatory framework applicable to you

You can chose any of the following modes of operations:

Merchant Exporter i.e. buying the goods from the market or from a manufacturer and then selling them to foreign buyers.

Manufacturer Exporter i.e. manufacturing the goods yourself for export Sales Agent/Commission Agent/Indenting Agent i.e. acting on behalf of the seller and charging commission Buying Agent i.e. acting on behalf of the buyer and charging commission.

After that carefully select the product to be exported. Product should be in demand overseas.

For creating favorable impression to customer business correspondance is essential. A specimen export letter is given below :

Specimen of Introductory Letter to International Importers

Ref: TIL/NYK2001/ 14th Novl,2000

The Manager (Purchase)

M/s. TIL Ltd.

…………………….

…………………….

(U.S.A.)

Dear Sir,

We are exporters of a wide variety of items including ………. for the last ten years. Our major buyers are ……… in ………. We are one of the registered export houses in India. We represent ………. the leading manufacturers of these items in India. These items are produced in collaboration with ………., the world famous company. We follow the ISI specifications. We believe that your company imports the items we export. We are enclosing herewith a copy of our brochure and price list for your perusal. We shall be glad to send you detailed literature/ samples of items that may be of interests to you.

Yours sincerely,

For NYK Ltd.

Manager (Marketing)

Distribution Channels

You can choose any of the distribution channels for your product to be exported:

• Exports through Export Consortia
• Export through Canalising Agencies
• Export through Other Established Merchant Exporters or Export Houses, or Trading Houses
• Direct Exports
• Export through Overseas Sales Agencies

Dealing with Customers

• Seller should respond to all user queries and e-mails quickly and thoroughly.  
• Reply to the impatient buyers with ample communication stating when is the next status update, such as when payment arrives, when item is shipped, etc. Encourage these types of buyers to pay for the shipping method, which will provide online tracking i.e. they can watch the progress of their packages.
• While dealing with paranoid buyer, trust is the key element. Regardless of sellers excellent feedback rating and professional style, these buyers can not be very comfortable with the deal in progress. For these buyers, quickly and completely lay out the steps of deal that is going to take place and offer them some additional services, like insurance, package tracking, escrow, etc. to help them to feel more secure.
• Try to send return e-mails within the same time to your customers.
• Never get emotional and hide behind your e-mail. Write when you are composed and relaxed, particularly to clients.
• Use shorter sentences.
• Use shorter words. Replace the longer one wherever it is necessary.
• The paragraph should focus on one idea.
• Maintian token of formalities. Use titles and family names in order to convey an attitude of propriety.
• Always do check for punctuation, spelling, and grammatical errors.
• Always avoid the use of slang, jargon, cliches and any other figures of speech like zero tolerance policy, done deal, etc.
• Be specific while you write and try to illustrate your points with concrete examples.
• Bring the e-mail to a clear conclusion.

Export Contract

It is necessary to enter into a export contract with the overseas buyer for preventing the disputes.The different aspects of contract are mentioned below:

Registration

• Registration with Regional Licensing: Authorities (obtaining IEC Code Number) The Customs Authorities will not allow you to import or export goods into or from India unless you hold a valid IEC number. For obtaining IEC number you should apply to Regional Licensing Authority (list given in Appendix 2) in duplicate in the prescribed form given in Appendix 1. Before applying for IEC number it is necessary to open a bank account in the name of your company / firm with any commercial bank authorised to deal in foreign exchange.

• Register With Export Promotion Council
  In order to enable you to obtain benefits/concession under the export-import policy, you are required to register yourself with an appropriate export promotion agency by obtaining registration-cum- membership certificate.

Preshipment Inspection by Government Authorities

An important aspect about the goods to be exported is compulsory quality control and pre-shipment inspection. Under the Export(Quality Control and Inspection) Act, 1963, about 1000 commodities under the major groups of Food and Agriculture, Fishery, Minerals, Organic and Inorganic Chemicals, Rubber Products, Refractoriness, Ceramic Products, Pesticides, Light Engineering, Steel Products, Jute Products, Coir and Coir Products, Footwear and Footwear Products / Components are subject to compulsory pre-shipment inspection.

Particulars of the consignment intended to be exported. A crossed cheque/draft for the amount of requisite inspection fees or an Indian Postal Order.

• Copy of the Commercial Invoice.
• Copy of letter of credit.
• Details of packing specifications.
• Copy of the export order/contract, indicating inter alia the buyer’s requirement that goods are strictly according to the prescribed specifications, or as per samples etc.

Labeling, Packaging, Packing and Marking Goods

An important stage after manufacturing of goods or their procurement is their preparation for shipment. This involves labeling, packaging, packing and marking of export consignments. Labeling requirements differ from country to country and the same should be ascertained well in advance from the buyer. The label should indicate quality, quantity, method of use etc.

10 Tips For A Perfect Online Business

1. Make a complete review of your competitors online market and emphasize the plans in which you have competitive advantage.
2. Get a secure online solution for your shopping cart.
3. Privacy policies are very essential for online business. Be bold to exhibit privacy policies and it should describe how the data of customers personal contact information and financial details is used.
4. Obtain a seal of approval for your privacy policies through a renowned company who adhere and comply with its verification and dispute-resolutin processes.
5. Fight computer viruses and try to protect the site as well as the computers with anti-virus software.
6. The payment services must be very secure.
7. Develop a strategic marketing plan that also includes determining and publishing the customer service policies.
8. Try to establish alliances with crucial partners, like with the product suppliers, the search engine optimizers, fulfillment of services, shippers, web technicians, marketing or public relation firms.
9. Create an online catalog or listings.
10. Key your inventory, the catalogs and listings up to date for your customers.

Add comment May 11th, 2007