Downloaded 253 times
![Risk
Physical
[General
insurers]
Commercial
[credit
guarantee
corporation]](https://image.slidesharecdn.com/ibmppt-140105114345-phpapp02/75/international-business-management-42-2048.jpg)
![Asian Development Bank
ADB logo
Motto
Fighting poverty in
Asia and the Pacific
Formation
December 19, 1966
Type
Regional organization
Legal status
Treaty
Purpose/focus
Crediting
Headquarters
Mandaluyong City,
Metro Manila,
Philippines
Region served
Asia-Pacific
Membership
67 countries
President
Haruhiko Kuroda
Main organ
Board of Directors[1]
Staff
2,500+](https://image.slidesharecdn.com/ibmppt-140105114345-phpapp02/75/international-business-management-48-2048.jpg)
![FDI
MNC
All sectors
[Not in Govt. and banned sectors]
Can be started in other sectors
To follow code of conduct strictly
ex:cap](https://image.slidesharecdn.com/ibmppt-140105114345-phpapp02/75/international-business-management-59-2048.jpg)
Uploaded bySumit Suman
international business management
The document discusses international business management with a focus on trade dynamics, specifically in the context of India. It covers types of trade such as domestic and foreign, the significance of foreign trade, challenges faced by the Indian foreign trade sector, and the role of government initiatives to promote trade. Additionally, it explores globalization, multinational corporations, trade policies, and the economic implications of trade practices in India.
More Related Content
Similar to international business management
international business management
- 1. INTERNATIONAL BUSINESS MANAGEMENT CONCEPT WITH REFERENCE TO INDIA. THEORIES
- 2. CHAPTER 1 INTRODUCTION TRADE– DEFINITION OF TRADE Trade.ppt.pptx WHY TRADE? DIFFERENT TYPES OF TRADE (A)Domestic,(B) Foreign trade (A)Free trade(B)Banned trade and (C)Protected trade DEFINITION OF FOREIGN TRADE – TRENDS IN WORLD TRADE tab-featuresoftrade.docx WHY/ IMPORTANCE OF FOREIGN TRADE – GLOBAL SOURCING whyforeigntrade.ppt.pptx FOREIGN EXCHANGE countries.ppt DIFFICULTIES IN FOREIGN TRADE TRADE1.ppt.pptx ARGUMENTS AGAINST INTERNATIONAL TRADE arg.pptx
- 3. COMPONENTS IN FOREIGNTRADE CLASSIFICATION OF GOODS IN FOREIGN TRADE (A) Merchandise goods (Visible) Goods in service (Invisible) (B) Free Goods Banned Goods Goods with license (C) Traditional Goods Non traditional Goods (D ) Raw material Consumables Capital Goods.
- 4. • COMPOSITION OFFOREIGN TRADE EXPORTS AND IMPORTS FACTORS.pptx • FORMS OF FOREIGN TRADE-COUNTER TRADE FORMS_OF_TR.pptx 1.Barter 2.Buy back 3.Compensation deal 4.Counter purchase • GDP – Trade GDP Ratio Gdp.mht tradegdp.pptx Indian Economic Outlook.htm tradoc_113390.pdf •Foreign trade and developed countries •its2011_e.pdf •General Awareness for Bank PO's and Clerks.htm •India’s foreign trade •Economy of India.mht •fore-trade.pdf
- 5. • Growth ofForeign trade in India • Composition of India’s Foreign Trade • Problems faced by Indian Foreign Trade sector • Steps taken by Indian Government for improving foreign trade
- 6. PROBLEMS FACED BYINDIAN EXPORT SECTOR • Lack of integrated approach. • Problem recognition and action lags. • High cost • Poor quality image • Unreliability. • Supply problems • Technological gap • Infrastructure constraints • Faceless presence. • Political problems • Marketing Constraints..
- 7. STEPS TAKEN BYGOVERNMENT POLICY FISCAL PROMOTIONAL EXIM POLICY Strengthening RBI EPC FEMA Exim Bank Commercial Banks 100% EOU DGFT,IIFT & OTHER INSTITUTIONS ECGC SEZ GLOBALISATION LIBERALISATION FDI CUSTOMS ACT,EXECISE Trade fairs, Symposiums ACT REMOVAL OF CANALISATION Registered money exchanges ENCOURAGEMENT OF STC FIEO Chamber of Commerce Infrastructure development (a)Pipeline (b) Major and minor ports (c) NHAI
- 8. DEPTS/CORPS/AGENCIES/FIS / FORINDIAN FOREIGN TRADE GOVT FI ACT CORPS AGENCIES Min of EA EXIM BANK EXIM POLICY STC EPC Min of Com COMMERCIAL BANKS FEMA MMTC CHAMBER OF COMM.,LOCAL & FOREIGN RBI ECGC CUSTOMS ACT MITCO GOVT.FORENSIC LAB. DGFT ECB ADB IBRD EXECISEACT SPICES TRADING CORP., FIEO DG for commercial intel & stat EXPORT(qc & INS) ACT 1963 ONGC ITPO Dev.com EC ACT IOC EXPORT INSPECTION COUNCIL,INDIAN COUNCIL OF ARBIT., CAC FOOD ADULT.,ACT 100% EOU/SEZ/EPZ SEBI,ISO EDU.INSTITUTIONS, IFT, IIP
- 9. I PARTIES INVOLOVEDIN EXIM TRADE 1.INDIVIDUALS 2.CORPORATE AND BUSINESS HOUSES 3.GOVERNMENT 4.BANKS AND RBI 5.EXIM BANK II GOVERNMENT (A)HISTORY / ORIGIN (B)ECONOMIC INTEGRATION-MFN CLAUSE (C)COMMODITY AGREEMENTS
- 10. PROCEDURE INVOLVED INFOREIGN TRADE-INDIAN CONTEXT •Aware of the various steps taken by the government to improve foreign trade •Know the departments/agencies involved in foreign trade •Should be aware of the various risks in foreign trade •Should know the various foreign currencies/exchange rate •Decide what type of trade100%EOU/partial EOU/SEZ •Obtaining the license numberDGFT •Finance required for business •Registration with VAT/DUTY •Clearance from RBI for handling foreign exchange •Documents involved in foreign trade •MarketingTechnological gap/Product lifecycle
- 11. • TRADE POLICY •Trade– Free trade, banned trade, protected trade definition • What is free trade? Advantages of free trade FEATURES OF FREE TRADE.pptx:FEATURES OF FREE TRADE. •What is banned trade? •What is Protected trade? • Areas of Protection (a) Domestic key industries. (b) Product life cycle (c) Dependence result in risk (d) Employment (e) Technology development i.e., encouraging creativity. (f) Protecting Defence (g) Discouraging anti dumping (h) Improving terms of trade and balance of payment (i) Returns for home production.
- 12. FREE TRADE IMPLIESTHE FOLLOWING FEATURES: •Trade of goods without taxes (including tariffs) or other trade barriers(e.g., quotas on imports or subsidies for producers) •Trade in services without taxes or other trade barriers •The absence of "trade-distorting" policies (such as taxes, subsidies, regulations, or laws) that give some firms, households, or factor of production an advantage over others •Free access to markets •Free access to market information •Inability of firms to distort markets through government-imposed monopoly or oligopoly power •The free movement of labor between and within countries •The free movement of capital between and within countries
- 13. • DEMERITS OF PROTECTION (1)Domesticmonopolies. (2)Deprived of knowing the world developments. (3)Corruption, discourages innovation (4)Resistance to change. reduces variety of choice (5)Encourages Red tapes • THE PROCESS OF PROTECTION - TRADE BARRIERS (a) Tariff barriers – Execise Duty, Customs Duty, Special Duty. - WTO recommendations. (b) Non Tariff barriers. (a) NTB by developed countries (b) NTB by non- developed countries.
- 14. NTB BY DEVELOPEDCOUNTRY NTB BY DEVELOPING COUNTRIES 1. VER IMPORT LICENSING HEALTH & SAFETY RESTRICTION STANDARDS QUOTA MINIMUM IMPORT AND EXPORT PRICE. FOREIGN EXCHANGE REGULATIONS. CANALISATION OF IMPORTS,STC , GOVT. PROCUREMENT.
- 15. TRADE BARRIERS TARIFF BARRIERS TRANSPARENT (FISCAL) CUSTOMSDUTY EXCISE DUTY SPECIAL DUTY NON TARIFF BARRIERS POLICY 1.QUOTA 2.SUBSIDY 3.VER (A)MIN.EXP.PRICE (B) MIN.IMP. PRICE (C )EXPORT DUTY 4.CHANGE IN CUSTOM PROCEDURE 5.SAFETY STANDARD/HEALTH STD. 6.GOVT. IN FOREIGN TV. 7.STATE TRADING ( COMMODITY AGREEMENTS) 8.FOREIGN EXCHANGE REGULATIONS
- 16. Protectionist policies A varietyof policies have been claimed to achieve protectionist goals. These include: TARIFFS: Typically, tariffs (or taxes) are imposed on imported goods. Tariff rates usually vary according to the type of goods imported. Import tariffs will increase the cost to importers, and increase the price of imported goods in the local markets, thus lowering the quantity of goods imported. Tariffs may also be imposed on exports, and in an economy with floating exchange rates, export tariffs have similar effects as import tariffs. However, since export tariffs are often perceived as 'hurting' local industries, while import tariffs are perceived as 'helping' local industries, export tariffs are seldom implemented. IMPORT QUOTAS: To reduce the quantity and therefore increase the market price of imported goods. The economic effects of an import quota is similar to that of a tariff, except that the tax revenue gain from a tariff will instead be distributed to those who receive import licenses Economists often suggest that import licenses be auctioned to the highest bidder, or that import quotas be replaced by an equivalent tariff. ADMINISTRATIVE BARRIERS: Countries are sometimes accused of using their various administrative rules (e.g. regarding food safety, environmental standards, electrical safety, etc.) safety as a way to introduce barriers to imports. ANTI-DUMPING LEGISLATION:Supporters of anti-dumping laws argue that they prevent "dumping“of cheaper foreign goods that would cause local firms to close down. However, in dumping practice, anti-dumping laws are usually used to impose trade tariffs on foreign exporters.
- 17. DIRECT SUBSIDIES: Governmentsubsidies (in the form of lump-sum payments or cheap loans) are sometimes given to local firms that cannot compete well against foreign imports. These subsidies are purported to "protect" local jobs, and to help local firms adjust to the world markets. EXPORT SUBSIDIES: Export subsidies are often used by governments to increase exports. Export subsidies are the opposite of export tariffs, exporters are paid a percentage of the value of their exports. Export subsidies increase the amount of trade, and in a country with floating exchange rates, have effects similar to import subsidies. EXCHANGE RATE MANIPULATION: A government may intervene in the foreign exchange market to lower the value of its currency by selling its currency in the foreign exchange market. Doing so will raise the cost of imports and lower the cost of exports, leading to an improvement in its trade balance. However, such a policy is only effective in the short run, as it will most likely lead to inflation in the country, which will in turn raise the cost of exports, and reduce the relative price of imports. INTERNATIONAL PATENT SYSTEMS: There is an argument for viewing national patent systems as a cloak for protectionist trade policies at a national level.
- 18. •Two strands ofthis argument exist: one when patents held by one country form part of a system of exploitable relative advantage in trade negotiations against another, and a second where adhering to a worldwide system of patents confers "good citizenship" status despite 'de facto protectionism'. •Peter Drahos explains that "States realized that patent systems could be used to cloak protectionist strategies. There were also reputational advantages for states to be seen to be sticking to intellectual property systems. •One could attend the various revisions of the Paris and Berne conventions, participate in the cosmopolitan moral dialogue about the need to protect the fruits of authorial labor and inventive genius...knowing all the while that one's domestic intellectual property system was a handy protectionist weapon."
- 19. Trade Domestic trade Foreign trade Tradepolicy Free Trade Protected Trade Banned Trade Extent of FT/PT/BT What % allowed Degree of Liberalization Extent of Globalisation
- 20. GLOBALISATION • WHAT ISGLOBALISATION GLOBALISATIONPPT.ppt.pptx globalisation.pptx • DRIVERS OF GLOBALISATION DRIVERSOFGLOBALISATION.pptx • STAGES IN GLOBALISATION AND ESSENTIALS TO HAVE GLOBALISATION STAGS OF GLOB.pptx • ADVANTAGES & DISADVANTAGES OF GLOBALISATION Benefits of globalisation-TABLE.doc •GLOBALISATION WITH RESPECT TO INDIA EVOLUTION OF GLOBALISATION IN INDIA.pptx obstofglob.pptx •Favorable factors favofglob.pptx
- 21. COMMODITY AGREEMENT -FORMAL AGREEMENTS •DEFINITION •WHY COMMODITY AGREEMENTS? - UNCTAD’S ROLE •FOUR FORMS OF COMMODITY AGREEMENT -QUOTA -BUFFER STOCK AGREEMENT -BILATERAL AGREEMENT AND MULTILATERAL AGREEMENT •CARTELS-INFORMAL AGREEMENTS •METHODOLOGY OF GOVERNMENT INVOLVING IN FOREIGN TRADE - STATE TRADING -STATE TRADING CORPORATION OF INDIA-STC -MMTC -MITCO -FCI -IOC •OBJECTIVES OF STATE TRADING CORPORATION •CANALISATION
- 22. MULTINATIONAL CORPORATIONS • Impactof globalisation FI FDI-Resource seeking investment or long term investment PORTFOLIO INVESTMENT market short term •MNC is a form of FDI seeking investment or •DEFINITION OF NATIONAL COMPANY •FORMS OF BUSINESS ORGANISATION •GOVERNMENT •PUBLIC SECTOR –JOINT SECTOR PARTNERSHIP •PRIVATE SECTOR SOLE PROPRIETOR PRIVATE LTD , PUBLIC LTD •COOPERATIVE SECTOR
- 23. DEFINITION OF MULTINATIONALCOMPANIES •A corporation that has its facilities and other assets in at least one country other than its home country. Such companies have offices and/or factories in different countries and usually have a centralized head office where they co-ordinate global management. Very large multinationals have budgets that exceed those of many small countries. •Corporation that has production facilities or other fixed assets in at least one foreign country and makes its major management decisions in a global context. •In marketing, production, research and development, and labor relations, its decisions must be made in terms of host-country customs and traditions. • In finance, many of its problems have no domestic counterpart-the payment of dividends in another currency, for example, or the need to shelter working capital from the risk of devaluation, or the choices between owning and licensing. •In addition to foreign exchange risks and the special business risks of operating in unfamiliar environments, there is the specter of political risk-the risk that sovereign governments may interfere with operations or terminate them altogether.
- 24. DIFFERENCE BETWEEN NATIONALAND MULTINATIONAL NATIONAL MULTINATIONAL 1. INCORPORATED IN INDIA MAY BE IN INDIA OR ELSEWHERE. 2. OPERATIONS MOSTLY IN INDIA. ONLY SPECIFIC TRANSACTIONS IMPORT AND EXPORT. TRANSACTIONS WITHIN COUNTRY AND BETWEEN THE COUNTRIES 3. EMPLOYS MOSTLY DOMESTIC PEOPLE. EMPLOYS ALL OVER THE WORLD. 4.MOSTLY TRANSACTS WITH LOCAL CURRENCY. MOSTLY TRANSACTS WITH LOCAL & FOREIGN CURRENCIES. 5. MAY NOT BE CONTROLLED BY FOREIGN EXCHANGE ACTS. NECESSARILY CONTROLLED BY FOREIGN EXCHANGE ACTS. 6.CAN BE GOVT, PUBLIC, PRIVATE SECTOR. ONLY IN PRIVATE SECTOR. CO.,
- 25. •FORMS OF MNCS FOREIGNCOMPANIES BRANCH ACQUISITION MERGER JOINT VENTURE •TYPES 1. HORIZONTAL 2. VERTICAL 3. BACK TO BACK
- 26. STRUCTURE OF MNC 1.Transferof technology 2.Transfer of technology +investment 3.Transfer of technology+investment+management 4.Franchisee Foreign brand Indian brand 5.Investment 6.Branch
- 27. ADVANTAGES 1.Employment 2.Standard of living 3.Varietyof products-no monopoly exploitation 4.Competitive costs 5.Foreign investment 6.Balance f payment 7.Specialization 8.Infrastructure development –communication , power 9.More facilities in pharma medical equipments, life saving drugs 10.Cultural relationship-Exchange goods in service
- 28. DISADVANTAGES 1.Exploitation - naturalresources @ cheaper costs 2.Exploitation of labour 3.Interference in government-often in changing the laws ,arm twisting 4.Dependence in view of their investment, employment facilities 5.Killing the local domestic industries 6.Taking control of the key industries 7.Slowly converting to colonies-opportunistic
- 29. •EVOLUTION OF MNCS ->PRE1991 ->POST 1991 •LIST OF MNCS IN INDIA •COMPOSITION OF MNCS IN INDIA ->MERCHANDISE GOODS -> GOODS IN SERVICES •GROWTH OF MNCS IN INDIA •CODE OF CONDUCT FOR FUNCTIONING OF MNCS IN INDIA • CAP IN STRUCTURE OF MNC
- 30. SECTOR STRUCTURE % OF FDI DEFENCE BANNED BANNED RAILWAYS BANNED BANNED INFRASTRUCTUREONLY TRANSFER IN RLY. & OF TECH., TURN DEFENCE KEY BANNED AGRI., LAND &OPERATIONS BANNED BANNED RESEARCH IN AGRI.,-SEEDS, METHODS ALLOWED MULTIBRAND RETAIL BANNED NUCLEAR ONLY TRANSFER OF TECH., RBI BANNED POSTAL BANNED BANNED
- 31. AVIATION ONLY FOREIGN ROUTES 100% INSURANCE T+ I+ M 49% COMMUNICATION T+ I + M 74% PHARMA T+I+M 74% AUTOMOBILE T+I +M 74% SINGLE BRAND RETAIL T+I+M 100% REAL ESTATE CERTAIN RESTRICT 100%
- 32. • STRICT COMPLIANCEIN THE BANNED SECTOR • ANY REVISION IN THE CAP. APPROVALM BY THE PARLIAMENT. • STRICT COMPLIANCE ON ALL THE FOREIGN EXCHANGE TRANSA CTIONS UNDER FEMA • ALL THE FOREIGN COMPANIES ARE TO BE REGISTERED UNDER COMPANIES ACT 1956 • BRANCHES OF FOREIGN COMPANIES ARE STRICTLY MONITORED. • NECESSARY APPROVAL FROM GOVT. IF NATURAL RESOURCES ARE TO BE USED., • LAND ACQUISITIONS ARE STRICTLY MONITORED. • QUALITY CONTROL CHECKS • NO INTERFERENCE IN GOVT. POLICIES • PERFORMANCE ARE AUDITED
- 33. • IN KEYINDUSTRIES STRICT VIGILANCE. • IN SOME SECTORS ONLY INVESTMENTS ALLOWED AND NOT EQUITY SHARE CAPITAL . EX., INSURANCE SECTOR. • IN THE ALLOWED SECTORS , MINIMUM 25% SHARE CAPITAL BY INDIANS.
- 34. 24/7 Customer ABB ABN-Amro Accenture Accor Activision Blizzard AdityaBirla Group Advanced Micro Devices Affiliated Computer Services Airbus Air France-KLM Akzo Nobel Alcatel-Lucent Allianz Alstom Altria Group American Express ANZ Apple Inc. Aquent llc Arcelor Mittal Arcor Assicurazioni Generali Atari Activision AXA Bacardi Banco Santander Bank of Montreal Barrick Gold Corporation Barilla Group BASF Bayer BBVA Bic Billabong BMW BNP Paribas Boeing Bombardier Inc. Bouygues Bridgestone BP (British Petroleum) Cadbury Schweppes
- 35. Capital One Caterpillar Inc. Celestica Centocor Chevron CiscoSystems Citigroup ConocoPhillips Coca-Cola Costco Creative Labs Credit Suisse Crédit Agricole Cummins Daimler AG Dandelion Corporation Danone Daud World Dell Deutsche Telekom Dilmah Dow Chemical Ejada Systems EDF Electronic Arts Electronic Data Systems Electrolux Emerson Electric Eni Enel Emmvee solar systems Emmvee solar Europe Emmvee toughened glass and photovoltaics Embraer Epson Ericcson Ernst & Young Etisalat ExxonMobil Faber-Castell FedEx Express
- 36. France Télécom Fiat Finmeccanica Gazprom General Motors Gerdau GoodyearTire and Rubber Company Google Hearst Corporation Hewlett Packard Hindustan Computers Limited Hitachi, Ltd. HSBC Hutchison Whampoa Limited ICICI Infosys ING Group Intesa Sanpaolo Isuzu Johnson & Johnson Konami KPMG Kronos Inc Ferrero Ficosa Ford Motor Company General Electric Generali Gillette Halliburton Heineken Honda Huawei IBM Indesit Ingersoll Rand Intel Corporation Jardine Matheson JPMorgan Chase & Co. Kingston Technology Krispy Kreme Lagardère
- 37. Lesaffre Lactalis Leoni AG LG L'Oréal Luxottica Maggi ManthanSoftware Services Masterfoods Mercedes-AMG Michelin Mobil Millipore Corporation Monsanto Company Namco Bandai Games Nestlé News Corporation Nintendo Novartis Panasonic Corporation Pepper Lunch Petronas Philips Proton (carmaker) Lear Lexmark Lockheed Martin Lukoil McDonalds Malaysia Airlines Martini & Rossi Mattel Inc Mercedes-Benz Microsoft Motorola Mohabbatte Corporation Namco Namco Bandai Holdings NetApp Inc. Nike, Inc. Nissan Oracle Corporation Parmalat PepsiCo Pfizer Procter & Gamble PSA Peugeot Citroën
- 38. Red Bull Reebok Regus Renault Shell/Royal Dutch RoyalBank of Canada Rusal SABMiller plc Samsung SanDisk Sanofi Aventis SAP AG Sasken Communication Technologies Limited Sasol Schlumberger Scotiabank Sega Sega Sammy Holdings Servcorp Siemens Société Générale Sony Sony Computer Entertainment Sony Music Entertainment Sony Pictures Entertainment Southwest Airlines Square Enix TCS Telefonica Total S.A. Toyota TRD Unilever Vodafone Wal-Mart
- 39. INDIAN BANKING SYSTEM •RBI IS THE HEAD OF INDIAN BANKING SYSTEM. • CONTROL BY RBI • (1) CRR • (2) SLR • (3) REPORATE • (4) REVERSE REPO RATE • (5) CAR • (6) BASE RATE / PLR • RBI CONTROLS THE MONEY MARKET. • TO CONTROL INFLATION/DEFLATION THE ABOVE RATES ARE REVISED NOW AND THEN.
- 40. FINANCE Capital DOMESTIC •SHARE CAPITAL •DEBENTURE •RIGHTS USE •MUTUAL FUNDS LOANS ANDADVANCES FOREIGN •ADR/GDR/ P.NOTES • •INTERNATIONAL FINANACE MAINS W.BANK • •ADB • • • DOMESTIC FOREIGN C.BANKS C.CREDIT Le O/D PRESHIPMENT POST SHIPMENT EXIM BANK ECGC NON-FINANCIAL •EXIM BANKS FOR FOREIGN COUNTRIES •ASSISTANCE FROM FOREIGN GOVTS. •ECB ->F.BANKS ->FINANCE INSTIT. INSTITUTIONS SOPS. 1.DUTY DRAWBACK 2.ADVANCE LICENSE FACILITIES 3.DUTY FREEBACK FOR 100%EOU AND SEZS 4.VARIOUS OTHER SCHEMES
- 41. Invoice Bill Transport Document B/L Finance documents L/C Advance payment Receipts Special documents DOCUMENTS Insurancedocuments Commercial Physical Documents in Foreign trade
- 42.
- 43. ECGC 1.Insolvency 2.Buyer rejecting dueto reasons 1.Political reasons 2.Strike 3.Lock outs 4.Policy change 5.Additional charges
- 44. NOT COVERED BYECGC 1.Intentional frauds. 2.Short term FCER. 3.Not getting the approval and exports (knowingly doing mistakes) SCHEMES OF EXPORT CREDIT GUARANTEE Individual operators Refinancing to banks
- 45. MONEY MARKET FOREIGN DOMESTIC ORGANISED 1.C BANKS 2.SHARECAPITAL 3.DEBENTURE 4.MUTUAL F UNDS 5.FINANCIAL INSTIT UNORGANISED 1.CHIT FUNDS 2.SMUGGLING 3.HAWALA 4.MONEY LENDERS ORGANISED 1.WORLD BANK 2.EXIM BANK 3.EC/GC BANK 4.ADB 5.ECB 6.OTHER FINACIAL INSTIT. 7.ADR/GDR INSTIT. 8.PORTFOLIOS INVESTMENTS UNORGANISED 1.EURO CURRENCY BANKS 2.HAWALA 3.SMUGGLING
- 46. ECGC(Export Credit GuaranteeCorporation of India Limited) -To cover the commercial risks in the EXIM trade, during 1957 Government of India setup a separate corporation called Export Risks Insurance Corporation (ERIC) -It was renamed as Export Credit and Guarantee Corporation Limited in 1964. -From 1990 it was again renamed as Export Credit Guarantee Corporation of India Limited. -It is a public sector undertaking under the control of Ministry Of Commerce headed by chairman and has Board of directors from banks, insurance companies, trade, DGFT,IIFT etc.
- 47. EXIM BANK •Public sectorfinancial institution started on January 1,1992 by an act of •parliament. •About 150 countries in the world are having their EXIM banks. •The main objective of the bank is to promote the EXIM trade of the country. •The main functions include ->lending ->guaranteeing ->advisory and ->promotional •Lending--larger loans to Indian co. Foreign co. and refinancing facilities to commercial banks. •It issues line of credit exim bank1.ppt
- 48. Asian Development Bank ADBlogo Motto Fighting poverty in Asia and the Pacific Formation December 19, 1966 Type Regional organization Legal status Treaty Purpose/focus Crediting Headquarters Mandaluyong City, Metro Manila, Philippines Region served Asia-Pacific Membership 67 countries President Haruhiko Kuroda Main organ Board of Directors[1] Staff 2,500+
- 49. NOTABLE ADB PROJECTSAND TECHNICAL ASSISTANCE ->Afghan Diaspora Project ->Funding Utah State University led projects to bring labor skills in Thailand ->Earthquake and Tsunami Emergency Support Project in Indonesia ->Greater Mekong Subregional Program ->ROC Ping Hu Offshore Oil and Gas Development ->Strategic Private Sector Partnerships for Urban Poverty Reduction in the Philippines ->Trans-Afghanistan Gas Pipeline Feasibility Assessment ->Loan of $1.2 billion to bail it out of an impending economic crisis in Pakistan and on going funding for the countries growing energy needs, specifically Hydro-power projects ->Micro finance support for private enterprises, in conjunction with governments, including Pakistan and India. ->The Yichang-Wanzhou Railway project in the mountainous area of western Hubei Province and north-eastern Chongqing Municipality, China. (A US $500,000 loan, approved in 2003).
- 50. DUTY DRAWBACK 1. WRONG CALCULATIONS. 2. USINGWRONG TARIFF NUMBERS. 3. SUPPLIES TO 100% EOUS / SEZ – DEEMED EXPORT. 4. CONVERTING FROM COASTAL RUN TO FOREIGN RUN. 5. ANY CHANGE IN GOVERNMENT POLICY, REVISION IN RATES ETC
- 53. ECONOMIC INTEGRATION-TRADE BLOC RIA RegionalIntegration Agreements -SAARC -SAPTA RTA Regional Trade Agreements -Trade agreements -NAFTA/EU 2.Every Country in the world is member of any Trade Bloc. 3.OBJECTIVES OF TRADE AGREEMENT Moving Surplus to deficit Transfer of Technology Political ties/Security Bargaining power Market access/market informalities Exploitation by strong nations On all issues- Domestic Industries Dumping Natural resources
- 54. Areas of Integration Free TradeArea Customs Union Common Market Economic Union Economic Integration •Popular Integration-EU/NAFTA -----SAARC/SAPTA---•Objectives of Developing countries- South cooperation 1.Accelerate the pace of development 2.Increase the economic efficiency 3.To strengthen the status of the South Vs. North •Areas of Economic efficiency Finance-Trade-Industry and Business-Services-Science and Technology -Environment and Development-Food Security-Transport and infrastructure -IT-People to people contacts •IndoLanka Free Trade Agreement
- 55. Association of leadingemerging economies Brazil, Russia, India, China and South Africa Except Russia all the other countries are newly developing countries or newly industrialized countries. Represent 3 billion people GDP of 13.7 US Trillion Started in 2006 in New York In 2010-South Africa joined So far 4 summits have taken place. Encourages commercial, political and cultural cooperation between the countries.
- 56. FOREIGN INVESTMENTS • FOREIGNINVESTMENTS - DEFINITION • TYPES OF FI (A)FDI (B) FII © EFFICIENCY SEEKING INVESTMENT • WHY FI ? ADVANTAGES INFRA STRUCTURE DEVELOPMENT , TRANSFER OF TECHNOLOGY EMPLOYMENT OPPORTUNITIES STANDARD OF LIVING BALANCE OF PAYMENT REVENUE TO GOVERNMENT – TAX / DUTY ENCOURAGES COMPETITION - QUALITY , PRICE OF THE PRODUCT
- 57. DANGERS OF FI a.OPPURTUNISTIC b.INTERFERENCEIN NATURAL POLICIES/SECURITY c.AFFECTING DOMESTIC INDUSTRY d.COLLAPSES THE NATURAL HERITAGE CULTURE e.BRAIN-DRAIN FACTORS AFFECTING FI a.POLICY OF THE GOVT./STABILITY OF THE GOVT POLITICAL. b.PROFITABILITY c.TECHNICAL GAP AND PRODUCT LIFE CYCLE d.SOCIAL/ECONOMIC ENVIRONMENT e.AVAILABILITY OF NATURAL RESOURCE
- 58. FI AND INDIA LONGTERM FI SHORT TERM FII - PORTFOLIO INVESTMENTS EFFICIENCY SEEKING INVESTMENTS FI IS NOT GROWING DUE TO FOLLOWING FACTORS :- •MORE IMPORTANCE TO PUBLIC SECTOR •FDI NOT INTERESTED WITH PUBLIC SECTORS ONLY WITH PRIVATE SECTOR •LOT OF RESTRICTIONS •CONFUSING POLICIES/CORRUPTION/RED TAPES
- 59. FDI MNC All sectors [Not inGovt. and banned sectors] Can be started in other sectors To follow code of conduct strictly ex:cap
- 60. FII-Short term Share market Resident Through Indianbank A/C KYC must Non-Resident -Can invest in Rupee through NRO A/C -KYC must a)Non-resident in foreign currency through FII b)Foreign nationals cannot invest directly only through FII
- 61. Share market----Fund manager-------Mutualfunds Resident Can invest directly KYC must Non-Resident Can invest in Rupee through NRO A/C KYC must Non-Resident in Foreign currency through FII Foreign national can participate through FII
- 62. FDI Foreign Direct Investment FII ForeignInstitutional Investor 1.Investment can be in rupee and in all currencies 1.Investment can be in rupee and in all currencies 2.Investing in long term assets resource seeking investment 2.Investment in market seeking investment or short term 3.Investments in MNC in the form of (a)Merger (b)Acquisitions (c)JVs, Subsidiaries and Foreign company 4.Cap in investment as prescribed in EXIM policy from time to time 3.Investment in share market, bond, commodity and gold bullion markets. 4.Foreign nationals cannot participate in all markets. NRIs can participate in NRO account. However, anybody can invest in mutual funds through FII. Recently Government approved investment by QIP in share market
- 63. 5.MNCs can floatshares in the Indian market as Indian company and the certificate is called “Share Certificate". As foreign company, they can float shares in India after obtaining approval from RBI/ SEBI and they called “Depository Receipts. ex: Standard Chartered Bank issue 5.FIIs issue participatory notes otherwise called P-notes 6.Indian corporates can go abroad and invest in foreign JVs ex: ONGC –Sudan Refinery 6.Normally Indians are not allowed to invest in shares of foreign companies. NRIs only can invest in foreign company funds. 7.Indian blue chip can float shares in foreign through foreign stock exchanges and the certificates thus issued are called ADR/ GDR.Both are not convertible to Indian rupee. Dividends are paid in foreign currency.
- 64. CONTROL CROSS ORDER MERGER/ACQUISITION CAPON INVESTMENTS SHARES ADR/GDR FDI SEBI-REGISTRATION –PARTICIPATORY NOTES FOREIGN INVESTMENTS BY INDIANS ABROAD HELPING FACTOREXIM BANK BRIC TATA,RELIANCE BP
- 65. MONETARY SYSTEM •Oldsystem barter •Barter with quantity •Barter with value •Compensation systemwages,salaries 1900-1945 (Pre-Brettonwood) •Gold currency •Gold bullian •Gold exchange std. Pre Britainwood 1945-1973 Quota-determination of FCER (Formation of IMF) IMPACT a.5 currencies were very costly (US,UK,Italy,France and Germany) b.Developing and underdeveloped countries found it difficult to trade with the above 5 countries. c.Lot of blackmarketing started. Organised Unorganised
- 66. d.UK-stopped loans tonon UK Traders for doing foreign trade.Trade affected in Suez Canal(1960’s). e.US also followed the same principle(1965-1970). SMITH SONIAN AGREEMENT --Devalued its currency twice. --Reduced its interest rates for non US for bank deposits(regulation Q) NO IMPACT ULTIMATELY 1975--IMF cancelled the quota system(gold standard) of finding out FCER. 1978—IMF gave 8 methods to be adopted by member countries.