IB0013 - Export Import management

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Summer 2013

Master of Business Administration- MBA Semester 3

IB0013 - Export Import management- 4 Credits

(Book ID: B1201)

Note: Answer all questions. Kindly note that answers for 10 marks questions should be approximately of 400 words. Each question is followed by evaluation scheme.

Q1. When you establish an export firm, there are various regulations which have to be followed. List the steps in establishment of an export import firm. Explain the procedure for allotment of IEC number.

( steps- 6 marks, procedure for IEC- 4 marks) 10 marks

Answer : Steps in establishment of an export import firm:

Import/export businesses match domestic and foreign buyers and sellers of various products and commodities. Import/export companies typically have low overhead costs and lean business models, allowing them to reap sizable profits for a minimal investment.

Q2. Export documentation is very important aspect of export activity both for flow of goods and payment. List the principal and auxiliary export documents. Explain any one document from these in detail.

( Listing- 7 marks, explanation- 3 marks) 10 marks

Answer: Principal and auxiliary export documents:

Both principal and auxiliary documents comes under the category of commercial documents. Documents required for an international sale can vary significantly from transaction to transaction, depending on the destination and the product being shipped. At a minimum, there will be two documents: the invoice and the transport document. Out of 16 commercial documents , there are 8 principal and rest are auxiliary documents.

Q3. The export goods have to travel a long distance before they reach importer. What are the various kinds of cargo risks during transit of goods and how it can be covered?

( cargo risks- 4 marks, covering of risks- 6 marks) 10 marks

Answer : Cargo risks :

1. Transport Risk :

For a better transport risk management, an importer must ensure that the goods supplied by the exporter is insured. Whether the goods are transported by Sea or by Air, the risk can be covered by Insurance. It is always advisable to set out the agreement between the parties as to the type of cover to be obtained in the Contract of Sale.

Q4. List the functions and explain the various risks covered under Export Credit Guarantee Corporation.

( functions- 4 marks, risks- 6 marks) 10 marks

Answer :  Functions of Export Credit Guarantee Corporation :

The Export Credit and Guarantee Corporation were set up as a Government undertaking in 1964 on the recommendation of a study group on export finance. It works on ‘no profit no loss’ basis. The main functions of the corporation are to provide insurance to export risks and to finance exports. E.C.G.C. helps exporters by furnishing guarantees to the financial banks in order to enable them to provide sufficient credit facilities

Q5. The goods must be cleared by Customs authority of the country for export and import. Explain the meaning of shipping bill. What are the steps involved in custom clearance of shipment of goods by sea.

( meaning-3 marks, steps- 7 marks) 10 marks

Answer : Meaning of shipping bill :

Shipping bill is an important document required by the customs authorities for allowing shipment.

It is prepared by the exporter and it contains the name of the vessel, name of the port of discharge, country of final destination, exporter's name and address, details about packages, numbers, quantity and details about each case, fob price, total number of packages with the weight and value and the name and address of the importer.

Q6. What do you mean by pre-shipment finance? Enumerate the RBI guidelines regarding pre-shipment finance.

( meaning - 3 marks, RBI guidelines- 7 marks) 10 marks

Answer : Pre-shipment finance:

Pre Shipment Finance is issued by a financial institution when the seller want the payment of the goods before shipment. Financial assistance extended to the exporter from the date of receipt of the export order till the date of shipment is known as pre-shipment credit. Such finance is extended to an exporter for the purpose of procuring raw materials, processing, packing, transporting, warehousing of goods meant for exports.

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Send your semester & Specialization name to our mail id

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