IB0013 –Export Import management

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ASSIGNMENT

DRIVE FALL	2013
PROGRAM	MBADS – (SEM 3/SEM 5) / MBAN2 / MBAFLEX – (SEM 3) / PGDIB – (SEM 1)
SUBJECT CODE & NAME	IB0013 –Export Import management
BK ID	B1201
CREDITS	4
MARKS	60

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.

1 Enumerate the various steps involved in processing of an export order. Discuss them in brief.

Answer : The export cycle

1. Setting up the deal

Once you have established your sales contract, by either being in possession of an international purchase order or a documentary credit stating you as the beneficiary, you are now in a position to process the order. There are a few steps you should go through when processing an export order. However, you must first wait until the deal has been properly established before committing your resources to the order.

2. Shipping the goods

Once the deal has been set up, you should take the following steps:

·         Read the purchase order/documentary credit very

2 What do you understand by SEZ? Explain the special features of SEZ units.

Answer : A Special Economic Zone in short SEZ is a geographically bound zones where the economic laws in matters related to export and import are more broadminded and liberal as compared to rest parts of the country. SEZs are projected as duty free area for the purpose of trade, operations, duty and tariffs. SEZ units are self-contained and integrated having their own infrastructure and support services.

Within SEZs, a units may be set-up for the manufacture of goods and other activities including processing, assembling, trading, repairing, reconditioning, making of gold/silver, platinum jewellery etc.

3 What is Bill of entry and what are its features? List the documents to be filed with B/B.

Answer : A bill of entry is a formal declaration describing goods that are being imported or exported. This document is examined by customs officials to confirm that the contents of a shipment conform with the law, and to determine which taxes, tariffs, and restrictions may apply to the shipment. It must be prepared by the importer or exporter, with many companies hiring a clerk specifically to handle the preparation process.

A typical bill of entry includes a description of the goods in the shipment, including details and the quantity of the goods, along with an estimate of their value. Customs officials reserve the right to inspect the shipment to determine whether or not it is consistent with the bill of entry, and discrepancies can be grounds for legal proceedings. Once the document has been reviewed and the shipment has been inspected, it can be cleared

4 Explain the meaning of exchange risk. What can be done to mitigate this risk? Discuss.

Answer : This risk usually affects businesses that export and/or import, but it can also affect investors making international investments. For example, if money must be converted to another currency to make a certain investment, then any changes in the currency exchange rate will cause that investment's value to either decrease or increase when the investment is sold and converted back into the original currency.

MSMEs are exposed to many forms of risk in their course of business, such as interest rate risk, foreign exchange risk, and natural disasters. These

5 What is custom duty and what are its types? Explain with example how custom duties are levied.

Answer : Export duties are levied occasionally to mop up excess profitability in international prices of goods in respect of which domestic prices may be low at the given time. But the sweep of import duties is quite wide. Import duties are generally of the following types:-

Types of customs Duties in India

While Customs Duties include both import and export duties, but as export duties contributed only nominal revenue, due to emphasis on raising competitiveness of exports, import duties alone constituted major part of the revenue from Customs Duties and include the following:

6 Write short notes on:

) ECGC

Answer : Export Credit Guarantee Corporation is a central government undertaking body to provide credit guarantee on the default of payments by the buyer. It works as an insurance firm who guarantees export payment, if the buyer defaults in making payment. It functions under the administrative control of Ministry of Commerce &

b)Packing credit

Answer : A borrowing facility provided by a financial institution to help an exporter finance the costs of buying or making a set of products, and then packing and transporting them before shipment occurs. A packing credit loan will often be extended if a letter of credit has been issued by a purchaser of the products that is based in another country or a confirmed order for exporting the goods exists.

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