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Subject Code: IMT-19

Subject Name : Indian Foreign Trade

Objective: The objective of the course is to make students aware of environmental changes and to show them how effective managers are adapting. The emphasis will be on the conceptual developments in the area of planning, organizing, leading and controlling managerial functions. The course also elaborates on conceptual framework of leadership and the role of managers as leaders and change agents. Contents : Export and Import Policy Foreign Trade Policy - A Historical Perspective, The Foreign Trade (Development and Regulation), EXIM Policy 1992-97 Balance of Payment Composition and Direction of Indias Trade, Capital Flow and Problem of Indebtedness International Framework of Export Reversing the Declining Trend and Accelerating Export Growth, International Framework of Exports Understanding of new Export Import Policy Aims and Objectives, Redeeming Features of the Policy, Duty Exemption scheme, EOU/ EPZ scheme, Deemed Export Scheme Liberalization and Globalization Pre-liberalised Era, Process of Liberalisation, the process of Globalisation, Consumer Goods Imports, Present State of Indian agriculture, Step-by-step Globalisation of agriculture, Globalization of Indian Industry Indian Joint Ventures Abroad Introduction, Policy Perspectives, Major Ventures, Post-Mortem of a Transational Partnership Foreign Direct Investment Policy Major issues in foreign investment, Foreign Direct Investment during the Pre-liberation period, 1981 to july 1991, FDI during Post-Liberalisation, August 1991 to March 1994, Advantages of Foreign Direct Investment , A comparative scenario of FDI in competing Nations Export Processing Zones and Export Oriented Units Definition, Export Processing Zones, 100 per cent Export-Oriented Units, Problems, New Initiative: National and International Trend Institutional Infrastructure for Export Promotion in India Introduction, Consultative and Deliberative Body-Board of Trade, Commodity Organisations, Service Institutions, Indian Government Trade Representatives Abroad

a. b. c. d. Write answers in your own words as far as possible and refrain from copying from the text books/handouts. Answers of Ist Set (Part-A), IInd Set (Part-B), IIIrd Set (Part C) and Set-IV (Case Study) must be sent together. Mail the answer sheets alongwith the copy of assignments for evaluation & return. Only hand written assignments shall be accepted. 5 Questions, each question carries 1 marks. 5 Questions, each question carries 1 marks. 5 Questions, each question carries 1 marks. Confine your answers to 150 to 200 Words. Two Case Studies : 5 Marks. Each case study carries 2.5 marks.

A. First Set of Assignments: B. Second Set of Assignments: C. Third Set of Assignments: D. Forth Set of Assignments:

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1. What are the focus areas of trade policy in eleventh five-year plan? 2. Briefly describe the provisions and implications of foreign trade policy in India. 3. State the components of the current account of balance of payments. Examine the changes in the current account deficit of India in the decade of 1990s and 2000s. 4. What are the top ten items of export and import of India? 5. Foreign trade can help in economic development. Critically examine the statement. SECOND SET OF ASSIGNMENTS Assignment-II = 5 Marks

1. Discuss the changes in global trade in the decade of 2000. 2. What are the features of Duty Exemption and Duty Remission Scheme? 3. What is the role of services sector in promotion of exports in India? 4. Describe the main features of the Foreign Trade Policy of 2009-14. 5. What is globalization? How has it helped in the promotion of foreign trade? THIRD SET OF ASSIGNMENTS Assignment-III = 5 Marks

1. Discuss the importance of foreign direct investment in rapid economic development of Indian economy. 2. Mergers and acquisitions are growth drivers in a globalised world. Explain. 3. State the different types of special economic zones. What role has been played by them in promotion of exports in India? 4. Describe the importance of Board of Trade in promotion of trade in India 5. What role is played by Marine Products Export development Authority (MPEDA) in promotion of exports in India? FOURTH SET OF ASSIGNMENTS Assignment-IV = 2.5 Each Case Study

Ban on Leather Goods from India Indian leather export, an important foreign exchange earner for the country, has been reportedly hit hard by the decision of some major US retail chains like Eddie Bauer, LL Bean, Timberland and Casual Corner, and a German company Bader to boycott leather goods from India in protest against the ill-treatment of animals here. This move came shortly after a decision by the global retail chains Gap, Marks & L. Spencer, Liz Claiborne and J. Crew not to buy Indian leather goods. This development has a lot to do with the lobbying by the US-based animal rights group People for Ethical Treatment of Animals (PETA) for a ban on leather goods from India by documenting evidence of
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cruelty to animals killed for making leather. It has been reported that the overseas firms have officially communicated to the Indian outfit of PETA that they will not be sourcing leather products from India until there is a strict enforcement of animal protection laws. Following this, the Mumbaibased Teja Industries, the official supplier of leather goods for Marks & Spencer in India, started outsourcing leather from other countries to manufacture products for the global chain. Questions 1. In the light of the case discuss the implications of social activist groups for business. 2. What should the Council for Leather Exports (GOI) and the leather industry do to overcome the problem?

Consistency of Indian Exports with Global Demand In the recent episode of global recession, the shocks were transmitted very fast from industrialized countries to developing countries, through international trade among other channels. The pace of export growth recovery could be relatively faster, if the export basket is in harmony with the globally dynamic products, though the depth of recession affecting different segments of the world economy also counts. Dynamic products play a crucial role in the global economic recovery as demand for these products picks up very fast with change in global trade winds. Based on the twin criteria of export growth and market share, 1,242 export products at the four-digit level are classified into five different groups. Two sub-periods, 1999-2001 and 2004-06 are taken for computation of the CAGR. The sub-period 2004-06 is taken for global exports share of products. Based on the twin criteria, five groups of products are identified as 1) trend setters, 2) champions, 3) under achievers, 4) achievers in adversity and 5) losers in declining markets. Dynamic products falling under the trend setters group with high CAGR and high share and champions group with high CAGR and relatively high share are the drivers of global trade. Most of the dynamic products fall under four broad categories of exports: machinery, auto components and cinematography which are high and medium technology-intensive; chemicals and plastics which are medium technology intensive; gems, jewellery and base metals which are mainly low technology-intensive; and mineral products which are mainly primary and resource-based products. The non-dynamic products include all the other three categories, namely the under- achievers with high CAGR but low share and heavily concentrated in sectors like processed food, minerals, chemicals, plastics, T&C and base metals; achievers in adversity with high share and low or declining growth rate mostly concentrated in sectors like processed food, pulps of wood, T&C, machinery and auto components; and losers in Declining Markets with low share and low CAGR concentrated in sectors like vegetable products, chemicals, pulps of wood, T&C, plaster & cement, base metals and machinery with bleak prospects of revival in the medium term. Securing market access for the last two sets of product groups is a major concern, because the global market is shrinking for these products. Global dynamic products constitute nearly 10 per cent of products but slightly less than 50 per cent of value. On the contrary, the product share of non-dynamic products is around 90 per cent and value share is slightly above 50 per cent. In the Indian case, dynamic products constitute 10 per cent of products and 51.3 per cent of value, while non-dynamic products constitute 90 per cent of products and 48.7 per cent of value. Thus the general pattern of composition of dynamic and non-dynamic products is similar in India and the world. Since the Asian Crisis, dynamic export products have provided a new direction to Indian exports. Products under the trend setters group have consistently improved their share in Indian exports from 21.5 per cent in 1998-99 to 35 per cent in 2006-07, posting a CAGR of 26.3 per cent during 1999/2000-2006/07 in rupee terms. The robust performance of the trend setters has been supported
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by the sustained growth of these products in global exports. The champions have also significantly improved their share in Indian exports from 10.8 per cent in 1998-99 to 16.3 per cent in 2006-07. This segment of exports has registered the fastest CAGR of 27.1per cent, even better than the trend setters, during the period 1999/2000-2006/07. While the share of the tiny emerging products, that is the group of under achievers, is almost stagnant even during the period of global export boom, the two weak segments of the export sector, namely achievers in adversity and losers in declining markets together have a share of nearly 35 per cent. The differing performances of dynamic versus non-dynamic products are particularly important in the context of multilateral vs regional/ bilateral trade. The composition of Indias exports by the two categories in the Regional Trading Arrangements (RTAs) of India with developing countries shows that the share of dynamic products is high in value terms in all the RTAs, while the share of non-dynamic products is very high in terms of numbers and quite substantial in value terms in all the RTAs Import preference for globally non-dynamic products is either thinly spread across the globe or heavily concentrated in some select regions. Marketing globally dynamic products could be done with ease under the multilateral set up without any preferential arrangement, while the regional approach could help in exporting sizeable amounts of globally non-dynamic products. As India is actively engaged in the process of regional trade, sizeable amounts of such products could find market in different regional, sub-regional and bilateral trading arrangements through negotiations. Thus systematic planning could help in diversification of Indias commodity basket as well as markets. Questions 1. What has been the growth of Indian exports during recession? 2. How can India promote the non-dynamic products?

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