FORE School of Management, New Delhi

Post Graduate Diploma in Management (FMG-_28_/IMG-__13 /FM-__02)

End Term Examination Term- 6 (2020-2021)
Course Name: Trade Data and Trade Opportunities

Time: 2 Hours Max Marks: 100

Instructions: a. This question paper contains 3 Pages
b. Possession and use of cell phone is prohibited
c. Only Non-Programmable calculator can be used
d. Be brief and to the point in the response
e. State assumptions made, if any
f. Answer all questions
g. Marks are indicated in the right hand parenthesis against
each question.

Q1. You are heading the market research department of an organization that is planning to
start exporting its products (assume any product of your choice) to a foreign market. Before
committing resources, the organization wants to gauge consumer tastes and preferences. You
are being asked to conduct a market survey via questionnaire.
In light of this, what steps would you follow? What are the potential challenges that need to
be kept in mind for a successful research program? (5 +15 marks)

Q2. Refer to the table 1 below to answer the following questions-

a. Will it be beneficial for Portugal and England to trade with each other? Which
commodity (or commodities) should be produced by Portugal and traded with
England?
(5 marks)

b. Give the detailed rationale for your answer in (a) using appropriate graphs and tables.
Show how much would both the countries consume with and without trade. (15
marks)

Table 1: Labour-hours required to produce 1 unit of a good

Country Wine (1 gallon) Cloth (1 yard)
England 120 100
Portugal 80 90
Note: Assume that the world consists of 2 countries and 2 commodities. There are no
transportation and other transaction costs.

Q3. (a) As of the year 2019, Japan imposed 10.90% of ad-valorem tariff on import of product
(HS: 610910010 – T-shirts, singlets and other vests, knitted or crocheted.: Of cotton: Of
yarns of different colours or printed), to all the members of the World Trade Organization
(WTO). In the same year, India exported USD 17 billion of the said product to Japan at zero
(0) tariff.
Explain the tariff rates of 10.90% and 0% in light of discussion on types of tariffs. (10 marks)
(b). As of the year 2019, European Union imposed a 20% tariff rate on imports of high-
quality beef up to 67000 tonnes. Beyond 67000 tonnes of imports, the applied tariff rises to
over 80%. Explain the form of tariff imposed by the European Union.
(5 marks).

Q4. As a consultant to the Ministry of Commerce, Government of India, you have been asked
to prepare a report advising on the potential diversification (product diversification) of
India’s exports. What strategy would you follow to identify the potential products? Elucidate
step by step. Explain three important trade indicators that you would use to support your
recommendations and why are they important. (5+15 marks)

Q5. Given below are the trade data relating to product, HS code: 8711 Motorcycles, incl.
mopeds, and cycles fitted with an auxiliary motor, with or without side-cars; side-cars,
 India’s export of product HS: 8711 in 2019 (USD thousand): 2021526
 India’s total exports in 2019 (USD thousand): 322786377
 World exports of product HS: 8711 in 2019 (USD thousand): 29775499
 World total exports in 2019 (USD thousand): 18707696803

a. Based on this data, would you suggest that India should focus on the exports of the said
product. Give reason(s) for your answer (5 marks)

b. A manufacturer of the said product (HS:8711 Motorcycles, incl. mopeds, and cycles fitted
with an auxiliary motor, with or without side-cars; side-cars) asks your advice on export
markets strategy. You are given the following information in the form of tables (table 2 and
3). Based on the given information, which market (or markets) would you suggest and in
which order? Give appropriate reasons for your recommendations using trade and tariff
indicators as provided in the tables. (15
marks)
c. Based on the data provided in this question, rank all the countries (as appearing in the
tables) according to the strength of bilateral trade relation with India vis-à-vis world (5
marks)
Table 2: Identification of exports markets for product HS code: 8711
Potential Total value of Annual Annual Share in Approximate Value
Markets imports (from growth in growth in world geographical imported
world) of value of value of imports of distance from from India
product 8711 imports imports product India (Miles) of product
in 2019 (from world) (from 8711 (%) 8711 in
(USD'000) of product world) of in 2019 2019
8711 (2018- product (USD'000)
19) (%) 8711 (2015-
19) (%)
Austria 500062 13 21 1.9 3995 39650
 France 1844502 6 12 6.9 4578 17503
Italy 1044971 -5 11 3.9 4081 15904
Nepal 209661 0 18 0.8 628 146762
Nigeria 1376612 131 24 5.2 4729 293176
Philippines 1442265 10 28 5.4 2873 156844
Uganda 75549 19 12 0.3 3414 57943
Mexico 342419 13 5 1.3 9378 50622
Guinea 83081 -7 5 0.3 9482 45298
World 26661938 6 11 100   2021526
Source: International Trade Center (https://www.trademap.org/)

Table 3 (continuation of table 2): Identification of exports markets for product HS code: 8711
Potential MFN Effectivel Total Total Concentratio Ranking Is India
Markets tariffs y applied imports imports of n of of amongst top
on tariffs to of all all supplying partner 20 import
produc India products products countries for countrie partner for
t 8711 (average) from from product 8711 s in product
(%) as on India world as of 2019 world 8711 (Rank
of product (USD'000 ('000) in imports in
2019* 8711 (%) ) in 2019 2019 as of parenthesis)
as of 2019 2019 as of 2019
Austria 6.58 6.58 1143487 176,596,13 0.13 14 Yes (3)
1
France 6.58 6.58 6984635 637949069 0.13 3 Yes (12)
Italy 6.58 6.58 5771856 473562250 0.12 7 Yes (12)
Nepal 29.27 29.27 7777208 12325259 0.92 25 Yes (1)
Nigeria 14.72 14.72 5704859 47387304 0.57 6 Yes (1)
Philippine 28.65 22.67 1835725 112908749 0.45 5 Yes (3)
s
Uganda 12.75 12.75 85088 7696029 0.79 56 Yes (1)
Mexico 15 15 5181075 455289486 0.24 20 Yes (2)
Guinea 5 5 354402 4493320 0.43 53 Yes (1)
Source: International Trade Center (https://www.trademap.org/) *Assume no other unilateral
or reciprocal trade relationship exist between the selected countries and other members of
WTO. Assume no non-tariff barriers exist.