J.

D WOMEN’S COLLEGE
PATNA

PROJECT REPORT ON

EXPORT PROCEDURE AND DOCUMENTATION

SUBMITTED IN PARTIAL FULFILLMENT FOR THE

REQUIREMENTS OF THE AWADS:
BACHELOR OF BUSSINESS MANAGEMENT (2018-21)

UNDER THE SUPERVISION OF : - DR.TRISHNA (professor)

Department of International business

SUBMITTED BY:- Priyanshu kumari

Roll no 86

SINGNATURE OF DR. TRISHNA …………..

 STUDENT DECLARATION
Priyanshu kumari student of BBM THIRD YEAR ROLL NO-86 have completed the
project entitled as “REPORT ON LEATHER PRODUCT EXPORT TO GERMANY”
under the guidance of “DR.TRISHNA MAM “, J.d WOMEN’S COLLEGE PATNA .

I hereby declare that fact and data in the project report are true to
the best of my knowledge and belief.
 ACKNOWLEDGEMENT
The satisfaction that comes through the successful completion of any task would
be incomplete without mentioning the names of the people who made it possible
because success is the epitome of hard work and guidance so with gratitude, I
acknowledge all those guidance so with gratitude, I acknowledge all those
guidance and encouragement that served as beacon of light and crowned my
effort with success so far.

With respect I would like to thank TRISHNA MA’M for providing me an

opportunity to make an assignment on INTERNATIONAL BUSSINESS and providing
many key inputs at every step for the project and extending her continuous
support during the complete tenure.

I also express my gratitude to all the faculty members of J.D WOMEN’S COLLEGE
patna for giving me opportunity to learn about the trading relation of india with
other countries.

Also deeply grateful to the trades who gave me valuable information about the
export of Indian leather to gemany.

PRIYANSHU KUMARI
 ABSTRACT
The leather industry occupies a prominent place in the Indian economy in view of
its substantial export earnings, employment potential and growth.

It is one of the largest employers in India under skilled and semi skilled category
of workers and also largest foreign exchange earner. The industry provides
employment to about 4.42 million people, of which 30 per cent are women.

An in-depth study was undertaken to analyse and interpret the current export
trend of Indian leather and its product to Germany market. A detail knowledge of
how this product could be exported to Germany to gain maximum profit.

Data were collected as per sector wise export to Germany. In light of the trend
found from the data an analysis the major markets for Indian Leather & Leather
Products are USA with a share of 15.70%, GERMANY 11.58%, UK 10.50%, Italy
6.48%, France 5.68%, Spain 4.54%, UAE 3.97%, Netherlands 3.42%, Hong Kong
3.34%, China 2.60%, Poland 2.02%, and Belgium 2.00%.

These 12 countries together account for nearly 71.84% of India's total leather,
leather products and footwear export.

European Union accounts for 54% of India's total export of leather and leather
products.
INDEX
 INTRODUCTION
INTERNATONAL BUSSINESS
Cambridge dictionary defines international business as- "The activity
of trading goods and services between countries". However
international business is beyond this definition, it has a very wide
scope. In this article, let's understand the different areas of
international business.

Basically, international business is a cross border transaction between

individuals, businesses, or government entities. The transaction can be
of anything that has value, examples include

-Physical Goods

- Services such as banking, insurance, construction,etc.

- Technology such as software, arms, and ammunition, satellite

technology, etc.

- Capital and

- Knowledge

For ease of understanding, in this article, the word "goods" will include
all of the above-mentioned items. For regular commodities, we will be
using the word "physical goods".

It involves cross-border transactions of goods and services between

two or more countries. Transactions of economic resources include
capital, skills, and people for the purpose of the international
production of physical goods and services such as finance, banking,
insurance, and construction. International business is also known as
globalization.

To conduct business overseas, multinational companies need to bridge

separate national markets into one global marketplace. There are two
macro-scale factors that underline the trend of greater globalization.
The first consists of eliminating barriers to make cross-border trade
easier (e.g. free flow of goods and services, and capital, referred to as
"free trade"). The is technological change, particularly developments in
communication, information processing, and second transportation
technologies.

Business activities done across national borders is International

Business. The International business is the purchasing and selling of the
goods, commodities and services outside its national borders. Such
trade modes might be owned by the state or privately owned
organization.

In which, the organization explores trade opportunities outside its

domestic national borders to extend their own particular business
activities, for example, manufacturing, mining, construction,
agriculture, banking, insurance, health, education, transportation,
communication and so on.

Nations that were away from each other, because of their geological
separations and financial and social contrasts are now connecting with
each other. World Trade Organization established by the administration
of various nations is one of the major contributory factors to the
expanded connections and the business relationship among the
countries.

The national economies are dynamically getting borderless and fused

into the world economy as it is clear that the world has today come to
be known as a ‘global village’. Numerous more organization are making
passage into a worldwide business which presents them with
opportunities for development and tremendous benefits.
India was trading with different nations for quite a while, yet it has
quickened its progress of incorporating with the world economy and
expanding its foreign trade and investment. International Business is
important to both Nation and Business organizations. It offers them
various benefits.

Benefits to Nation
-It encourages a nation to obtain foreign exchange that can be utilized
to import merchandise from the global market.

- It prompts specialization of a country in the production of

merchandise which it creates in the best and affordable way.

- Also, it helps a country in enhancing its development prospects and

furthermore make opportunity for employment.

- International business makes it comfortable for individuals to utilise

commodities and services produced in other nations which help in
improving their standard of life.

Benefits to Firms
-It helps in improving profits of the organizations by selling products in the
nations where costs are high.

- It helps the organization in utilizing their surplus resources and increasing

profitability of their activities.

- Also, it helps firms in enhancing their development prospects.

- International business also goes as one of the methods for accomplishing

development in the firms confronting extreme market conditions in the local
market.

- And it enhances business vision as it makes firms more aggressive, and

diversified.

International business occurs in many different formats:

The movement of goods from country to another (exporting,
importing, trade)
- Contractual agreements that allow foreign firms to use products,
services, and processes from other nations (licensing, franchising)

-The formation and operations of sales, manufacturing, research and

development, and distribution facilities in foreign markets.

The Growth of International Business

The prevalence of international business has increased significantly
during the last part of the twentieth century, thanks to the
liberalization of trade and investment and the development of
technology. Some of the significant elements that have advanced
international business include:

The formation of the World Trade Organization (WTO) in 1995

 The inception of electronic funds transfers

 The introduction of the euro to the European Union

 Technological innovation that facilitates global communication and

transportation

 The dissolution of a number of communist markets, thus opening up

 many economies to private business Today, global competition affects

nearly every company—regardless of size. Many source suppliers from
foreign countries and still more compete against products or services
that originate abroad. International business remains a broad concept
that encompasses the smallest companies that may only export or
import with one other country, as well as the largest global firms with
integrated operations and strategic alliances around the globe.

The Challenges and Considerations of International Business:-

Because nation-states have unique government systems, laws and
regulations, taxes, duties, currencies, cultures, practices, etc.
international business is decidedly more complex that business that
operates exclusively in domestic markets.
The major task of international business involves understanding the
sheer size of the global marketplace. There are currently more than 200
national markets in the world, presenting a seemingly endless supply of
international business opportunities. However, the diversity between
nations presents unique considerations and a plethora of hurdles, such
as:

- National wealth disparities: Wealth disparities among nations remain

vast.

- Regional diversity according to wealth and population: North America

is home to just 5 percent of the world’s population, yet it controls
almost one-third of the world’s gross domestic product.

Cultural/linguistic diversity: There are more than 10,000

linguistic/cultural groups in the world.

-Country size and population diversity: There were about 60 countries

at the start of the twentieth century; by 2000, this number grew to
more than 200.

Some of the challenges considered by companies and professionals

involved in international business include:

Economic Environment
The economic environment may be very different from one country to
the next. The economy of countries may be industrialized (developed),
emerging (newly industrializing), or less developed (third world).
Further, within each of these economies are a vast array of variations,
which have a major effect on everything from education and
infrastructure to technology and healthcare.

A nation’s economic structure as a free market, centrally planned

market, or mixed market also plays a distinct role in the ease at which
international business efforts can take place. For example, free market
economies allow international business activities to take place with
little interference. On the opposite end of the spectrum, centrally
planned economies are governmentcontrolled. Although most
countries now function as free-market economies, China—the world’s
most populous country—remains a centrally planned economy.
Political environment
The political environment of international business refers to the
relationship between government and business, as well as the political
risk of a nation. Therefore, companies involved in international
business must expect to deal with different types of governments, such
as multi-party democracies, one-party states, dictatorships, and
constitutional monarchies.

Some governments may view foreign businesses as positive, while

other governments may view them as exploitative. Because
international companies rely on the goodwill of the government,
international business must take the political structure of the foreign
government into consideration.

International firms must also consider the degree of political risk in a

foreign location; in other words, the likelihood of major governmental
changes taking place. Just a few of the issues of unstable governments
that international companies must consider include riots, revolutions,
war, and terrorism.

Cultural Environment
The cultural environment of a foreign nation remains a critical
component of the international business environment, yet it is one of
the most difficult to understand. The cultural environment of a foreign
nation involves commonly shared beliefs and values, formed by factors
such as language, religion, geographic location, government, history,
and education.

It is common for many international firms to conduct a cultural analysis

of a foreign nation as to better understand these factors and how they
affect international business efforts.

Competitive Environment
The competitive environment is constantly changing according to the
economic, political, and cultural environments. Competition may exist
from a variety of sources, and the nature of competition may change
from place to place. It may be encouraged or discouraged in favor of
cooperation, and the relationship between buyers and sellers may be
friendly or hostile. The level of technological innovation is also an
important aspect of the competitive environment as firms compete for
access to the newest technology.

To ensure success in a foreign market, international businesses must

understand the many factors that affect the competitive environment
and effectively assess their impact.

Importance of international business

-Earn foreign exchnage
INTERNATIONAL TRADING ENVIRONMENT
INDIA’S FOREIGN TRADE POLIY

The foreign trade policy is essentially a set of guidelines for the

import and export of goods and services. These are established by
the Directorate General of Foreign Trade (DGFT), the governing body
for the promotion and facilitation of exports and imports under the
Ministry of Commerce and Industry. The policy is notified for a
period of five years. It is updated every year on March 31, and the
changes come into effect from April 1.

While the trade policy covers both imports and exports, its primary
objective is to facilitate trade by reducing transaction cost and time,
thereby making Indian exports more globally competitive. It aims to:

 Accelerate economic activity and make the most of global

market opportunities

 Encourage sustained economic growth by providing access to
raw materials, components, intermediates (goods used as inputs
for the production of other goods), consumables and capital
goods required for production

 Strengthen Indian agriculture, industry and services
  
 Generate employment

 Encourage stakeholders to strive for international standards of
quality

 Provide quality consumer products at reasonable prices
The Department of Commerce has the mandate to make India a major
player in global trade and assume a role of leadership in international
trade organizations commensurate with India’s growing importance.
The Department devises commodity and country-specific strategy in
the medium term and strategic plan/vision and India’s Foreign Trade
Policy in the long run.
India’s Foreign Trade Policy (FTP) provides the basic framework of
policy and strategy for promoting exports and trade. It is periodically
reviewed to adapt to the changing domestic and international scenario.
The Department is also responsible for multilateral and bilateral
commercial relations, special economic zones (SEZs), state trading,
export promotion and trade facilitation, and development and
regulation of certain export oriented industries and commodities.

Foreign Trade is the important factor in economic development in any

nation. Foreign trade in India comprises of all imports and exports to
and from India. The Ministry of Commerce and Industry at the level of
Central Government has responsibility to manage such operations. The
domestic production reveals on exports and imports of the country.
The production consecutively depends on endowment of factor
availability. This leads to relative advantage of the financial system.
Currently, International trade is a crucial part of development strategy
and it can be an effective mechanism of financial growth, job
opportunities and poverty reduction in an economy. According to
Traditional Pattern of development, resources are transferred form the
agricultural to the manufacturing sector and then into service

HISTORIC REVIEW:-

 Foreign trade in India began in the period of the latter half of the 19th
century. The period 1900-1914 saw development in India's foreign
trade. The augment in the production of crops as oilseeds, cotton, jute
and tea was mainly due to a thriving export trade. In the First World
War, India's foreign trade decelerated. After post-war period, India's
exports increased because demand for raw materials was increased in
all over world and there were elimination of war time restrictions. The
imports also increased to satisfy the restricted demand. Records
indicated that India's foreign trade was rigorously affected by the great
depression of 1930s because of decrement in commodity prices,
decline in consumer's purchasing power and unfair trade policies
adopted by the colonial government.

During the Second World War, India accomplished huge export surplus
and accumulated substantial amount of real balances. There was a
huge pressure of restricted demand in India during the Second World
War. The import requirements were outsized and export surpluses
were lesser at the end of the war. Before independence, India's foreign
trade was associated with a colonial and agricultural economy. Exports
consisted primarily of raw materials and plantation crops, while imports
composed of light consumer merchandise and other manufactures. The
structure of India's foreign trade reflected the organized utilization of
the country by the foreign leaders. The raw materials were exported
from India and finished products imported from the U.K. The
production of final products were discouraged. For instance, cotton
textiles, which were India's exports, accounted for the largest share of
its imports during the British period. This resulted in the decline of
Indian industries. Since last six decades, India's foreign trade has
changed in terms of composition of commodities.
The exports included array of conventional and non-traditional
products while imports mostly consist of capital goods, petroleum
products, raw materials, intermediates and chemicals to meet the ever
increasing industrial demands. The export trade during 1950-1960 was
noticeable by two main trends. First, among commodities which were
directly based on agricultural production such as tea, cotton textiles,
jute manufactures, hides and skins, spices and tobacco exports did not
increase on the whole, and secondly, there was a significant boost in
the exports of raw manufactures such as iron ore.

In the period of 1950 to 1951, main products dominated the Indian

export sector. These included cashew kernels, black pepper, tea, coal,
mica, manganese ore, raw and tanned hides and skins, vegetable oils,
raw cotton, and raw wool. These products comprised of 34 per cent of
the total exports. In the period of 1950s there were balance of
payments crunch. The export proceeds were not enough to fulfil the
emerging import demand. The turn down in agriculture production and
growing pace of development activity added pressure. The external
factors such as the closure of Suez Canal created tension on the
domestic financial system.

The critical problem at that moment was that of foreign exchange

scarcity. The Second Five Year Plan with its emphasis on the
development of industry, mining and transport had a large foreign
exchange factor. This tension on the balance of payments required the
stiffening of import strategy at a later stage.

CURRENT TRADE POLICY (2015-20):-

The current Foreign Trade Policy (2015-20) focusses on improving
India’s market share in existing markets and products as well as
exploring new products and new markets. India’s Foreign Trade Policy
also envisages helping exporters leverage benefits of GST, closely
monitoring export performances, improving ease of trading across
borders, increasing realization from India’s agriculture-based exports
and promoting exports from MSMEs and labour intensive sectors. The
DoC has also sought to make states active partners in exports. As a
consequence, state governments are now actively developing export
strategies based on the strengths of their respective sectors.
While the external environment has a major role to play in the success
of export policies, it is also critical to address constraints within India
including infrastructure bottlenecks, high transaction costs, complex
procedures, constraints in manufacturing and inadequate
diversification in India’s services exports. India is a signatory to the
Trade Facilitation Agreement (TFA) at the WTO, which will contribute to
the simplification and lowering of transaction costs.
According to current WTO rules as well as those under negotiation India
needs to eventually phase out subsidies and move towards
fundamental systemic measures in the future. Under the Agreement on
Subsidies, India has moved on from Annex VII countries of WTO on
breaching the US$ 1,000 per capita income benchmark for 3
consecutive years in 2015.
The present Commerce & Industry Minister Shri Piyush Goyal has also
asserted that India needs to evolve from a dependence on subsidies, “I
do not think that any programme or ambitious scheme can run only on
subsidies and government help. We have to move out of this
continuous effort and demand and make our industry truly competitive
and self-reliant.”
The government is looking to focus on promoting exports of high value-
added products, where India has a strong domestic manufacturing
base, including engineering goods, electronics, drugs and
pharmaceuticals, textiles and agriculture. This is apart from the
continued push to AYUSH and the Indian services sector.
Around 70% of India’s exports constitute products that have just 30%
share in global trade. The government is looking at some more
promising product groups like defence equipment, medical devices,
agro-processing, technical textiles and chemicals.
In 2018, then Commerce & Industry Minister Shri Suresh Prabhu
envisaged a strategy to double India’s exports by 2025. The approach
included devising a commodity-specific strategy for key sectors like
gems and jewellery, leather, textile & apparel, engineering sector,
electronics, chemicals and petrochemicals, pharma, agri and allied
products and marine products. Territory specific strategy will cover
North American Free Trade Agreement (NAFTA), Europe, North East
Asia, ASEAN, South Asia, Latin America, Africa and WANA, Australia,
New Zealand, and CIS.

FTI (2015-20) :- HIGHS AND LOWS

The current trade policy – which focused on improving India’s
performance in existing markets/products and exploring new
markets/products – has been praised as “progressive” for the
following reasons:  

 It consolidated a range of export incentives with different

eligibility criteria into two schemes – the Merchandise Exports
from India Scheme (MEIS) and Services Exports from India
Scheme (SEIS).
 It offered export incentives under these two schemes in the
form of duty credit scrips, which can be used by exporters to
pay import duties. The scrips are fully transferable, which
means that if an exporter has no need for them, they can pass
it on to another.
 It reduced export obligation from 90% to 75% for capital goods
sourced from local manufacturers under the Export Promotion
Capital Goods Scheme (EPCG).
 It allowed manufacturers who are “status holders”
(entrepreneurs certified by the DGFT as having helped India
become a major export player) to self-certify their
manufactured goods as originating from India. This helps them
qualify for preferential treatment under various bilateral and
regional trade agreements. 
 It identified 108 micro, small and medium enterprise (MSME)
clusters for focused interventions with a view to boost exports.
 It promoted paperless processing of various DGFT licences and
applications.     

However, the policy has also had its fair share of criticism. Some of
its provisions have been challenged at the World Trade Organisation
(WTO) by the United States. Some sticking points:

 In 2019, a WTO dispute settlement panel, acting on

Washington’s complaint, said India’s export subsidy provisions
violate WTO rules and must be withdrawn. These included tax
incentives under the popular MEIS and SEIS. As India’s per
capita gross national product is over $1,000 per annum, it can
no longer offer subsidies based on export performance, the
panel ruled. This controversy reinforces the growing view in
India that the country needs to move away from subsidies and
think of other ways to help its exporters.       
  There is a strong belief in India (bolstered by its trade policy)
that free trade agreements (FTAs) haven’t worked for it. One
indication of this came in November 2020 when India decided
to not be a part of the Regional Comprehensive Economic
Partnership (RCEP), the world’s largest FTA. Experts and
economists believe this cost India a golden chance to be a
major player in exports. 

Expectations from FTP 2021-2026

‍

Covid-19 was catastrophic for international trade. Indian exports fell

by a record 60% and imports by 59% in April 2020. Though the
situation has improved, the road to recovery is long and hard. That is
why the new trade policy must deliver the goods. Based on inputs
from traders, trade associations, members of Parliament and a
government-appointed high-level advisory group, some key
expectations are:

 WTO-compliant tax incentives: With incentives under MEIS and

SEIS under a cloud, the need of the hour is WTO-compliant tax
benefits. To this end, the government has announced the
Remission of Duties or Taxes on Export Products (RoDTEP)
scheme, effective January 1, 2021. It replaces MEIS. Rates and
conditions for the new scheme are yet to be announced. 
 Easy credit access: A long-standing demand of exporters,
especially MSMEs, is credit access. Formal financial institutions
such as banks are reluctant to lend to MSMEs due to their lack
of adequate collateral. The policy can help open up alternate
credit avenues, such as finance technology start-ups. The
advisory group suggests raising borrowing limits at the Export
Import Bank of India.               
 Infrastructure upgrade: One reason why China is a
manufacturing and export powerhouse is its network of ports,
highways and high-speed trains, which are among the best in
the world. India needs to learn from its neighbour and improve
its flagging infrastructure by upgrading existing ports,
warehouses, quality testing and certification centres and
building new ones. The Trade Infrastructure for Export Sector, a
scheme for developing infrastructure to promote exports, was
 launched in 2017 for a period of three years. Many in the
industry hope it will be extended.     
 Less subsidy, more support: In 2020, Commerce Minister
Piyush Goyal said quality, technology and scale of production
were the answers to India’s global ambitions, not subsidies.
Many in the industry agree, saying government support in the
form of skill development programmes and technological
upgradation rather than subsidies would help them become
more competitive. Pharmaceuticals, biotechnology and medical
devices are some sectors that could do with upskilling.
Similarly, the trade policy could include incentives with a focus
on research and development, something the government has
spoken of in the past. On the technology front, the Amended
Technology Upgradation Fund Scheme – which facilitates
improvements in investment, productivity, quality and exports
in the textile industry through technology upgrades – can be
replicated for other sectors.
 Tax breaks: If India were to do away with subsidies, exporters
would still need some form of government support. Easier and
lower taxes are a way of filling this gap. The reduction of
corporate tax rates and simplification of duty structures are
long-standing demands. The Confederation of Indian Industry
suggests simplifying the import duty structure by following “the
general principle of higher duties on finished goods and
lower/minimal duties on intermediates and raw material”.
There are also demands for an overhaul/improvement of
existing schemes such as the EPCG and Duty Drawback
Scheme.      
 Digitisation and e-commerce: With Covid-19 disrupting
traditional supply chains, India needs modern trade practices.
Digitisation and e-commerce are two ways to go about this.
Digitisation can start with making common import-export
processes paperless. Trade body Nasscom, for example,
recommends an online mechanism for Importer Exporter Code
(IEC) holders to change their particulars (mobile numbers, e-
mail IDs, etc). It also makes a case for encouraging e-commerce
exports by a) including e-commerce export platforms under
Niryat Bandhu (a scheme for mentoring entrepreneurs in
international trade), b) establishing e-commerce export
promotion cells within export promotion councils, and c)
establishing e-Commerce Export Zones to promote MSMEs.
 Export awareness: At times, Indian exporters are defeated not
by a lack of trade opportunities but by lack of awareness of the
same. The trade policy can make a provision for government
 workshops and awareness programmes that educate and
inform traders about international laws and standards, global
markets, intellectual property rights, patents and geographical
indication (GI). 
 Import wishlist: While most of the expectations might be
geared towards exports, India’s import community has its
wishlist too, which includes permission to import capital goods
on self-certification basis and to import prohibited items with
the approval of the Central government-approved Board of
Approval or Inter-Ministerial Standing Committee. 

4P’s of International business:-