W14_U10_BBA_S6_International Marketing PDF

International Marketing Unit – 10 India’s International Policy Semester-06 Bachelors of Business Administration  International Marketing...

International Marketing Unit – 10 India’s International Policy Semester-06 Bachelors of Business Administration  International Marketing JGI x UNIT India’s International Policy Names of Sub-Unit Government Measures and Export Incentives, EXIM Policy in India, Comprehensive exploration of the current Export-Import (EXIM) policy in Export Credit Guarantee Corporation (ECGC) Services, Role of Indian Banks in International Trade, Role of Financial Institutions in International Marketing, Current Policies and Trends in India's International Trade. Overview Explore India's dynamic Export-Import (EXIM) policy, delving into government measures, export incentives, and the pivotal role of the Export Credit Guarantee Corporation (ECGC). Understand the involvement of Indian banks and financial institutions in international trade, and stay updated on the current policies and trends shaping India's international trade landscape. Learning Objectives  Understand the key components of India's Export-Import (EXIM) policy and its impact on international trade.  Analyze the role and services offered by the Export Credit Guarantee Corporation (ECGC) in promoting and securing exports.  Examine the contributions of Indian banks in facilitating and supporting international trade transactions. 2 UNIT 10: India’s International Policy  Evaluate the significance of financial institutions in formulating and executing international marketing strategies. Learning Outcomes Upon completing this course, participants will  Demonstrate a comprehensive understanding of the current Export-Import policy in India and its implications on global trade dynamics.  Assess the role of the Export Credit Guarantee Corporation (ECGC) in mitigating risks and enhancing the competitiveness of Indian exports.  Analyze the specific functions and mechanisms employed by Indian banks to drive and facilitate international trade activities.  Understand the critical role financial institutions play in shaping and supporting international marketing initiatives, aligning with evolving global trade trends. Pre-Unit Preparatory Material  "India's Export-Import Policy: Navigating Global Markets" - An in-depth analysis of India's EXIM policy and its evolution over the years.  "Banking on Global Trade: Insights into the Role of Indian Banks" - A comprehensive overview of the contribution and functions of Indian banks in international trade facilitation. Table of topics 10.1 Government Measures and Export Incentives 10.2 EXIM Policy in India 10.3 Comprehensive exploration of the current Export-Import (EXIM) policy in Export Credit Guarantee Corporation (ECGC) Services 10.4 Role of Indian Banks in International Trade 10.5 Role of Financial Institutions in International Marketing 10.6 Current Policies and Trends in India's International Trade 10.7 Conclusion: 3  International Marketing JGI 10.1 Government Measures and Export Incentives Government Measures:  Trade Facilitation: The Indian government has implemented measures to simplify trade procedures, reduce bureaucratic hurdles, and enhance overall trade facilitation. This includes initiatives such as the Single Window Interface for Trade (SWIFT) and the Customs Automated System.  Infrastructure Development: Investment in infrastructure, such as ports, roads, and logistics, is a crucial government measure to boost exports. Improved infrastructure reduces transportation costs and facilitates smoother movement of goods, thereby enhancing the competitiveness of Indian exports.  Policy Reforms: Periodic policy reforms aimed at liberalizing trade, reducing regulatory complexities, and aligning with international standards contribute to a conducive business environment for exporters. The introduction of the Goods and Services Tax (GST) is an example of a significant reform simplifying the taxation system.  Export Promotion Councils (EPCs): EPCs play a vital role in promoting and supporting exports from various sectors. The government collaborates with these councils to provide guidance, incentives, and market intelligence to exporters, fostering a conducive environment for international trade. Export Incentives:  Export Credit Guarantee Corporation (ECGC): The ECGC provides export credit insurance to protect exporters against payment risks, enabling them to explore new markets and buyers with confidence. This government-backed support encourages exporters to take calculated risks in expanding their global footprint.  Duty Drawback Scheme: Under this scheme, exporters receive a refund of customs duties paid on imported inputs used in the exported product. This helps in maintaining the competitiveness of Indian goods in international markets by offsetting the indirect taxes embedded in the export product.  Merchandise Exports from India Scheme (MEIS): MEIS provides exporters with financial incentives based on a percentage of their export turnover. The scheme aims to promote the export of specified goods from India and boost foreign exchange earnings.  Interest Subvention Scheme: The government offers interest rate subsidies to exporters, reducing the cost of credit and making it more affordable. This helps in 4 UNIT 10: India’s International Policy promoting competitiveness and encourages exporters to invest in enhancing production and quality standards. Government measures in India encompass a broad range of initiatives aimed at creating a conducive environment for international trade. Export incentives play a crucial role in supporting and rewarding exporters, contributing to the growth of the export sector and the overall economy. 10.2 EXIM Policy in India The EXIM policy in India is a set of guidelines and measures formulated by the government to regulate the country's import and export activities. The policy is periodically updated, usually every five years, to align with the changing global economic scenario and national development objectives. Here's a detailed explanation of the key components and features of India's EXIM policy:  Trade Liberalization:  The EXIM policy often emphasizes liberalization measures to facilitate trade. Reduction in tariff barriers, elimination of licensing requirements, and simplification of export-import procedures are common strategies to encourage a more open and competitive trade environment.  Export Promotion:  The policy focuses on promoting exports by providing various incentives and support mechanisms. These may include export credit facilities, subsidies, and schemes like the Merchandise Exports from India Scheme (MEIS) to boost specific sectors.  Import Regulation:  Import regulations are outlined to manage the inflow of goods into the country. The government may impose restrictions or prohibitions on certain imports to protect domestic industries, ensure national security, or adhere to international agreements.  Customs Duties and Tariffs:  The EXIM policy defines customs duties and tariffs applicable to different goods. Changes in these rates can impact the cost competitiveness of imported and exported products. The policy may aim to protect domestic industries by adjusting tariff levels. 5  International Marketing JGI  Export Control:  Certain goods, especially those with strategic importance or related to national security, may be subject to export controls. The EXIM policy lays down guidelines for the export of such items, ensuring compliance with international regulations and commitments.  Incentives for Special Economic Zones (SEZs):  SEZs are designated areas that enjoy certain exemptions and benefits to promote export-oriented activities. The EXIM policy often includes provisions to encourage businesses to set up operations in SEZs, fostering economic growth and international trade.  Foreign Trade Agreements (FTAs) and Economic Groupings:  The policy addresses India's participation in FTAs and economic groupings, defining the terms of trade with partner countries. Negotiations and agreements under the EXIM policy aim to enhance market access for Indian exporters and importers.  Digital Initiatives and E-Governance:  With a focus on efficiency and transparency, the EXIM policy promotes digital initiatives and e-governance in trade-related processes. Online platforms facilitate smoother documentation, faster clearance, and real-time tracking of shipments.  Safeguard Measures:  In response to perceived threats to domestic industries, the EXIM policy may incorporate safeguard measures such as anti-dumping duties or countervailing duties to protect domestic producers from unfair trade practices. Understanding the EXIM policy is crucial for businesses engaged in international trade, as compliance with its provisions is essential for smooth and legal cross-border transactions. Regular updates and amendments reflect the government's efforts to align trade policies with economic goals and global trends. 10.3 Comprehensive exploration of the current Export-Import (EXIM) policy in Export Credit Guarantee Corporation (ECGC) Services 6 UNIT 10: India’s International Policy The Export Credit Guarantee Corporation of India (ECGC) plays a pivotal role in facilitating international trade by providing credit insurance and related services. The ECGC operates within the framework of India's overall Export-Import (EXIM) policy. Here's a detailed exploration of how the ECGC aligns with and contributes to the EXIM policy:  Risk Mitigation:  Objective: The ECGC aims to mitigate credit risks associated with international trade transactions. Its services protect exporters from non-payment risks arising due to commercial and political uncertainties.  EXIM Policy Alignment: The EXIM policy recognizes the importance of risk mitigation for exporters. ECGC's services align with this objective by providing insurance coverage against various risks, ensuring that exporters can explore new markets without fear of payment defaults.  Credit Insurance:  Objective: ECGC offers credit insurance to exporters, covering the risk of non- payment by buyers due to insolvency or protracted default.  EXIM Policy Alignment: The EXIM policy emphasizes the need for financial support to exporters. ECGC's credit insurance aligns with this by providing a financial safety net, allowing exporters to extend credit terms to buyers and secure their receivables.  Export Credit:  Objective: ECGC provides export credit insurance to banks and financial institutions, facilitating the extension of credit to exporters.  EXIM Policy Alignment: The EXIM policy acknowledges the role of credit in promoting exports. ECGC's export credit insurance supports this objective by making it easier for exporters to access credit, thereby promoting export-led growth.  Political Risk Coverage:  Objective: ECGC covers political risks such as war, civil unrest, and adverse government actions that may impact international trade transactions.  EXIM Policy Alignment: The EXIM policy recognizes the need to address political risks that exporters may face. ECGC's coverage aligns with this objective, safeguarding exporters against unpredictable geopolitical events that could affect their business.  Market Intelligence: 7  International Marketing JGI  Objective: ECGC provides market intelligence and credit reports on overseas buyers, helping exporters make informed decisions.  EXIM Policy Alignment: The EXIM policy emphasizes the importance of market research and intelligence. ECGC's provision of such information aligns with the policy's objective of supporting exporters in understanding and navigating international markets.  Support for Small and Medium Enterprises (SMEs):  Objective: ECGC offers specific schemes and support mechanisms for SMEs to encourage their participation in international trade.  EXIM Policy Alignment: The EXIM policy recognizes the need to boost the involvement of SMEs in exports. ECGC's tailored services for SMEs align with this policy objective, fostering inclusivity in the export sector. The ECGC's services are intricately woven into the fabric of India's EXIM policy, providing a comprehensive risk mitigation framework and support system for exporters. By aligning with the broader goals of the EXIM policy, ECGC contributes significantly to the growth and sustainability of India's international trade. 10.4 Role of Indian Banks in International Trade Indian banks play a crucial role in facilitating and supporting international trade by providing a range of financial services and instruments. Their involvement is integral to ensuring the smooth flow of funds, reducing risks, and promoting global business transactions. Here's a detailed explanation of the various facets of the role played by Indian banks in international trade:  Trade Finance:  Letter of Credit (LC): Indian banks issue Letters of Credit, a widely used trade finance instrument. LCs provide a secure payment mechanism, assuring exporters that they will receive payment if they meet the specified conditions.  Bank Guarantees: Banks issue guarantees to support various aspects of international trade, such as bid bonds, performance guarantees, and advance payment guarantees, providing assurance to both buyers and sellers.  Export Financing: 8 UNIT 10: India’s International Policy  Pre-shipment Finance: Indian banks offer pre-shipment finance to exporters to meet working capital requirements before the shipment of goods. This ensures smooth production and timely delivery.  Post-shipment Finance: Banks provide post-shipment finance to exporters after the goods have been shipped. This helps in bridging the gap between shipment and receipt of payment, ensuring cash flow continuity.  Import Financing:  Buyer's Credit: Indian banks extend credit to overseas buyers, facilitating imports. This can include term loans or credit lines to the buyer, making it easier for them to purchase goods and services from Indian exporters.  Supplier's Credit: Banks may negotiate credit terms with overseas suppliers, allowing Indian importers to defer payments and manage cash flow effectively.  Foreign Exchange Services:  Indian banks play a pivotal role in providing foreign exchange services. They facilitate currency conversions, manage exchange rate risks, and offer hedging instruments such as forward contracts to protect businesses from adverse currency movements.  Risk Management:  Credit Risk Mitigation: Banks assess and mitigate credit risks associated with international trade transactions. This includes evaluating the creditworthiness of overseas buyers and managing risks through credit insurance or other mechanisms.  Political and Country Risks: Banks help businesses navigate political and country risks by offering political risk insurance, advising on risk mitigation strategies, and structuring transactions to minimize exposure.  Advisory Services:  Indian banks provide advisory services related to international trade regulations, documentation, and compliance. They assist businesses in understanding and adhering to the legal and regulatory requirements of different countries.  Technology Integration:  Banks leverage technology to streamline international trade processes. Online platforms and digital solutions facilitate the electronic issuance of documents, online tracking of shipments, and efficient communication between parties involved in the trade transaction.  Government Schemes and Incentives: 9  International Marketing JGI  Banks assist exporters in leveraging government schemes and incentives by providing information, facilitating documentation, and ensuring compliance. They play a role in helping businesses access benefits like interest rate subsidies and export credit insurance. Indian banks act as crucial intermediaries in international trade, providing the financial infrastructure and support necessary for businesses to engage in cross-border transactions. Their diverse range of services contributes to the growth and sustainability of India's participation in the global economy. 10.5 Role of Financial Institutions in International Marketing Financial institutions play a crucial role in supporting and facilitating international marketing activities. Their involvement goes beyond providing traditional banking services, encompassing a range of financial products and services designed to mitigate risks, enhance liquidity, and facilitate the expansion of businesses into global markets. Here's a detailed exploration of the role of financial institutions in international marketing:  Trade Finance:  Letter of Credit (LC): Financial institutions issue Letters of Credit, providing a financial guarantee to exporters that they will receive payment if they fulfill the specified conditions. This mitigates the risk for exporters and facilitates international transactions.  Trade Credit Insurance: Financial institutions offer trade credit insurance, protecting businesses from the risk of non-payment by buyers. This coverage enhances the confidence of exporters, enabling them to explore new markets and customers.  Foreign Exchange Services:  Financial institutions provide foreign exchange services, assisting businesses in managing currency risks associated with international trade. They offer currency conversion, hedging instruments, and risk management strategies to minimize the impact of exchange rate fluctuations.  Working Capital Solutions:  Financial institutions offer working capital solutions tailored for international marketing. This includes financing options such as revolving credit facilities, 10 UNIT 10: India’s International Policy invoice discounting, and supply chain finance to support the cash flow needs of businesses engaged in cross-border trade.  Risk Management and Mitigation:  Financial institutions assist businesses in identifying and managing various risks associated with international marketing, including credit risk, political risk, and economic risk. They provide risk assessment services, advisory support, and financial instruments to mitigate these risks.  Export Credit:  Financial institutions extend export credit to businesses, providing them with the necessary financing to fulfill export orders. This type of credit can be instrumental in enabling businesses to scale up their international marketing efforts and explore new markets.  Investment Banking Services:  Investment banking services offered by financial institutions can be utilized for mergers and acquisitions, joint ventures, and strategic partnerships in the global market. These services support businesses in expanding their international presence and market reach.  Structured Trade Finance:  Financial institutions provide structured trade finance solutions, including pre- export financing, inventory finance, and commodity finance. These solutions are tailored to the specific needs of businesses engaged in international trade and marketing.  Government and Multilateral Agencies Collaboration:  Financial institutions often collaborate with government agencies and multilateral organizations to facilitate international marketing. They assist businesses in accessing government-backed export promotion schemes, incentives, and funding programs.  Advisory Services:  Financial institutions offer advisory services related to international marketing strategies. This may include market research, feasibility studies, and financial planning to help businesses make informed decisions and navigate the complexities of global markets.  Technology Integration:  Financial institutions leverage technology to enhance the efficiency of international marketing processes. Online platforms and digital solutions 11  International Marketing JGI enable seamless and secure financial transactions, document handling, and communication between global partners. Financial institutions play a multifaceted role in supporting international marketing efforts. Their diverse range of financial products and services empowers businesses to navigate the complexities of global trade, manage risks, and capitalize on opportunities for expansion and growth. 10.6 Current Policies and Trends in India's International Trade Policies:  Export-Import Policy:  India periodically updates its Export-Import (EXIM) policy to align with global economic trends. Recent policies focus on trade facilitation, reducing bureaucratic hurdles, and promoting a more open and competitive trade environment. Measures include simplifying procedures, revising tariff structures, and addressing non-tariff barriers.  Make in India and Atmanirbhar Bharat:  The "Make in India" initiative encourages domestic manufacturing and export- led growth. The "Atmanirbhar Bharat" (Self-reliant India) policy aims to boost domestic production, reduce dependence on imports, and enhance the competitiveness of Indian products in the global market.  Digital Initiatives:  Embracing digitalization, the government promotes e-governance in trade- related processes. Initiatives like the Single Window Interface for Trade (SWIFT) streamline documentation, reduce processing times, and enhance transparency, facilitating smoother international trade operations.  Bilateral and Regional Trade Agreements:  India is actively engaged in negotiating bilateral and regional trade agreements. The Comprehensive Economic Cooperation Agreement (CECA) and Free Trade Agreements (FTAs) aim to expand market access, enhance economic cooperation, and strengthen ties with partner countries. Trends:  Diversification of Trade Partners:  India is diversifying its trade partners to reduce dependence on specific countries. Strengthening ties with regions such as Africa, Latin America, and 12 UNIT 10: India’s International Policy Southeast Asia reflects a strategic shift toward balanced and diversified international trade relationships.  Focus on Services Exports:  While goods exports remain significant, there is an increasing emphasis on services exports, including IT and software services, business process outsourcing (BPO), and professional services. This trend aligns with India's strengths in the service sector, contributing to economic growth.  E-commerce and Digital Trade:  The rise of e-commerce has transformed international trade dynamics. India is witnessing a surge in cross-border e-commerce, leading to new policy considerations for regulating digital trade, ensuring consumer protection, and addressing challenges related to taxation and data security.  Sustainable and Green Trade Practices:  The global shift towards sustainable and eco-friendly practices is influencing India's international trade. There is an increasing focus on promoting exports of environmentally friendly goods and services, aligning with global sustainability goals.  Supply Chain Resilience:  The disruptions caused by the COVID-19 pandemic have highlighted the importance of resilient supply chains. India is exploring strategies to enhance supply chain resilience, including reducing dependence on a single source for critical imports and strengthening domestic manufacturing capabilities.  Investment Promotion:  Policies are geared towards attracting foreign direct investment (FDI) and promoting investments in key sectors. Initiatives like the National Infrastructure Pipeline (NIP) aim to create a conducive environment for foreign investors, fostering economic growth and enhancing India's appeal as an investment destination.  Global Value Chains (GVCs):  Integration into global value chains is a key trend. India is positioning itself as a manufacturing hub by participating in GVCs, fostering collaboration with multinational corporations and enhancing the competitiveness of Indian industries.  Digital Payments and Financial Technology (Fintech):  The adoption of digital payments and fintech solutions is transforming financial transactions in international trade. Initiatives like the Unified 13  International Marketing JGI Payments Interface (UPI) contribute to seamless and secure cross-border transactions, supporting the growth of international trade. Understanding and adapting to these policies and trends is crucial for businesses and policymakers alike to navigate the evolving landscape of India's international trade and capitalize on emerging opportunities. 10.7 Conclusion: In conclusion, India's international trade landscape is shaped by dynamic government measures, robust EXIM policies, and the crucial roles played by institutions like ECGC, banks, and financial entities. Current policies emphasize diversification, digitalization, and sustainability, reflecting a strategic approach to global engagement. As businesses navigate evolving trends, understanding the synergy between government initiatives and financial support structures becomes paramount for success in the global marketplace. 10.8 Glossary:  Export Incentives: Financial or non-financial support provided by the government to promote and boost exports.  EXIM Policy: Government guidelines outlining regulations and measures governing export and import activities.  ECGC Services: Export Credit Guarantee Corporation services, including credit insurance to protect exporters against non-payment risks.  Letter of Credit (LC): A financial instrument issued by a bank to guarantee payment to the exporter upon fulfilling specified conditions.  Bilateral Trade Agreements: Agreements between two countries to facilitate trade and economic cooperation.  Trade Facilitation: Measures aimed at simplifying and streamlining international trade processes and procedures.  Supply Chain Resilience: The ability of a supply chain to withstand and recover from disruptions or challenges.  Sustainable Trade Practices: Strategies that consider environmental and social factors in international trade. 14 UNIT 10: India’s International Policy  Digitalization in Trade: Adoption of digital technologies to enhance efficiency and transparency in trade operations.  Foreign Direct Investment (FDI): Investment made by a company or individual in one country in business interests in another country. Self- Assessment questions Descriptive Questions: 1. How do government measures and export incentives contribute to the competitiveness of Indian exports? 2. What are the key elements of the current Export-Import (EXIM) policy in India? 3. How does ECGC's role in international trade align with risk mitigation strategies for exporters? 4. What specific services do Indian banks offer to facilitate international trade transactions? 5. In what ways do financial institutions contribute to the success of international marketing strategies? Post Unit Reading Material  Ministry of Commerce and Industry, Government of India: https://commerce.gov.in/  Export Credit Guarantee Corporation of India: https://www.ecgc.in/ Topics for Discussion forum  "The impact of digitalization on India's international trade: Opportunities and challenges."  "Strategies for enhancing supply chain resilience in the context of current global uncertainties." 15  International Marketing JGI 16