Introduction of Export Import Business in India 

Introduction of Export Import Business in India

• Starting import business is the goal of thousands of businessmen and import business is a very profitable business. If the importer adopted the right strategy. The success of import business depends on the importer’s knowledge and understanding about the international market and foreign market analysis.
• Importing goods from abroad has become a big business today, every product can be imported by flights like food to machinery. India’s imports exceed exports, so we can imagine the demand for imported goods. Millions of products are sold every day around the world.

Exporter, Importer & Their Type

• The exporter is a person who selling or transporting goods out of the country.
• Importer is a person who buying or transporting goods from another to home country.

Different types of Exporter

• • Merchant Exporter

• • Manufacturer Exporter

• • Service Exporter

• • Project Exporter

• • Deemed Exporter

Types of Exporters in India

  Who is Merchant Exporter

• • Merchant Exporter means A person who is engaged in trading activity or who is brought product from manufacturer for sell.

• • Merchant exporter is procuring the material from manufacturer & exporting goods in his firm name.

• • Here, Merchant exporter is procuring the order from international market & then proceed it 

• • The merchant exporter does not have his own manufacturing unit. The merchant exporter brings the goods directly from the manufacturer through his premises without sealing the export consignment or under rebate claim or under bond.

• • Merchant exporters are the exporters who purchase goods from domestic market & sell them in foreign countries. They enjoy several advantages

• • Limited Capital

• •   Specialization in Marketing

• •   Large Market Share

What is Manufacturer exporter

• • Manufacturer exporter is a person who manufacturing goods & exports or intends of export such goods.

• • Manufacturer exporter procures & process raw materials at his factory & export finished good.

• • Manufacturer exporter procures order from abroad country & export in their own name.

• • Manufacturer can also appoint agent/sales man/Marketer etc.

• • Manufacturer enjoy several advantages

• • First-hand information about foreign market.

• • Exercise a direct control over marketing activities

• • Enjoy full benefit of export incentives.

• • Enjoy greater profits & goods will in the market

What is Project Exporter

• • There are many professional companies undertake contract engineering procurement, Construction, Supplies, Constructions & Building Materials, Consultancy etc.

• • When they complete their project/sale & earn in foreign currency, it can be called Project Exporter.

Status Holders

• • Concept of status holder is introduced in 1960 by government of India. Export house was first category introduced by government with objective of promoting export by providing assistance for building marketing infrastructure & export promotion.

• • As per new foreign trade policy 2009-2014 status holders have been categorised on the basis of export performance.

What is Service Exporter

• • Service export is playing major role in the total export of India.

• • The government introduce the concept of export house in Exim policy 2002-2007.

• • As per the policy, if service provider who achieved stipulated level of export performance are eligible for recognition of status holder.

• • They are eligible for all facilities & incentives, As yet given to export & trading houses

• • Facilities include import of capital goods under EPCG Scheme, Import of restricted items, Passenger Baggage etc.

What is FEMA (Foreign Exchange Management Act)?

• • The central government of India formulates an act to encouraged foreign payment & across border trade in India known as foreign exchange management.

• • FEMA was introduced in the year 1999 to replace FERA (Foreign Exchange Regulation Act).

• • FEMA was formulated to fill all the loopholes & drawback of FERA (Foreign Exchange Regulation Act) & hence several economic reforms (major reforms) were introduced under the FEMA act.

• • FEMA was basically introduced to de-regularize & have a liberal economy in India.

Foreign Exchange Management Act

• • FEMA was introduced in India was facilities to external trade & payment.

• • In addition, FEMA is also formulated for development & maintenance of Indian forex market.

• • FEMA outlines formalities & procedures for the dealing of all foreign exchange transaction in India.

• •  The foreign exchange transaction has been classified into two categories

• • Current Account Transaction

• • Capital Account Transaction

• • Under the FEMA Act, Balance of payment is recorded between citizen of different countries.

• • It is divided into two categories.

• • Current Account Transaction

• • Capital Account Transaction

• • Capital account comprise all capital transaction.

• • And, Current Account comprises trade of merchandise.

• • Current Account Transaction are those transaction which involve inflow or out flow of, money from / to the country, Inflow & Outflow of money countries during a year. Due to trading & rendering of commodity, service, income.

• • The current account is an indicator of economy’s status.

• • As mentioned above, Balance of payment include current & capital account.

• • Balance of payments reminder of capital account which includes the economy due to capital receipts and expenditure.

• • Capital account recognises domestic investment in foreign assets & foreign Investment in domestic.

Role of FEMA(Foreign Exchange Management Act) in Export-Import

• • The authorized person may facilitate foreign exchange trading; However, the Act empowered the RBI to impose several restrictions on its capital account. The Authorized Person was expected to provide details and information regarding foreign exchange transactions to the RBI on a regular basis.
  •  FEMA law allows transactions in foreign currency, foreign securities or holding real estate abroad. This was allowed when the security, currency, property assets were owned by a person resident outside India.
  • FEMA compliance includes foreign exchange transactions and remittances involving individuals/entrepreneurs/businessmen moving funds in or out of India or exchanging foreign currency in India for business purpose.
  • A number of subsequent rules and regulations were issued under the Act addressing specific issues such as authentication of documents, current account transactions, adjudication proceedings and appeal compounding proceedings, permitted capital account transactions and borrowing or lending in foreign currency.
  • As per the rule defined under FEMA certain limits have been set such as if a person violates the quota, then the fine will be three lakhs, the amount is not quota, the fine amount is Rs 2 lakh in cases where the violation continues. on daily basis. Is. Up to Rs 5000 per day except the first day of violation. Further, if any property will be confiscated and treated as charged.
  • In fact, FEMA has been drafted to make India a more liberal foreign exchange market.
  • The Act encouraged de-regulation of foreign exchange & smooth international trade.
  • FEMA also has a distinct administration from FERA, which sought to impose comprehensive regulation on every aspect of India’s forex transaction on the other hand, FEMA intended to regulate only certain forex transactions that could of feet national economy & individual forex transaction for independent market.

What is Foreign Trade Policy (FTP)?

• • Foreign Trade Policy is the combination of word, first is foreign trade & second is policy.

• • Foreign Trade: It is aim exchange of goods & services between nations. Goods can be defined as finished goods, Unfinished or processing goods or agricultural product & foodstuff.

Introduction of Foreign Trade Policy.

• • India is known as one of the most important & emerging players in the global economy.

• • Foreign Trade Policy & government reforms make significant destination for foreign investment in world.

• • Technological & Infrastructural development being carried out all over the world. Enable efficient trade & economic practices.

• •  A strong foreign trade policy is of great importance for the successful economic development of a country.

• • Therefore, India adopted a foreign trade policy known as the EXIM policy or the Export-Import policy.                                                                                     
  •  Foreign Trade Policy is liberalizing export-import business in India. Solve all those problems, which are facing exporters and importers in India. 

• • With the help of foreign trade policies country can lead to equality prices to ensure a stable demand & supply situation within the economy.

• • Foreign Trade Policy also enables a nation to import at a time of natural calamity & manage scarcity when demand of particular product is high by proving better quality & quantity of good.

• • It also assists at rising standard of living & making commodities available at a lower rate.

• • Therefore, FTP is a enhance the position in international market & providing benefit to all.

Role of Foreign Trade Policy (FTP).

• • To enable growth in export-import & boosting the economy of India.

• • To at least double the percentage share of global trade conducted with in next five years.

• • To improve the balance of payment & trade.

• • To provide for sustainable growth by making available essential raw materials for manufacturing & other components consumer & capital goods required to increase production & provide efficient services.

• • To increase technological capacity for production & cost effectiveness of industry & services. Thus, improving their competitive strength Vis-a Vis other countries & to encourage the achievement of internationally accepted standard of quality.

• • To provide high quality goods & services at globally to buyer or customer. “Canalization is an import feature of foreign Trade policy under which certain classes of goods can be imported only through designated agencies”.

• • Creating opportunities by engaging in good and ethical practices.

• • Accelerating the economy from low level economic activities to high level economic activities by it globally oriented & vibrant economy.

• • To take maximum benefits from global market & taking the best opportunity available.

• • Making policies in favour of ease of doing business & E-governance.

• • To allow Hessel-Free transaction for Export-Import.

• • Reducing problem between Directorate General of foreign trade (DGFT) by reducing number of documents.

• • To allow the import technology & equipment which may help in achieving better international standard of quantity or quality & Reduce the cost of production.

• • Establish an advance licensing system for imported goods required for manufacturer of various goods for export. An advance licenses issue by Directorate General of Foreign Trade (DGFT) to allow duty free import of input, which are physically integrated with the export product (making a normal allowance for wastage).

• • Allowing import of certain goods listed in the pen general license; a type of export license issued by the government to domestic suppliers.                                                                                                                                                                                                                            

Export Import Rules & Regulations

•   India’s foreign trade i.e. exports and imports is regulated by the Foreign Trade Policy notified by the Central Government under the Foreign Trade Development and Regulation Act 1992. Import and export of all goods is free instead of goods regulated by EXIM policy.

Opportunity in Export-Import.

• • Export Import Business in India have a many additional factors which can have a huge impact on its success.

• • Export & Import are not just the core of any large successful business but it also helps economy grow & expand.

• • If we do business in India only, it has a limited potential, but when we go in international level, we get the order from Worldwide & Having a higher customer base & profit.
  • And, it gets the more customer than domestic or access to more consumer & business.