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INDEX
UNT-1
Introduction: Role of exports and imports in economic development, Export-Import Policy of
India, composition of India’s foreign trade, FEMA: Its rationale and implications. …………………………2

UNT-2
Export Procedure: Registration of exporters, Export documentation, General excise clearance,
Custom clearance, Insurance cover, Role of ECGC, Quality control and pre shipment inspection, HS
System of classification and coding, Application of EDI in export documentation. ………………………..5

UNT-3
Export Finance: Pre and post shipment finance, Finance for exports on deferred payment terms,
Role of EXIM bank, Mode of payment in international trade, UCP 600, Export pricing, INCOTERMS
2000. ……………………………………………………………………………………………………………………………………………8

UNT-4
Export Promotion: Infrastructural facilities, EPC, RCMC, EPZ, SEZs, DEPB scheme, EPCG scheme,
Export oriented organizations: FIEO, APEDA, Role of DGFT, Categorization of export houses. ……..10

UNT-5
Overseas Trade Logistics: Mode of international transport, Air transport, Ocean transport and their
comparison, Indian shipping: Its growth and problems, Indian shipping policy, Technological
development in international transport, Containerization and its phases of development, Role of
ICDs, Advantages and disadvantages of containerization. …………………………………………………………..12

UNT-6
Intermediaries and Ports in India: Freight forwarders (Forwarding and clearing agencies), Port and
overseas marketing logistics, Role of ports in India’s export efforts, Major ports and minor ports in
India, Problems and prospects, Traffic handling at major ports in India………………………………………..15
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UNT-1
Introduction: Role of exports and imports in economic development, Export-Import Policy of
India, composition of India’s foreign trade, FEMA: Its rationale and implications.
Introduction to Exports and Imports in Economic Development
1. Role of Exports and Imports in Economic Development:
Exports and imports are fundamental components of international trade that significantly influence a
country’s economic growth and development.
A. Role of Exports:
1. Earning Foreign Exchange:
 Exports generate foreign currency, which is essential for a country to purchase goods
and services from other countries.
 Example: India’s IT services exports contribute significantly to foreign exchange
reserves.
2. Boosting GDP:
 Export activities increase production, leading to higher GDP.
 Example: The textile industry’s exports have a direct impact on India’s GDP growth.
3. Employment Generation:
 Export-oriented industries create jobs in manufacturing, logistics, and services.
 Example: The export of handicrafts and handlooms provides employment in rural
areas of India.
4. Promoting Industrialization:
 Encourages industries to adopt advanced technologies to meet international
standards.
 Example: India’s pharmaceutical exports have driven the adoption of global quality
practices.
5. Improving Balance of Payments:
 Helps reduce trade deficits by increasing foreign income.
B. Role of Imports:
1. Access to Essential Goods:
 Imports provide access to goods that are not produced domestically.
 Example: India imports crude oil as domestic production is insufficient to meet
demand.
2. Technological Advancement:
 Importing advanced machinery and technology boosts productivity.
 Example: Import of semiconductor equipment to support India’s electronics
industry.
3. Competitive Market:
 Exposure to foreign products promotes healthy competition and improves quality.
4. Fulfilling Consumer Demand:
 Provides consumers with a variety of products, enhancing their lifestyle.
 Example: Import of luxury cars and electronic gadgets in India.
5. Supporting Industrial Growth:
 Industries rely on imported raw materials and components.
 Example: Import of specialized steel for India’s automobile industry.

2. Export-Import Policy of India:

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India’s Export-Import (EXIM) Policy, also known as the Foreign Trade Policy (FTP), governs the
country’s international trade. The policy aims to facilitate trade, enhance competitiveness, and boost
foreign exchange reserves.
A. Objectives of the EXIM Policy:
1. Promote Exports:
 Increase foreign exchange earnings.
2. Regulate Imports:
 Ensure the availability of essential goods.
3. Enhance Competitiveness:
 Improve the global competitiveness of Indian products.
4. Create Employment:
 Generate jobs through export-led growth.
5. Sustainable Development:
 Balance economic growth with environmental concerns.
B. Key Features of India’s EXIM Policy:
1. Trade Facilitation:
 Simplification of export-import procedures.
2. Incentive Schemes:
 Merchandise Exports from India Scheme (MEIS) and Service Exports from India
Scheme (SEIS) to encourage exports.
3. Export Promotion Councils:
 Organizations that support exporters in specific sectors.
4. Duty Exemptions:
 Schemes like Advance Authorization allow duty-free import of raw materials for
export production.
5. Focus on High-Growth Markets:
 Emphasis on diversifying export markets to reduce dependency on traditional
partners.
C. Recent Developments:
 The Foreign Trade Policy 2015-20 (extended till 2023) focused on "Make in India" and
"Digital India" initiatives to boost exports.

3. Composition of India’s Foreign Trade:

India’s foreign trade comprises the export and import of goods and services.
A. Composition of Exports:
1. Merchandise Exports:
 Engineering Goods: Automobiles, machinery, etc.
 Petroleum Products: Refined oil exports.
 Gems and Jewelry: Diamonds, gold, etc.
 Textiles and Apparel: Garments, fabrics, etc.
 Pharmaceuticals: Generic drugs.
2. Service Exports:
 IT and Software Services: Major contributor.
 Business Process Outsourcing (BPO): Call centers, back-office support.
 Financial Services: Consultancy, banking.
B. Composition of Imports:
1. Crude Oil and Petroleum Products:
 Largest import category due to high energy demands.
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2. Gold and Precious Stones:

 For jewelry manufacturing and investment.
3. Electronics:
 Mobile phones, computers, etc.
4. Machinery and Equipment:
 Industrial machinery, electrical equipment.
5. Chemicals and Fertilizers:
 Essential for agriculture and industries.
C. Major Trading Partners:
 Exports: USA, UAE, China, Bangladesh, Netherlands.
 Imports: China, USA, UAE, Saudi Arabia, Iraq.

4. FEMA: Its Rationale and Implications:

The Foreign Exchange Management Act (FEMA), 1999 was enacted to regulate foreign exchange
transactions in India. It replaced the Foreign Exchange Regulation Act (FERA), 1973.
A. Rationale Behind FEMA:
1. Liberalization of Foreign Exchange:
 Shift from a restrictive regime under FERA to a more liberal and facilitative
framework.
2. Globalization:
 To support India’s integration into the global economy post-1991 economic reforms.
3. Promotion of Foreign Investments:
 Create an investor-friendly environment by simplifying foreign exchange regulations.
4. Ease of Doing Business:
 Simplify processes for individuals and businesses dealing with foreign exchange.
5. Current Account Convertibility:
 Facilitate free flow of foreign exchange for trade in goods and services.
B. Key Provisions of FEMA:
1. Regulation of Foreign Exchange Transactions:
 Covers payments to and from India, foreign investments, and remittances.
2. Classification of Transactions:
 Current Account Transactions: Freely permitted, e.g., payments for imports/exports.
 Capital Account Transactions: Subject to restrictions, e.g., foreign investments.
3. Role of RBI:
 Empowered to regulate foreign exchange under FEMA.
4. Liberalization Measures:
 Simplified procedures for foreign investments and remittances.
5. Penalties for Non-Compliance:
 Provisions for monetary penalties in case of violations.
C. Implications of FEMA:
1. Encouragement of Foreign Investments:
 Boosted India’s FDI inflows due to a liberal regulatory framework.
2. Flexible Exchange Rate Management:
 Facilitated market-determined exchange rates.
3. Enhanced Global Trade:
 Simplified regulations encouraged businesses to engage in international trade.
4. Regulation of Money Laundering:
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 FEMA, along with PMLA (Prevention of Money Laundering Act), helps combat illegal
financial activities.
5. Impact on Individuals:
 Easier foreign remittances for education, travel, and medical expenses.

Conclusion:
Exports and imports are vital for India’s economic development, influencing GDP growth,
employment generation, and technological advancement. The EXIM Policy facilitates trade through
regulatory measures, while FEMA ensures smooth foreign exchange transactions. Understanding the
composition of India’s foreign trade and the legal framework governing it is essential for businesses

UNT-2
Export Procedure: Registration of exporters, Export documentation, General excise clearance,
Custom clearance, Insurance cover, Role of ECGC, Quality control and pre shipment inspection, HS
System of classification and coding, Application of EDI in export documentation.
Export Procedure
1. Registration of Exporters:
Before engaging in export activities, businesses in India must complete certain registrations to
comply with legal requirements and benefit from government incentives.
A. Importer Exporter Code (IEC):
 Mandatory Registration: Issued by the Directorate General of Foreign Trade (DGFT), the IEC
is essential for all businesses involved in import and export.
 Application Process:
o Apply online through DGFT’s website.
o Submit documents like PAN card, bank details, and proof of address.
 Example: A textile firm in Surat needs an IEC to export garments to Europe.
B. Registration with Export Promotion Councils (EPCs):
 Purpose: To avail export incentives and participate in trade fairs.
 Example: A gem exporter must register with the Gem and Jewellery Export Promotion
Council (GJEPC).
C. Registration with Goods and Services Tax (GST):
 Exporters must have a GST registration to claim tax refunds on exports.

2. Export Documentation:
Export documentation ensures smooth customs clearance and compliance with international trade
laws.
A. Commercial Documents:
1. Commercial Invoice: Details of goods, price, terms of sale.
2. Packing List: Description of goods, quantity, weight, and packaging details.
3. Bill of Lading (for sea transport) / Airway Bill (for air transport): Proof of shipment.
4. Proforma Invoice: Preliminary invoice issued before shipment.
B. Regulatory Documents:
1. Export License (if applicable): For restricted goods.
2. Certificate of Origin: Specifies the origin of goods.
3. Inspection Certificate: For quality control.
4. Insurance Certificate: Proof of insurance coverage.
C. Financial Documents:
1. Letter of Credit (LC): A guarantee from the buyer’s bank.
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2. Bill of Exchange: A payment request.

3. General Excise Clearance:

Excise clearance is required for goods manufactured in India.
A. Central Excise Clearance (Now GST-based):
 Exporters must furnish a LUT (Letter of Undertaking) under GST to export without paying
IGST.
 If LUT is not furnished, IGST is payable but can be claimed as a refund.
B. Procedure:
1. Apply for LUT through the GST portal.
2. Submit required documents (PAN, GST registration, etc.).
3. Obtain clearance to proceed with exports.

4. Custom Clearance:
Custom clearance ensures goods comply with export regulations.
A. Documentation Submission:
 Submit Shipping Bill (key document) electronically via ICEGATE (Indian Customs EDI
Gateway).
 Attach commercial invoice, packing list, LUT, etc.
B. Customs Examination:
 Physical verification of goods if required.
 Risk-based assessment reduces delays.
C. Payment of Duties (if applicable):
 Some exports may attract duties; otherwise, goods are cleared under duty exemption
schemes.
D. Clearance:
 Let Export Order (LEO): Issued after customs clearance, allowing shipment.

5. Insurance Cover:
Insurance protects exporters against risks during transit.
A. Types of Insurance:
1. Marine Insurance: Covers goods transported by sea.
2. Air Cargo Insurance: For air shipments.
3. Comprehensive Policies: Cover theft, damage, war risks, etc.
B. Importance:
 Protects against financial losses due to accidents, natural disasters, or piracy.
Example: An exporter shipping electronic goods from Mumbai to Dubai secures marine insurance
to cover potential damage during transit.

6. Role of ECGC (Export Credit Guarantee Corporation):

The ECGC provides credit risk insurance and financial support to Indian exporters.
A. Functions:
1. Credit Risk Insurance: Protects against buyer default, insolvency, or political risks.
2. Export Credit Insurance: Covers both pre-shipment and post-shipment risks.
3. Support for Export Finance: Facilitates loans from banks by covering credit risks.
B. Benefits:
 Encourages exporters to explore new markets without fear of non-payment.
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Example: A small business exporting spices to Africa uses ECGC coverage to mitigate risks of
delayed payments from foreign buyers.

7. Quality Control and Pre-Shipment Inspection:

Pre-shipment inspection ensures that goods meet quality standards and contractual specifications.
A. Quality Control Measures:
1. Internal Quality Checks: By the exporter’s quality team.
2. Third-Party Inspection: Certified agencies like SGS, Bureau Veritas.
B. Pre-Shipment Inspection (PSI):
 Mandatory for specific products (e.g., food items, chemicals).
 Certification provided after inspection.
C. Regulatory Bodies:
 Export Inspection Council (EIC): Oversees quality control for Indian exports.
Example: Indian seafood exports to the EU require mandatory pre-shipment inspection for health
and safety compliance.

8. HS System of Classification and Coding:

The Harmonized System (HS) is an internationally standardized system for classifying traded
products.
A. Structure of HS Code:
 6-digit Code: Universal across all countries.
 8/10-digit Code (HSN in India): For more detailed classification.
B. Purpose:
1. Customs Tariff: Determines applicable duties.
2. Trade Statistics: For monitoring import-export data.
3. Compliance: Ensures proper documentation.
Example: The HS code for Basmati rice is 1006.30, used globally for trade and customs purposes.

9. Application of EDI in Export Documentation:

Electronic Data Interchange (EDI) facilitates paperless trade through digital transmission of
documents.
A. Benefits of EDI:
1. Faster Processing: Reduces time taken for customs clearance.
2. Error Reduction: Minimizes manual entry errors.
3. Cost-Effective: Reduces paperwork and administrative costs.
4. Real-Time Tracking: Enables status tracking of export shipments.
B. EDI in India:
 ICEGATE (Indian Customs EDI Gateway): Handles electronic submission of shipping bills,
invoices, and other documents.
C. Example:
 An exporter of pharmaceuticals submits shipping documents electronically via ICEGATE,
reducing clearance time from days to hours.
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UNT-3
Export Finance: Pre and post shipment finance, Finance for exports on deferred payment terms,
Role of EXIM bank, Mode of payment in international trade, UCP 600, Export pricing, INCOTERMS
2000.
Export Finance
1. Pre and Post Shipment Finance:
Export finance provides the necessary working capital for exporters to manage the production and
shipment of goods.
A. Pre-Shipment Finance (Packing Credit):
 Definition: Financial assistance provided to exporters before the shipment of goods.
 Purpose: To purchase raw materials, process goods, packaging, and transportation.
 Features:
o Provided against confirmed export orders or letters of credit.
o Short-term credit, usually up to 180 days.
Example: An Indian garment exporter receives an export order from the USA. The bank provides a
packing credit loan to buy fabrics and cover production costs.
B. Post-Shipment Finance:
 Definition: Finance provided after the goods are shipped to cover the gap until payment is
received from the importer.
 Types:
1. Export Bills Purchased/Discounted: Banks buy export bills before maturity.
2. Export Bills Negotiated: For documents under a letter of credit.
3. Advances Against Export Receivables: For unpaid export invoices.
Example: After shipping electronics to Germany, an exporter presents the shipping documents to the
bank, which discounts the export bill, providing immediate funds.

2. Finance for Exports on Deferred Payment Terms:

Deferred payment exports involve credit sales where the importer pays after an agreed period.
A. Supplier's Credit:
 Exporter extends credit to the importer and receives finance from banks to cover the gap.
B. Buyer's Credit:
 The importer arranges finance from international banks to pay the exporter upfront,
repaying the bank later.
Example: An Indian machinery exporter sells equipment to Africa with payment terms spread over
five years. The exporter receives funds immediately through buyer’s credit arrangements.

3. Role of EXIM Bank (Export-Import Bank of India):

EXIM Bank promotes and finances India’s international trade.
A. Key Functions:
1. Export Credit: Provides direct finance to exporters.
2. Lines of Credit (LOC): Extends credit to foreign governments for purchasing Indian goods.
3. Overseas Investment Finance: Supports Indian companies investing abroad.
4. Advisory Services: Offers consultancy for export promotion.
Example: EXIM Bank provides a $20 million credit line to a foreign buyer purchasing Indian
engineering products.

4. Mode of Payment in International Trade:

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International trade payments involve several methods to mitigate risks.

A. Advance Payment:
 Importer pays before goods are shipped.
 Risk: Low for exporters, high for importers.
B. Open Account:
 Goods are shipped before payment is made.
 Risk: High for exporters.
C. Documentary Collection:
 Bank handles shipping documents, releasing them to the importer upon payment.
1. Documents Against Payment (D/P): Payment on document presentation.
2. Documents Against Acceptance (D/A): Payment after an agreed period.
D. Letter of Credit (LC):
 Bank guarantees payment if terms are met.
 Types:
o Irrevocable LC
o Confirmed LC
Example: A tea exporter from India uses an LC to ensure payment security from a European importer.

5. UCP 600 (Uniform Customs and Practice for Documentary Credits):

UCP 600 is a set of international rules governing letters of credit, published by the International
Chamber of Commerce (ICC).
A. Key Provisions:
1. Standardizes LC practices globally.
2. Defines responsibilities of banks and parties involved.
3. Clarifies documentary requirements.
B. Importance:
 Reduces disputes in international transactions.
Example: An Indian spice exporter relies on UCP 600 rules when negotiating an LC with a buyer in
France, ensuring clarity on document requirements.

6. Export Pricing:
Export pricing strategies consider production costs, competition, demand, and international
regulations.
A. Factors Affecting Export Pricing:
1. Cost-Based Pricing: Includes production, packaging, transportation, and duties.
2. Market-Based Pricing: Considers competitor prices and market conditions.
3. Strategic Pricing: Penetration pricing to enter new markets.
B. Example:
An Indian pharmaceutical company adjusts export prices for Africa based on local market conditions,
offering competitive rates.

7. INCOTERMS 2000 (International Commercial Terms):

INCOTERMS define responsibilities of buyers and sellers in international transactions, published by
the ICC.
A. Key Groups:
1. E-Term (Ex Works): Seller’s responsibility ends at their premises.
2. F-Terms (FOB, FCA): Seller delivers goods to a carrier.
3. C-Terms (CIF, CFR): Seller pays for transport and insurance.
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4. D-Terms (DAP, DDP): Seller delivers to the buyer’s location.

B. Example:
 FOB (Free on Board): An Indian textile exporter is responsible until goods are loaded on the
ship in Mumbai; the buyer takes over after that.

UNT-4
Export Promotion: Infrastructural facilities, EPC, RCMC, EPZ, SEZs, DEPB scheme, EPCG scheme,
Export oriented organizations: FIEO, APEDA, Role of DGFT, Categorization of export houses.

Export Promotion
1. Infrastructural Facilities:
Infrastructural facilities are essential for boosting export activities. These facilities support the
smooth flow of goods, reduce costs, and enhance competitiveness.
A. Key Infrastructural Facilities:
1. Ports and Shipping: Efficient ports, container terminals, and shipping lines for smooth
international logistics.
2. Transport Network: Roads, railways, and air cargo facilities for quick movement of goods.
3. Warehousing: Specialized storage facilities for perishable and non-perishable goods.
4. Communication Systems: Advanced IT networks for seamless global communication.
5. Logistics Parks and Industrial Corridors: Integrated facilities for export processing.
Example: Jawaharlal Nehru Port Trust (JNPT) in Mumbai is India’s largest container port, handling
significant export volumes.

2. Export Promotion Councils (EPC):

EPCs are government-supported organizations that promote and develop exports in specific sectors.
A. Functions of EPCs:
1. Market Research: Identifying global demand trends.
2. Trade Fairs: Organizing exhibitions and B2B meetings.
3. Policy Advocacy: Recommending export-friendly policies.
4. Training Programs: Educating exporters on global standards.
Example: Gems and Jewellery Export Promotion Council (GJEPC) promotes India’s gem and jewelry
exports worldwide.

3. Registration-cum-Membership Certificate (RCMC):

RCMC is mandatory for businesses to avail export-import benefits under the Foreign Trade Policy
(FTP).
A. Key Points:
1. Issuance: Provided by the relevant EPC based on the product category.
2. Validity: Generally valid for five years.
3. Benefits: Eligibility for government incentives, subsidies, and schemes.
Example: A textile exporter must register with the Textile EPC to obtain an RCMC for availing export
subsidies.

4. Export Processing Zones (EPZ):

EPZs are designated areas focused on promoting exports through specialized facilities and incentives.
A. Features of EPZs:
1. Duty-Free Imports: Raw materials can be imported without customs duties.
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2. Infrastructure: World-class industrial setups with logistics support.

3. Tax Incentives: Income tax exemptions for export-oriented units.
Example: Santa Cruz Electronics Export Processing Zone (SEEPZ) in Mumbai specializes in electronics
and jewelry exports.

5. Special Economic Zones (SEZs):

SEZs are geographically designated areas with economic laws different from the rest of the country
to attract foreign investments and boost exports.
A. Benefits of SEZs:
1. Tax Holidays: Income tax exemptions for several years.
2. Simplified Procedures: Easy licensing and regulatory frameworks.
3. Infrastructure: High-quality facilities for manufacturing and services.
Example: Noida SEZ supports IT, electronics, and software exports with world-class facilities.

6. Duty Entitlement Passbook (DEPB) Scheme:

The DEPB scheme provided exporters with duty credit based on the value of exports, helping
neutralize customs duties on imported inputs.
A. Key Features:
1. Duty Credit: Exporters received credits to offset import duties.
2. Transferability: DEPB credits could be sold to other importers.
3. Simplification: Encouraged competitive pricing for Indian exports.
Example: A leather goods exporter earned DEPB credits after shipping products to Europe, reducing
costs on future imports.
(Note: The DEPB scheme was discontinued in 2011 and replaced by newer schemes.)

7. Export Promotion Capital Goods (EPCG) Scheme:

The EPCG scheme allows exporters to import capital goods at reduced customs duties to enhance
production for exports.
A. Features:
1. Duty Concession: Import capital goods at 0% or reduced duty.
2. Export Obligation: Exporters must fulfill a specific export commitment.
3. Technology Upgrade: Encourages modernizing equipment for competitive exports.
Example: An automobile manufacturer imported advanced machinery under the EPCG scheme,
committing to increased exports over the next six years.

8. Export-Oriented Organizations:
A. Federation of Indian Export Organizations (FIEO):
 Role: Apex body representing Indian exporters.
 Functions:
1. Policy advocacy with government bodies.
2. Organizing trade delegations and exhibitions.
3. Providing training programs for exporters.
Example: FIEO organizes international trade fairs, connecting Indian exporters with global buyers.
B. Agricultural and Processed Food Products Export Development Authority (APEDA):
 Role: Promotes agricultural and processed food product exports.
 Functions:
1. Market development and infrastructure support.
2. Setting quality standards for exports.
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3. Providing financial assistance for export-related projects.

Example: APEDA helps mango exporters from India find markets in the Middle East and Europe.

9. Role of Directorate General of Foreign Trade (DGFT):

DGFT is the regulatory authority for foreign trade in India under the Ministry of Commerce.
A. Key Responsibilities:
1. Formulating Foreign Trade Policy (FTP): Provides export-import guidelines.
2. Issuing Licenses: For import/export of restricted items.
3. Incentive Schemes: Implements MEIS, SEIS, EPCG, etc.
4. Monitoring Compliance: Ensures adherence to trade policies.
Example: DGFT issues Importer Exporter Code (IEC), mandatory for conducting foreign trade
activities in India.

10. Categorization of Export Houses:

Export houses in India are categorized based on their annual export performance.
A. Categories:
1. Export House (EH): Basic recognition for consistent exporters.
2. Star Export House: For exporters with significant foreign exchange earnings.
3. Trading House: For larger export volumes.
4. Star Trading House: Higher recognition for export excellence.
5. Premier Trading House: Top-tier status for global exporters.
B. Benefits:
1. Priority in customs clearances.
2. Access to government incentives.
3. Easier access to credit and financing facilities.
Example: A company exporting software services worth millions annually can qualify as a Star Export
House, receiving faster clearances and benefits.

Conclusion:
Export promotion in India involves a comprehensive framework of infrastructural support, policy
initiatives, and specialized organizations. Schemes like EPCG, SEZs, and the roles of DGFT, EPCs, and
export-oriented bodies like FIEO and APEDA are vital in enhancing India’s global trade presence.
Through continuous reforms and support systems, India aims to strengthen its position in the
international market.

UNT-5
Overseas Trade Logistics: Mode of international transport, Air transport, Ocean transport and their
comparison, Indian shipping: Its growth and problems, Indian shipping policy, Technological
development in international transport, Containerization and its phases of development, Role of
ICDs, Advantages and disadvantages of containerization.
Overseas Trade Logistics
1. Mode of International Transport:
International transport is a crucial element of overseas trade logistics. It facilitates the movement of
goods across borders, connecting producers with consumers globally. The two primary modes are:
A. Air Transport:
 Definition: Air transport involves the shipment of goods via aircraft.
 Key Features:
1. Speed: Fastest mode for international shipping.
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2. Reliability: Scheduled flights ensure timely deliveries.

3. High-Value Goods: Ideal for electronics, pharmaceuticals, and perishable goods.
Example: A company exporting fresh flowers from India to Europe uses air transport to ensure the
products remain fresh.
B. Ocean Transport:
 Definition: Ocean transport refers to the shipment of goods via sea using cargo ships.
 Key Features:
1. Cost-Effective: Economical for large and bulky shipments.
2. Capacity: Suitable for heavy machinery, vehicles, and bulk commodities.
3. Slower Transit: Takes longer compared to air transport.
Example: Crude oil exports from the Middle East to India are primarily done through ocean transport
due to large volumes.

2. Comparison of Air and Ocean Transport:

Criteria Air Transport Ocean Transport
Speed Very fast Slower
Cost Expensive Cost-effective for bulk goods
Capacity Limited High cargo capacity
Ideal for Perishables, urgent goods Heavy, bulk commodities
Reliability High (less affected by weather) Moderate (can be affected by weather)
Environmental Impact Higher carbon emissions Lower emissions per unit shipped

3. Indian Shipping: Its Growth and Problems:

A. Growth of Indian Shipping:
 Post-Independence: India’s shipping industry saw rapid growth post-1947 with the
establishment of key ports.
 Expansion: Development of private ports, modern cargo handling, and increased foreign
trade.
 Key Players: Shipping Corporation of India (SCI) plays a significant role.
B. Problems Faced by Indian Shipping:
1. Aging Fleet: Many ships are outdated, leading to high maintenance costs.
2. High Operational Costs: Fuel prices, port charges, and crew wages add to expenses.
3. Regulatory Challenges: Complex compliance requirements and lack of uniformity in global
maritime laws.
4. Competition: Strong competition from foreign shipping lines.

4. Indian Shipping Policy:

India’s shipping policy aims to enhance maritime trade, promote shipbuilding, and improve port
infrastructure.
A. Key Objectives:
1. Fleet Modernization: Encouraging private investment in modern ships.
2. Port Development: Upgrading ports with advanced logistics.
3. Incentives: Tax benefits and subsidies for Indian shipping companies.
B. Notable Initiatives:
 Sagarmala Project: Focuses on port-led development, improving port connectivity, and
reducing logistics costs.
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5. Technological Development in International Transport:

Technological advancements have transformed international transport, enhancing efficiency, safety,
and tracking.
A. Key Developments:
1. GPS Tracking: Real-time tracking of cargo.
2. Automated Ports: Use of robotics and automation for faster cargo handling.
3. Digital Documentation: E-bills of lading and blockchain for secure transactions.
4. Eco-Friendly Ships: Development of fuel-efficient and low-emission vessels.
Example: Maersk’s use of blockchain technology ensures transparency in its global shipping network.

6. Containerization and Its Phases of Development:

A. Definition:
Containerization is the use of standardized containers for transporting goods, allowing seamless
movement across different transport modes.
B. Phases of Development:
1. Early Adoption (1950s-60s): Introduction of container shipping in the USA.
2. Global Expansion (1970s-80s): Widespread adoption in Europe and Asia.
3. Modernization (1990s-Present): Advanced container handling at mega ports, use of smart
containers with IoT.
Example: The Port of Singapore handles millions of TEUs (Twenty-foot Equivalent Units) annually,
showcasing advanced containerization.

7. Role of Inland Container Depots (ICDs):

A. Definition:
ICDs are dry ports located inland, away from seaports, facilitating customs clearance and handling of
containerized cargo.
B. Functions:
1. Customs Clearance: Reduces congestion at seaports.
2. Cargo Handling: Loading, unloading, and temporary storage of goods.
3. Efficient Transport: Connects hinterlands with major ports via rail/road networks.
Example: The Tughlakabad ICD in Delhi serves as a vital hub for exporters in northern India.

8. Advantages and Disadvantages of Containerization:

A. Advantages:
1. Standardization: Uniform container sizes simplify handling.
2. Efficiency: Faster loading/unloading, reducing port turnaround times.
3. Security: Reduces risks of theft and damage.
4. Cost-Effective: Lowers shipping costs through economies of scale.
5. Intermodal Transport: Easy transfer between ships, trucks, and trains.
B. Disadvantages:
1. High Initial Costs: Investment in specialized equipment and infrastructure.
2. Empty Container Repositioning: Costly to move empty containers back to origin ports.
3. Cargo Limitations: Not suitable for oversized or irregularly shaped goods.
4. Environmental Impact: Large vessels contribute to marine pollution.
Example: While containerization has boosted global trade, ports often face challenges managing the
surplus of empty containers, especially in regions with trade imbalances.
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UNT-6
Intermediaries and Ports in India: Freight forwarders (Forwarding and clearing agencies), Port and
overseas marketing logistics, Role of ports in India’s export efforts, Major ports and minor ports in
India, Problems and prospects, Traffic handling at major ports in India.
Intermediaries and Ports in India
1. Freight Forwarders (Forwarding and Clearing Agencies):
A. Definition:
Freight forwarders, also known as forwarding and clearing agencies, are intermediaries who assist
exporters and importers in transporting goods from the manufacturer to the market. They handle
logistics, documentation, and customs clearance.
B. Functions:
1. Transportation Arrangement: Selects the best routes and modes of transport.
2. Customs Clearance: Manages customs documentation, duties, and compliance.
3. Documentation: Prepares necessary export/import documents like Bills of Lading,
Commercial Invoices, etc.
4. Cargo Insurance: Arranges insurance to protect goods during transit.
5. Warehousing: Provides storage solutions before and after shipment.
6. Consolidation Services: Combines shipments from multiple exporters to reduce costs.
Example: A textile exporter in Mumbai uses a freight forwarder to handle transportation, customs
clearance, and delivery to a client in the USA.

2. Port and Overseas Marketing Logistics:

A. Definition:
Port and overseas marketing logistics refer to the management of goods movement from the origin
to the destination, including port handling, international shipping, and distribution in foreign
markets.
B. Key Components:
1. Port Operations: Loading, unloading, storage, and customs clearance at ports.
2. International Shipping: Choosing the right mode (sea, air) for cost-effective delivery.
3. Distribution Channels: Managing the supply chain in the destination country.
4. Inventory Management: Ensuring optimal stock levels for timely delivery.
Example: An electronics company exports goods from Chennai Port to Europe, using a combination
of sea freight and local distributors to reach retailers.

3. Role of Ports in India’s Export Efforts:

A. Economic Importance:
1. Trade Facilitation: Ports serve as gateways for 90% of India's foreign trade by volume.
2. Revenue Generation: Significant contributors to the economy through duties, taxes, and
fees.
3. Employment: Ports create jobs in logistics, warehousing, and related industries.
4. Infrastructure Development: Boosts regional development through improved connectivity.
B. Strategic Role:
 Connectivity: Enhances trade links with global markets.
 Efficiency: Reduces transit time and costs through modern facilities.
 Support for Exporters: Provides specialized services like cold storage for perishables.
Example: The Jawaharlal Nehru Port (Nhava Sheva) handles a large volume of India’s containerized
exports, significantly contributing to the country’s trade.
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4. Major Ports and Minor Ports in India:

A. Major Ports:
India has 13 major ports managed by the central government. They handle large volumes of cargo
and have modern infrastructure.
1. Jawaharlal Nehru Port (Maharashtra): Largest container port.
2. Kandla Port (Gujarat): Major port for crude oil and petroleum products.
3. Chennai Port (Tamil Nadu): Handles automobiles, containers, and general cargo.
4. Visakhapatnam Port (Andhra Pradesh): Bulk cargo, coal, and iron ore.
5. Kolkata Port (West Bengal): Oldest port, handles containers and bulk cargo.
B. Minor Ports:
Managed by state governments, minor ports handle smaller cargo volumes but play a vital role in
regional trade.
 Examples: Mundra (Gujarat), Ennore (Tamil Nadu), Hazira (Gujarat).

5. Problems and Prospects:

A. Problems Faced by Indian Ports:
1. Congestion: Overcrowding at major ports leads to delays.
2. Outdated Infrastructure: Inadequate equipment and handling facilities.
3. Inefficient Operations: Bureaucratic delays in customs and port procedures.
4. Environmental Issues: Pollution and ecological degradation due to port activities.
5. High Costs: Increased logistics costs due to inefficiencies.
B. Prospects for Improvement:
1. Port Modernization: Upgrading infrastructure under projects like Sagarmala.
2. Private Participation: Encouraging private investments for better efficiency.
3. Digitalization: Use of EDI and automation to streamline operations.
4. Expansion of Minor Ports: Reducing congestion at major ports.
5. Green Ports: Adoption of eco-friendly practices.
Example: The development of Mundra Port as a private port has transformed it into one of India’s
most efficient and technologically advanced ports.

6. Traffic Handling at Major Ports in India:

A. Definition:
Traffic handling refers to the volume of cargo managed by ports, including imports, exports, and
transshipment.
B. Major Cargo Types:
1. Bulk Cargo: Coal, iron ore, crude oil.
2. Container Cargo: Consumer goods, electronics.
3. Liquid Cargo: Petroleum, chemicals, LNG.
4. Breakbulk Cargo: Machinery, vehicles.
C. Key Statistics (Example):
 Jawaharlal Nehru Port: Handles over 5 million TEUs annually.
 Kandla Port: Manages over 100 million tonnes of cargo, primarily petroleum products.
 Chennai Port: Specializes in automobile exports, handling over 1 million cars annually.
D. Factors Affecting Traffic Handling:
1. Port Capacity: Infrastructure and equipment availability.
2. Global Trade Trends: Demand and supply fluctuations.
3. Government Policies: Tariffs, trade agreements, and port regulations.
4. Technological Advancements: Automation improves handling efficiency.
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Example: The introduction of automated cranes at JNPT has significantly improved its container
handling capacity, reducing turnaround time.