International Trade

BBA – 6th Sem

Unit – 1
Entrepreneur Role of Export Promotion and Import Substitution:- Entrepreneurs are at the center of export
promotion and import substitution strategies, playing a critical role in driving economic growth, enhancing
competitiveness, and ensuring economic self-reliance. Through their innovative approaches and risk-taking abilities,
they not only open up new markets and opportunities but also build the technological and industrial capacity of the
economy. By balancing the focus on expanding exports and reducing dependency on imports, entrepreneurs
contribute to creating a diversified, resilient, and dynamic economic landscape. Policymakers must, therefore,
recognize and support the entrepreneurial spirit, providing the necessary infrastructure, incentives, and policy
frameworks to harness the full potential of entrepreneurs in promoting export-led growth and import substitution for
sustainable economic development.

Export Promotion: Entrepreneurs as Global Ambassadors:-

 Market Expansion and Diversification:- Entrepreneurs play a critical role in expanding market frontiers
beyond domestic boundaries. Through exports, they tap into new markets, thereby not only increasing sales
and profitability but also reducing the risk associated with relying on a single market. This diversification aids
in stabilizing revenue streams, especially in times of domestic economic downturns.
 Innovation and Competitiveness:- To compete on the global stage, entrepreneurs innovate and improve
their offerings, aligning with international standards and tastes. This drive for innovation elevates the overall
competitiveness of the economy, fostering a culture of continuous improvement and technological
advancement.
 Brand Country:- Successful entrepreneurs help in branding their country as a reliable source of quality
products and services. This positive image boosts the global perception of the country’s export portfolio,
opening doors for more entrepreneurs to enter international markets.
 Foreign Exchange Earnings:- By increasing exports, entrepreneurs contribute significantly to the country’s
foreign exchange earnings. These earnings are crucial for financing imports of essential goods, technology,
and capital equipment necessary for economic development.

Import Substitution: Building Self-Reliance and Technological Capacitance:-

 Reducing Dependency on Imports:- Entrepreneurs focusing on import substitution contribute to national

self-reliance by producing goods domestically that were previously imported. This not only saves valuable
foreign exchange but also reduces the economy’s vulnerability to international market fluctuations and trade
barriers.
 Industrialization and Job Creation:- Import substitution strategies often lead to industrialization, as
entrepreneurs set up manufacturing units to produce goods locally. This industrial growth creates numerous
job opportunities, contributing to poverty alleviation and socioeconomic development.
 Technology Transfer and Adaptation:- Entrepreneurs involved in import substitution often adapt foreign
technologies for local production. This process of technology transfer and adaptation can lead to innovation
and the development of indigenous technologies, further strengthening the economy’s productive capacity.
 Stimulating Local Industries:- Import substitution encourages the growth of local industries by providing
them with a larger market for their products. As domestic industries thrive, there is an increased demand for
locally sourced raw materials, which stimulates the growth of ancillary industries, creating a multiplier effect on
the economy.

Synergistic Impact of Export Promotion and Import Substitution:-

 Balanced Trade:- Entrepreneurs engaging in both export promotion and import substitution contribute to
achieving a balanced trade scenario. While exports bring in foreign currency, reducing imports ensures that
the currency is retained within the country. This balance is crucial for the overall health of the economy.
 Economic Diversification:- By fostering both export-oriented and import-substituting industries,
entrepreneurs help diversify the economic base of a country. This diversification reduces economic
vulnerability to specific sectors and promotes a resilient economic structure capable of withstanding global
shocks.
  Technological Leapfrogging:- The dual focus on export promotion and import substitution encourages
technological leapfrogging, where entrepreneurs skip over older technologies straight to newer ones,
enhancing productivity and competitive advantage.
 Enhancing Product Quality:- The need to meet international standards for export markets and substitute
imports with high-quality domestic products drives entrepreneurs to enhance product quality. This focus on
quality elevates the overall standard of goods and services in the economy.
 Policy Support and Economic Reform:- The success of export promotion and import substitution often
necessitates supportive policy frameworks. Entrepreneurs, through their associations and chambers of
commerce, can lobby for reforms and policies that facilitate their activities, leading to more conducive
business environments and economic reforms.

Projects and consultancy exports:- There has been a substantial transformation of India’s export structure in the
recent years. India has now emerged as a major exporter of capital equipment and other sophisticated items,
including projects and consultancy services. Projects exports are regarded as a key indicator of technological maturity
and industrial capabilities of a country. In fact, the future of India’s export trade depends on how far performance in
these sectors can be further improved.

Projects exports:-

1. Turnkey projects namely those which involve the rendering of services like design, civil construction, erection
and commissioning of plant or supervision thereof along with the supply of equipment.
2. Engineering services contracts, involving the supply of services alone, such as design erection commissioning
or supervision of erection and commissioning.
3. Consultancy services contracts, which may include the preparation of feasibility studies, project reports,
preparation of designs and advice to the project authority on specification for plant and equipment,
preparation of tender documents, evaluation of tenders and purchase of plant and equipment.
4. Civil construction contracts with or without preparation of designs or drawings for the civil work to be
undertaken.

The categories mentioned above are not to be treated as mutually exclusive. A project contract includes supply of
service or equipment, coming under more than one of the categories.

Project Export Profile:- During the last 26 years, India has achieved a moderate success in the export of capital
goods, projects and civil engineering jobs. On an average these categories account for about 40 per cent of India’s
total engineering exports.

The success achieved by Indian companies in the field of construction contracts is, however, much more spectacular.
The Middle Eastern countries because of their oil revenue emerged as very important markets for infrastructural
projects. Till the year 1981, the construction projects worth Rs 5,170 crores approximately were secured. About 80 per
cent of these contracts were secured by the Indian construction companies in Iraq and Libya. These contracts were
mainly for the constructions of (1) Townships, (2) Airports, (3) High Rise Buildings, (4) Water & Sewerage Treatment
plants, (5) Flyovers and (6) New Railway lines. The year 1981 which is considered to be the peak year provided
contracts worth Rs 1,594 crores to Indian construction companies. Since 1981 however a decline has set in
construction project exports. However, there has been a consistent increase in recent years.

Civil Construction Turnkey projects and consultancy won by Indian Firms:- In the year 1982 Civil Constructions
Project value was Rs 451 crores. In the years 2000-01 (Apr-Dec) Civil Construction Project value was Re 1,225 crores
and Turnkey Projects was 1,833 and Consultancy services was 4,241 crores.

The decline was basically due to two factors:-

1. The fall in oil prices has dramatically reduced the purchasing power of the Middle Eastern countries
2. Most of the basic infrastructural projects have since been completed. Demand is now shifting away from
construction to industrial projects.

The contracts secured in the recent years have been quite diverse in nature indicating the growing versatility and
technological capabilities of Indian project exporters. The West Asian region still continues to be the major market
accounting for half of the total project export contracts. The markets in South East Asia and sub-Saharan African
account for the remaining half.
Consultancy Exports:- Indian has just made an entry in the field of consultancy exports. Until recently, export of
consultancy services was dominated by the developed countries. India which reportedly has the third largest
engineering manpower is now in a position to enter this highly sophisticated and expanding segment of world trade.
Indian has over 200 consultancy and design organizations. Foreign exchange earned from consultancy exports stood
at Rs 1,369 crores during 1993-94 as against only Rs 1 crore in 1974-75. The major areas in which Indian consultancy
has achieved considerable success are technical management (O & M) of cement plants, agricultural research
services, setting up of molasses based distilleries, sugar projects, petrochemicals industries, design programming,
computer software cooling tower systems, fuel firing systems, architectural, structural, electrical and air-conditioning
engineering designs, transport and communication management, economic feasibility reports market surveys etc. The
major countries where exports of consultancy services were made are France, Japan, Norway, the UK, the USA
Russia, Holland, Switzerland, Sweden, Kuwait, Muscat, UAE, Saudi Arabia, Iraq, Algeria, Oman, Ethiopia, Cameroon,
Tanzania Singapore, Hong Kong, Sri Lanka, Korea, Indonesia, Pakistan, Malaysia and Laos.

Incentives Available:- The following incentives and facilities are available to Indian consultancy organizations:-

1. Consultancy services: exporters whose annual foreign exchange earnings by way of export of services are not
less than Rs 5 lakhs, are eligible for foreign exchange facilities for business development, purchase of tender
documents, payment of commission bid bonds etc.
2. In order to cover risks, ECGC has designed policies to cover specific transactions services exports.
3. Marketing Development Assistance is provided to consultancy organizations which are registered with FIEO
for undertaking market studies opening of foreign offices, publicity campaigns and feasibility studies.
4. Under Section 80-O of the Income Tax Act, consultancy organizations are entitled to a deduction of up 50 per
cent of the net foreign exchange earnings in computing total income.
5. EWIM bank has introduced a scheme under which deferred payment facilities are available from EXIM bank in
respect of consultancy jobs to be undertaken from India.
6. Facilities are also available for bid preparation as per the details given above projects exports.
7. 100 percent income tax exemption on export profits from computer software.
8. Setting up a “Consultancy Trust Fund” of US $ 0.5 million with the World Bank to be utilized for engaging
Indian consultants for World Bank financed projects.

RBI gas simplified the export procedures to promote project exports as follows:-

1. Limit for clearance of proposals by the authorized dealers as well as Exim Bank has been revised upward.
2. Need for obtaining Pre-Bid clearance from authorized dealers/ Exim Bank for overseas Projects has been
dispensed with.
3. Authorization to Authorized dealers/ Exim bank to clear the proposals involving bridge finance up to 25 per
cent of the contract value.
4. Allowing exporters to maintain a single foreign currency account for more than one contract being executed
abroad in the same country subject to conditions stipulated by authorized dealer/Exim Bank.
5. In case of third country purchases, it has now been decided that letters of credit may be established by any
authorized dealer on back-to-back basis, subject to same terms and conditions.
6. Authorized dealers/Exim Bank Working Group may now consider and approve project export proposals/serve
contracts abroad involving all types of guarantees required to be furnished in connection with execution of
projects/contracts abroad.

OCI in consultation with the industry has evolved a Medium Term Export promotion Strategy paper which provides
guidelines for future action. Apart from the above the OCI on its part is organizing meetings, conferences,
workshops with a view to provide platform of interaction of all constituents of this sector. Besides OCI is also
mounting trade delegations and organizing/participating in national and international exhibitions.

India’s Foreign Trade Policy: Origin, Meaning, importance:- 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 services.
Historical 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.

Table: Measures initiated in India to Influence Foreign Trade during 1949-1950 to 1979-1980
Source: Inputs from various issues of Economic Survey, Ministry of Finance, Government of India, New Delhi.

In the age of globalisation, India is new entrant to expand international trend. In 1991, the government initiated some
changes in its strategy on trade, foreign Investment, Tariffs and Taxes under the name of “New Economic Reforms”.
Indian government mainly concentrated on reforms on Liberalization, openness and export sponsorship activity. It is
witnessed that foreign Trade of India has considerably revolutionized export in the Post reforms period. Trade Volume
increased and the composition of exports has undergone several noteworthy changes. In Post – reform Period, the
major provider to export’s growth has been the manufacturing sector.

Though India has steadily opened up its wealth, its tariffs are high as compared with other countries, and its
conjecture norms are still restricted. Foreign trade in India in legal term is the Foreign Trade (Development and
Regulation) Act, 1992. The Act provide with the development and regulation of foreign trade by assisting imports into,
and supplementing exports from India. To fulfil the requirements of the Act, the government may make necessities for
assisting and controlling foreign trade, may forbid, confine and regulate exports and imports, in all or particular cases
as well as subject them to exclusion. Government is endorsed to devise and declare an export and import policy and
also amend the same from time to time, by notification in the Official Gazette, and is also authoritative to appoint a
‘Director General of Foreign Trade’ for the purpose of the Act, including formulation and accomplishment of the export-
import policy.

The 15X15 Matrix Strategies was introduced in 1995 and major aim of this policy was to recognize market
diversification and commodity diversification. When reviewed the success of this, it represented that the share of the
total top 15 product groups exported to the top 15 market destinations declined from 71% in 1996-97 to 66% in 2000-
01 in respect of the total export of these 15 product groups for all destinations taken together. It clearly showed the
market diversification for these product groups. The major items of India’s exports controlled in the Matrix continue to
remain the same during 2000 – 01 such as Gems and Jewellery, RMG Cotton including accessories and Cotton Yarn,
Fabrics and Made Ups. The top three destinations changed from US, UK and Japan to US, Hong Kong and UAE.
Another strategy was Focus LAC which was introduced in 1997 in order to enhance exports of chosen products such
as Textiles including RMG, Engineering goods and Chemical products to Latin American Region. The highest growth
rate of exports to this region was accomplished during period of 2000-01 when the value of exports was high of US$
982 million. Though the current trade between LAC and India is still low, there is possibility to increase two-way trade
between India and the LAC region. It is observed from the export strategies of previous time is that the composition,
competitiveness and complexion of world products trade are changing rapidly and there is a need to review the market
constantly for any medium term export strategy to achieve a higher share of global exports on a sustainable basis.
The main concentration of previous foreign trade strategies was on the existing export products of India.

Nonetheless, presently, the government has made policy on trade and investment policy that has established an
obvious change from protecting ‘producers’ to benefiting ‘consumers’. It is reflected in its foreign trade strategy of India
for 2004/09 which indicated that “for India to become a major player in world trade we have also to make possible
those imports which are required to stimulate our economy”. With numerous economic alterations, globalisation of the
Indian economy has been the foremost factor to formulate the trade policies. The announcement of a new Foreign
Trade Policy of India for a five year period of 2004-09, substituting until now taxonomy of EXIM Policy by Foreign
Trade Policy is major step in the development of foreign trade policy. This policy made the overall development of
India’s foreign trade and offers guidelines for the development of this sector. Main purpose of the Exim Policy is to
hasten the economy from low level of economic activities to high level of economic activities by making it a globally
oriented energetic economy and to derive maximum benefits from expanding global market opportunities, to
encourage continued economic growth by providing access to essential raw materials, intermediates, components,
consumables and capital goods required for augmenting production, to boost the techno local strength and efficiency
of Indian agriculture, industry and services, thereby, improving their competitiveness, to generate new employment
and opportunities and encourage the attainment of internationally accepted standards of quality. Finally, this policy
provides quality consumer products at reasonable prices. A vibrant export-led growth strategy of doubling India’s
share in global commodities trade with an attention on the sectors having prospects for export development and
potential for employment generation, represent the main factor of the policy. These activities augment India’s
international competitiveness and assist in increasing the suitability of Indian exports. The trade policy recognizes
major strategies, outlines export incentives, and also focus on issues relating to institutional support including
simplification of procedures relating to export activities. India is now violently pushing for a more moderate global trade
management, especially in services. It has understood a leadership role among developing nations in global trade
debates, and played a decisive part in the Doha negotiations. With economic reforms, globalisation of the Indian
economy has been the major factor in devising the foreign trade policy of India.
Source: Inputs from various issues of Economic Survey, Ministry of Finance, Government of India, New Delhi.

The objective of the Foreign Trade Policy is to twofold India percentage share of global merchandise trade and to act
as an effectual instrument of economic growth by giving a thrust to employment generation, especially in semi-urban
and rural areas. The growth performance of exports has been a result of watchful effort of the Government to lessen
transaction costs and assist trade. The guidelines of the Foreign Trade Policy (2004-09) for a five year period clearly
articulate objectives, strategies and policy initiatives that has been involved in putting exports on a higher growth line.

Reviewing data of exports by Principal Commodities for the period April – October 20016-17, the export growth was
largely driven by petroleum products, engineering. Export of other products like Agriculture and Allied Products, Ores
and Minerals, Leather and Leather Manufactures, Gems and Jewellery, Chemicals and related Products, Engineering
Goods and other commodities are shown below:

There are numerous challenges and issues in foreign trade. These include burden of export promotion schemes,
danger of circular trading, and risk of importing outdated machinery. Sometimes policy fails to take a holistic view of
trade issues. Other issue is relative importance of the home market, the nature or the degree of State intervention and
recessionary conditions in the global market. India’s exports have suffered due to structural constraints operating both
on the demand and supply side. On the demand side exports have continued to undergone the problems of adverse
world trading environment, protectionist sentiments in the developed countries in the guise of technical standards,
environmental and social concerns and tariff differentials in imports by the developed countries. At the supply end, the
factors that have constrained exports from India include infrastructure constraints, high transaction costs, inflexibilities
in labour laws, quality problems, constraints in attracting FDI in the export sector, etc
It is summarized that foreign trade has significant function in the fiscal development of any nation. India has made
strong foreign trade policies and reformed these from time to time with the process of globalisation and liberalization.
Since 1991, India’s foreign trade considerably transformed. India’s major exports include manufacturing and
engineering goods. India has good trading relations with all developed countries in the world. More than fifty percent of
India’s total export trade is with Asia and ASEAN region and about sixty percent of India’s total imports is with the
same countries. India’s wealth previously was agricultural economy. India’s major requirement use to be food grains
and other goods in import with fast industrialization, the composition of India’s imports goods changed and needed
chemicals, fertilizers and machinery which were required to meet the developmental requirements of country. In the
composition of export; country sells agricultural products such as tea, spices, and other raw materials. However, with
the industrialization of the financial system, compositions of exports changed. Currently, India exports products such
as machinery chemicals and marine products. This may enhance the fiscal condition of India.

Overview of various Export Promotion Schemes:-

1) EXPORT PROMOTION SCHEMES:- Foreign Trade Policy 2015-20 and other schemes provide promotional
measures to boost India’s exports with the objective to offset infrastructural inefficiencies and associated costs
involved to provide exporters a level playing field. Brief of these measures are as under:-
Exports from India Scheme:-
i) Merchandise Exports from India Scheme (MEIS):- Under this scheme, exports of notified goods/
products to notified markets as listed in Appendix 3B of Handbook of Procedures, are granted freely
transferable duty credit scrips on realized FOB value of exports in free foreign exchange at specified
rate. Such duty credit scrips can be used for payment of basic custom duties for import of inputs or
goods.
Exports of notified goods of FOB value upto Rs 5,00,000 per consignment, through courier or foreign
post office using e-commerce shall be entitled for MEIS benefit. List of eligible category under MEIS if
exported through using e-commerce platform is available in Appendix 3C.
ii) Service Exports from India Scheme (SEIS):- Service providers of notified services as per Appendix
3D are eligible for freely transferable duty credit scrip @ 5% of net foreign exchange earned.
2) DUTY EXEMPTION & REMISSION SCHEMES:- These schemes enable duty free import of inputs for export
production with export obligation. These scheme consists of:-
i) Advance Authorization Scheme:- Under this scheme, duty free import of inputs are allowed, that
are physically incorporated in the export product (after making normal allowance for wastage) with
minimum 15% value addition. Advance Authorization (AA) is issued for inputs in relation to resultant
products as per SION or on the basis of self declaration, as per procedures of FTP. AA normally have
a validity period of 12 months for the purpose of making imports and a period of 18 months for
fulfillment of Export Obligation (EO) from the date of issue. AA is issued either to a manufacturer
exporter or merchant exporter tied to a supporting manufacturer(s).
ii) Advance Authorization for annual requirement:- Exporters having past export performance (in at
least preceding two financial years) shall be entitled for Advance Authorization for Annual
requirement. This shall only be issued for items having SION.
iii) Duty Free Import Authorization (DFIA) Scheme:- DFIA is issued to allow duty free import of inputs,
with a minimum value addition requirement of 20%. DFIA shall be exempted only from the payment of
basic customs duty. DFIA shall be issued on post export basis for products for which SION has been
notified. Separate schemes exist for gems and jewellery sector for which FTP may be referred.
iv) Duty Drawback of Customs/Central Excise Duties/Service Tax:- The scheme is administered by
Department of Revenue. Under this scheme products made out of duty paid inputs are first exported
and thereafter refund of duty is claimed in two ways:-
 All Industry Rates : As per Schedule
 Brand Rate : As per application on the basis of data/documents
v) Interest Equalization Scheme (IES):- It provides interest equalization rate of 3% on Pre and Post
Shipment Rupee Credit tor all manufacturing exporters and Merchant exporters exporting identified
416 four digit tariff lines and 5% on all merchandise products manufactured and exported by MSMEs.
3) EPCG SCHEME:-
i) Zero duty EPCG scheme:- Under this scheme import of capital goods at zero custom duty is allowed
for producing quality goods and services to enhance India’s export competitiveness. Import under
EPCG shall be subject to export obligation equivalent to six times of duty saved in six years. Scheme
also allows indigenous sourcing of capital goods with 25% less export obligation.
 ii) Post Export EPCG Duty Credit Scrip Scheme:- A Post Export EPCG Duty Credit Scrip Scheme
shall be available for exporters who intend to import capital goods on full payment of applicable duty
in cash.
4) EOU/EHTP/STP & BTP SCHEMES:- Units undertaking to export their entire production of goods and services
may be set up under this scheme for import/ procurement domestically without payment of duties. For details
of the scheme and benefits available therein FTP may be required.
5) OTHER SCHEMES:-
i) Towns of Export Excellence (TEE):- Selected towns producing goods of Rs. 750 crores or more are
notified as TEE on potential for growth in exports and provide financial assistance under MAI Scheme
to recognized Associations.
ii) Market Access Initiative (MAI) Scheme:- Under the Scheme, financial assistance is provided for
export promotion activities on focus country, focus product basis to EPCs, Industry & Trade
Associations, etc. The activities are like market studies/surveys, setting up showroom/warehouse,
participation in international trade fairs, publicity campaigns, brand promotion, reimbursement of
registration charges for pharmaceuticals, testing charges for engineering products abroad, etc.
iii) Status Holder Scheme:- Upon achieving prescribed export performance, status recognition as one
star Export House, two Star Export House, three star export house, four star export house and five
star export house is accorded to the eligible applicants as per their export performance. Such Status
Holders are eligible for various non-fiscal privileges as prescribed in the Foreign Trade Policy.

In addition to the above schemes, facilities like 24X7 customs clearance, single window in customs, self assessment
of customs duty, prior filing facility of shipping bills etc. are available to facilitate exports.

Marketing plan for exports:- It’s essential to build a detailed export marketing plan, based on market research, for
each of your overseas markets. Huge differences between markets and countries prevent the use of a ‘one size fits
all’ approach.

Your export marketing plan should take into account your chosen approach to the market and your plans for logistics,
order fulfilment, customer service and supplier management.

Export marketing plan considerations:- Investigate your new market and how your product will fit into it. Consider
the following questions:-

 What’s your priority: Minimising potential costs or controlling the process?

 Do you have the market knowledge (and language skills) to make contacts and generate sales?
 Do you have the time and money to invest in setting up a local branch or subsidiary?
 Are there restrictions on the way you can enter the market? For example some countries may insist you form
a joint venture with a local business.
 What is appropriate for your product? If it requires specialist after-sales support, selling through an
intermediary may not be suitable.
 What are the usual distribution channels for products like yours in the target market?

Choose your target markets:- One of the key decisions you will make when exporting is choosing which markets to
target. Trying to export to several different countries can be very expensive. Unless you tailor what you offer to suit
each individual market, you may fail to offer what customers really want. Instead, it’s usually best to focus on selling to
one or two individual markets.

Visit your target markets:- Trade visits are organised visits to target markets. While they provide an excellent
opportunity to research overseas markets, you can also use them to generate business.

Invest NI offers a range of services to help businesses going on trade visits to generate advance publicity in their
target market. It also offers a range of other advice and financial support.

Research partners, logistics, and infrastructure:- The distribution channels available for selling will vary between
countries. There are several different ways to enter overseas markets.

Consider the following:-

 How will you be paid by your overseas customers?

 Will the exchange rate be prone to excessive fluctuation?
 What’s the communications infrastructure like?
  Does your target market have widespread access to telephones, faxes or the internet?
 Do you need UK freight forwarders experienced in your chosen market and product?

Communicate with customers abroad:- As part of your promotion, you may want to communicate directly with
customers in your export market. The choice you make will be defined by your budget and how effectively each
method will reach the customers in your chosen market. Read more about the basics of advertising.

Alternatively, you may choose to buy in a database of potential customers from a direct mail agency. You should
select the agency carefully to ensure you receive high-quality data. Read more about the basics of direct marketing.