INTERNATIONAL
BUSINESS OF INDIA
Presented By :
Charanleen Kaur
Roll No.5754
Batch 2009-11
WHAT IS INTERNATIONAL BUSINESS
International business means carrying on
business activities beyond national
boundaries.
These activities normally include



transaction of economic resources
international production
foreign investment especially, foreign direct
investment
NEED OF INTERNATIONAL BUSINESS
 To import the goods that are not
produced domestically
 To export the goods that are
produced over and above the
domestic requirements
 To encourage foreign direct
investment to build the resource gap
 Micro-economic level importance
INDIA AND GLOBAL TRADE
India had a significant share in the
world trade at the time of
independence. However, since then
there was a regular decline in India’s
share in the world exports till 1980.
From 1950 to 1980 the percentage
declined from 2 to 0.4. It, how ever
improved to about 0.8 by 1997. It
reached 0.83% in 2003 and rose to
1.45% in 2008.
The break-up of foreign trade in terms
of exports & imports (Rs.crores)
Year
1995-96
1996-97
1997-98
1998-99
2002-03
2003-04
2004-05
2005-06
Export
106353
85623
126286
101850
255137
291582
356625
456418
Import
122678
97111
151553
132447
297206
353976
481950
660408
BOT
-16325
-1488
-25267
-25267
-42067
-62394
-125190
-203990
Exports as a % 0f National Income
YEAR
IN %
1960-61
6.8
1970-71
3.8
1980-81
5.4
1990-91
7.2
1996-97
9.6
1997-98
8.4
1998-99
8.0
1999-00
8.5
2000-01
8.8
2001-02
8.7
2002-03
9.0
2007-08
17
EXPORT STRATEGY
 Imports will increase and to finance
them , we need higher exports
earning.
 It is not advisable to depend on
external assistance to finance
imports.
 Debt-servicing burden is ever
mounting, necessitating increased
export earning.
FOREIGN TRADE POLICY
(2004-09)
OBJECTIVES
(i) to double our percentage share of
global merchandize trade within 5
years
(ii) to use trade expansion as an
effective instrument of economic
growth and employment generation.
ACHIEVEMENTS OF FOREIGN
TRADE POLICY (2004-09)
Looking back, we can say with satisfaction that the UPA
Government has delivered on its promise.
In the last five years ;
 our exports witnessed robust growth to reach a level of
US$ 168 billion in 2008-09 from US$ 63 billion in 200304.
 Our share of global merchandise trade was 0.83% in
2003; it rose to 1.45% in 2008 as per WTO estimates.
 On the employment front, studies have suggested that
nearly 14 million jobs as a result of augmented exports
in the last five years.
Export By Region
( in Rs.Crores)
Share – 52%
Growth – 29%
400000
350000
300000
250000
200000
Apr-Feb 2008
Apr-Feb 2009
150000
100000
50000
0
Europe
Africa
America
Asia &
ASEAN
CIS &
Baltics
Other
Region
Import By Region
(In Rs.Crores)
Share – 61%
Growth – 36%
800000
700000
600000
500000
400000
Apr-Feb 2008
Apr-Feb 2009
300000
200000
100000
0
Europe
Africa
America
Asia &
ASEANH
CIS &
Baltics
Other
Region
Top Five Commodities of Export
Growth –
87%
120000
100000
80000
60000
Apr-Feb 2008
Apr-Feb 2009
40000
20000
0
Petroleum
Gems & Transport Machinery Drugs &
Jewellery Equipment
&
Chemicals
Instruments
Top Five Commodities of Import
Growth – 38%
400000
350000
Growth – 99%
300000
250000
200000
Apr-Feb 2008
Apr-Feb 2009
150000
100000
50000
0
Petroleum Electronic Machinery
Products
Goods
except
Electronic
Gold
Pearls
FTP (2009 – 2014)
The short term objective of current FTP
is :
 To arrest and reverse the declining trend of exports and
to provide additional support especially to those sectors
which have been hit badly by recession.
 The government is likely to set a policy objective of
achieving an annual export growth of 15% with an
annual export target of US$ 200 billion by March 2011.
 In the remaining three years of this FTP i.e. upto 2014,
the country should be able to come back on the high
export growth path of around 25% p.a.
 By 2014, the govt. expects to double India’s exports.
SPECIAL FOCUS INITIATIVES
With a view to continuously increasing
our percentage share of global trade
and expanding employment
opportunities , 13 special focus
initiatives have been identified.
Government of India shall make
concerted efforts to promote exports
in these sectors. These sectors are…
(1) Market Diversification
 In this policy, focus is on
diversification of Indian exports to
other markets, specially those located
in Latin America, Africa, parts of Asia
and Oceania. The initiatives taken
under this policy are..
 26 new countries have been included
under Focus Market Scheme.
(2) Technological Upgradation
Such initiatives include :
 EPCG Scheme at zero duty has been
introduced for certain engineering,
electronic products, plastics, handicrafts,
etc.
 To encourage value added manufacture
export, a minimum 15% value addition on
imported inputs has been stipulated.
 A number of products including
automobiles have been included for
incentives under Focus Product Scheme.
(3) Support To Status Holders
The Government recognized ‘Status
Holders’ contribute approx. 60% of
India’s goods exports. To incentivise
and encourage the status holders,
additional duty credit scrip @ 1 % of
the FOB of past export shall be
granted for specified product groups.
(4) Agriculture and Village Industry
 Vishesh Krishi and Gram Udyog
Yojana
 Import of inputs such as pesticides
are permitted for agro exports.
 New towns of export excellence with
a threshold limit of Rs 150 crore shall
be notified.
(5) Handlooms
 Specific funds are earmarked under
MAI / MDA Scheme for promoting
handloom exports.
 Duty free import of old pieces of
hand knotted carpets on for re-export
after repair is permitted.
 New towns of export excellence with
a threshold limit of Rs 150 crore shall
be notified.
(6) Handicrafts
 Specific funds are earmarked under
MAI / MDA Scheme for promoting
handicraft exports.
 New towns of export excellence with
a threshold limit of Rs 150 crore shall
be notified.
(7) Gems and Jewellery
 Import of gold of 8 k and above is allowed
subject to import being accompanied by an
Assay Certificate specifying purity, weight and
alloy content.
 Duty free import entitlement of commercial
samples shall be Rs. 300,000.
 Import of Diamonds for Certification/ Grading
& re-export by the authorized offices/agencies
of Gemological Institute of America (GIA) in
India or other approved agencies will be
permitted.
(8) Leather and Footwear
 Duty free import entitlement of
specified items is 3% of FOB value of
exports of leather garments during
preceding financial year.
 Re-export of unsuitable imported
materials such as raw hides & skins
and wet blue leathers is permitted.
(9) Marine Sector
 Imports for technological upgradation
under EPCG in fisheries sector
(except fishing trawlers, ships, boats
and other similar items) exempted
from maintaining average export
obligation.
(10) Electronics and IT Hardware
Manufacturing Industries
 Expeditious clearance of approvals
required from DGFT shall be ensured.
 Exporters /Associations would be
entitled to utilize MAI & MDA
Schemes for promoting Electronics
and IT Hardware Manufacturing
industry exports.
(11) Sports Goods and Toys
 Sports goods and toys shall be treated
as a Priority sector under MDA / MAI
Scheme.
 Applications relating to Sports Goods
and Toys shall be considered for fast
track clearance by DGFT.
(12) Green Products and
Technologies
 India aims to become a hub for production and
export of green products and technologies. To
achieve this objective, special initiative will be
taken to promote development and
manufacture of such products and technologies
for exports. To begin with, focus would be on
items relating to transportation, solar and wind
power generation and other products.
(13) Incentives for Exports from
the North Eastern Region
 In order to give a fillip to exports of
products from the north-eastern
States, notified products of this
region would be incentivized .
Conclusion
International Business plays a crucial role in
the economic development of a nation as it
leads to industrialization, employment and
reduction of scarcity of consumer goods.
Our share of world trade has significantly
increased over the years. At present,
International Business opportunity in India
exists in areas like IT, Telecom, R&D,
Infrastructure, Retailing, etc. Sectors like
health, education, housing, water
resources, SMEs are untapped and offer
huge scope.