GOVERNMENT INFLUENCE ON TRADE

Government needs to act as a facilitator and create a positive environment that will enable and enhance TRADE and BUSINESS Internationally This is possible only if a Country or a Region having proper integrated co-operation works towards common goal and success For example when European Countries started facing crisis most of them came together to form EU OR when JAPAN was destroyed completely it could revive within no time to be one of the few strong economies with world class infrastructures during

SOME OF THE CAUSES THAT NEEDS TO BE EXAMINED

CORRUPTION SPEED MONEY BLACKMAILING QUALITY OF POLITICIANS QUALITY OF EMPLOYEES IN CENTRAL GOVERNMENT AND STATE GOVERNMENT MINISTRIES AND VARIOUS DEPARTMENTS MANIPULATIONS AND FRAUDS BY CAPITALISTS/BUSINESSMEN ALONGWITH GOVERNMENT EMPLOYEES AND POLITICIANS DEATH OF SMALL AND MEDIUM INDUSTRIES AFTER LPG PROCESS IN INDIA LACK OF RIGHT EDUCATION PROCESS IN RURAL AND URBAN AREAS CREATING NEGATIVE ENVIRONMENTS/IMPACTS RURAL AREAS EDUCATION STILL IN DANGER ROAD / SURFACE TRANSPORTATION IN INDIA GENERATES MAXIMUM CORRUPTION ENVIRONMENT SMUGGLING OF INDUSTRIAL AND NON-INDUSTRIAL GOODS

TAXES AND DUTIES

DIRECT TAXES INDIRECT TAXES CENTRAL GOVERNMENT STATE GOVERNMENT OCTROI BY MUNICIPAL CORPORATIONS ON EXPORTS AND EXPORT RELATED IMPORTS EXEMPTIONS AND INCENTIVES

DGFT IMPEX POLICIES AND PROCEDURES

IMPORTER - TRADER TRADER - EXPORTER IMPORTER TRADER EXPORTER IMPORTER - MANUFACTURER IMPORTER - MANUFACTURER EXPORTER MANUFACTURER EXPORTER 100 % EOUS OUTSIDE ANY ZONE 100 % EOUS INSIDE SEZS ( GOVERNMENT SEZS) 100 % EOUS INSIDE PRIVATELY OWNED SEZS 100 % EOUS INSIDE FTZS SUBSIDIES AND BENFITS STATE AND CENTRAL GOVERNMENT

INFRASTRUCTURES
ICDS CFS CONTAINER TRAINS SEA PORTS AIRPORTS NATIONAL HIGHWAYS STATE HIGHWAYS POWER SUPPLY WATER SUPPLY PROXIMITY SKILLED AND UNSKILLED LABOR AVAILABILITY OF PROFESSIONAL STAFF

ADVANCE LICENSING DEPB SCHEME

DEPB DUTY ENTITLEMENT PASS BOOK SCHEME HERE A NORMAL MANUFACTURER EXPORTER WILL BE ALLOWED TO IMPORT RAW-MATERIALS WHO IS ALSO INVOLVED IN DOMESTIC ACTIVITIES BUT WITH A CONFIRMED EXPORT ORDER/ CONTRACT THE MANUFACTURER NEEDS TO SUBMIT HIS EXPORTABLE DETAILS WITH INPUT NORMS SPECIFIED BY DGFT INPUT NORMS MEANS WHAT WILL BE THE RAW MATERIAL / S REQUIRED FROM OVERSEAS AND FROM WHICH COUNTRY AND HOW MUCH WILL BE UTILISED FOR PER UNIT OF END PRODUCT ALONG WITH WASTAGE NORMS BASED ON THIS PROCESS, DGFT WILL ISSUE ADVANCE LICENSE AND PASS BOOK DEBIT ENTRIES WILL BE MADE WHILE IMPORTING AND CREDIT ENTRIES WILL BE MADE DURING EXPORTS BY CUSTOMS WHICH WILL BE LATER AUDITED AND APPROVED BY DGFT

MOTIVATION LEVELS
EXCEPTING IN THE CASE OF CAPITAL MARKETSIN INDIA THIS HAS NO MUCH RELEVANCE TO GLOBAL / ECONOMIC FUNDAMENTALS AS WE HAVE BEEN OBSERVING AGRICULTURE SECTOR AND MANUFACTURING SECTORS HAVE BEEN PERFORMING BADLY SINCE MANY YEARS AND GOVERNMENT PRESENT OR PAST HAS NOT TAKEN ANY INTIATIVES TO LOOK INTO THE DETAILS THROUGH BUDGETS AND VARIOUS PLANS OF PLANNING COMMISSION MANY SCHEMES AND FUNDS ARE ALLOCATED SINCE INDEPENDENCE BUT GROUND REALITY TURNS OUT TO BE SOMETHING DIFFERENT SERVICE SECTOR HAS BEEN PERFORMING TO AN AVERAGE EXTENT BUT IN AN HIGHLY RISKY ENVIRONMENT

SINCE LAST 2 YEARS THERE HAS BEEN MAJOR CRISIS AND ORGANISATIONS LIKE INFOSYS, TCS, MANUFACTURERS, ETC FROM SERVICE SECTOR HAS FACED TREMENDOUS LOSSES DUE TO CURRENCY FLUCTUATIONS AND LOSS IN EXPORT EARNINGS DUE TO US $

GOVT. ALSO WENT TO THE EXTENT OF SPENDING MONEY FROM BOP/GDP BASKET TO BRING BACK THE US$ v/s RS. CONVERSION

OTHER INFLUENCES GOVT.

CRUDE OIL PRICES ESCALATING SINCE JUNE 2006 DROPPED BY FEW DOLLARS BUT AFFECTING VARIOUS ECONOMIES THROUGH ALL THE SECTORS MANAGING THE SUBSIDIES AND INCENTIVES COST AND PROFIT MOTIVES INTELLECTUAL PROPERTY RIGHTS PATENTS, TRADE MARKS, ETC. TILL 1989 IT WAS LICENSE RAJ SUPPORTING CAPITALISTS WHO COULD BUY POITICIANS AND GOVT. SINCE 1990 IT IS AGAIN CAPITALISTS AND MNCS/GLOBAL COS PLAYING THEIR ROLE SMALL INDUSTRIES AND SMES THROUGH WHOM TRADE COULD BE EXPANDED IS TOTALLY IGNORED THIS IS POSSIBLE BY CONSORTIUM FORMATION SUPPORTED BY INSTITUTIONS LIKE SIDBI AND EXIM BANK OR THROUGH VARIOUS METHODS

INTERNATIONAL TRADE THEORY

MICHAEL PORTER COMPETITIVE STRATEGY COMPETITIVE ADVANTAGE THE VALUE CHAIN CONCEPT Every activity performed by the firm creates some value, which reflects finally in the firms product offer and these activities are linked into a chain Porter calls it the firms Value Chain

UNIFIED CHAIN
The significance of Porters contribution lies in the fact that he views the whole business task as a unified chain meant to deliver value to the customer According to Porter : There is great need to look beyond the Product and Group the Function while defining a business, to go beyond the natural boundaries to potential international competition and to go beyond the ranks of ones competitors of today to those that may become competitors tomorrow And it is as a result of these urgings that the proper definition of a companys business has become an endlessly debated subject

PRODUCT EXTENSION STRATEGY

Same Product as marketed domestically is extended to the foreign market without any significant modification Possible when certain significant factors like consumer tastes, product use conditions, etc., are same in both Home and Foreign Markets There is no legal requirements necessitating product modification for the foreign market Bicycle Products from India, Forest Products from India, Ethnic Products for Indian Population in Overseas Countries, Vicco SF Tooth Paste, etc

Product Adaptation

1. 2. 3. 4. 5. 6. 7. 8. 9.

The product is properly modified to suit the environment of the foreign market Important factors which necessitates such product modifications for the foreign market vis--vis the domestic market are : Differences in consumer tastes-preferences, etc Conditions of use of the product Use facility characteristics Use or need satisfaction Cultural environment Natural environment, like geo-physical characteristics, weather/climatic conditions, etc. Regulatory environment Income levels and standard of living Competitive environment

THE FIVE FORCES IN AN INDUSTRY

SHAPING COMPETITION DETERMINING PROFITABILITY They are : 1. Bargaining power of suppliers 2. Bargaining power of buyers 3. Threat of new entrants 4. Threat of substitute products 5. Rivalry among existing firms 6. Industry competitors