Q 1. Discuss the objectives and motives of International Business. Ans.

INTERNATIONAL BUSINESS International business includes any types of business activities whether goods or services that crosses national boundaries. A number of definitions of International business can be found but no single universally accepted definition exists for the term international business. We shall discuss some of the definitions to understand the meaning of international business. Some people define international business as an organization that buys and/or sells goods and services across two or more countries. Some others consider it as big enterprises which have operating units outside their home country. Still others consider it as joint ventures with locally owned business or with foreign governments. International business has become massive in scale and has come to exercise a major influence over political economics and social forces because of many types of comparative business studies and knowledge of many aspects of foreign business operations. In fact, sometimes the foreign operations and comparatives business refers to domestic operation within a foreign country. Comparatives business, on the other hand, focuses on similarities and differences among country and business systems. MOTIVES OF INTERNATIONAL BUSINESS Businesses undertake international operations because of a number of benefits that arise from international business. Motives of international business are as follows:

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International business helps a firm in spreading the commercial risk across several countries. When demand of a product in one country is depressed, the production may be exported to other countries, cold weather, for instances may depress soft drink consumption in one country but all countries do not have winter at the same time. In fact, some countries are relatively warm throughout the year. Such markets provide outlets for production of soft drinks even in winter. International business help a firm in increasing their overall sales and profit. Many Firm in USA have done well because of their international sale. Many firm resort to international business with a motive to survive. Some firms may not have large market in home country. There may be intense competition in the home country. Under such a situation, the firm would look towards foreign markets. International business operation explore management to new ideas and different approaches to solving problems. This in turn will help individual executives to develop their general management skills and personal effectiveness. They become innovative and adopt broader horizons. All these factors can give a firm a competitive edge in the home country. Many firms conduct international business to harness the economics of scope. Economics of scope provide benefits like unit cost reductions resulting from undertaking range of activities using common services and inputs useful for each activity.

Q 2. What is Shipping Bill? Explain various types of Shipping Bills. Ans. SHIPPING BILL This is the most important document required by the customs authorities for allowing exports. It contains all the details of the goods shipped. The Clearing and Forwarding agents (also known as Customs House Agents), or the exporter himself / herself fills up the shipping bill. Shipping bill is used when the shipment is sent by Sea/Air and the Bill of Export is used when the shipment is sent by road. There are different types of Shipping Bills / Bills of Exports Used for particular shipments. The various types of these bills are as under: 1. Shipping Bill for Export of Goods under claim for Duty Drawback (Green Bill) 2. Shipping Bill for Duty Free Goods (White Bill) 3. Shipping Bill for Export Of Goods under Duty Entitlement Pass Book Scheme (Blue Bill) 4. Shipping Bill for Export of Duty Free Goods Ex-Bond (Pink Bill) 5. Shipping Bill for Export of Dutiable Goods (Yellow Bill) The Shipping Bill is prepared in quadruplicate. The formats and kinds of the Bill of Exports are the same as those of the Shipping Bill.

Q 3. Discuss the role of Clearing and Forwarding Agents in the successful execution of an export order. Ans. Role Of Clearing and Forwarding Agents

Introduction Clearing and Forward Agents are link between the owners of goods and owners of means of transport. They assist the owner of goods in efficient movement of goods in efficient movement of goods to the buyers. In the process they comply with a number of procedural and documentary requirements. Role of Clearing and Forwarding Agents The Clearing and Forwarding Agents is the specialized people who guide the exporters in selections of shipping line/airline. They assist exporters in ensuring smooth and timely shipment of goods. They provide a number of services which may be classified into essential services and desirable services. It is essential in export trade that the shipment of goods is sent to the buyer in time. In fact, timely delivery is one of the conditions of the export order. No exporter should relax on this aspect. He should ensure smooth and timely shipment of goods. The C&F Agent provides services to an exporter to ensure smooth & timely shipment of goods by air/sea. The C&F Agents provide various essential and desirable services. These are as follows: Essential Services i) Warehouse facilities before the goods are transported to docks/port. ii) Transportation of goods to docks and arrangement of warehousing at ports. iii) Booking of shipping space or air freighting and advice on relative cost of sending goods by sea and air. iv) Arrangement for shipment to be on board. v) Obtaining marine insurance policies. vi) Preparation and processing of shipping documents, bill of lading, dock receipt, export declarations, consular invoices, certification of origin etc.

Desirable Services i) Warehouse facilities abroad at least in major international markets, in case the importer refuses to take delivery of the good for any reason. He can trace the goods, if shipment goes astray, through his international connections. Arrangement for assessing damage to the shipment enroute.

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Q 4. What is the documentation required under import policy ? Ans. The document involved in import trade in India are discussed below : There are three types of Bill of Entries: White Bill of Entries or Home Consumption B/E. Yellow Bill of Entry or Warehouse B/E. Green Bill of Entry or Ex-bond B/E. B/E must be presented to the customs for noting in the Import Deptt. Of Customs House after the item-wise document called Import General Manifest (IGM) is filled by the steamer agent. The facility to file B/E prior to Import Manifest 30 days before the arrival of vessel is permitted Under Section 46(3) of Customs Act, but the custom department applies prior entry stamp on the B/E. Documents to be filed with B/E Invoice Packing List Insurance Policy Original Bill of Lading or Airway Bill (Delivery Order)

Copy of L/C or contract. Certificate of Origin. Product Details. Custom Copy of Import Authorization or Customs Clearacnce Permit in Original.

Q 5. What do you understand by SEZ? Discuss the facilities given to SEZ units. Ans. Special Economic Zones (SEZ) Special Economic Zones are duty free enclaves which are set up separately from the Domestic Tariff Area (DTA) for the purpose of production of goods at low cost, meant for exports, provided with facilities like infrastructure machinery, customs, expertise, etc. Goods and services coming from DTA to SEZ area are treated as exports and goods and services coming from SEZ area to DTA are considered imports. In view of the growing importance and great potentials for exports an Act, 2005 was enacted in India. The policy relating to Special Economic Zones is governed by SEZ Act, 2005 and the Rules framed there under. The special features of SEZ units are as under:i) ii) iii) SEZ units may import/procure from DTA units without payment of duty all types of inputs and capital goods. Gems and jewellery units of SEZ may source gold /silver/platinum through nominated agencies. SEZ units may also procure goods from bonded warehouse in the DTA and International Exhibition held in India, without payment of duty.

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SEZ units may procure without payment of duty and services from DTA units, for setting up, operation and maintenance of units in the SEZ. SEZ units may import/procure, from DTA, without payment of duty, all types of goods for creating a central facility for use by units in SEZ. SEZ units may also source capital goods from a domestic or foreign leasing company, without payment of duty.

Q 6. Write the names of principal export documents and explain any two of them. Ans. Principal Export Document 1. Commercial Invoice 2. Packing List 3. Certificate of Inspecting/Quality Control 4. Certificate Insurance 5. Bill of Lading/Combined Transport Document 6. Certificate of Origin Bill of Exchange 7. Shipment Advice Bill of Lading Bill of Lading indicates: a. Title of goods shipped b. Receipt for the goods shipped and an admission to their apparent condition and quality at the same time of shipment. c. An evidence of the contract of freightment. It is transferable by endorsement and delivery. Its possession is equivalent to the possession of goods Bill of lading is issued by the shipping company against Mates Receipt. It is issued in sets of negotiable and non-negotiable copies.

 Bill of Exchange It is an unconditional written order requesting the buyer (drawee) to pay a specified sum of money to a specified person at a specified time. One who prepares this order is called drawer (seller). Bill of exchange is also known as draft in international trade. This draft could be Sight Draft or Usance Draft. The Buyer (drawee) has to pay for the amount of the draft at the same time of its presentation in the case of fight draft. It is used for D/P as a mode of payment. If the exporter allows credit period to the importer to make payment, then the draft used is known as Usance draft. This draft is to be accepted by the buyer (importer) before shipping document are given to him. It is used for D/A as a mode of payment. It is important to note that the bill of exchange should be drawn to the order of the Exporters Bank i.e. the bank which would negotiate the document/collect the proceeds.