Regulations Of International Trade Traditionally trade was regulated through bilateral treaties between two nations.

For centuries under the belief in mercantilism most nations had high tariffs and many restrictions on international trade. controversial multilateral treaties like the General Agreement on Tariffs and Trade (GATT) and World Trade Organization have attempted to promote free trade while creating a globally regulated trade structure. These trade agreements have often resulted in discontent and protest with claims of unfair trade that is not beneficial to developing countries. Free trade is usually most strongly supported by the most economically powerful nations, though they often engage in selective protectionism for those industries which are strategically important such as the protective tariffs applied to agriculture. General Agreement on Tariffs and Trade (GATT) The General Agreement on Tariffs and Trade (typically abbreviated GATT) was negotiated during the UN Conference on Trade and Employment and was the outcome of the failure of negotiating governments to create the International Trade Organization (ITO). GATT was signed in 1947 and lasted until 1993, when it was replaced by the World Trade Organization in 1995. The original GATT text (GATT 1947) is still in effect under the WTO framework, subject to the modifications of GATT 1994. As trade has become more and more important to nations' economic wellbeing, countries have attempted to manage it to achieve greater wealth and stability. International organizations have been formed to facilitate cooperation on trade issues. The General Agreement on Tariffs and Trade (GATT) is essentially a treaty among many different nations to help manage global trade. Over 80 percent of world trade occurs between GATT signatories. The basic principles of the treaty are that: national origin of an import should not be a factor in considering trade barriers; tariffs and not quotas should be used to protect domestic industries; countries should consult on trade matters; and GATT meetings should provide a forum to discuss trade issues and a legal instrument to codify agreements. Representatives from the countries that have signed the treaty meet periodically at what are called "rounds" of GATT talks, to negotiate trade agreements and settle disputes. Since World War II, the GATT has played a major role in the reduction of obstacles to international trade.

GATT held a total of 8 rounds,

GATT and WTO trade rounds Name Start Duratio Countr n ies 23 Subjects covered Tariffs Achievements Signing of GATT, 45,000 tariff concessions affecting $10 billion of trade Countries exchanged some 5,000 tariff concessions Countries exchanged some 8,700 tariff concessions, cutting the 1948 tariff levels by 25% $2.5 billion in tariff reductions Tariff concessions worth $4.9 billion of world trade Tariff concessions worth $40 billion of world trade

Genev 7 April 1947 a months Annec 5 April 1949 y months Torqu September 8 ay 1950 months Genev a II Dillon Kenne dy January 1956 5 months

13

Tariffs

38

Tariffs Tariffs, admission of Japan Tariffs Tariffs, Antidumping

26 26 62

September 11 1960 months May 1964 37 months

September 74 Tokyo 1973 months

102

Tariffs, nonTariff reductions worth tariff measures, more than $300 billion "framework" dollars achieved agreements The round led to the creation of WTO, and Tariffs, nonextended the range of tariff measures, trade negotiations, rules, services, leading to major intellectual reductions in tariffs property, (about 40%) and dispute agricultural subsidies, an settlement, agreement to allow full textiles, access for textiles and agriculture, clothing from developing creation of countries, and an WTO, etc extension of intellectual property rights.

Urugu September 87 ay 1986 months

123

Doha

November 2001

141

Tariffs, nontariff measures, agriculture, labor standards, The round is not yet environment, concluded. competition, investment, transparency, patents etc

TRIPS Agreement The TRIPS Agreement, which came into effect on 1 January 1995, is to date the most comprehensive multilateral agreement on intellectual property.The areas of intellectual property that it covers are: copyright and related rights (i.e. the rights of performers, producers of sound recordings and broadcasting organizations); trademarks including service marks; geographical including appellations of origin; industrial designs;patents including the protection of new varieties of plants; the layout-designs of integrated circuits; and undisclosed information including trade secrets and test data. The three main features of the Agreement are: Standards. In respect of each of the main areas of intellectual property covered by the TRIPS Agreement, the Agreement sets out the minimum standards of protection to be provided by each Member. Each of the main elements of protection is defined, namely the subject-matter to be protected, the rights to be conferred and permissible exceptions to those rights, and the minimum duration of protection. Enforcement. The second main set of provisions deals with domestic procedures and remedies for the enforcement of intellectual property rights. The Agreement lays down certain general principles applicable to all IPR enforcement procedures. In addition, it contains provisions on civil and administrative procedures and remedies, provisional measures, special requirements related to border measures and criminal procedures, which specify, in a certain amount of detail, the procedures and remedies that must be available so that right holders can effectively enforce their rights. Dispute settlement. The Agreement makes disputes between WTO Members about the respect of the TRIPS obligations subject to the WTO's dispute settlement procedures.

World Trade Organization - WTO

The World Trade Organization (WTO) deals with the global rules of trade between nations. Its main function is to ensure that trade flows as smoothly, predictably and freely as possible. The WTO was born out of negotiations, and everything the WTO does is the result of negotiations. The bulk of the WTOs current work comes from the 198694 negotiations called the Uruguay Round and earlier negotiations under the General Agreement on Tariffs and Trade (GATT). The WTO is currently the host to new negotiations, under the Doha Development Agenda launched in 2001. Where countries have faced trade barriers and wanted them lowered, the negotiations have helped to open markets for trade. But the WTO is not just about opening markets, and in some circumstances its rules support maintaining trade barriers for example, to protect consumers or prevent the spread of disease. Functions of WTO Trade negotiations The WTO agreements cover goods, services and intellectual property. They spell out the principles of liberalization, and the permitted exceptions. They include individual countries commitments to lower customs tariffs and other trade barriers, and to open and keep open services markets. They set procedures for settling disputes. These agreements are not static; they are renegotiated from time to time and new agreements can be added to the package. Many are now being negotiated under the Doha Development Agenda, launched by WTO trade ministers in Doha, Qatar, in November 2001. Implementation and monitoring WTO agreements require governments to make their trade policies transparent by notifying the WTO about laws in force and measures adopted. Various WTO councils and committees seek to ensure that these requirements are being followed and that WTO agreements are being properly implemented. All WTO members must undergo periodic scrutiny of their trade policies and practices, each review containing reports by the country concerned and the WTO Secretariat. Dispute settlement The WTOs procedure for resolving trade quarrels under the Dispute Settlement Understanding is vital for enforcing the rules and therefore for ensuring that trade flows smoothly. Countries bring disputes to the WTO if they think their rights under the agreements are being infringed. Judgements by specially appointed independent experts are based on interpretations of the agreements and individual countries commitments. Building trade capacity WTO agreements contain special provision for developing countries, including longer time periods to implement agreements and commitments, measures to increase their trading opportunities, and support to help them

build their trade capacity, to handle disputes and to implement technical standards. The WTO organizes hundreds of technical cooperation missions to developing countries annually. It also holds numerous courses each year in Geneva for government officials. Aid for Trade aims to help developing countries develop the skills and infrastructure needed to expand their trade. Outreach The WTO maintains regular dialogue with non-governmental organizations, parliamentarians, other international organizations, the media and the general public on various aspects of the WTO and the ongoing Doha negotiations, with the aim of enhancing cooperation and increasing awareness of WTO activities.

NEED OF WTO The WTO agreements are lengthy and complex because they are legal texts covering a wide range of activities. But a number of simple, fundamental principles run throughout all of these documents. These principles are the foundation of the multilateral trading system. Non-discrimination A country should not discriminate between its trading partners and it should not discriminate between its own and foreign products, services or nationals. More open Lowering trade barriers is one of the most obvious ways of encouraging trade; these barriers include customs duties (or tariffs) and measures such as import bans or quotas that restrict quantities selectively. Predictable and transparent Foreign companies, investors and governments should be confident that trade barriers should not be raised arbitrarily. With stability and predictability, investment is encouraged, jobs are created and consumers can fully enjoy the benefits of competition choice and lower prices. More competitive Discouraging unfair practices, such as export subsidies and dumping products at below cost to gain market share; the issues are complex, and the rules try to establish what is fair or unfair, and how governments can respond, in particular by charging additional import duties calculated to compensate for damage caused by unfair trade. More beneficial for less developed countries Giving them more time to adjust, greater flexibility and special privileges; over three-quarters of WTO members are developing countries and countries in transition to market economies. The WTO agreements give them transition periods to adjust to the more unfamiliar and, perhaps, difficult WTO provisions. Protect the environment

The WTOs agreements permit members to take measures to protect not only the environment but also public health, animal health and plant health. However, these measures must be applied in the same way to both national and foreign businesses. In other words, members must not use environmental protection measures as a means of disguising protectionist policies. Liberalization The economic liberalisation in India refers to ongoing economic reforms in India that started on 24 July 1991. After Independence in 1947, India adhered to socialist policies. In the 1980s, Prime Minister Rajiv Gandhi initiated some reforms. In 1991, after India faced balance crisis, it had to sell 67 tons of gold to Union Bank of Switzerland and Bank of England as part of a bailout deal with the International Monetary Fund (IMF). In addition, IMF required India to undertake a series of structural economic reforms. As a result of this requirement, the government of P. V. Narasimha Rao and his finance minister Manmohan Singh (the present Prime Minister of India) started breakthrough reforms, although they did not implement many of the reforms IMF wanted. The new neo-liberal policies included opening for international trade and investment, deregulation, initiation of privatization, tax reforms, and inflation-controlling measures. The overall direction of liberalisation has since remained the same, irrespective of the ruling party, although no party has yet tried to take on powerful lobbies such as the trade unions and farmers, or contentious issues such as reforming labour laws and reducing agricultural subsidies. The main objective of the government was to transform the economic system from socialism to capitalism so as to achieve high economic growth and industrialize the nation for the well-being of Indian citizens. Today India is mainly characterized as a market economy. As of 2009, about 300 million peopleequivalent to the entire population of the United Stateshave escaped extreme poverty. The fruits of liberalisation reached their peak in 2007, when India recorded its highest GDP growth rate of 9%. With this, India became the second fastest growing major economy in the world, next only to China. An Organisation for Economic Co-operation and Development (OECD) report states that the average growth rate 7.5% will double the average income in a decade, and more reforms would speed up the pace. Indian government coalitions have been advised to continue liberalisation. India grows at slower pace than China, which has been liberalising its economy since 1978.McKinsey states that removing main obstacles "would free Indias economy to grow as fast as Chinas, at 10 percent a year". For 2010, India was ranked 124th among 179 countries in Index of Economic Freedom World Rankings, which is an improvement from the preceding year.

The assassination of Prime Minister Indira Gandhi in 1984, and later of her son Rajiv Gandhi in 1991, crushed international investor confidence on the economy that was eventually pushed to the brink by the early 1990s. As of 1991, India still had a fixed exchange rate system, where the rupee was pegged to the value of a basket of currencies of major trading partners. India started having balance of payments problems since 1985, and by the end of 1990, it was in a serious economic crisis. The government was close to default, its central bank had refused new credit and foreign exchange reserveshad reduced to the point that India could barely finance three weeks worth of imports. Most of the economic reforms were forced upon India as a part of the IMF bailout. A Balance of Payments crisis in 1991 pushed the country to near bankruptcy. In return for an IMF bailout, gold was transferred to London as collateral, the rupee devalued and economic reforms were forced upon India. That low point was the catalyst required to transform the economy through badly needed reforms to unshackle the economy. Controls started to be dismantled, tariffs, duties and taxes progressively lowered, state monopolies broken, the economy was opened to trade and investment, private sector enterprise and competition were encouraged and globalisation was slowly embraced. The reforms process continues today and is accepted by all political parties, but the speed is often held hostage by coalition politics and vested interests. Annual growth in GDP per capita has accelerated from just 1 per cent in the three decades after Independence to 7 per cent currently, a rate of growth that will double average income in a decade. [...] In service sectors where government regulation has been eased significantly or is less burdensomesuch as communications, insurance, asset management and information technologyoutput has grown rapidly, with exports of information technology enabled services particularly strong. In those infrastructure sectors which have been opened to competition, such as telecoms and civil aviation, the private sector has proven to be extremely effective and growth has been phenomenal. Globalization and Liberalization Globalization and liberation are directly linked with each other. The first wake of globalization started in India when the economic liberalization policies were undertaken in the 1990s by Dr Manmohan Singh, the then Finance Minister of the country. Since then, the economy of India has improved to a great extent and has significantly led to the rise in the standard of living of the citizens. Pre liberalization period and globalization

From independence till the later part of the 1980s, India economic approach was mainly based on government control and a centrally operated market. The country did not have a proper consumer oriented market and foreign investments were also not coming in. This did not do anything good to the economic condition of the country and as such the standard of living did not go up. In the 1980s, stress has given on globalization and liberalization of the market by the Congress government under Rajiv Gandhi. In his government tenure, plenty of restrictions were abolished on a number of sectors and the regulations on pricing were also put off. Effort was also put to increase the condition of the GDP of the country and to increase exports. Even if the economic liberalization policies were undertaken, it did not find much support and the country remained in its backward economic state. The imports started exceeding the exports and the India suffered huge balance of payment problems. The IMF asked the country for the bailout loan. The fall of the Soviet Union, a main overseas business market of India, also aggravated the problem. The country at this stage was in need of an immediate economic reform. Liberalization in the 1990s It was in the 1990s that the first initiation towards globalization and economic liberalization was undertaken by Dr Manmohan Singh, who was the Finance Minister of India under the Congress government headed by P.V. Narasimha Rao. This is perhaps the milestone in the economic growth if India and it aimed towards welcoming globalization. Since, the liberalization plan, the economic condition gradually started improving and today India is one of the fastest growing economies in the world with an average yearly growth rate of around 6-7%.

Impact of globalization and liberalization Globalization and liberalization has greatly influenced the Indian economy and made it a huge consumer market. Today, most of the economic changes in the country are based on the demand supply cycle and other economic factors. Today, India is the worlds 12th largest economy in terms of market exchange rate and 4th largest in terms of the Purchasing Power Parity. According to a report by the World Bank, the Indian market is expected to grow at around 8% in the year 2010. Globalization and liberalization has also made a positive impact on various important economic segments. Today, the service sectors, industrial sectors and the agriculture sector have really grown to a great extent. Around 54%

of the annual Gross Domestic Product (GDP) of India comes from the service industry while the industrial and agriculture sector contributes around 29% and 17% respectively. With the improvement of the market, more and more new sectors are coming up and reaping profits such as IT services, chemical, textiles, cement industry and so on. With the increase in the supply level, the rate of employment is also increasing considerably. There has been an improvement in the manufacturing sector as well which grew from 8.98% in 2005 to around 12%. The communication segment has grown up to around 16.64%. The condition is expected to improve further with more demand and increase in customer base. The yearly growth of the industrial sector has been around 6.8 % which will rise more in the future. India is one of the well known industrial markets in the Asia-Pacific region. Globalization and foreign investment One of the main aspects of globalization is foreign investment. India today has emerged as one of the perfect markets for foreign investors due to its vast market base. More and more foreign companies are investing in the Indian market to get more returns. The foreign institutional investments (FII) amounts to around US$ 10 billion in FY 2008-09, while the rate of Foreign direct investments (FDI) has grown around 85.1% in 2009 to US$ 46.5 billion from US$ 25.1 billion (2008). World Bank The World Bank is an international financial institution that provides loans to developing countries for capital programmes. The World Bank's official goal is the reduction of poverty. By law, all of its decisions must be guided by a commitment to promote foreign investment, international trade and facilitate capital investment. The World Bank differs from the World Bank Group, in that the World Bank comprises only two institutions: the International Bank for Reconstruction and Development (IBRD) and the International Development Association (IDA), whereas the latter incorporates these two in addition to three more: International Finance Corporation (IFC), Multilateral Investment Guarantee Agency (MIGA), and International Centre for Settlement of Investment Disputes (ICSID). Poverty reduction strategies For the poorest developing countries in the world, the bank's assistance plans are based on poverty reduction strategies; by combining a crosssection of local groups with an extensive analysis of the country's financial

and economic situation the World Bank develops a strategy pertaining uniquely to the country in question. The government then identifies the country's priorities and targets for the reduction of poverty, and the World Bank aligns its aid efforts correspondingly. Forty-five countries pledged US$25.1 billion in "aid for the world's poorest countries", aid that goes to the World Bank International Development Association (IDA) which distributes the loans to eighty poorer countries. While wealthier nations sometimes fund their own aid projects, including those for diseases, and although IDA is the recipient of criticism, Robert B. Zoellick, the president of the World Bank, said when the loans were announced on December 15, 2007, that IDA money "is the core funding that the poorest developing countries rely on" Clean Technology Fund management The World Bank has been assigned temporary management responsibility of the Clean Technology Fund (CTF), focused on making renewable energy costcompetitive with coal-fired power as quickly as possible, but this may not continue after UN's Copenhagen climate change conference in December, 2009, because of the Bank's continued investment in coal-fired power plants Clean Air Initiative Clean Air Initiative (CAI) is a World Bank initiative to advance innovative ways to improve air quality in cities through partnerships in selected regions of the world by sharing knowledge and experiences. It includes electric vehicles. United Nations Development Business Based on an agreement between the United Nations and the World Bank in 1981, Development Business became the official source for World Bank Procurement Notices, Contract Awards, and Project Approvals. In 1998, the agreement was re-negotiated, and included in this agreement was a joint venture to create an electronic version of the publication via the World Wide Web. Today, Development Business is the primary publication for all major multilateral development banks, United Nations agencies, and several national governments, many of whom have made the publication of their tenders and contracts in Development Business a mandatory requirement. Currently, the subscription to "online version only" is not free, but costs US$ 550. The World Bank or the World Bank Group is also a sitting observer in the United Nations Development Group

International monetary fund The International Monetary Fund (IMF) is an organization of 187 countries, working to foster global monetary cooperation, secure financial stability, facilitate international trade, promote high employment and sustainable economic growth, and reduce poverty around the world. An international organization created for the purpose of: 1. Promoting global monetary and exchange stability. 2. Facilitating the expansion and balanced growth of international trade. 3. Assisting in the establishment of a multilateral system of payments for current transactions. The IMF plays three major roles in the global monetary system. The Fund surveys and monitors economic and financial developments, lends funds to countries with balance-of-payment difficulties, and provides technical assistance and training for countries requesting it Functions The IMF pursues the various facets of its mandate in a number of ways. These are summarized below, and described more detail in later chapters. Surveillance over Members Economic Policies In becoming members of the IMF, countries agree to pursue economic policies that are consistent with the objectives of the IMF. The Articles of Agreement confer on the IMF the legal authority to oversee compliance by members with this obligation, making the IMF the only organization that has a mandate to examine on a regular basis the economic circumstances of virtually every country in the world. The appraisal of a countrys economic and structural policies and performance from an international standpoint. It is a regulatory or jurisdictional function, which historically has been focused on the assessment of the exchange arrangements, the exchange rates and balance of payments. Financing Temporary Balance of Payments Needs

The Articles of Agreement enable the IMF to lend to member countries that have a balance of payments need to provide temporary respite and enable countries to put in place orderly corrective measures and avoid a disorderly adjustment of the external imbalance. Such lending is usually undertaken in the context of an economic adjustment program implemented by the borrowing country to correct the balance of payments difficulties, which also safeguards IMF resources. In addition to providing direct financing to its member countries, the IMF plays an important catalytic role in helping member countries to mobilize external financing for their balance of payments needs. Combating Poverty in Low-Income Countries The IMF provides concessional loans to low-income member countries to help support these countries efforts to eradicate poverty. In this venture, the IMF works closely with the World Bank and other development partners. In this area the IMF also plays a critical catalytic role to mobilize external financing and donor support for the countries balance of payments and development needs. The IMF also participates in two international initiatives to provide debt relief: the Heavily Indebted Poor Countries (HIPC) Initiative and the Multilateral Debt Relief Initiative (MDRI).

Mobilizing External Financing IMF endorsement of a countrys policies serves as an important catalyst for mobilizing resources from bilateral and multilateral lenders and donors. They rely on an IMF endorsement of a countrys economic policies or might even require a formal IMFsupported economic program before committing or disbursing their own resources to that country or granting debt relief. IMF policy assessments and recommendations also provide important signals to investors and financial markets regarding a countrys economic future, and impact on investor and market confidence in the economy. Strengthening the International Monetary System The IMF is the central institution in the international monetary system. It serves as a forum for consultation and collaboration by members on international monetary and financial matters, and works with other multilateral institutions to devise international rules that would facilitate the prevention

and orderly resolution of international economic problems. Increasing the Global Supply of International Reserves The IMF is authorized to issue an international reserve asset called the Special Drawing Right (SDR) if there is a global need to supplement existing reserve assets. These allocated SDRs are part of the net international reserves of members and can be exchanged for convertible currencies. They are not a claim on the IMF. The SDR is also the IMFs unit of account for all financial transactions with members. Building Capacity through Technical Assistance and Training Technical assistance and training are provided in the core areas of IMF expertise to help member countries design economic policies and improve economic management capabilities, which in turn can help reduce the risk of policy failures and the countries resilience to shocks, and facilitating program design and implementation. These activities are particularly important in developing countries, where resources are scarce and institutions often weak. Dissemination of Information and Research The IMF is a premier source for economic analysis of its member countries economic policies and statistical information. Information is disseminated through its numerous economic reports and research studies on member countries, as well as specialized statistical publications. The IMF also conducts research in areas relevant to its mandate and operations, mainly to improve its economic analysis and its advice to member countries. The results of this research are disseminated through books, IMF and academic journals and working papers, occasional papers, and the internet. Special Drawing Rights (SDRs) Special Drawing Rights (SDRs) are supplementary foreign exchange reserve assets defined and maintained by the International Monetary Fund (IMF). Not a currency, SDRs instead represent a claim to currency held by IMF member countries for which they may be exchanged. As they can only be exchanged for Euros, Japanese yen, UK pounds, or US dollars, SDRs

may actually represent a potential claim on IMF member countries' non-gold foreign exchange reserve assets, which are usually held in those currencies. While they may appear to have a far more important part to play, or, perhaps, an important future role, being the unit of account for the IMF has long been the main function of the SDR. Created in 1969 to supplement a shortfall of preferred foreign exchange reserve assets, namely gold and the US dollar, the SDR's value is defined by a weighted currency basket of four major currencies: the Euro, the US dollar, the British pound, and the Japanese yen. SDRs are denoted with the ISO 4217 currency code XDR

EXIM BANK Exim Bank plays four-pronged role with regard to India's foreign trade: those of a coordintator, a source of finance, consultant and promoter. ExportImport Bank of India is the premier export finance institution of the country, set up in 1982 under the Export-Import Bank of India Act 1981. Government

of India launched the institution with a mandate, not just to enhance exports from India, but to integrate the countrys foreign trade and investment with the overall economic growth. Since its inception, Exim Bank of India has been both a catalyst and a key player in the promotion of cross border trade and investment. Commencing operations as a purveyor of export credit, like other Export Credit Agencies in the world, Exim Bank of India has, over the period, evolved into an institution that plays a major role in partnering Indian industries, particularly the Small and Medium Enterprises, in their globalisation efforts, through a wide range of products and services offered at all stages of the business cycle, starting from import of technology and export product development to export production, export marketing, preshipment and post-shipment and overseas investment. Functions Of EXIM Bank Export Credits Exim Bank offers the following Export Credit facilities, which can be availed of by Indian companies, commercial banks and overseas entities. For Indian Companies executing contracts overseas Pre-shipment credit Exim Bank's Pre-shipment Credit facility, in Indian Rupees and foreign currency, provides access to finance at the manufacturing stage - enabling exporters to purchase raw materials and other inputs. Supplier's Credit This facility enables Indian exporters to extend term credit to importers (overseas) of eligible goods at the post-shipment stage. For Project Exporters Indian project exporters incur Rupee expenditure while executing overseas project export contracts i.e. costs of mobilisation/acquisition of materials, personnel and equipment etc. Exim Bank's facility helps them meet these expenses.

For Exporters of Consultancy and Technological Services Exim Bank offers a special credit facility to Indian exporters of consultancy and technology services, so that they can, in turn, extend term credit to overseas importers. Guarantee Facilities Indian companies can avail of these to furnish requisite guarantees to facilitate execution of export contracts and import transactions.

Finance for Export Oriented Units Term Finance (For Exporting Companies)

Project Finance Equipment Finance Import of Technology & Related Services Domestic Acquisitions of businesses/companies/brands Export Product Development/ Research & Development General Corporate Finance

Working Capital Finance (For Exporting Companies)

Funded o Working Capital Term Loans [< 2 years] o Long Term Working Capital [upto 5 years] o Export Bills Discounting o Export Packing Credit o Cash Flow financing Non-Funded o Letter of Credit Limits o Guarantee Limits

Working Capital Finance (For Non- Exporting Companies)

Bulk Import of Raw Material

Term Finance (For Non- Exporting Companies)

Import of Equipment

Export Finance

Pre-shipment Credit Post Shipment Credit Buyers' Credit Suppliers' Credit [including deferred payment credit] Bills Discounting Export Receivables Financing Warehousing Finance Export Lines of Credit (Non-recourse finance)

Equity Participation (In Indian Exporting Companies)

To part finance project expenditure(Project, inter alia, includes new project/ expansion/ acquisition of business/company/ brands/research & development)

Note:a. Exim Financing is available in Indian Rupees and in Foreign Currency b. Term finance, except for long term working capital, is available for periods up to 10 years [in select cases 15 year finance can also be made available] c. Interest: Fixed & Floating options [Benchmarks for floating rates - LIBOR/GSec/MIBOR] d. Repayments: Amortizing/ Ballooning/ Bullet [As per cash flows] Overseas Investment Finance

Finance for Indian Company's equity participation in the overseas Joint Venture (JV)/ Wholly Owned Subsidiary (WOS) Direct Finance (Term & Working Capital) to the overseas JV / WOS Finance (for equity/debt component) for acquisition of overseas businesses / companies including leveraged buy-outs including structured financing options Direct Equity by Exim Bank in the overseas JV/ WOS of an Indian Company

Lines of Credit CONFIRMATION OF LETTERS OF CREDIT (L/C) BY EXIM BANK The program envisages confirmation of Letters of credit (L/Cs), Standby letters of credit, demand guarantees, promissory notes or bills of exchange denominated in Dollars, Euro, Yen or in other freely available convertible currencies acceptable to IFC, received by Indian exporters from preapproved banks in the countries of IFC's operation, i.e. Central Asia, Central and Eastern Europe, Latin America & the Caribbean, Middle East & North Africa as also other regions of Asia and Africa. IFC will provide guarantee facility to Exim Bank to cover such L/C confirmation and confirmation of other trade instruments

Procedural flow chart

1. Exim Bank signs agreement with Borrower and announces when 2. 3. 4. 5. 6.

effective. Exporter checks procedures and Service fee with Exim Bank and negotiates contract withImporter. Importer consults borrower and signs contract with exporter. Borrower approves contract. Exim Bank approves contract and advises borrower and also exporter and commercial bank. Exporter ships goods.

7. Commercial bank negotiates shipping documents and

pays exporter.
8. Exim Bankreimburses Commercial bank on receipt of claim by debit

to borrower.
9. Borrower repays Exim Bank on due date.

Eligible Goods Capital goods, plant and machinery, industrial manufactures, consumer durables and any other items eligible for being exported under the 'Exim Policy' of the Government of India. General

Exporters are advised to check with Exim Bank before finalizing the contracts with the buyers, details of service fee and other charges, if any, payable by the exporters on the contracts to be covered under the relative LOC.

SME & Agri Finance Small and Medium Enterprises (SME) Finance The importance of SME sector is well-recognized world over owing to its significant contribution in achieving various socio-economic objectives, such as employment generation, contribution to national output and exports, fostering new entrepreneurship and to provide depth to the industrial base of the economy. India has a vibrant SME sector that plays an important role in sustaining economic growth, increasing trade, generating employment and creating new entrepreneurship in India. Indian SMEs require business advisory services to enhance their international competitiveness in a highly competitive globalising world. The SMEs find the services of reputed national and international consultants as not cost effective and often, not adequately focused. Recognising this knowledge gap, Exim Bank of India has been endeavouring to provide a suite of services to its SME clients. These include providing business leads, handholding during the process of winning an export contract and thus assisting the generation of export business on success fee basis, countries/ sector information dissemination, capacity building in niche areas such as quality,

safety, export marketing, etc. and financial advisory services such as loan syndication, etc. DEBT RESTRUCTURING SCHEME FOR SMALL AND MEDIUM ENTERPRISES(SMEs) Publications

Export Performance of Small and Medium Enterprises in India Research Brief Occasional Paper : Institutional Support to SMEs A Study of Trade and Investment Potential Occational Paper : Institutional Support Systems for SMEs in India and International Experiences

AGRI FINANCE The globalization and post-WTO scenario offers considerable scope for exports of Indian agricultural products. Exim Bank has a dedicated Agri Business Group to cater to the financing needs of export oriented companies dealing in agricultural products. Financial assistance is provided by way of term loans, pre-shipment/postshipment credit, overseas buyers' credit, bulk import finance, guarantees etc. Term loans with varying maturities are provided for setting up processing facilities, expansion, modernization, purchase of equipment, import of equipment/technology, financing overseas joint ventures and acquisitions etc. The Bank has strong linkages with other stakeholders in agri sector such as Ministry of Food Processing Industries, GoI, NABARD, APEDA, Small Farmers' Agri-Business Consortium (SFAC), National Horticultural Board etc. Apart from financing, the Bank also provides a range of advisory services to agri exporters. The Bank also publishes a number of Occasional Papers, Working Papers on export potential of various sub-sectors in agriculture and a bi-monthly publication in different languages on global scenario in agri-business and opportunities therein. Film Finance

he Bank has till date sanctioned loans more than Rs 33.15 crores for film production. The first three films financed by Exim Bank have been commercially successful across India and overseas markets. Nature of Finance

Cashflow financing for film production Cashflow financing for film distribution/exhibition in overseas markets Term loans for fixed assets finance Term financing for export market development

Films financed by Exim Bank Released

Honeymoon Travels Pvt. Ltd. Kabul Express Dhoom -2 Don - The Chase Begins Again Fanaa Bunty Aur Babli Salaam Namaste Veer Zaara The Rising Dhoom Hum Tum Cheeni Kum

Rural Initiatives Exim Bank believes that there is a strong linkage between export development and poverty reduction. For a country like India, with a large (70%) rural population, creation of export capability in rural grassroot enterprise is a must. Globalisation will be successful and acceptable only if benefits reach the rural population. Rural enterprises suffer from various handicaps including image, quality, capacity, packaging, delivery, etc. NGOs and SHGs are the front for rural enterprises. Through proper guidance and support, rural grassroot enterprises can access the global market and realize better prices for their products thereby contributing to poverty reduction. Exim Bank's experience in working with NGOs/SHGs and rural enterprises is encouraging. Exim Bank, leveraging its presence in both India as well as

overseas, is facilitating linkage between rural grassroot enterprises and corporates and with overseas buyers and agencies with the objective of bringing the benefits of globalisation to the rural population. Export Services MULTILATERAL AGENCIES FUNDED PROJECTS OVERSEAS (MFPO) Information and support services to Indian companies to help improve their prospects for securing business in multilateral agencies funded projects.

Dissemination of business opportunities in funded projects Providing detailed information on projects of interest Information on Procurement Guidelines, Policies, Practices of Multilateral Agencies Assistance for Registration with Multilateral Agencies Advising Indian companies on preparation of Expression of Interest, Capability Profile Bid Intervention

PROMOTING INDIAN CONSULTANCY Tie-up with

International Finance Corporation, Washington D.C. Eastern & Southern African Trade & Development Bank (PTA Bank) African Management Services Company (AMSCO), Netherlands

Examples

Gems & Jewellery Study - Zambia Financial Training Mission - Kenya Cement Project - Cameroon Software - Madagascar Wool Knitting - Vietnam Textile - Nigeria Refrigeration - Ghana Financial Training - Poland

EXIM BANK AS A CONSULTANT

Feasibility study for establishment of an export credit and guarantee facility for Gulf Cooperation Council countries.

Regional cooperation in export finance and export credit guarantees for ESCAP. Study on promotion of international competitiveness and exports of manufactured goods for ESCAP. Setting up the Afrexim Bank Designing of Export Financing Programmes - Turkey Setting up an Exim Bank in Malaysia Designing of Export Marketing Seminars for SMEs in Vietnam Export Development Project: Ukraine Enterprise Support Fund: Armenia Establishing an Export Credit Guarantee Company in Zimbabwe Advisory services to Industrial Development Corporation of South Africa for international finance products Study on Projecting Mauritius as an Investment Hub for Indian Firms Blue Print for setting up of an Exim Bank in Zimbabwe

Export Marketing Services The Bank provides assistance to Indian companies, to enable them establish their products in overseas markets through its Export Marketing Services, starting from identification of prospective business partners to facilitating placement of final orders. The Export Marketing service leverages the Banks high international standing, in-depth knowledge and understanding of the international markets and well established institutional linkages, coupled with its physical presence, to support Indian companies in their overseas marketing efforts on a success fee basis. Service offered across sectors

Marine Products Textiles - yarns, fabrics, apparels. Food Processing - Ready to Serve, spices and condiments Office Stationery Ayurveda medicines/cosmetics. Others

KNOWLEDGE BUILDING EXIMIUS CENTRES FOR LEARNING - AHMEDABAD, BANGALORE AND PUNE

To organise seminars and workshops in areas such as international trade & investment, export marketing, quality, packaging, business

opportunities in multilateral agencies funded projects, sector and country specific programmes Guest faculty from network partners such as IFC, World Bank, EBRD, UNIDO, Asian Development Bank, African Development Bank, CBI, the Netherland

ECGC

Export Credit Guarantee Corporation of India Limited, was established in the year 1957 by the Government of India to strengthen the export promotion drive by covering the risk of exporting on credit.

Being essentially an export promotion organization, it functions under the administrative control of the Ministry of Commerce & Industry, Department of Commerce, Government of India. It is managed by a Board of Directors comprising representatives of the Government, Reserve Bank of India, banking, insurance and exporting community. ECGC is the fifth largest credit insurer of the world in terms of coverage of national exports. The present paid-up capital of the company is Rs.800 crores and authorized capital Rs.1000 crores.

ECGC Functions

Offers insurance protection to exporters against payment risks

Provides guidance in export-related activities

Makes available information on different countries with its own credit ratings

Makes it easy to obtain export finance from banks/financial institutions

Assists exporters in recovering bad debts

Provides information on credit-worthiness of overseas buyers