1. foreign trade - karnataka · 1. foreign trade meaning: foreign trade is the trade between one...
TRANSCRIPT
1. FOREIGN TRADE
Meaning: Foreign Trade is the
trade between one country and
another country. i.e.,. In between
the countriesthe countries.
It is also called InternationalIt is also called International
Trade or External TradeTrade or External Trade.
2. Need
A. Due to possession of different natural resources by different ycountries.
Each county is not best suited to produce all the goods at lowest possible g pcosts.
3. Forms / Kinds
1. Imports (purchase of goods and services from abroad))
2. Exports (sale of goods and services to otherservices to other countries)
Entrepot Trade (purchase from one country and sale of the same another country)
Diff b tDifferences between
Points Home Foreign1.Geographical
boundariesSameNational
DifferentNations
2.Volume3.Specializa-
95%National
5%Inter -
tion Level National
Diff b tDifferences between
Points Home Foreign4.Documenta
-tionNumber of less
DocumentsMore
5. Rules &Regulations
Of one country
Of two ormore countries
Diff b tDifferences between
Points Home Foreign6 Restrictions Free from Subject6.Restrictions
7 Transport
Free from
Less
Subject toMore7. Transport
Cost.8 Transitory
Less
Less
More
More8. TransitoryPeriod
Less More
Diff b t
Points Home Foreign
Differences between
Points Home Foreign9. Risks and Less MoreInsurance10. Balance Do not There Of payments.11 Trade
haveUnifor
isDiffere11. Trade
policiesUniform
Different
Importance / Advantagesof foreign trade
Key PointsKey Points1.Territorial specialization.2. Better utilization of the available
resources.
Importance / AdvantagesImportance / Advantagesof foreign trade
3. Sale of surplus goods (Export).(Export).
4. Purchase of deficit goods (I t)(Import).
5. Widens the market
Importance / Advantagesof foreign trade
6. Importation of latest
g
ptechnology, machines etc.
7 Direct foreign investment7. Direct foreign investment.
Importance / Advantages
8 Stabilit in prices
of foreign trade
8. Stability in prices.
9 Improvement in quality9. Improvement in quality.
10 Development in10. Development in
transportation.p
Importance / Advantages
11 Greater Emplo ment
p gof foreign trade
11. Greater Employment
opportunitiesopportunities.
12. International economic12. International economic
cooperation and peace.
Disadvantages / Defectsof foreign Trade
1 Diffic lties at times of ar1. Difficulties at times of war.
2 Reckless utilization of natural2. Reckless utilization of natural
resources.resources.
3. May ruin domestic industries.y
Disadvantages / Defects
4 Enco rages importation ofof foreign Trade
4. Encourages importation of
luxury goodsluxury goods.
5. Practice of dumping.5. Practice of dumping.
6. One sided development.p
Disadvantages / Defectsof foreign Trade
7. Adverse balance of payments.of foreign Trade
8. Exporting only raw materials.
9. Interference in the domestic
affairs
10. Business rivalry.
Export Procedure
Stages or steps involved in
exporting goods from one
country to another country.
i I di t A ii.e. India to America.
Export Procedure
1. Receipt of Enquiry 2 Sending of Q otation2. Sending of Quotation.3. Receiving an Indent.g4. Obtaining IEC No and
E t LiExport Licence.
5. Assembling of goods.
6. Packing and Marking of goods.
7. Appointment of a Forwarding agent.
Export Procedure
8. Formalities of Forwarding agent.
a. Taking delivery of goods
b. Securing shipping space
shipping order, charter party
C t f litic. Customs formalities
d. Obtaining Dock Receiptg p
e. Obtaining Mate’s Receipt
f. Obtaining Bill of lading
g. Marine Insurance Policy
h. Advice to the exporter
Export Procedure
9. Other Relevant Documents
a. Certificate of Origin
b. Consular Invoice
Export Procedure
10. Preparation of Export
Invoice
11. Securing the Payment
12. Advice to the importer
Import Procedure
Steps or Stages involved in
importing goods by one country
from another country. i.e., by India
from China.
Import Procedure
Steps or Stages:
1. Obtaining IEC Number and
Import LicenseImport License.
2 Obtaining Foreign Exchange2. Obtaining Foreign Exchange.
3 Placing an Indent3. Placing an Indent.
Import Procedure
Steps or Stages:
4. Receipt of Letter of Advice and
Shipping DocumentsShipping Documents.
5 Formalities to be performed by the5. Formalities to be performed by the
Cleaning Agent.Cleaning Agent.
Steps or Stages
5) Formalities:
A. Permission from the shipping
companycompany.
B Customs formalities:B. Customs formalities:
i) Bill of Entry Formsi) Bill of Entry Forms.
Steps or Stages
5) Formalities:
ii)Bill of Sight.
iii) A li ti t I tiii) Application to Import.
i ) Pa ment of import d t (if an )iv) Payment of import duty (if any).
Steps or Stages
5) Formalities:
c) Dispatch of goods
d) L tt f Ad id) Letter of Advice.
6)Recei ing deli er of goods6)Receiving delivery of goods.
InsuranceInsuranceMeaning of Important Terms
1) Insurance Device, tool, (may be General or
contract, undertaking,General or
Life)2) Insurer
undertaking, solution
2) Insurer, assurer.
InsuranceInsurance
3) Insured or Assured
Who is indemnified or compensated.Assured
4) Premium5) Risk
compensated.Consideration.Contingency Event5) Risk
6)PolicyContingency, Event.Documents containing the terms &the terms & conditions
Insurance7) Insurable
interestLikely to gain or lose.
interest
8) Subjectmatter
A thing on which insurance is covered.
9) Principle All contracts except9) PrincipleofIndemnity
All contracts except life.
Indemnity
General Principles of InsuranceGeneral Principles of Insurance
1 Utmost good faith:1. Utmost good faith:Full disclosure of material facts.
2. Insurable interest:Is a must necessary to know theIs a must, necessary to know the time.
3. Principle of Indemnity:Applicable to all contractsApplicable to all contracts except-Life Ins
General Principles of InsuranceGeneral Principles of Insurance
4. Principle of subrogation:4. Principle of subrogation:extension, right of the insurer
i t d d t & thi dagainst damaged property & third party.
5. Double insurance / principle of contribution: applicable extn rightcontribution: applicable, extn, right.
6. Reinsurance: All types, insurer & ire-insurer, purpose.
Types of policiesTypes of policies
A Fire Insurance Policies:A. Fire Insurance Policies:1. Valued Policy – Value agreed & stated at time of entering into contract.2. Specific Policy – Either specific amount or actual lossspecific amount or actual loss, whichever is lower is payable.
Fire Insurance PoliciesFire Insurance Policies3. Average Policy –
Amt of compensation=Actual loss X Sum of insuredActual loss X Sum of insured
Value of the property
4 Floating Policy – a) Single policy4. Floating Policy a) Single policy covers properties in different localitieslocalities.
Fire Insurance Policies
b) Used by business organizations, whose business is spread overwhose business is spread over.
5.Re-instalment or Replacement policy: Compensation either in cash or in kind. In case of cash –equivalent to the cost of the property.property.
Types of policiesyp pB. Kinds of Marine Insurance
Policies:Policies:1. Valued Policy.2. Unvalued Policy.3 Voyage Policy Eg Mumbai to3. Voyage Policy. Eg. Mumbai to Goa.
4. Time Policy. Definite period of time. E.g. from 1st Apr 2011 to 31stg pMar 2012.
Kinds of Marine InsuranceKinds of Marine Insurance Policies
5. Mixed Policy – Voyage & Time.6. Floating Policy (declaration /open cover))a. No mention is made of the ship or cargoor cargo.b. Taken out for a certain sum.
Kinds of Marine Insurance Policies
c. Value of the policy is reduced by the declared amount.
7 W P li H P li7. Wager Policy or Honor Policy –without having insurable interest.
T f Lif ITypes of Life InsurancePolicies
1. Whole – Life Policy or Ordinary Life PolicyLife Policy.Features:a. Payment of premium till to the deathdeath.b. Compensation will be paid to the dependents.
Whole – Life Policy
Features:c. No fixed periodd Low rate of premiumd. Low rate of premium.e. May be with profit policy (Bonus)
or without profit policy.
Types of Life Insurance Policies
2. Endowment Policy: Sum assured becomes payable either.becomes payable either.a. After the expiry of a fixed period.b. or on the death of the assured whichever is earlier.
3. Joint Life Policy.4 J t P li4. Janata Policy.
5 Child d ti li5. Children education policy.
6 A it P li6. Annuity Policy.
7 Term assurance policy7. Term assurance policy.
8 Group insurance policy8. Group insurance policy.
Differences between
Points General LifeInsurance Insurance
1. Contract Indemnity Guarantee
2. Event
y
Uncertain Certain
3. Insurable MI-At time At time of Interest of loss
FI-At both taking out policy
timep y
Differences between
Points General LifePoints GeneralInsurance
LifeInsurance
4 P i d Sh t L4. Period
5 S d
Short
C t b
Long
C b5. Surrenderof Policy
Cannot be Can be
Differences betweenPoints General Life
Differences between
Insurance Insurance6 Rights of Exists Do not6. Rights of
Contribution &
Exists Do not Exists
&Subrogation
7 Purpose Only Both7. Purpose Only Protection of Loss
Both
of Loss
Differences between
Points GeneralInsurance
LifeInsurance
8. Rate of Premium
Degree of Risk
Age, Health
9. Claim May or There will may not be
Differences between
Points General Life
Differences between
Points GeneralInsurance
LifeInsurance
10 Double Not Common10. Double Insurance
Not common
Common
11. UnderInsurance
Common No QuestionInsurance Question