M.B.A. II (Semester III) (New-CBCS) Examination, 2016
Group G INTERNATIONAL BUSINESS (Paper II)
International Trade Procedures and Documentation (Paper XX)
Day and Date Thursday, 29-12-2016 Total Marks 70
Time 10.30 a.m. to 1.00 p.m.
Instructions Question No. 1 is compulsory.
Attempt any two questions from Q. Q. 3 and Q. 4.
Attempt any two questions from Q. Q. 6 and Q. 7.
All questions carry equal marks.
1. Analyze the following case, identify the problem, generate possible alternatives
and choose the best alternative 14
Persistence, price and the personal touch
The personal touch has proved pivotal for Deep Sea Electronics plc in the lucrative
Indian market. The company, which manufactures control and monitoring
equipment for generators, began exporting to India five years ago and is
confidently poised to expand sales three-fold over the next five years. The firm,
which employs 116 people, has build up a solid customer base in this rapidly
expanding market place, selling directly to 20 separate manufacturers but also
using the services of an agent.
The company has dramatically redefined its sales strategy over the past decade.
Ten years ago domestic sales accounted for 80 percent of its production. Now
the position is reversed with between 85 and 90 percent going overseas. Managing
director David Thomson insists that would be exporters need to be persistent to
secure a foothold in India. "Its a difficult market to enter, although it's going
through change," he explains. "Up until now it's been obsessed with price and
although it's still the main driving force its not as much of a factor as it was
previously, "You've got to be confident in your products' quality, reliability and
value and don't give up. For the first several times you visit they will hit you
with price, price, price and its very easy to walk away. But you need to continue
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to visit and promote why your products are more expensive than local ones and
eventually the price problem will degrade." Representatives from Deep Sea
Electronics visit India three or four times a year and the firm also participates in
exhibitions in India. Mr. Thomson makes regular visits himself.
Its absolutely essential to go there and have face-to-face meetings," he adds.
"Typically you would be talking about four visits over twelve months before sales
opportunities open up. We've used distributors in the past and still do. But
distributors should be viewed as an addition to direct sales and not as a
replacement." It is important not to regard India as a single homogenous market
but rather as a collection of interlinked markets. There are huge variations between
different regions. Many companies find it easier to concentrate on a single region.
Tariffs may have come down from a high of 350 percent during its protectionist
days but still remain relatively high, although the continuing trend is for these to
be reduced. Customs duties can be complex and there is a one percent handling
fee on top of basic duties. India's key industries include telecommunications,
which is growing faster than anywhere else in the world as well as chemicals,
food processing, steel, transportation equipment, cement and textiles which
account for a fifth of all manufacturing. Also crucial are mining, petroleum,
machinery, software and pharmaceuticals. Indian companies also control
prestigious international brands such as car-makers Land Rover and Jaguar. It
has one of the fastest growing automotive sectors in the world. Its home-produced
Tata Nano is the cheapest car on the planet. Other key sectors include aerospace
agribusiness, biotechnology (growing at a staggering 37 percent a year)
and pharmaceuticals, construction, creative and media, education, skills and
leisure, engineering, environment, financial and legal services, healthcare and
medical, ICT, oil and gas, power, transport and water.
2. Write a short note on following (any two) 14
SEZ
Duty Exemption Schemes
Income Tax Benefits.
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3. Write a short note on following (any two) 14
FEMA
INCO Terms
Customs Tariff Act, 1974.
4. Write a short note on following (any two) 14
EDI
Export Credit Insurance
Convertibility of Rupee.
5. What is the term EXIM Explain the nature and characteristics feature of EXIM
documents. 14
6. What is ECGC Explain various covers issued by ECGC. 14
7. What is letter of credit Explain in detail process and types of letter of credit. 14