INTERNATIONAL BUSINESS LAWS

NATURE, SCOPE, NEED AND PROBLEMS FOR INTERNATIONAL BUSINESS International Business is the process of focusing on the resources of the globe and objectives of the organizations on global business opportunities and threats. International business defined as global trade of goods/services or investment. More comprehensive view does not focus on the firm but on the exchange process Free Trade occurs when a government does not attempt to influence, through quotas or duties, what its citizens can buy from another country or what they can produce and sell to another country. The Benefits of Trade allow a country to specialize in the manufacture and export of products that can be produced most efficiently in that country. Nature of International Business Nature of international business environment is quite dynamic. Everyday changes at the global horizon impact it and sometimes a shock at international level entirely changes it. For example if a powerful country attacks at an oil-producing country the entire oil market of the world receives its hit because of its outcome. The oil supply in international market is due to be affected owing to war and eventually oil prices would move up. We can analyze the nature of international business environment from four points of view. These are: Economic Political Social Natural Economic nature of international business environment The economic nature of international business environment revolves around twin blades of demand and supply. If the global demand of a commodity soars obviously its prices would rise and vice versa. Likewise in case of huge supply prices would dive and vice versa. There may be several reasons of ups and downs in the demand and supply of any particular commodity in the international market but its effect would directly hit the international business environment and make it pleasant or panicky. Political nature of international business environment Global politics is based on global economy. As a matter of fact politics both national and international focuses their economic success more devotedly and remain concerned on economic failure. Which leader usually fails to deliver? The one, who fails to bring prosperity in the country which is obviously an economic fact, so in global politics main focus of the powerful nations is to raise their political clout all around the world and get more access in the international market. In this way their actions directly impact the nature of international business environment either negatively or positively depending upon the nature of their action. Social nature of international business environment Social nature of international business environment has long lasting effects. It is related to overall norms, trends and mood of the societies all across the world. The rising trend of automation has boosted up the use of machine at every level. As a result the manufacturing of every product got a boost. People started adopting a luxurious lifestyle and for it they need more and more electronic products. As a result we are watching a big boom in industrialization and overall global markets are expanding enormously. In this way the social nature of international business environment prove its power of huge impact. Natural aspect of the nature of international business environment Any kind of natural disaster sometimes entirely shakes the nature of international business environment. A huge disaster causing destruction of infrastructure in any region gives an extra ordinary lift to the

construction sector of the global market because of the rehabilitation phase after the disaster. Therefore, natural aspect of the nature of business environment has its own enormous impact on the international market. Hence we can say that nature of international business environment is volatile and mostly dependent upon several factors. Therefore, every business concern which is exposed to the international market must keep in view of its every aspect while venturing at the global level. Scope of International Business 1. International Marketing 2. International Finance and Investments 3. Global HR 4. Foreign Exchange Need for International Business 1. To achieve higher rate of profits 2. Expanding the production capacity beyond the demand of the domestic country 3. Severe competition in the home country 4. Limited home market 5. Political conditions 6. Availability of technology and managerial competence 7. Cost of manpower, transportation 8. Nearness to raw material 9. Liberalisation, Privatisation and Globalisation (LPG) 10. To increase market share 11. Increase in cross border business is due to falling trade barriers (WTO), decreasing costs in telecommunications and transportation; and freer capital markets Reasons of Recent International Business Growth 1. Expansion of technology 2. Business is becoming more global because Transportation is quicker Communications enable control from afar Transportation and communications costs are more conducive for international operations 3. Liberalization of cross-border movements 4. Lower Governmental barriers to the movement of goods, services, and resources enable Companies to take better advantage of international opportunities Problems in International Business 1. Political factors 2. High foreign investments and high cost 3. Exchange instability 4. Entry requirements 5. Tariffs, quota etc. 6. Corruption and bureaucracy 7. Technological policy FOREIGN EXCHANGE MANAGEMENT ACT When a business enterprise imports goods from other countries, exports its products to them or makes investments abroad, it deals in foreign exchange. Foreign exchange means 'foreign currency' and includes:- (i) deposits, credits and balances payable in any foreign currency; (ii) drafts, travellers' cheques, letters of credit or bills of exchange, expressed or drawn in Indian currency but payable in any

foreign currency; and (iii) drafts, travellers' cheques, letters of credit or bills of exchange drawn by banks, institutions or persons outside India, but payable in Indian currency. In India, all transactions that include foreign exchange were regulated by Foreign Exchange Regulations Act (FERA),1973. The main objective of FERA was conservation and proper utilisation of the foreign exchange resources of the country. It also sought to control certain aspects of the conduct of business outside the country by Indian companies and in India by foreign companies. It was a criminal legislation which meant that its violation would lead to imprisonment and payment of heavy fine. It had many restrictive clauses which deterred foreign investments. In the light of economic reforms and the liberalized scenario, FERA was replaced by a new Act called the Foreign Exchange Management Act (FEMA),1999.The Act applies to all branches, offices and agencies outside India, owned or controlled by a person resident in India. FEMA emerged as an investor friendly legislation which is purely a civil legislation in the sense that its violation implies only payment of monetary penalties and fines. However, under it, a person will be liable to civil imprisonment only if he does not pay the prescribed fine within 90 days from the date of notice but that too happens after formalities of show cause notice and personal hearing. FEMA also provides for a two year sunset clause for offences committed under FERA which may be taken as the transition period granted for moving from one 'harsh' law to the other 'industry friendly' legislation. Broadly, the objectives of FEMA are: (i) To facilitate external trade and payments; and (ii) To promote the orderly development and maintenance of foreign exchange market. The Act has assigned an important role to the Reserve Bank of India (RBI) in the administration of FEMA. The rules, regulations and norms pertaining to several sections of the Act are laid down by the Reserve Bank of India, in consultation with the Central Government. The Act requires the Central Government to appoint as many officers of the Central Government as Adjudicating Authorities for holding inquiries pertaining to contravention of the Act. There is also a provision for appointing one or more Special Directors (Appeals) to hear appeals against the order of the Adjudicating authorities. The Central Government also establish an Appellate Tribunal for Foreign Exchange to hear appeals against the orders of the Adjudicating Authorities and the Special Director (Appeals). The FEMA provides for the establishment, by the Central Government, of a Director of Enforcement with a Director and such other officers or class of officers as it thinks fit for taking up for investigation of the contraventions under this Act. JOINT VENTURES A joint venture is a strategic alliance where two or more parties, usually businesses, form a partnership to share markets, intellectual property, assets, knowledge, and, of course, profits. A joint venture differs from a merger in the sense that there is no transfer of ownership in the deal. This partnership can happen between goliaths in an industry. Cingular, for instance, is a strategic alliance between SBS and Bellsouth. It can also occur between two small businesses that believe partnering will help them successfully fight their bigger competitors. Companies with identical products and services can also join forces to penetrate markets they wouldn't or couldn't consider without investing tremendous resources. Furthermore, due to local regulations, some markets can only be penetrated via joint venturing with a local business. In some cases, a large company can decide to form a joint venture with a smaller business in order to quickly acquire critical intellectual property, technology, or resources otherwise hard to obtain, even with plenty of cash at their disposal.

PATENT, TRADEMARK AND COPY RIGHTS Copyrights, trademarks, and patents are confusing. All three are registered with an agency of the federal government. Each is often referred to as intellectual property. When someone uses a copyright or patent or trademark without permission, we talk about infringement. Most importantly, each one gives the owner exclusive rights to the work, meaning the owner has the right to prevent anyone else from using their work. What exactly is the difference between these three forms of intellectual property protection? A copyright protects the expression of a persons ideas. Copyright protection is given to creative works like writing, computer programs, music, lyrics, graphic designs, sculpture, photographs, movies, and sound recordings. The expression must be original, which, in this context, means a work that is not an exact copy of another work. Patents protect inventions. In order to qualify for a patent, an invention must be novel, which means that it is something that is different in an important way from all previous inventions. The invention must also be usefulnot necessarily important, but it must have some use and it must also be non-obvious. Nonobvious means that someone who understands the technical area of the invention would see the invention as a surprising and significant development in the field. A trademark protects something that is used to identify where a product or a service comes from. A trademark describes something and is not the thing being described. An example of a trademark would be a corporate identity, such as a logo, which is placed on products to inform consumers that the product came from that particular company.

CUSTOM VALUATION Customs valuation is a customs procedure applied to determine the customs value of imported goods. If the rate of duty is ad valorem (ad valorem: A tax, duty, or fee which varies based on the value of the products, services, or property on which it is levied), the customs value is essential to determine the duty to be paid on an imported good. Therefore it is the process where customs authorities assign a monetary value to a good or service for the purposes of import or export. Generally, authorities engage in this process as a means of protecting tariff concessions, collecting revenue for the governing authority, implementing trade policy, and protecting public health and safety. Beginning near the end of the 20th century, the procedures used throughout most of the world for customs valuation were codified in the Agreement on Implementation of Article VII of the General Agreement on Tariffs and Trade (GATT) 1994. E-COMMERCE Electronic commerce, or e-commerce, refers to economic activity that occurs online. E-commerce includes all types of business activity, such as retail shopping, banking, investing and rentals. Even small businesses that provide personal services, such as hair and nail salons, can benefit from e-commerce by providing a website for the sale of related health and beauty products that normally are available only to their local customers. Easy for Businesses Although e-commerce once required an expensive interface and personal security certificate, this is no longer the case. Virtual storefronts are offered by a variety of hosting services and large Internet

presences that offer simple solutions to vendors who have little or no online experience. Tools for running successful e-commerce websites are built into the hosting servers, eliminating the need for the individual merchant to redesign the wheel. These tools include benefits such as virtual shopping carts, inventory and sales logs and the ability to accept a variety of payment options, including secure credit card transactions. Security Improvements Early e-commerce was stunted by security fears, but improved technology has made millions of people worldwide feel comfortable buying online. Seeing the vast potential in online commerce, most credit card companies helped allay fears by guaranteeing that cardholders would not be held responsible for fraudulent charges as a result of online shopping. All of these factors have helped e-commerce become a booming industry. GENERAL AGREEMENT ON TARIFFS AND TRADE (GATT) General Agreement on Tariffs and Trade (GATT) was a multilateral agreement regulating international trade. According to its preamble, its purpose was the "substantial reduction of tariffs and other trade barriers and the elimination of preferences, on a reciprocal and mutually advantageous basis." It was negotiated during the United Nations 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 1994, when it was replaced by the World Trade Organization in 1995. The World Trade Organization (WTO) is an organization that intends to supervise and liberalize international trade. The organization officially commenced on January 1, 1995 under the Marrakech Agreement, replacing the General Agreement on Tariffs and Trade (GATT), which commenced in 1948. The organization deals with regulation of trade between participating countries; it provides a framework for negotiating and formalizing trade agreements, and a dispute resolution process aimed at enforcing participants' adherence to WTO agreements, which are signed by representatives of member governments and ratified by their parliaments. Most of the issues that the WTO focuses on derive from previous trade negotiations, especially from the Uruguay Round (19861994). The organization is attempting to complete negotiations on the Doha Development Round, which was launched in 2001 with an explicit focus on addressing the needs of developing countries. As of June 2012, the future of the Doha Round remains uncertain: the work programme lists 21 subjects in which the original deadline of 1 January 2005 was missed, and the round is still incomplete. The conflict between free trade on industrial goods and services but retention of protectionism on farm subsidies to domestic, agricultural sector (requested by developed countries) and the substantiation of the international liberalization of fair trade on agricultural products (requested by developing countries) remain the major obstacles. These points of contention have hindered any progress to launch new WTO negotiations beyond the Doha Development Round. As a result of this impasse, there has been an increasing number of bilateral free trade agreements signed As of July 2012, there are various negotiation groups in the WTO system for the current agricultural trade negotiation which is in the condition of stalemate. Functions of WTO The former GATT was not really an organization; it was merely a legal arrangement. On the other hand, the WTO is a new international organization set up as a permanent body. It is designed to play the role of a watchdog in the spheres of trade in goods, trade in services, foreign investment, intellectual property rights, etc. Article III has set out the following five functions of WTO; (i) The WTO shall facilitate the implementation, administration and operation and further the objectives of this Agreement and of the Multilateral Trade Agreements, and shall also provide the frame work for the implementation, administration and operation of the plurilateral Trade Agreements.

(ii) The WTO shall provide the forum for negotiations among its members concerning their multilateral trade relations in matters dealt with under the Agreement in the Annexes to this Agreement. (iii) The WTO shall administer the Understanding on Rules and Procedures Governing the Settlement of Disputes. (iv) The WTO shall administer Trade Policy Review Mechanism. (v) With a view to achieving greater coherence in global economic policy making, the WTO shall cooperate, as appropriate, with the international Monetary Fund (IMF) and with the International Bank for Reconstruction and Development (IBRD) and its affiliated agencies. Objectives of WTO Important objectives of WTO are mentioned below: (i) To implement the new world trade system as visualised in the Agreement; (ii) To promote World Trade in a manner that benefits every country; (iii) To ensure that developing countries secure a better balance in the sharing of the advantages resulting from the expansion of international trade corresponding to their developmental needs; (iv) To demolish all hurdles to an open world trading system and usher in international economic renaissance because the world trade is an effective instrument to foster economic growth; (v) To enhance competitiveness among all trading partners so as to benefit consumers and help in global integration; (vi) To increase the level of production and productivity with a view to ensuring level of employment in the world; (vii) To expand and utilize world resources to the best; (viii) To improve the level of living for the global population and speed up economic development of the member nations. TRIM TRIMs are rules that restrict preference of domestic firms and thereby enable international firms to operate more easily within foreign markets. The Trade Related Investment Measures Agreement came into effect on 1 January 1995 as part of the Uruguay Round negotiations. It addressed investment measures that were trade related and which violated Article III (National Treatment) or Article XI (general elimination of quantitative restrictions). Basically it prohibited member countries making the approval of investment conditional on compliance with laws, policies or administrative regulations that favoured domestic products. Franchise The International Franchise Association (IFE) defines a full business format franchise as follows: A franchise operation is a contractual relationship between the franchisor and the franchisee in which the franchisor offers or is obliged to maintain continuing interest in the business of the franchisee in such areas as know-how and training, wherein the franchisee operates under a common trademark, format or

procedure owned or controlled by the franchisor, under which the franchisee has or will make a substantial capital investment in his business from his own resources. It is apparent that the key elements of the definition include: (1) a contractual relationship, (2) the franchisor offers or is obliged to maintain a continuing interest in relation to the know-how and training, (3) the franchisee operates under a common trademark, format or procedure, (4) owned or controlled by the franchisor, and (5) the franchisee has or will make a substantial capital investment from his own resources. Types of franchises Although it is often said that there are two main types of franchising, namely (i) product and trademark or trade name franchising and (ii) business format franchising, this is not an accurate explanation. A more correct approach is to view a product or trademark franchise, as franchising in a simpler form in that the franchisee is only entitled to use the franchisors name or trademark and product. This type of franchising is prevalent amongst motor vehicle dealers, soft drink bottlers and certain fuel service stations. Thus in a product or trademark franchise only a single or a limited number of intellectual property rights are used. The opposite end of the scale is a full business format franchise in terms of which the franchisee uses the franchisors entire business concept, which includes the name , trademarks, copyright, goodwill, knowhow, trade secrets, trade dress and similar intellectual property. It is clear that in a full business format franchise numerous intellectual property rights are licensed to the franchisee to use. The two customary types of franchises are therefore at opposite ends of a continuum. It is of course for the franchisor or proprietor of the intellectual property to decide precisely what makes commercial sense and what he is going to allow the franchisee to use. FRANCHASING AGREEMENT : A Franchise Agreement is a legal, binding contract between a franchisor and franchisee. A Franchise Agreement is a sophisticated form of Licence Agreement. It is therefore necessary to first look briefly at what a license is and what can be licensed. A license agreement is a contractual business relationship between a licensor and licensee. The licensor is either the proprietor or a holder of certain intellectual property rights or technology, which he allows the licensee to use in return for some sort of remuneration or other advantage. Intellectual property rights that can be licensed include statutory or non-statutory intellectual property rights. Statutory intellectual property rights include patents, designs, trademarks and copyright whereas non-statutory intellectual property rights include know-how, trade secrets, customer lists, formulas, business methods, personnel training and manuals. The object of a license is almost invariably to commercially exploit technology or intellectual property. To ensure the long term success of a License Agreement, in other words, to achieve a win/win situation, the license must be structured in such a way that it is to the mutual benefit of both parties. Contract of Sale - A contract of sale of goods is a contract whereby the seller transfers or agrees to transfer the property in goods to the buyer for a price. There may be a contract of sale between one part-owner and another. [Section 4(1)]. A contract of sale may be absolute or conditional. [Section 4(2)]. The term contract of sale is a generic term and as such includes both a sale as well as an agreement to sale. Thus, following are essentials of contract of sale

There must be at least two parties:- To form a contract, there must be at least two parties i.e a seller and a buyer. One person cannot act both as a seller and a buyer. The subject matter of the contract must be goods: - Goods means every kind of movable property other than actionable claims and money, and includes stock and shares, growing crops, grass which are agreed to be removed before sale. Even standing trees can be sold as goods. Actionable claims are claims which can be enforced only by an action or suit e.g. debt. A debt is not movable property or goods. Price: A price in money (not in kind) should be paid or promised. Money means currency in circulation. However, goods may be sold for consideration which may partly be in the form of money and partly of goods. But it cannot be in the form of kind alone as it will be a barter or exchange and not sale.

Ascertainment of price - The price in a contract of sale may be fixed by the contract or may be left to be fixed in manner thereby agreed or may be determined by the course of dealing between the parties. [section 9(1)]. Where the price is not determined in accordance with the foregoing provisions, the buyer shall pay the seller a reasonable price. What is a reasonable price is a question of fact dependent on the circumstances of each particular case. [section 9(2)]. Transfer of property:- Property in goods means ownership. A transfer of property in goods from seller to the buyer must take place. Property (ownership) is of two types (a) General Property:- It means ownership of goods which is transferred from seller to the buyer (b) Special property: It means interest in the property which is transferred by the pledgor to the pledgee in case of Pledge. It is aptly said that risk prima facie follows the ownership. Thus three things are transferred along with the ownership. (i) Title (ii) Possession (iii) Risk (of loss/damage) Besides the above a contract of sale must be absolute or conditional (Sec 4 (2)) and all other essential elements of a valid contract must also be present in the contract of sale. FOB A trade term requiring the seller to deliver goods on board a vessel designated by the buyer. The seller fulfills its obligations to deliver when the goods have passed over the ship's rail. When used in trade terms, the word "free" means the seller has an obligation to deliver goods to a named place for transfer to a carrier. CIF (Cost Insurance and Freight) CIF (or Cost, Insurance, and Freight) is another shipping term used in international circles. Internationally, it is used to indicate a method of shipment by water. In this case, the sellers responsibility is toward the costs, Insurance and freight to take the goods to its point of destination. The buyer is responsible for any loss or damage from the point that the goods are delivered off of the ship at its destination point, and once the goods pass the ships rails. The buyer is then responsible for any cost s incurred once the goods reach their destination and are loaded on dock. International business taxation International taxation is the study or determination of tax on a person or business subject to the tax laws of different countries or the international aspects of an individual country's tax laws. Governments usually limit the scope of their income taxation in some manner territorially or provide for offsets to taxation relating to extraterritorial income. The manner of limitation generally takes the form of a

territorial, residency, or exclusionary system. Some governments have attempted to mitigate the differing limitations of each of these three broad systems by enacting a hybrid system with characteristics of two or more. Many governments tax individuals and/or enterprises on income. Such systems of taxation vary widely, and there are no broad general rules. These variations create the potential for double taxation (where the same income is taxed by different countries) and no taxation (where income is not taxed by any country). Income tax systems may impose tax on local income only or on worldwide income. Generally, where worldwide income is taxed, reductions or foreign credits are provided for taxes paid to other jurisdictions. Limits are almost universally imposed on such credits. Multinational corporations usually employ international tax specialists, a specialty among both lawyers and accountants, to decrease their worldwide tax liabilities. With any system of taxation, it is possible to shift or recharacterize income in a manner that reduces taxation. Jurisdictions often impose rules relating to shifting income among commonly controlled parties, often referred to as transfer pricing rules. Residency based systems are subject to taxpayer attempts to defer recognition of income through use of related parties. A few jurisdictions impose rules limiting such deferral ("anti-deferral" regimes). Deferral is also specifically authorized by some governments for particular social purposes or other grounds. Agreements among governments (treaties) often attempt to determine who should be entitled to tax what. Most tax treaties provide for at least a skeleton mechanism for resolution of disputes between the parties. SUBSIDIES A subsidy is a grant or other financial assistance given by one party for the support or development of another. Subsidy has been used by economists with different meanings and connotations in different contexts. A subsidy is a measure that keeps prices for consumers below market levels, or keeps prices for producers above market levels or that reduces costs for both producers and consumers by giving direct or indirect support." The most common definition of a subsidy refers to a payment made by the government to a producer. Subsidies can be direct cash grants, interest-free loans or indirect tax breaks, insurance, low-interest loans, depreciation write-offs, rent rebates. This form of support can be legal, illegal, ethical or unethical. Subsidies are used for a variety of purposes, including employment, production and exports. A subsidy can also be you keeping any portion of your paycheck. Subsidies are often regarded as a form of protectionism or trade barrier by making domestic goods and services artificially competitive against imports. Subsidies may distort markets, and can impose large economic costs. Financial assistance in the form of a subsidy may come from one's government, but the term subsidy may also refer to assistance granted by others, such as individuals or non-governmental institutions. FDI The Foreign Direct Investment means cross border investment made by a resident in one economy in an enterprise in another economy, with the objective of establishing a lasting interest in the investee economy. FDI is also described as investment into the business of a country by a company in another country. Mostly the investment is into production by either buying a company in the target country or by expanding operations of an existing business in that country. Such investments can take place for many reasons, including to take advantage of cheaper wages, special investment privileges (e.g. tax exemptions) offered by the country. Why Countries Seek FDI ? (a) Domestic capital is inadequate for purpose of economic growth; (b) Foreign capital is usually essential, at least as a temporary measure, during the period when the capital market is in the process of development; (c) Foreign capital usually brings it with other scarce productive factors like technical knowhow, business expertise and knowledge

What are the major benefits of FDI : (a) Improves forex position of the country; (b) Employment generation and increase in production ; (c) Help in capital formation by bringing fresh capital; (d) Helps in transfer of new technologies, management skills, intellectual property (e) Increases competition within the local market and this brings higher efficiencies (f) Helps in increasing exports; (g) Increases tax revenues Why FDI is Opposed by Local People or what are Disadvantages of FDI : (a) Domestic companies fear that they may lose their ownership to overseas company (b) Small enterprises fear that they may not be able to compete with world class large companies and may ultimately be edged out of business; (c) Large giants of the world try to monopolise and take over the highly profitable sectors; (d) Such foreign companies invest more in machinery and intellectual property than in wages of the local people; (e) Government has less control over the functioning of such companies as they usually work as wholly owned subsidiary of an overseas company; Brief Latest Developments on FDI (all sectors including retail):2012 October: In the second round of economic reforms, the government cleared amendments to raise the FDI cap in the insurance sector from 26% to 49%; in the pension sector it approved a 26 percent FDI; Now, Indian Parliament will have to give its approval for the final shape," 2012 - September : The government approved the 51% foreign investment in multi-brand retail, Relaxed FDI norms for civil aviation and broadcasting sectors. FDI cap in Broadcasting was raised to 74% from 49%; Allowed foreign investment in power exchanges 2011 December: (i) The Indian government removed the 51 percent cap on FDI into single-brand retail outlets and thus opened the market fully to foreign investors by permitting 100 percent foreign investments in this area. What is Scope of FDI in India? Why World is looking towards India for Foreign Direct Investments: India is the 3rd largest economy of the world in terms of purchasing power parity and thus looks attractive to the world for FDI. Even Government of India, has been trying hard to do away with the FDI caps for majority of the sectors, but there are still critical areas like retailing and insurance where there is lot of opposition from local Indians / Indian companies. Some of the major economic sectors where India can attract investment are as follows:DUMPING In international trade, the export by a country or company of a product at a price that is lower in the foreign market than the price charged in the domestic market. As dumping usually involves substantial export volumes of the product, it often has the effect of endangering the financial viability of manufacturers or producers of the product in the importing nation. Dumping is also a colloquial term that refers to the act of offloading a stock with little regard for its price.

(a) (b) (a) (b) (c)

While the World Trade Organization reserves judgment on whether dumping is unfair competition, most nations profess to be against the practice. Dumping is legal under World Trade Organization rules unless the foreign country can reliably show the negative effects of the exporting firm on the domestic producers. In order to counter dumping, most nations use tariffs and quotas to protect their domestic industry from the negative effects of predatory pricing. In an increasingly global economy, consumers in a nation that has been the target of dumping activity may have few qualms about consuming products that have been dumped, as long as they are of comparable quality to local merchandise but are priced much lower. Over time, dumping may have a negative impact on the local economy by driving domestic producers out of business, which would result in job losses and a higher rate of unemployment. BILATERAL TAX AGREEMENT An arrangement between two jurisdictions that mitigates the problem of double taxation that can occur when tax laws consider an individual or company to be a resident of more than one jurisdiction. A bilateral tax agreement can improve the relations between two countries, encourage foreign investment and trade, and reduce tax evasion. Bilateral tax agreements can deal with many issues such as taxation of different categories of income (business profits, royalties, capital gains, employment income, etc.), methods for eliminating double taxation (exemption method, credit method, etc.), and provisions such as mutual exchange of information and assistance in tax collection. EXIM OR FOREIGN TRADE POLICY Exim Policy or Foreign Trade Policy is a set of guidelines and instructions established by the DGFT in matters related to the import and export of goods in India. The Foreign Trade Policy of India is guided by the Export Import in known as in short EXIM Policy of the Indian Government and is regulated by the Foreign Trade Development and Regulation Act, 1992. DGFT (Directorate General of Foreign Trade) is the main governing body in matters related to Exim Policy. The main objective of the Foreign Trade (Development and Regulation) Act is to provide the development and regulation of foreign trade by facilitating imports into, and augmenting exports from India. Foreign Trade Act has replaced the earlier law known as the imports and Exports (Control) Act 1947. Indian EXIM Policy contains various policy related decisions taken by the government in the sphere of Foreign Trade, i.e., with respect to imports and exports from the country and more especially export promotion measures, policies and procedures related thereto. Trade Policy is prepared and announced by the Central Government (Ministry of Commerce). India's Export Import Policy also know as Foreign Trade Policy, in general, aims at developing export potential, improving export performance, encouraging foreign trade and creating favorable balance of payments position. History of Exim Policy of India In the year 1962, the Government of India appointed a special Exim policy Committee to review the government previous export import policies. The committee was later on approved by the Government of India. Mr. V. P. Singh, the then Commerce Minister and announced the Exim Policy on the 12th of April, 1985. Initially the EXIM Policy was introduced for the period of three years with main objective to boost the export business in India Objectives Of The Exim Policy : Government control import of non-essential items through the Exim policy. At the same time, all-out efforts are made to promote exports. Thus, there are two aspects of Exim Policy; the import policy which is concerned with regulation and management of imports and the export policy which is concerned with

exports not only promotion but also regulation. The main objective of the Government's EXIM Policy is to promote exports to the maximum extent. Exports should be promoted in such a manner that the economy of the country is not affected by unregulated exportable items specially needed within the country. Export control is, therefore, exercised in respect of a limited number of items whose supply position demands that their exports should be regulated in the larger interests of the country. In other words, the main objective of the Exim Policy is: To accelerate the economy from low level of economic activities to high level of economic activities by making it a globally oriented vibrant economy and to derive maximum benefits from expanding global market opportunities. To stimulate sustained economic growth by providing access to essential raw materials, intermediates, components,' consumables and capital goods required for augmenting production. To enhance the techno local strength and efficiency of Indian agriculture, industry and services, thereby, improving their competitiveness. To generate new employment. Opportunities and encourage the attainment of internationally accepted standards of quality. To provide quality consumer products at reasonable prices. INTERNATIONAL LICENSING Licensing is the process of leasing a legally protected (that is, trademarked or copyrighted) entity a name, likeness, logo, trademark, graphic design, slogan, signature, character, or a combination of several of these elements. The entity, known as the property or intellectual property, is then used in conjunction with a product. Many major companies and the media consider licensing a significant marketing tool. Licensing is a marketing and brand extension tool that is widely used by everyone from major corporations to the smallest of small business. Entertainment, sports and fashion are the areas of licensing that are most readily apparent to consumers, but the business reaches into the worlds of corporate brands, art, publishing, colleges and universities and non-profit groups, to name a few. Licensing can extend a corporate brand into new categories, areas of a store, or into new stores overall. Licensing is a way to move a brand into new businesses without making a major investment in new manufacturing processes, machinery or facilities. In a well-run licensing program, the property owner maintains control over the brand image and how it's portrayed (via the approvals process and other contractual strictures), but eventually reaps the benefit in additional revenue (royalties), but also in exposure in new channels or store aisles.

ECONOMIC INTEGRATION An economic arrangement between different regions marked by the reduction or elimination of trade barriers and the coordination of monetary and fiscal policies. The aim of economic integration is to reduce costs for both consumers and producers, as well as to increase trade between the countries taking part in the agreement. There are varying levels of economic integration, including preferential trade agreements (PTA), free trade areas (FTA), customs unions, common markets and economic and monetary unions. The more integrated the economies become, the fewer trade barriers exist and the more economic and political coordination there is between the member countries. By integrating the economies of more than one country, the short-term benefits from the use of tariffs and other trade barriers is diminished. At the same time, the more integrated the economies become, the less power the governments of the member nations have to make adjustments that would benefit

themselves. In periods of economic growth, being integrated can lead to greater long-term economic benefits; however, in periods of poor growth being integrated can actually make things worse. TRIPS The Agreement on Trade Related Aspects of Intellectual Property Rights (TRIPS) is an international agreement administered by the World Trade Organization (WTO) that sets down minimum standards for many forms of intellectual property (IP) regulation as applied to nationals of other WTO Members.[2] It was negotiated at the end of the Uruguay Roundof the General Agreement on Tariffs and Trade (GATT) in 1994. The TRIPS agreement introduced intellectual property law into the international trading system for the first time and remains the most comprehensive international agreement on intellectual property to date. In 2001, developing countries, concerned that developed countries were insisting on an overly narrow reading of TRIPS, initiated a round of talks that resulted in the Doha Declaration. The Doha declaration is a WTO statement that clarifies the scope of TRIPS, stating for example that TRIPS can and should be interpreted in light of the goal "to promote access to medicines for all." Specifically, TRIPS requires WTO members to provide copyright rights, covering content producers including performers, producers of sound recordings and broadcasting organizations; geographical indications, including appellations of origin; designs; integrated; patents; new plant varieties; trademarks; trade dress; and undisclosed or confidential information. TRIPS also specify enforcement procedures, remedies, and dispute resolution procedures. Protection and enforcement of all intellectual property rights shall meet the objectives to contribute to the promotion of technological innovation and to the transfer and dissemination of technology, to the mutual advantage of producers and users of technological knowledge and in a manner conducive to social and economic welfare, and to a balance of rights and obligations. TRIMS The Agreement on Trade Related Investment Measures (TRIMs) are rules that apply to the domestic regulations a country applies to foreign investors, often as part of an industrial policy. The agreement was agreed upon by all members of the World Trade Organization. (The WTO wasn't established at that time, it was its predecessor, the GATT (General Agreement on Trade and Tariffs). The WTO came about in 1994-1995. Policies such as local content requirements and trade balancing rules that have traditionally been used to both promote the interests of domestic industries and combat restrictive business practices are now banned. Trade Related Investment Measures is the name of one of the four principal legal agreements of the WTO trade treaty. TRIMs are rules that restrict preference of domestic firms and thereby enable international firms to operate more easily within foreign markets.