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Trends in Exports
 An entrepreneur who plans to enter into exports must
identify the products/product groups with potential in the
foreign markets by analyzing the trends in exports-
country- wise and commodity-wise – over a period of time

 A study of the trends over a period of five years is expected

to yield very useful information

 The Ministry of Commerce, based on the analysis of the

trends in exports has a matrix of quite a few countries and
products

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Production Capacity and Product
Availability
 Choose those products for which there is adequate
production capacity in the country and the product
can be sourced for the desired quantities.

 A steady supply base is essential to ensure that the

exporter is able to deliver the goods to the foreign
buyer as per the agreed delivery time schedules

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Product Adaptability
 A product may have huge potential for export in one
market; yet the same product offered in another market
may draw a blank.

 The product to be successful in foreign markets must be

capable of the suitable changes in its design, colour, size,
taste, packaging, etc. This process of change is known as
product adaptation. Product adaptability is an important
consideration in the selection of the product for export.

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Demand in the Potential Export
Markets
 The level of demand for a product in the target export
markets is an important factor in the selection of the
product for export.
 The potential of the product in a market can be
assessed by considering certain factors like

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Demographic and Physical
Environment
a) Size of the population, its growth and density levels.
b) Is the size of the target population adequate?
c) Distribution of population by urban, sub-urban and
rural areas.
d) Climate and weather conditions. How will these
changes affect the product or the service offered?
e) Shipping distances from the point of export.
f) Nature of the transport and telecommunications
infrastructure.
g) Adequacy of the shipping, packaging, unloading, and
other local distribution networks.
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Political Environment
a) Is the system of government conducive to the conduct of
business?
b) What is extent of government involvement in the private
business transactions?
c) What is the government’s attitude towards imports?
d) Is the political system stable?
e) Does the government seek to dismantle quotas, and other
trade barriers?
f) Is the country committed to fostering higher levels of
exports and imports?

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Economic Environment
a) Predicted economic growth levels.
b)Gross national product and the balance of payment position of
the country.
c)Percentage share of exports and imports in the overall economy.
d) The country’s import to export ratio.
e)Rate of inflation, and foreign currency or the exchange
regulations.
f)What is the per capita income of the target country? Is it
increasing?
g)What is the discretionary income spent on the consumer goods?

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Social and Cultural Environment
a) What is the proportion of the literate population?
b) What is the average educational level of the people?
c) What is the percentage of the population identified as
middle class?
d) Is the target market similar to the home market in terms of
its characteristics?
e) Would the product require any modification or adaptation
or translation?

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Market Access
a) Legal aspects of distributorship in the foreign market
b) What are the documentary requirements, and the technical, or
environmental import regulations covering the product?
c) Is the market closed to foreigners, despite the emergence of a
free and open market?
d) What intellectual property protection laws would affect the
product or the service?
e) If a commercial dispute arises, does the judicial system offer a
fair and unbiased review?
f) Are the tax laws fair to foreign investors? What is the rate of tax
on repatriated profits?

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Product Potential
a) Is there an identified need for the product in the target market?
b) What is the gap between production and anticipated consumption?
c)To what extent the gap is being filled by the imports?
d)What is the percentage of imports to the total demand of the product?
e)Is the product or the service understood and accepted by the target
market?
f)What is the general level of acceptance of the imported products in the
foreign markets?
g)What is the state of competition in the foreign market for the product?
h)Who are the competing exporters and from which countries?

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Trade Restrictions
 A country may impose restrictions on the import of products
from other countries in the form of licensing or other
quantitative restrictions. This has changed now to some extent
due to WTO
 Yet it has been observed that the countries have started
imposing restrictions on imports citing reasons aimed at
protecting environment, child labout, public health, public safety
etc. Even the countries are resorting to the use of anti-dumping
duties or the countervailing duties or the safeguard duties to
protect their domestic industries.
 Such regulations or the tariff measures have the effect of
restricting imports into their countries. An exporter should find-
out whether such restrictions are applicable to the proposed
product for export in the target market.
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Incentives/Facilities Offered for
Export
An exporting country offers various incentives or
facilities to promote the exports.
In India, some of he incentives exporters enjoy are:
 duty drawback
 facility of duty free import of raw materials
 import of capital goods for the promotion of exports at
concession rates of import duties etc
Such incentives/facilities should be taken into account while
deciding the product for exports.

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Quality and Niche Marketing
 Studies on export-import trade indicate that firms that have
shown a sustained increase in their sales and overall profits
have often emphasized quality and concentrated on niches.
 Traditional marketing methods are no longer as effective as
they used to be and a new emphasis on quality and niche
marketing is proving successful. Creating brand identity
helps.

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Organisation Supporting Exporters
 Export Promotion Councils (EPC)
 Commodity Boards
 Federation of Indian Export Organisations (FIEO)
 Indian Institute of Foreign Trade (IIFT)
 Indian Institution of Packaging (IIP)
 Export Inspection Council (EIC)
 Indian Council of Arbitration (ICA)
 India Trade Promotion Organisation (ITPO)
 Chamber of Commerce & Industry (CII)
 Federation of Indian Chamber of Commerce & Industry (FICCI)
 Bureau of Indian Standards (BIS)
 Marine Products Export Development Authority (MPEDA)
 India Investment Centre (IIC)
 Directorate General of Foreign Trade (DGFT)
 Director General of Commercial Intelligence Statistics (DGCIS)

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