CHALLENGES TO INDIAN EXPORT

Submitted By
1. Reet Khanuja

15202036

2. Mrityunjay Kr. Pandey

15202030

3. Mohini Khandelwal

15202028

4. Kalicharan Padhy

15202022

5. Laxmi Agarwalla

15202024

6. Nivedita Nanda

15202032

7. Kingshuk Gupta

15202022

MAJOR EXPORTS OF INDIA

Oil Products - $
61.2 billion.
Gems, precious metal - $41.2 billion.
Textile Industry - $
40.0 billion.
Pharmacy Products - $ 24.0 billion.

MAJOR COUNTRIES TO WHICH

EXPORTS ARE DONE

USA
UAE
Singapore
UK
Germany

$33.9
18.6
10.3
9.7
5.2

Billion
Billion
Billion
Billion
Billion

MAJOR COMPANYS INVOLVED

Essar

Bello Jewels Pvt Ltd.

It is one among the leading companies in india. The gems and jewelry sector
covers a wide range of items which include diamonds, precious and semi
precious stones, in addition to gold,silver, studded and costume jewelry.
The gems and jewelry industry in India is mostly concentrated in the
unorganized sector and employs around 2 million workers.
The diamond segment contributes a major share of nearly 70 percent of the
total (gems and jewelry) export and thus the remainder of the analysis focuses
on the performance of Indian diamond exports

Bombay Dyeing

Cotton, textiles and garments are traditional export items and an important
industry for India. Indias textile industry, in particular, is the second largest
textile industry in the world after China. Over time, a number of changes in
the domestic and global environment have had a bearing on this industry.

It is a highly labour-intensive industry and therefore of chief importance to

the Indian economy.

This industry employs the largest number of workers after agriculture,

around 35 million workers, and an additional 50 million people who are
typically engaged in allied activities.

India is the largest producer of jute, the second largest producer of Silk
and the third largest producer of cotton (and Cellulosic Fibre/Yarn).
Consequently, this industry is visible in global trade, and contributes to 12
percent of world exports of textile fiber and yarn, and up to 25 percent of
world trade in cotton yarn.

The apparel industry is one of largest foreign revenue earners and in

aggregate, contributes 12 percent of Indias total exports

Ranbaxy

The dynamic growth of Indian Pharma Industry, a knowledge based industry,

and the recommendations of four major Pharma associations made the Ministry
of Commerce & Industry to realize the need for separate export promotion
council.
India ranks 3rd in terms of volume of production (10 per cent of global share)
and 14th largest by value (1.5 per cent of global share). The reason for lower
value share is the lowest cost of drugs in India ranging from 5 per cent to 50 per
cent less as compared to developed countries.
The industry is making adequate returns from the domestic sales but bulk of its
profits come from the export of generics and active pharmaceutical ingredients
to the developed markets. The industry has been exporting more than half of its
total production, which is estimated to be more than 20 billion dollars currently.
The largest export destination continues to be the US, followed by the UK,
Germany, South Africa, and Russia.

Shipping Industries at a glance

Zim Integrated Shipping Services India Private Limited(ZIM is

owned by 32% Israel Corporation and 68% Financial Institutions
and Ship-Owners.)
Shipping Corporation of India Limited(indian owned)
MSC Agency India Private Limited(South Africa)
Qatar Shipping Company(Qatar UAE)
Doehle Danautic India
TORM Shipping India Pte. Ltd.
Dockendale Ship Management India Private Limited
Mitsui O.S.K. Lines Maritime India Pvt. Ltd
Northern Marine Management
Mariners Planet India Pvt. Ltd
Merchant Shipping Services Private Limited
MMS Maritime (India) Pvt. Ltd.
The Great Eastern Shipping Company Ltd.

Top 10 Shipping Companies in India

Shipping Corporation Of India Ltd.

Revenue:- Rs 13808 crores.

Operations:- 79 vessels operational in sea.
Employees:- 2500-3000.
Essar shipping

Revenue- Rs 8383 crores.

Operations- 26 vessels carry crude oil and other bulk cargo.
Employees- 3000-6000.
The Great Eastern Shipping Company

Revenue- Rs 8157 crores.

Operations- 20 vessels.
Employees- 2000-3000.

Continued..

Bharati Shipyard

Revenue- Rs 5257 crores.

Operation- Only in designing and building.

Employees- 3000-5000.

ABG Shipyard

Revenue- Rs 4322 crores.

Operation- Ship building ,designing and repairing.

Employee- 3000-4000.

Mercator Limited
Revenue- Rs 1835 crores.
Operation-Company caters shipping ,coal dredging and
offshore
business.
Employees- 2000-5000.

Continued..

Gujarat pipavav

Revenue- Rs 1515 crores.

Operation- Build merchant vessels.

Employees- 3500-5000.

Varun Shipping

Revenue- Rs 1500 crores.

Operation- 20 vessels,10 LPG carriers,3 crude oil tankers.

Employee- 3000-5000.

Global Offshore services Ltd.

Revenue-Rs 641 crores.

Operations- 10 vessels.

Employees-1500-2000.

Shreyas Shipping

Revenue- Rs 185 crores.

Operation- Port agency services.

Employee- 2000-4000.

Size and Structure

Size of the Industry

515 vessels with a

GRT(Gross Registered
Tonnage) of 7.06 million

Geographical distribution

The major ports are located at

Calcutta/ Haldia, Chennai,
Cochin, Ennore, Jawaharlal
Nehru Port at Nhava Sheva,
Kandla, Mormugao, Mumbai,
New Mangalore, Paradip,
Tuticorin and Vishakhapatnam.

Output per annum

42% of total Indian tonnage

Percentage in world market

8% of entire world trade

Indian Shipping Industry At A Glance in

2014 15

Cargo traffic,which was 976 MMT in 2012 is expected to reach 1758 MMT
by 2017.
India currently ranks 16th among maritime countries,and boasts a
coastline of about 7517 km.
Around 95 percent of Indias trade by volume and 70 percent by value
takes place through maritime transport,according to Ministry Of Shipping.
The capacity of all major ports as on March 31,2014 was 800.52 MMT
against cargo traffic of 555.54 MMT handled in 2013-14.
The container handling in 2014 expanded 7.15% to 7.25% .
Indian port sector received FDI worth $ 1637.30 million in the period April
2000-February 2015,as per the Department of Industrial Policy &
Promotion(DIPP), Ministry of Commerce and Industries.
The ports sector was also awarded 30 projects in FY14, investing over Rs
20000 crore (US $ 3.16 billion) which is a threefold increase over the
preceding year.

What Strategies Are Adapted When Oil Prices

Change.

1.

2.

Ship owners started to use fuel surcharges to recoup some of the

increased costs that they face so that they pass some of these costs
on to the importers. Other then passing the costs, liners are also
implementing other strategies to cover this variable cost, below are
some of the trends:
Designing More Efficient VesselsShips will save approximately 50% on fuel consumption compared
to the old design fleet.
Initial high investment in designing ships are high but this will have
a very short period of payback time due to cost efficiency on fuel.
Another advantage of new ships is that they will be 100% recyclable
when they retire after25 years of service.
Vessel SpeedIncreasing the speed from say 23 knots to 26 knots will incur extra
fuel cost but can be covered by timely shipping of products.
3. Outsourcing Fuel supplyMore and more liners are outsourcing their fuel supply to
professional companies who focus on this issue alone so that liners
can focus more on their core business. These companies develop
comprehensive fuel strategies that effectively manage oil prices as
well as finding the right type of fuel to meet government
regulations.

Highlights of the Foreign Trade Policies 20152020

Increase exports to $900 billion by 2019-20, from $466
billion in 2013-14
Raise India's share in world exports from 2% to3.5%.
Merchandise Export from India Scheme (MEIS) and
ServiceExports from India Scheme (SEIS) launched.
Higher level of rewards under MEIS for export items
withHigh domestic content and value addition.
Export obligation under EPCG scheme reduced to 75%
toPromote domestic capital goods manufacturing.

Objectives of Foreign Trade Policies

To double India's share
To increase economic growth
To encorage domestic producers
To enhance technological strength
To encourage attainment of quality goods

PORT SECTOR

India has 12 major ports and about 187 non-major ports.

Ports handle 95% of trade volumes in India.
The Indian ports sector plays a vital role in sustaining
growth in the countrys trade and commerce.
Indian Government plays an important role in supporting
the ports sector. It has allowed Foreign Direct Investment
(FDI) up to 100 per cent under the automatic route for port
and harbour construction and maintenance projects.
The DIPP, Ministry of Commerce and Industry, reported
that the Indian ports sector received FDI worth US$
1,637.3 million between April 2000 and May 2015.

PORT CLEARANCES

Exporter has to obtain IEC code from DGFT

Open a current account in the designated bank for credit of
any Drawback incentive.
All the exporters intending to export under the export
promotion scheme need to get their licences registered at
the Customs Station.
The processing of Shipping Bills requires the production of
a GR form that is used to monitor the foreign exchange
remittance in respect of the export goods .

PORT CLEARANCES

Shipping Bill

"Let Export Order"

Stuffing / Loading of goods in containers

Export General Manifest

Bill of Lading

PAYMENT TECHNIQUES

EXIM bank is the premier finance institution in India,

established in 1982, under Export Import Bank Of India
Act, 1981.

Main Idea is to promote Indian Export.

Exim Bank is managed by a Board of Directors, which has

representatives from the Government, Reserve Bank of
India,Export Credit Guarantee Corporation of India, a
financial institution, public sector banks, and business
communities.

FUNCTIONS OF BANK
1. Corporate Banking Group
2. Export Credit Services
3. Credit Proposals from SMEs
4. Support Services (Research & Planning,
Treasury & Accounts etc..)

EXPORT FINANCE METHODS

1. Letter of Credit
2. Bills of Exchange / Drafts
3. Factoring
4. Working Capital Financing
5. Counter trade

EXPORT INSURANCE

Export Insurance Services,Inc.is an Insurance brokerage specializing in commercial

credit, export credit & political risk Insurance for domestic & International trade &
finance.
EIS,Inc.is among the top three brokers serving small business exporters for the
Export-Import Bank of the United states.
EIS has been repeatedly recognized by EX-IM Bank for the outstanding growth in its
portfolio of U.S.

Usually small business exporters who actively use EX-IM bank Insurance.

EIS has also demonstrated leadership bringing small business clients to EXIM.

Where as banks include new online insurance application process,which is designed to

speed up services to users .

The Benefit of Export Insurance Policy

Up to 95% cover is provided to the Exporter.

The Exporter is covered against loss suffered due to specified risk .
Export risk includes political risk & commercial risk.
NEIA(National Export Insurance a/c) is operated by ECGC & set up by GOI
to cover the credit Insurance.
The NEIA trust also provides cover to banks for buyers credit transactions
which facilitates foreign buyer to pay for project exports from India.
To ensure proper & effective utilization of the NEIA scheme,to monitor its
operations & to provide guidance, the GOI has set up a high powered
committee. They are

1) The Secretary-Ministry of Commerce - chairman

2) The Secretary-Department of Economic affairs
3) The Secretary-Ministry of External affairs
4) The Additional secretary & Financial advisor-Department of commerce.
5) The CMD-EXIM Bank
6) Representatives of RBI
7) Joint Secretary-Ministry of commerce & Industry.

Factors Affecting Export Business

Trade barriers : The degree to which governments erect or remove trade

barriers has a tremendous impact on importing and exporting.
Shipping costs: Importing and exporting typically involves the movement
of large amounts of materials. The costs of this movement have a major
impact on whether importing and exporting can be profitable.
Domestic costs and infrastructure availability: One reason that
importing and exporting has risen is that it has become cheaper and more
feasible to produce many things in poorer countries and ship them to richer
ones.
Marketing: Marketing is indeed a crucial aspect in businesses, most
especially in the import export business. You must make them aware of
these products and services.
Logistics: In the import export business, the delivery of products is one of
the utmost important considerations, most especially if the products
imported or exported are perishable.
Government rules: This business is always dependent on various rules
imposed by the government. These rules may vary from country to country.

OTHER TOP EXPORTED

PRODUCTS AND COMPANIES
Natural or cultured pearls, precious or semiprecious stones, and jewellery
INVOLVED
ARE:
clad with precious metals and also coins accounted for 15.95% of total
exports. Companies involved are Bello Jewels Pvt Ltd, C.R enterprise ,
Rajesh export limited.

Exports of Iron and steel accounted for 3.76% of the totalbusiness.

Companies involved are Vedanta ltd, Sesa goa group, Ashapura group.
Organic chemicals like fertilizers and similar products made up 3.64% of
Indias exports. Companies involved are Hindustan Fertilizer Corporation
Limited, Madras Fertilizers Limited, National Fertilizers Limited.