Basics of Export Marketing

Strategy
A
Presentation
By
Dr. Pawan K. Chugan
Institute of Management
Nirma University
Ahmedabad
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 Basics of Export Marketing Strategy
What is Export
Export include physical exports, service
exports, re-exports and deemed exports.
The FT(D&R) Act 1992 defines export as taking
out of India goods by land, sea or air. Although
the Act does not term as “physical export”, we
have put this phrase to distinguish it from
“deemed export” which is sales in India but
considered as export for limited purposes.
However, it includes re-exports as also the services
exports.
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 Basics of Export Marketing Strategy
Free Exports
As per the policy, all goods my be exported without
any restriction except to extent such exports are
regulated by ITC(HS) Classification of Export and
Import Items or any other provision of the policy,
or any other law for the time being in force.
Export of Gifts
Goods including edible items, of value not
exceeding Rs. 5,00,000/- in a licensing year, may be
exported as gift. However, items mentioned as
restricted for exports in ITC(HS) shall not be
exported as gift, without a licence / certificate /
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permission.
Basics of Export Marketing Strategy
Third Party Exports
It means exports made by an exporter or
manufacturer on behalf of another exporter(s).
In such cases shipping bill shall indicate the
name of both the exporter / manufacturer and
exporter(s)
Re-exports
The definition of exports defines taking out of
goods to a place outside India. It does not
specify as to what form of these goods i.e.
whether indigenous or imported. 4
Basics of Export Marketing Strategy
Hence, it includes re-exports of imported
goods in any form or condition i.e. with or
without any processing or manufacture,
repacking, labelling, etc. Even mistakenly
imported goods can be re-exported.

Goods imported, in accordance with the

policy, may be exported in the same or
substantially the same form, without a licence /
certificate / permission provided the item to be
imported or exported is not mentioned as
restricted in the ITC(HS) classification. 5
Basics of Export Marketing Strategy

Replacement Exports
The policy permits the goods or parts
thereof on being exported and found
defective / damaged or otherwise unfit for
use, replacement free of charge by the
exporter and such goods shall be allowed
clearance by customs authorities provided
that the replacement goods are not
mentioned as restricted in the ITC (HS)
Classification. 6
Basics of Export Marketing Strategy

Such goods or parts thereof on being

exported and found defective, damaged or
otherwise unfit for use may be imported
for repair and subsequent re-export. Such
goods shall be allowed clearance without a
licence / certificate / permission and in
accordance with Customs notification on
this behalf.
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Basics of Export Marketing Strategy
Consignment Export / Outright Sale
Exports
Exports can also be categoriesed
according to the system of payment to be
realized as follows:
Outright (Sales) Exports:
Normally, most of the exports are made
on outright basis against firm price, and
where no return of the unsold goods is
made. 8
Basics of Export Marketing Strategy
Consignment Exports:
These are also known as on ‘Sale or
Return’ basis where the importer abroad
is at liberty to return the unsold goods,
although the exports may / may not be
against the firm price.
There is thus, risk of :
No sale
Return of Goods and
Non-receipt of sale proceeds 9
 Basics of Export Marketing Strategy
The bank in such cases forward shipping
documents to their overseas
branch/correspondent, with instructions to
deliver the documents only against trust
receipt/undertaking to deliver sale proceeds
by a specified date.
Consignment exports can also be made to
Indian warehouses abroad in which case
realization of export sale proceeds is
permitted with 15 months.
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Basics of Export Marketing Strategy
Deemed Exports:
As per foreign trade policy”deemed
exports” means “those transactions in
which the goods do not have to leave
the country”. Hence, the essential
characteristics of any sale to be
considered as deemed export are:
1. Transaction may involve any item i.e.
product only and not services, and
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 Basics of Export Marketing Strategy
2. Sale is only to the specific categories as
listed under the chapter on deemed
exports of FTP of India and
3. The item does not leave the country i.e.
exported out side India, if it goes out, the
transaction will be termed as physical
exports.
Foreign trade policy further specifies
categories of supplies of goods by the main
or sub-contractors as detailed in the
chapter on Deemed Export Assistance.
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Basics of Export Marketing Strategy
Project Exports
Export of civil construction projects,
industrial turnkey projects and
consultancy services are collectively
referred to as “project exports”.
Services Exports
Services include all tradable services
covered under the GATS and earning free
foreign exchange as listed in the
Handbook 13
Basics of Export Marketing Strategy
Export of Goods on Lease, Hire, etc.
Export of machinery, equipment, etc. are
also permitted to be made on lease, hire,
etc. basis under agreement with the
overseas lessee against collection of hire
charges and ultimate re-import of the
goods exported. Exporters who wish to
export goods on such terms may
approach, through an AD, the concerned
regional office of RBI giving full
particulars. 14
Basics of Export Marketing Strategy
Export Licence/ Certificate / Permission
Restricted Items:

An application for grant of an export licence /

permission / certificate in respect of items
mentioned in Schedule II of ITC(HS)
Classification of Exports and Imports is
required to be made in the Aayaat Niryaat Form
the DGFT at the H/Q along with the documents
prescribed therein.

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Basics of Export Marketing Strategy
Export Licence/ Certificate / Permission
SCOMET: An Inter-Ministerial working
group in DGFT shall consider
applications for export of Special
Chemicals, Organism, Materials,
Equipments, and Technologies
(SCOMET) as specified in Schedule 2,
Appendix 3 of ITC(HS) on the basis of
guidelines issued in this regard from time
to time. Applications for licence are to be
sent to the DGFT. 16
Basics of Export Marketing Strategy
Export of Items under State Trading
Regime
An application for export of items
mentioned in ITC(HS) under STR regime
is required to made to the DGFT.

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Basics of Export Marketing Strategy

Merchanting Trade
It is also known as Intermediary Trade.
It involves purchase of good from one country
for sale to another country.

RBI has made rules relating to financing of

such trade in intermediaries in the India. For
example, such trade will cover financing of
goods shipped from UK to Sri Lanka.

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Basics of Export Marketing Strategy

Thus, trade between two foreign entities

operated by an Indian trader is described as
‘Merchanting Trade Transactions”. In such a
transaction, it is not necessary to physically
import the goods into the country and then re-
export the same

Offshore Trading
It is the same as Merchanting or Intermediary
trade as explained above.
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 Basics of Export Marketing Strategy
Export Environment in India
It generally, consist of the study of:
National Foreign Trade Policy 2015-20
Study of Duty Free or Duty Concessional Imports
Availability of Foreign Exchange for Export
Promotion etc.
Availability of Export Assistance and various schemes
thereof
Policy for Foreign Direct Investment and Joint
Ventures / Collaborations
Understanding of Procedural Aspects.

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Basics of Export Marketing Strategy
FOCUS MARKETS
FOCUS LAC
FOCUS AFRICA
FOCUS CIS
Export Cluster Towns
Tirpur (TN) for hosiery
Panipat (Haryana) and Ludhiana (Punjab)
for woolens etc.

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 Basics of Export Marketing Strategy

Indian Territorial Limit

Customs Act, 1962 a Union Legislation, extending to the
whole of India (including J&K) and the Indian territorial
limit i.e. every point on a line at a distance of 12 nautical
miles (1NM = 6, 080 feet approx) from appropriate base
( i.e. nearest land point) and the air space above every
such point.

Beyond the 12 NM territorial (political) limit, every point

at sea bed and sub-soil plus the sea waters up to 200 NM
from base line is India's continental shelf and exclusive
economic zone for exploration, exploitation,
environment protection etc. 22
Basics of Export Marketing Strategy

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