Just For Starters: How To Start Your Own Export Business (3rd Edn.)


Just For Starters: How To Start Your Own Export Business (3rd Edn.)

Author: NIIR Board
Format: Paperback
ISBN: 9789381039045
Code: NI44
Pages: 352
Price: Rs. 525.00   US$ 75.00

Published: 2005
Publisher: NIIR PROJECT CONSULTANCY SERVICES
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Entrepreneurship helps in the development of nation. A successful entrepreneur not only creates employment for himself but for hundreds. Deciding on a right project can lead you to the road to success. Entrepreneurship is one of the critical decisions to be made and it involves number of risk and has its own advantages also. But the charm of being a master of you is always above any other form of work. To start you own venture you have to decide on many things. Starting a business involves planning, making key financial decisions and completing a series of legal activities. To run a successful business, you need to learn all about your existing and potential customers, your competitors and the economic conditions of your market place. The small industries sector plays a vital role in the industrial development of the recent globalization process. In both developed and developing countries, the Government is turning to small and medium scale industries and entrepreneurs, as a means of economic development and a veritable means of solving problems. It is a seedbed of innovations, inventions and employment. Any unit or new entrepreneur, establishing or implementing the project needs a complete set of plan and finance for making it successful.

Startup India Stand up

Our Prime Minister unveiled a 19-point action plan for start-up enterprises in India. Highlighting the importance of the Standup India Scheme, Hon’ble Prime minister said that the job seeker has to become a job creator. Prime Minister announced that the initiative envisages loans to at least two aspiring entrepreneurs from the Scheduled Castes, Scheduled Tribes, and Women categories. It was also announced that the loan shall be in the ten lakh to one crore rupee range.

A startup India hub will be created as a single point of contact for the entire startup ecosystem to enable knowledge exchange and access to funding. Startup India campaign is based on an action plan aimed at promoting bank financing for start-up ventures to boost entrepreneurship and encourage startups with jobs creation.

Startup India is a flagship initiative of the Government of India, intended to build a strong ecosystem for nurturing innovation and Startups in the country. This will drive sustainable economic growth and generate large scale employment opportunities. The Government, through this initiative aims to empower Startups to grow through innovation and design.



What is Startup India offering to the Entrepreneurs?

Stand up India backed up by Department of Financial Services (DFS) intents to bring up Women and SC/ST entrepreneurs. They have planned to support 2.5 lakh borrowers with Bank loans (with at least 2 borrowers in both the category per branch) which can be returned up to seven years.

PM announced that “There will be no income tax on startups’ profits for three years”

PM plans to reduce the involvement of state government in the startups so that entrepreneurs can enjoy freedom.

No tax would be charged on any startup up to three years from the day of its establishment once it has been approved by Incubator.



You do not need to be a genius to run a successful business, but you do need some help. And that is exactly what this book is, a guide into the stimulating world of business ownership and management. This book basically deals with the preliminary steps, registration of the firm, organizational export assistance, selection of a product for export, obtaining a export licence, identification of export market, export environment, export marketing assistance, basis of export marketing, export potential products, packaging and labelling , export assistance and facilities, processing of an export order, export sales contract, negotiations for export business tips for success, new developments in business to business marketing, the evolution of strategic management, thirty six trends for the new millennium etc.

This book will help you to handle all aspects of running your own business. This is very useful book for new entrepreneurs. You will see how your dream to be your own boss becomes a reality.

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Contents

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1. Introduction
2. The Preliminary Steps
3. Registration of the Firm
4. Organizational Export Assistance
5. Selection of A Product for Export
6. Obtaining A Export Licence
7. Identification of Export Market
8. Export Environment
9. Export Marketing Assistance
10. Basis of Export Marketing
11. Export Potential Products
12. Where to Export
13. How to Export
14. Sales (Distribution) Channels Abroad
15. Knowledge of Foreign Exchange
16. Foreign Exchange Facilities to Exporters
17. Export Correspondence and Electronic Messaging
18. Trade Disputes
19. MDA-Marketing Development Assistance
20. Foreign Sales Agent
21. Export Pricing
22. Financing
23. Insurance to Exporters
24. Export Contracts
25. Packaging and Labelling
26. Quality
27. Transportation and Documentation
28. Fiscal Incentives for Exporting
29. Export Assistance and Facilities
30. Processing of an Export Order
31. Export Sales Contract
32. Negotiations for Export Business Tips for Success
33. New Developments in Business to Business Marketing
34. The Evolution of strategic management
35. Thirty six Trends for the New Millennium
36. Useful Addresses

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Sample Chapters


(Following is an extract of the content from the book)
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WHERE TO EXPORT

How to Pick A Market

After the compilation of national and international data one on exports of a product(s), the exporter should pick his market(s). He must devote his attention to the most promising area and avoid concentration on many markets. There are several national and international impediments to selling or enlarging export to certain areas. Besides, governmental assistance might not always be available on exports to all countries. It is always better to concentrate on a few markets.

A few primary considerations for picking a market are given below.

Political Embargo

The countries to which there is a political embargo on exports should be straight away excluded from the list of potential markets. For example, India does not permit exports to some countries. Similarly, the countries which do not allow import of the items which you intend to export should also be avoided.

Non-Availability of Export Assistance

Against exports for which payment is not received in foreign exchange, no export assistance is permissible. Such countries which include Bhutan should, therefore, also be normally dropped from the list of potential markets.

Special Requirements

Every market (and a country/region) has a special requirement in terms of product specifications, quality and a different price edge. The very fact that a product has found a niche in some market say Europe does not necessarily mean that the same niche exists in the other market say in USA or that the attitudes affecting buying decisions are similar.

For example, most Europeans regard America as an extremely cost conscious and technologically alert nation. This is not always the case. Many companies believe that a product, successful in Europe, will achieve similar success in the U.S. Not so. Many exporters, because of the absence of language barrier, think there are few differences between the requirements of the British (or for that matter Indian, Canadian or Australian) and U.S. markets. There are many.

Therefore, understanding the market is a key requirement. Japanese companies whose success in capturing such a large percentage of the US market is largely based on the fact that they have responded to American needs differences.

Then, it is not necessary to be a large company to sell in huge market like that of America. There are major opportunities for the small to medium sized firms with something special to offer. What is required is a proper market assessment in terms of special requirements.

Product Specification

Requirements of some markets are different in terms of product specifications. For example, many countries require electrical goods which can be operated on 110 voltage current as against 220 voltage in India. Hence, each market where product specification is different from the national ones may be avoided as production of the goods to suit their requirements might need major changes in plant outlay involving huge investment not warranted in the initial stages till not only a lucrative but also a promising and continuous market is assured.

There are also markets where the pattern of trade in a product is quite different. In select West European countries, for instance, motorists prefer only such auto components as are marked 'original equipment' (OE) even for replacement in comparison to motorists in developing countries. Hence, the latter markets offer better prospects for Indian auto ancillary items than developed countries, where it is difficult to get one's products marked as "OE".

Distant Location

Markets which are comparatively at a longer distance and for which regular shipping services are not available, not only make adherence to delivery schedules more difficult, but also render the goods uncompetitive on account of higher incidence of freight. Moreover, it might not be possible to maintain regular supply line which is important for securing a foothold in a market. Hence, while long distance markets may be overlooked from the list of promising area available immediately, exporters may concentrate on neighbouring countries.

Countries in Latin America like Brazil and Mexico fall in this category.

Market Accessibility

Certain markets are comparatively less accessible in terms of import regulations such as licensing and quota restrictions. Similarly, goods from particular sources might be preferred under bilateral trade or barter trade agreements as against products from India. Similarly, our products might not receive preferential or 'most-favoured nation' treatment in the matter of levying customs (import) duties and, hence, burdened with higher tariff, thereby, rendering them uncompetitive.

There might then be restrictions on remittances and convertibility of currency in some countries. These should also be normally excluded from the list of potential areas for export.

Stay away from market(s) where import restrictions and exchange control restrict scope for selling.

Preferential Treatment

While accessibility to certain markets is difficult, there are a few countries which accord preferential treatment to products from developing countries like India. European Community (EC) or European Union (EU) Common Market countries (France, Germany, Italy, Greece, Belgium, The Netherlands, Luxembourg, United Kingdom, Ireland, Denmark, Spain and Portugal), Australia, USA, etc., have, for example, instituted the scheme of Generalised System of Preferences (GSP) for imports from developing countries. Such markets may be selected for immediate exploitation for export.

Business Community

In several countries the business community comprises of Indians or Pakistanis, Sri Lankans, Bangla Deshis, etc. who are more receptive to our goods, they being aware of our trading practices. There might also be no language problem. It is, therefore, better if such countries are selected for initial exploration of markets.

Sources of Information

To Whom to Contact

At this stage the prospective exporter might feel somewhat baffled about the source from which to obtain information on the above given aspects. He may feel that he cannot collect this information without expert help, and truly so. The expert advice is available from different sources, best of them being the Ministry of Commerce (Foreign Trade/Territorial Division) and Indian Government Commercial Representatives Abroad. The Export Promotion Councils/Commodity Boards concerned as also the foreign offices of State Trading Corporation (STC) and India Trade Promotion Organisation are the other specialised offices to provide information on different aspects. The Embassies/Consulates of foreign countries in India can also provide useful information.

Trade Point. Contact the Trade Point in Ministry of Commerce for information on foreign trade. Set up with technical support from UNCTAD with connectivity to the Global Trade Point Network (GTPN), it has access to a large number of Electronic Trade Opportunities (ETOs) which directly benefit the exporting community.

NCTI. The National Centre for Trade Information (NCTI) has been set up in the India Trade Promotion Organisation (ITPO) premises in Pragati Maidan, New Delhi. Its objective is to collect, collate, store, process, analyse and disseminate information on trade and commerce at national and international level and by establishing linkages with export promotion bodies, etc.

Import Promotion Offices or Import Opportunities Offices in several countries are the other sources of information which could help the exporters in deciding the prospects of selling his product(s) in a particular country.

Appraisal of Markets

To achieve success in selling one's product(s) in the markets identified and picked up on the basis of export data and other information described in preceding paragraphs, it would be essential to make an appraisal of these markets in terms of demand and supply of the product(s) concerned, competition, prices, business conditions and trading practices, distribution methods, etc. Collection of information and its proper analysis on these aspects would help in the assessment of proper size of the market and the strategy needed for not only initial success but also deeper penetration at an accelerated rate.

Market Report

In fact, the exporter should prepare a preliminary report containing information on various aspects concerning the market and product. This 'Report' may cover a number of factors and their importance will vary with the product and with market being studied.

For example, If the exporter wants to sell table lamps, he will need to know the voltage and frequency used, the type of plug employed, and what electrical standards the product will have to meet. If he sells foods, product standards of a different sort should be known to him. Labelling regulations are the other aspects about food products which the exporter needs to find out.

The Market Report may contain, inter alia, the information on following aspects.

Demand and Supply

  1. Indigenous (local) production three years' growth trend and the likely expansion.
  2. Imports (sourcewise)- quantity and value - during the past three years.
  3. Export-quantity and value during the past three years.
  4. Production and imports of substitutes.
  5. Popular brands and makes.

Prices

  1. Import prices of the product and substitutes to be calculated on the basis of value divided by quantity. However, for manufactured products, unit value calculated in this manner may not give true picture.
  2. Customs duty and other local taxes including preferential duty, if any, on imports from any source.
  3. Prices at importer, wholesale and retail level.

Distribution Methods

  1. Normal distribution channels physical and trade both for indigenous and imported products.
  2. Mark-up/commission at different levels.
  3. Warehousing facilities available in the country at government/trade (importer's) level.

Trading Practices

  1. Quotations preferred in F.O.B., C. & F, C.I.F., and other prices.
  2. System of measurement-metric, Imperial, etc.
  3. Normal payment methods
  4. Packing and packaging requirements in terms of size of packing, material to be used, colour preference, etc.

Information on different aspects for the 'Market Report' will be available in varying degrees depending on the product and country from various sources detailed below.

Report of Market Surveys and Trade Delegations

Market studies and surveys for one commodity in one country or a number of countries and for a number of commodities in one country/area are conducted regularly by different national export promotion organisations and international agencies like the International Trade Centre (ITC), Geneva/Brussels. Their reports contain detailed information on marketing prospects(s) in particular country and areas. Information on marketing aspects is also available from the reports of trade delegations and study-cum-sales teams sponsored by different organisations. All these Reports are published, and available from concerned and/ or following organisations :--

  1. Export Promotion Councils/Commodity Boards
  2. India Trade Promotion Organisation,
  3. Report of the Surveys by India Government Commercial Trade Representatives abroad.
  4. Chambers of Commerce/Trade Associations-Reports of Trade Delegations/Study Teams.
  5. Indian Institute of Foreign Trade
  6. Federation of Indian Export Organisations
  7. Research organisations like National Council for Applied Economic Research (NCAER),
  8. International Trade Centre (ITC)-UNC-TAD/GATT, Geneva (Switzerland) and ITC, Brussels
  9. Directorate General of Commercial Intelligence & Statistics, Calcutta. Its weekly periodical i.e. Indian Trade Journal is particularly a good source for India's Trade Commissioner's reports.

Bibliography. An exhaustive and useful 'Bibliography on Overseas Market Surveys of Indian Products' has been published by the Indian Institute of Foreign Trade (IIFT). While the exporter should obtain a copy of this Bibliography which is priced very low, a reference to the concerned Export Promotion Councils and bodies like FIEO and IIFT is also advised. Exporters should also contact the India Trade Promotion Organisation which though has not published any bibliography, is maintaining product/country information in a well-classified manner.

Even if neither a survey/study has been conducted nor a delegation/study team sponsored so far, information on various marketing aspects could be available from the E.P. Councils/Trade Representatives abroad. They are continuously collecting/receiving information on overseas markets through their foreign offices or international research agencies. Approach them with the following product information :-

  1. Product-technical and trade name with product literature & catalogues, if possible
  2. Sizes and specifications
  3. Country(s) on which information is sought

Contact with Exporters

Establish contact with exporters of similar but non-competitive products as also exporters of other products to countries where you wish to sell. Members of your associations who have been in business and travelling abroad could be very helpful in giving information, if not directly related to your product, at least on general aspects on commercial and trading practices. Similarly, many large-scale exporters and Export Houses might be willing to share their information and experience with you. Do not hesitate in establishing contact with them.

Personnel in various organisations like IIFT, ITPO, EPCs and also Chambers of Commerce, who have been researching into the various markets could be the best source for information in this regard.

Commercial Banks

Foreign exchange departments of commercial banks do possess a lot of information which is useful to exporters. Being dealing with different products and countries, the collect varied type of information and may be willing to share with their clients.

Foreign Trade Representatives

The Trade Representatives of foreign countries in India could also be helpful in collecting necessary information on their country. Besides, they can tell you the names of trade associations in their country which can also be contacted for detailed information.

HOW TO EXPORT

Export Selling

Basically, there are two methods of export selling-direct and indirect. For direct exporting, the firm makes its own arrangements either within the existing selling apparatus or by setting up a separate and different department/company to handle export transactions. In case of indirect exporting, the firm sells through an intermediary like merchant-exporters, Export Houses, Export Consortia/Marketing Groups, and Trading Corporations-Central and State.

Though the choice between the two methods of selling depends upon different considerations, important of them being the amount of money and effort one wants to put in, it may sometimes be obligatory to operate through agencies like STC through agencies like STC through whom exports of certain products are canalised. There are also cases where both the methods are employed.

Indirect Exporting

Because of the complexities of export operations and till such time you are well equipped, it might be worthwhile to operate through one and/or the following different types of intermediaries operating in India.

Merchant-Exporters

There are several merchandising houses as distinct from Registered Export Houses (separately discussed below) specialising in export of groups of products to a number of countries, and mostly operating in metropolitan cities like Delhi, Mumbai, Calcutta and Chennai. The advantages vis-a-vis disadvantages that can be derived from merchant-exporters are detailed below. They usually make an outright purchase of the product and sell under manufacturers label. They may also put their own labels as agreed upon between the parties.

Advantages. Following are the advantages of exporting through merchant-exporters :-

  1. The manufacturer receives cash for his product and the merchant assumes all the sales and credit risks.
  2. No expenses on setting up an export organisation, howsoever small, and selection and training agents abroad.
  3. Export merchant provides the firm with a good way of finding out whether its products can command continuing sales in foreign markets. If he finds it difficult to sell, he will not place further orders.
  4. Merchant-exporter is invaluable for selling to distant or difficult markets where know-how is all that important.
  5. For 'package markets' the merchant-exporter can combine several shipments from various firms into one and, thereby, improving the chances of selling.
  6. The manufacturer is free to concentrate on production; for packing, shipping, etc., he merely follows the merchant's instructions.
  7. The merchant-exporter has his own sales organisation in various countries and system for gathering market information to assure continued marketing prospects.
  8. The benefits available under various export promotion schemes may continue to be enjoyed by the manufacturer.

Disadvantages. The agency of merchant-exporter is, however, not always advantageous on account of the following: -

  1. The manufacturer never comes into direct contact with foreign buyer and, thus, may not be able to develop his own (direct) export business.
  2. He does not establish any goodwill for his product if the same is sold under merchant's label and brand.
  3. The net return on sales is lower, after all, the merchant has to make a profit too.
  4. The product may not create a long-term market as it might be less competitive due to addition of merchant's profit and mark up.
  5. The manufacturers do not get the national honour and prestige that direct exporters are entitled to.

Export Houses/Trading Houses/Star Trading Houses/Super Star Trading Houses

Merchandising and manufacturing companies fulfilling certain criteria are registered by the Government of India for strengthening their negotiating capacity for sales abroad, building up a more enduring relationship between them and their supporting manufacturers, enabling them to keep their manufacturers of export product supplied with imported raw materials from ready stocks, and to develop cooperative relations with their counter-parts in overseas markets. A list of Registered Export Houses, etc. can be obtained from the Federation of Indian Export Organisations, New Delhi. Application for grant of certificate for Export House shall be filed with the concerned regional licensing authorities headed by Joint DGFT. However application for grant of Certificate for Trading House, Star Trading Houses and Super Star Trading Houses shall be filed with Director General of Foreign Trade. Such applications shall be made by the Registered office in the case of a company and Head office in care of others.

Advantages/Disadvantages. While the advantages/ disadvantages of operating through Export Houses/Trading Houses are, by and large, similar to those of merchant-exporters, there are a few additions.

Additional benefits which are available to manufacturers, by exporting their products through them. The additional advantages are:-

  1. Availability of imported raw materials in advance, as the Export Houses are/may be maintaining stocks due to policy of grant of additional import licences to them.
  2. The manufacturer can continue to utilise the benefit of import replenishment licences as the Export Houses may nominate him being their supporting manufacturer.
  3. Many of the Export Houses are very well organised and provide technical guidance for manufacturing the product.
  4. On account of their large scale organisation in India and abroad, as compared to Merchant-Exporters, they are in a better position to collect marketing information, consequently resulting enlarge business turnover.
  5. Export of products requiring after-sales service should better be routed through an Export House having foreign offices. After-sales service is a costly affair which is, by and large, beyond the scope of merchant-exporters and manufacturer himself.

Canalising Agencies

Government and other canalising agencies like the State Trading Corporation and its subsidiary Projects and Equipment Corporation (PEC) besides exporting specified canalised items, also undertake overseas selling of other products. Since many of these agencies are also registered as Export Houses, the advantages/disadvantages of exporting through them are, more or less, the same as explained above.

STC. The canalising agencies, however, provide special facilities and assistance to their supporting manufacturer-suppliers, and have evolved different systems of procuring and exporting canalised and non-canalised items. Since STC is the most important among these agencies, an attempt is made here to briefly indicate the procedure evolved by it for enrolling suppliers called 'Business Associates' and the facilities given to them.

CANALISED ITEMS

Enrolment of Business Associates

  1. Apply to STC (head office) on the prescribed proforma giving range and specifications, if any, of the product(s).
  2. Verification/inspection of manufacturing units either by STC or through Small Industries Service Institute (SISI) concerned.
  3. On satisfactory inspection report, the unit is approved as STC's Business Associate and attached with concerned branch/regional office.
  4. No registration fee is charged from Associates.

Obligations of Associates

  1. The Associate will enter into a contractual agreement (back to back) to the effect that he will supply the goods of right type at the price negotiated in conjunction with STC.
  2. The Associate will not directly negotiate price make offers to importers in countries where goods are already being exported.
  3. The associates can, nowever, negotiate price and procure orders if the products are to be newely introduced. Execution of such orders will, however, be made through STC only.
  4. The export products would be offered for checking of quality of STC officials in the manner prescribed.
  5. The Associates will pay to STC the service charges prescribed from time to time.
  6. The Associate will not as a matter of right demand the placement of an export order of a particular quality, either initially or for a repeated offer.
  7. Goods will be despatched to the STC's clearing and forwarding agents appointed for its Associates.
  8. Letter of Credit (L/C) opened by the importer will neither be divided nor assigned among the Associates, except in case where goods are exported by an individual Associate against a particular L/C.
  9. Documents will be prepared by each Associate, and exports effected on 'A/C STC'.

Facilities

  1. STC coordinates shipment of goods like leather footwear exported in lots, and prepares bill of lading (B/L) and other documents supported by individual supplier's/Associate's documents.
  2. Finance against RR and at concessional rate of interest, for products like footwear.
  3. Loans for procurement of machines for tanneries, footwear and shoe components.
  4. Assistance for modernising the leather industry by setting up Common Facility Centres such as testing laboratories and research centres.
  5. Arrangement for supply of good quality and standard raw materials. The scheme for different types of materials/products is as follows:

Leather Products

  1. Purchases in bulk from tanneries with the instructions that materials be supplied to Associates at given prices.
  2. Payment to tanneries is made by STC.
  3. Cost of material is recovered from Associates from the sale proceeds of their exports.
  4. STC charges a little commission on such supplies.

NON-CANALISED ITEMS

Enrolment of Business Associates

  1. The scheme of enrolling 'Business Associates' is normally open to manufacturers of products and not to merchants.
  2. Application on the prescribed proforma with details of (a) names, range and specification of products manufactured, (b) capacity and production, (c) quality control measures and standards followed, (d) balance sheet, (e) bank report and reference, and (f) past exports, if any, be sent to the head office/branch office of STC.
  3. Inspection of unit by STC direct and/or through Small Industries Service Institute (SISI).
  4. Enrolment as Business Associate on receipt of satisfactory report without payment of any fee.

Terms and Conditions

Contractual agreement between the Associate and STC, inter alia, provides that :-

  1. The contracts for the export of goods may be concluded between the STC and foreign buyer or between the Associate and foreign buyer. In the latter case, however, they will contain a stipulation that exports are routed through the STC and the Letter of Credit (L/C) etc, is opened in the name of STC which is transferable in the name of an Associate by the STC. Shipping Documents shall indicate that export is being made on behalf of STC.
  2. The Associate shall submit to the STC a copy each of the relative invoices and bills of lading immediately on effecting shipment.
  3. The Associate will furnish to the STC a monthly statement indicating the contracts signed by him and the shipments affected under them.
  4. A "Nil" return will be sent to STC in case no export order has been reviewed and/or no shipment is effected by the Associate.
  5. The Associate shall refer to the STC all enquiries received by him for supply of his products. He shall not associate himself with any other party in India for organising his exports in the markets in question, except with the exports in the markets in question, except with the written consent of STC. However, the STC's right to export the particular product to any country either directly or through any other Associate is not impaired.
  6. All expenses involved in publicity materials, samples, etc., will be borne by the Associate. He shall also make available sufficient number of catalogues, samples, etc., free of charge, to enable the STC to forward the same to foreign buyers.
  7. The Associate shall pay to STC a specified service charge on the FOB value of goods exported. This payment will be made at the time of negotiating documents under L/C or at the option of STC in such other manner as may be approved by it.
  8. If the Associate desires to use STC's name in his letterheads and forms, he shall obtain prior permission from the STC in writing.

Facilities & Benefits

    1. Marketing assistance through: -
    2. Participation in trade fairs/exhibitions on behalf of Associates.
    3. Obtaining of tender documents and bearing of participation cost,
  1. Financial assistance by discounting of documents. The amount is advanced of a concessional rate of interest and adjusted from proceeds of export sales.
  2. Attestation of FOB value done by banks-STC being empowered to attest, thereby, helping the Associates to claim export benefits, if any.
  3. Assistance in procurement of raw materials and components, imported and indigenous, even by making investment.
  4. Supply of imported materials (whether canalised through STC or non-canalised but otherwise permissible) ex-stock or through fresh imports.
  5. Assistance to expand the existing units or for creation of additional production capacity for exports, in the form of loan, supply of imported plant and machinery or raw materials.

State Corporations

Still another media available for indirect exporting is the agency of State Corporations dealing in export marketing of products particularly those manufactured in the small scale sector. While in some States, separate agencies like Gujarat Export Corporation, U.P. Export Corporation, etc., have been established, in other places, States Small Industries Corporations have been simultaneously entrusted with development of exports as well.

These Corporations, by and large, follow the pattern of STC in all matters connected with exports, i.e., in relation to enrolment of manufacturers as their Business Associates and providing of facilities, etc. Some of them may have also entered into agreements with STC, etc., for taking advantage of the expertise gained and contacts established by the latter in regard to marketing of Indian products abroad. While exporters are advised to contact the individual Corporations for detailed information, the terms and conditions in general include an agreement to be entered into by them with the Corporations to the effect of the following.

Terms & Conditions

  1. Exports of all products will be effected 'on account' Corporation. The invoices and relative bill of lading shall contain a reference to the name of the Corporation.
  2. Copies to export order shall be endorsed to the Corporation.
  3. Indication in the Proforma Invoice that exports shall be 'on account' Corporation.
  4. Exports effected 'on account' Corporation shall be to the entire benefit of the Corporation for the purpose of registration as an 'Export House'. The Business Associates shall not apply for such registration on the basis of exports made 'on account' Corporation.

Facilities and Incentives

  1. All incentives whatsoever admissible on exports of items shall be enjoyed by the Business Associates. The Corporation shall issue a 'No Objection' certificate to the Associate as soon as the goods are shipped and bills negotiated to the effect that it has no claim on these incentives.
  2. The Corporation will assist the Associates in getting incentives from various sources but it is not responsible if any claim is rejected.

Quality & Standards

  1. The Business Associates shall export the best quality of goods and responsible for any claim made by the foreign buyer for defective quality or late delivery.
  2. The Corporation shall have the right to check quality, standards and packing, etc., of all the goods exported on its account.
  3. The inspection of goods by the Corporation shall not absolve the Business Associate from any claim whatsoever made by the foreign buyers.

Termination

  1. Either party may terminate the agreement as to the future business by giving three months notice to the other party.
  2. Any dispute or difference arising between the parties shall be referred to sole arbitrator (Director of Industries or his nominee in case of Punjab).

Export Marketing Groups

or

Export Consortia

The problems of assessing, breaking into, sustaining and developing markets which are comparatively complicated, can be overcome by manufacturers particularly in the small and medium scale sector, by organising themselves into export marketing groups/export consortia. Sporadic sports have been/are being made in India for their establishment. Contact the Director (Export), DCSSI's office, Nirman Bhawan, New Delhi-110011, for further details.

Direct Exporting

In case the firm decides not to operate through any of the intermediaries described in the earlier paragraphs, and opts for direct exporting, it will have to most carefully choose between one and/or the other kind of export sales organisation to be created. If its export plans are 'ambitious' and 'prospects for selling to a number of markets promising', it will need a 'more elaborate set up'. If the firm is making a mere modest start, the appointment of an export manager plus a clerk may be sufficient. The different types of sales organisations that may be advantageously adopted by the firms depending upon their plans to export and product(s) and/or market(s), are indicated below.

Added Responsibility to Sales Personnel

The firms wishing to start export business may in the beginning, give added responsibility of handling export marketing to existing sales personnel. This arrangement seems simple and economical and it usually works well especially if a company's export sales are largely concentrated in one or two areas where the documents demanded are not complicated and credit or shipping problems are few.

Export Techniques

The staff to be trained for export sales will, however, be required to be given training in export marketing techniques. These training facilities are available with a number of institutions (both in the public and private sector, and at university and college levels), some of which are listed here.

Export Training Institutes

The Export Training Institutes exist in India as well as abroad. At international level, the well-known institute is-

The Institute of Export

64 Clifton Street

London EC 2A 4 HB (UK)

At national level, there is a primary and other institutions as listed below.

Primary Institution

Indian Institute of Foreign Trade,

B-21, Institutional Area, South of IIT Campus,

New Delhi-110016

Contact the Institute's Programmes Officer for details of its training/orientation programmes

Other Institutions

1. Small Industries Service Institutes (SISIs).

2. Delhi Productivity Council,

Swami Ram Tirath Nagar

New Delhi-110055

3. (i) Indian Institute of Management

10th K.M. Bannerhatta Road

,

Bangalore-560076

(ii) Indian Institute of Management

15 Rajani Sen Road,

Calcutta-700026

(iii) Indian Institute of Management Vastrapur,

Ahmedabad

(iv) Indian Institute of Management

Post Bag No. 2, Sector-1, Aligani Extn. P.O.

Lucknow-226020

4. Administrative Staff College of India,

Bella Vista,

Hyderabad-500 049

5. Small Industry Extension Training Institute (SIET),

Yousufguda,

Hyderabad-500 045

Colleges/Universities

1. Delhi School of Economics

(Deptt. of Commerce)

Delhi University

Delhi-110007

2. Punjab University

(Deptt. of Business Management),

Patiala (Punjab)

3. Punjab University

(Deptt. of Business Management),

Chandigarh

4. University of Rajasthan

(Deptt. of Business Management),

Jaipur (Rajasthan)

5. Commercial and Secretarial Institute,

Madarsa Road, Kashmere Gate

Delhi-110006

6. Bhartiya Vidya Bhavan

Kasturba Gandhi Marg

New Delhi - 110001

There are also several organisations in the private sector which organise training programmes. Look into daily newspapers and you will find some of them.

Export Department

In the scheme of export sales organisation, the next step is to create/set up a separate Export Department as the firm's overseas sales expand. This department is usually put under the overall charge and responsibility of the head of the firm, say, the Managing Director, President or Proprietor and headed by a fulfilled ged export manager with the complementary staff. It works out its own strategy for promotion of export and maintains close liaison with the production and related departments. Expenses incurred on this department are directly charged to exports which is not the case where responsibility of export sales is entrusted to existing personnel.

Export Company

Depending upon the firm's export sales turnover, existing and potential, it may consider setting up a separate export company, This company may ultimately turn into a Registered Export House dealing with not only parent firm's products but also of other firms. 'Normally, this company buys a certain amount of production from its parent company and the latter bills it as it does any domestic customer'.

Organising for Exports

Where you decide to give added responsibility to your existing sales personnel or establish a separate department/company, you need to organise yourselves for exports. Export marketing being highly specialised and scientific activity, you need to create the necessary apparatus each concerned with specific functions requiring special attention.

The organisational pattern will depend upon the size (scale) at which you want to commence your export marketing activity. However, there is a minimum requirement with regard to staff and personnel which must be fulfilled. These requirements as outlined in the chart may be suitably modified.


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