All About How To Become A Successful Exporter | Any Origin

Hi friend. Welcome to this foundation course in the area of global business and exports management. The aim of this course is to provide a basic knowledge of the entire process of exporting. The contents of this course are created to help you learn all about this domain irrespective of the country of your origin and country of exports. However certain examples of exports from India are used to illustrate the points. The examples are easily replicable to other countries. The course plan you can download from the resources section of this lecture.

Answer all that is right (only one answer is correct- Single choice quiz)

Hello friends, in this section. My idea is to share with you one very interesting case study that I have developed for this course This case study is based on real events, although the exact details of the people involved and the company involved are not shared.

The idea is for educational purposes. So this case study will give you a fairly good idea about how certain simple ideas can get converted into big business and what is involved in the journey to make those ideas successful. What are the difficulties that are generally faced by global business professionals? So all those things are covered in this case study.

So I'll be showing you this case study in the form of a story. The story of this person, Mr. Krishna Reddy, who hails from India, working in France. So how he got the idea of a new business and how converted his idea into a very big global company.

So this case study that I have titled is- Bringing Indian service industry to the world. This case study is about one Mr. Krishna Rao, who hails from Bangalore. He's an IIT-IIM graduate and got a job placement in the technology department of an MNC, French MNC, headquartered in Paris, France.

He was located in Paris, France. And although he had very different ideas about his career, he took the opportunity because he found it very interesting to get some experience in an overseas location where he had never ventured, he never went outside India any time in his life.

So this was a great opportunity to learn about the world and how business is done globally. He was quite impressed, actually, with the global entrepreneurs. He really wanted to become a global entrepreneur, and he found this opportunity as a gateway for learning about his future career.

An Indian middle-class person with IIT - IIM graduation, he joined this MNC company that is into electric business based in Paris, France. So while being in Paris, France, it was a totally new experience for him and he always wanted to remain in touch with his Indian roots.

He found that there are a lot of Indian families who are living in France and neighboring countries and through WhatsApp groups, he was very much in touch with many, many families who are migrants working in not only France but in other countries.

And he wanted to be communicative with them. He wanted to visit them. And luckily, his job in the technology, new technology department of the company required him to travel to different European countries on work. During his free time on his trips, he remained in touch with Indian families in different countries and attended the events, any events, or any family functions wherever he was invited.

So he readily accepted those offers and he used to visit those families in various countries wherever he went. He had friends. He also had some relatives in different countries working there.

He was very social by nature. This social nature came from his father and his grandfather back in India, who gave him the instinct of remaining social and who taught him the power of being a social animal among the Indian communities. So he was very much interested to attend. He really liked to attend events and functions wherever he was invited. What he realized in one of the events he was attending in France, in one of the Indian families, he realized how expensive it was for an Indian family to organize even small events because those events were to be India-like and the merchandise and the services for those events were India-like were not available or they were very expensive if they were available in France or in other European countries.

He realized that there is definitely there is a demand for organizing such events at cheaper prices and it is really very expensive even at the European salaries. These Indian families were not able to afford to organize such events, but they really wanted to organize such events.

That is what he realized. And he got the idea of providing such services in Europe or maybe even on a world scale. He wanted to provide these services using the latest technologies and the latest products that were available not only from India but from other countries like China.

So he always had this entrepreneurial instinct. He wanted to be a global entrepreneur. After hearing so many success stories of global entrepreneurs from India in one of the global meets organized at IIM, Ahmedabad, where he was doing his MBA. So he always wanted to be a global entrepreneur, and this job was for him, just a gateway to realizing his dream.

So what? He realized that. Many of these services and merchandise could be made available at the fraction of the price if done in a very organized manner and sourced from India and China. And some of these services could be easily provided using the latest digital tools and new technologies. And he was really very much upbeat about it.

Beginner's luck is a phenomenon where a novice or inexperienced person has an unusually high degree of success in a particular activity or endeavor, especially during their initial attempts. This can refer to a variety of activities, such as gambling, sports, investing, or even creative pursuits like writing or painting.

The idea behind beginner's luck is that because someone is new to an activity, they may approach it with a fresh perspective and lack of preconceived notions or habits that could limit their success. This can sometimes result in unexpected and favorable outcomes, leading to the impression that the person has a natural talent or affinity for the activity.

It's worth noting that while beginner's luck can be a real and sometimes exciting experience, it's important to not rely solely on it. As a beginner becomes more experienced, their initial success may level out, and they will need to develop new skills and strategies to continue improving and achieving their goals.

In this lecture, Dr. Jain is sharing the initial response that Krishna received and about the beginner's luck that blessed him to make his venture a reality.

Starting a business can be a rewarding but challenging journey, and many startups face similar difficulties along the way. Some of the common business challenges faced by startups include:

Lack of capital: Many startups struggle to secure enough funding to get their businesses off the ground and keep them running.

Competition: Startups often face intense competition from established players in their market, making it difficult to stand out and attract customers.

Hiring and retaining talent: Finding and retaining the right employees can be a major challenge for startups, especially those with limited resources.

Cash flow management: Startups often have limited cash reserves, making it difficult to manage their cash flow and ensure that they have enough money to meet their obligations.

Product-market fit: Finding the right balance between developing a product that customers want and creating something that can be sold at a profit can be a major challenge for startups.

Scaling the business: As startups grow, they may struggle to scale their operations and keep up with increasing demand for their products or services.

Marketing and brand awareness: Building a strong brand and getting the word out about a startup's products or services can be a major challenge, especially for those with limited marketing budgets.

These are just a few of the many challenges that startups may face, and overcoming them requires a combination of creativity, hard work, and persistence. It's important for startup founders to be aware of these challenges and to be prepared to adapt and pivot as needed in order to succeed.

Let me give you a brief synopsis of international trade and the history of international trade. From time immemorial, trade was happening. International trade was happening among the people from different continents on this planet. Mostly what we know and what evidence we have, the trade was through the exchange of goods, the so-called barter trade. That was the kind of trade that was happening for a very, very long time.

And in between, in different eras, some kinds of intermediate commodities were used to exchange goods. Similar to what we now use as paper currency, That time those commodities were used, which included some kind of rare metals, rare agricultural commodities or even some types of stones, rare stones, and some methods were used for exchanging goods. So many items were tried and these were largely successful in its times. These must be popular. We have the evidence. We have the complete history. We can even write a complete book on these different eras of international trade when different types of methods were used to do international trade. Somewhat different from what we do today.

In the Middle Ages, when the European era started, international trade, what we saw as modern international trade included exchanging goods through some kind of official currency or some precious metals like gold, wherein the intermediaries were also involved in many cases, to facilitate the movement of goods from one continent to another continent or country to country. The so-called banks came into the picture and the modern type of international trade emerged and took shape. Therefore we can say that what we know today started taking some kind of shape at this time. Many political analysts, philosophers, and economists observed the phenomena. They gave their ideas, so they took cues from the way trade was being done at those times. At the same time, the traders took cues from those ideas to increase their profits and expand their businesses. So that is what was happening for many, many decades, even centuries.

These ideas emerged from time to time, mostly by economists in the form of some kind of classical theories or modern theories. Some of these theories became very, very popular. In my subsequent blog post, I will in a very short text, discuss some of these theories, classical theories as well as some modern theories that are very, very popular among the traders, as well as the administrators of the countries who are involved in foreign trade.

These popular ideas I will share these with you soon. Keep Reading.

In the next video, I will be explaining the most popular classic and historical theories that explained why countries resorted to international trade and why so much human interest in trading so long distances.

Friends, if we talk about what is the historical perspective of certain theories and explanations, which tells us that why, since time immemorial, international trade was happening around the world, why countries traded with each other and how it benefited them, How it benefited them to improve their economies. Why people were motivated to do international trade, in spite of the fact that international trading is a difficult proposition, requiring long-distance movements, which is difficult for humankind.

Travel long distances either by land route or by sea and in the present times by air. So friends it is important to understand that what were the explanation which were given?

And what was the rationale, which was given for international trading? So, if we talk about the ancient trade, it is commonly understood that the world was trading with each other, since very, very long time ago. In the known history, ancient history, it is said that two countries were major player in international trade.

Those were the countries which now represent the present regions of India and China. We talk of movement of goods through the surface that were called silk routes, and later on through sea routes. So, the dominant player at that time because of their large size, because of their strong GDP, India and China were supposed to be the major players in those times. But friends, it is very little known that, in the ancient time, the most dominant civilization for international trade was not India and China. It was the Phoenicians, an ancient Semitic Thallasocratic civilization, which was situated on the western coastal part of the Fertile Crescent centered on the coastline of what is we now know as modern Lebanon. That was a region. And friends that was the region where a lot of agriculture happened. It was a very fertile land. And in ancient trade, the major commodity of international trade was related to agriculture. So, this so called Phoenicians, they were the most dominant player in international trade on those things. Friends, let us talk about some of the common theories of trade or the explanation of international trade, which were given from time to time by different thinkers and economists.

Friends in modern history, one of the earliest modern theory of international trade was called theory of mercantilism. So, Friends, this theory of mercantilism was related to the thinking that the countries which will export more and import less will increase their state power. It was friends due to this theory that, it is argued, that the era of colonialism started. And one very good example of this is the colonialism by Britishers of India. So, when East India Company came to the Indian continent, they set up their bases to increase their exports to India and import only the raw materials or commodities in such a way that they benefited from this theory of mercantilism. And the power of Britain increases and because of this reason only after spending several decades of their base in India, in 1858, the British Raj was declared on India and the backing of political bigwigs of Britain was very, very clear to this theory of mercantilism. But friends later on, Adam Smith gave another theory which was called the theory of absolute advantage.

According to this theory, Adam Smith, who is regarded as the father of economics, proposed that, countries do not need to resort to theory of mercantilism. Rather they should focus on the absolute advantages which those countries enjoy. It means that they are able to produce certain things better than anybody else. And they can produce more with the similar resources. And if they do so, they will be able to export those items or goods or services to other countries. And obviously, they will benefit. And Adam Smith also proposed that most of these countries have certain absolute advantage in something and if they will trade with each other, everybody will benefit

So, friends that was a kind of demise of the theory of mercantilism. So, the ideas changed from theory of mercantilism to theory of absolute advantage, which was proposed by Adam Smith. Later on another economist, Ricardo proposed that even if countries have absolute advantage in several items, they need not focus on producing all those items. Rather, they should focus on producing those items in which they have a comparative advantage, which means they may be having absolute advantage in multiple items, but they will comparatively have better absolute advantage in certain items than others. So, according to this theory, it was proposed that if those countries exports and focus in the production and export of certain items only, where they have very strong comparative advantages, the advantages of international trade among all the countries will further improve. So, this theory very clearly indicated that international trade will benefit all the countries.

So, it is not required that by force a certain country to create a situation where they export more and they import less. Then Friends, another theory that is called product life cycle theory was also proposed, which tried to explain the reasons of international trade. According to product life cycle theory, every product has an introduction phase, a growth phase, a maturity stage and a decline stage and there is a fixed time frame within which these stages come - introduction, growth, maturity, and decline. So, it was proposed that by introducing the same product at a later date in other countries will cause a new product life cycle. Which will have a new introduction, at a later stage. It will have a new growth, it will have new maturity and it will have new decline. So, friends what will happen is that the time period will get elongated. Which means the overall length of the product lifecycle of a product will increase. So, it's a very very strong motivation, friends, for resorting to international trade of certain goods and services. Another theory which tried to explain the intra- industry international trade.

And it is called the country similarity theory. So, friends as per the country similarity theory, it was proposed that certain countries with a similar level of economic development would find it comfortable to use goods and services which are produced in those countries which are having the similar level of economic development. Because if they have similar level of economic development, the needs and tastes of the customers are likely to be of similar technological level, of similar nature. So, what will happen is that, the intra-industry trade will increase, among those countries. Friends later on another theory which is called - strategic advantage theory was proposed.

Under this, it was proposed that very big corporations so-called multinational companies, large companies which manufacture in big way, they have their major product lines. So what they do due to competition, they try to seek strategic advantages, like first-mover advantages, or by resorting to patents, copyrights and forcing the customers to buy their patented products and copyrighted products and services. So, friends, what happens that to gather these strategic advantages and by having these patents, technology, information, or having the first-mover advantage, these companies find it very, very comfortable to make profits by expanding to overseas markets. Because those patents, those copyrights, and the fact that they had the first mover advantages will apply in other countries also.

So companies would like to maximize their profits of the strategic advantages which they enjoy. So this was another theory, which was proposed. Then freinds, there was another theory which is called pull and push forces theory. What is the rationale of this theory is that it says that due to certain internal factors, country factors and international factors, there will be some pull or push forces, which will force or enable companies to expand into international markets. So, friends to give you an example, if a certain company has a very comfortable internal environment and specific capabilities, talents and resources, they will over the time look for international expansion using those specific enablers, internal enablers, certain capabilities, certain competencies, which the company enjoys, which others cannot do.

So, this kind of specific advantages which this company enjoys will force the company to expand into international market. Similarly friends due to country factors like small size of the market or very strong domestic competition or unfavorable government policies, companies will be forced to seek and explore the markets in other countries which are large, which are located better, which has got strong consumer demand. Where the regulatory and operational environment is very favorable. So, friends, these countries factors can push several companies to either exit from those countries or limit their operation in those countries and, then seek international markets. So, to give you an example, friends in this push and pull forces theory, if you look at country like Switzerland, which, which is a developed country and which, which is famous for products like watches, chocolates and many financial services.

So, friends, Switzerland as a country is a very small country and it has got very limited captive market. So, the business operations in Switzerland cannot enjoy economies of scale, because of the small size of customer base. So, the companies in Switzerland, they always look for international markets and some of the most successful companies in Switzerland, they actually, depend on revenue more from outside Switzerland, than in Switzerland., Friends, another theory, which is called Porter's diamond theory was proposed.

According to this theory, there are multiple factors which exist in a particular industry domain, in a particular country or region, which enables certain industries and companies to derive strategic and comparative advantages vis a vis others and vis a vis other countries. This strategic and comparative advantage is derived from multiple factors, which enable these companies to export their goods in international market.

In the next video, I will be discussing the most popular modern theory which most accurately explains the current reasons for international trade. This theory is called the Diamond theory. This theory was proposed by Michael Porter. This theory is also called - National Competitiveness Theory.

So, friends, if we look at this diamond theory, the multiple factors. Which have very strong bearing on the possibility of deriving a competitive and strategic advantage. One is the demand factor. So, if the demand of a particular product or service is very high in that country. The chances are that the industry will enjoy some kind of strategic advantage over others. Similarly, factors like factor conditions. Like man, machine, and material. If they are favorable. If those factors like man, machine and material which are factor conditions and they are favorable in a particular market. They will definitely help the country, industry and companies to derive strategic advantage vis a vis others. Then friends, another factor is the availability of related and supporting industries. Because the large operations of very large companies which produce goods in very large quantities to benefit from economies of scale, requires outsourcing of several intermediate products, raw materials, services to be outsourced from smaller manufacturers and service providers. So, large companies, large industries, very large manufacturing units require a very strong base of related and supporting industries in that particular country or region.

So, friends, this becomes another very important major factor of diamond theory which helps in the deriving strategic advantage. Then, the fourth very important factor which is explained as per the diamond theory is the nature of the rivalry, the structure of rivalry, the level of competition in that particular market for that product. So, friends if these four factors which are demand conditions, factors conditions, availability of support industries, and the nature of rivalry and competition for a particular industry and product in that market are favorable.

As per Porter's diamond theory, it will help in creating an environment which will give strategic and competitive advantages for that industry and for that country, it is also called national competitive advantage. But friends, these four factors which are connected with each other, also requires the support of chance which is the luck factor and the government policies. If the government policies are not favorable, all these advantages which are derived from the four major factors will not be achievable.

Similarly if the luck and chance factor is not there all the good intention of governments and the availability of all factor conditions, demand conditions, strong competition and related and supporting industries will go in vain. So, chances like if the country is facing long periods of war with neighbors or long periods of internal strife, civil wars, strikes. So, friends if we take the example of small car the manufacturing industry in India as an example, to explain this diamond theory. We find that the The Indian market has a very strong competition in the manufacturing of small cars because of high demand in the Indian market for these cars.

And So far the government policies has been very favorable in the manufacturing of the automobiles. The availability of related and supporting industries in India is very good. Similarly, factor conditions, man, machines, material are favorable for the manufacturing of small cars and the luck for Indians and Indian market is so far so good. So, friends in this example, what we have seen that, India, due to this strong benefit from the idea of diamond model of porter, where the four major factors and the two peripheral factors which are interconnected with each other makes a very strong diamond. So India's for example, India's competitive diamond in small car manufacturing is very strong, very large, very lucrative. It is very much favorable. So, friends because of this, India is one of the largest manufacturer of small cars manufacturing and India is a able to export small cars in many many countries.

Choose only one answer that is best.

The foreign trade policy of any country is affected by several external and internal factors. The role of WTO is important in framing and alignment of foreign trade policy of democratic countries. Internal factors like per ca pita GDP, unemployment, and internal political factors have their own role to play in framing the foreign trade policy.

To become a successful exporter, it is very, very important that you have a fairly good idea about what is a foreign trade policy of a country, how it affects the process of exporting, how it helps exporters, how it serves the different objectives, which it has for the country and for the exporting community as well as for the importing community. So, in short foreign trade policy helps exporters to understand the concept of exporting. So, it is very, very important for exporters to have a fairly good knowledge of the respective trade policy of their country.

So, friends, who are basically involved in the making of the foreign policy and implementation of the policy. So, who are the players who implement or who make the foreign trade policies. So, in general, the foreign trade policy of a country is made by the respective governments. So, main player in the making and implementation of foreign policies are the government and they do it with the help of the central banks in those countries.

Like for example, in India, we have Reserve Bank of India, which is the central bank of India. Then the actual formulation of the policy is done by the Ministry involved in different countries, different ministries work on foreign trade policy of their country. In India for example, Ministry of Commerce is the main ministry which is entrusted with the job of formulating the foreign policy. But, of course, Ministery of Commerce takes advice and help from other ministries also.

Then friends, in each country, the foreign trade policy is made, which is implemented and regulated by certain bodies, which may be called as directorates or controllers. For example, Controllers of Export and Import. For example, in India, there used to be a Controller of Export and Import but presently, it has been re designated as Director General of Foreign trade. Earlier the Chief Controller of Export and Import is now re designated as Director General of Foreign Trade.

So, every country has their own Directorate, Controllers, who control the export and import transactions. They make policies and they make sure that those policies are implemented, people abide by the rules and regulations of those policies. So, that is the role of the Controllers or the Directorates.

Now friends, it is important to understand that what are the factors which affect policy making? So, these factors sometimes dictate the formation of the policy, foreign trade policy amendments, modifications etc. from time to time. Not only in India, but all the countries there are certain factors. Most of these factors are either external factors or internal factors. So, the governments while formulating the foreign trade policies are affected by the external factors and their internal factors, which shape up the foreign trade policy making and even implementation and further amendments and the notifications or the corrections. So, they are affected by changing external and internal factors and environment.

One of the biggest external environment factors for the foreign trade policies of most of the country is the World Trade Organization. Friends World Trade Organization is the main international body which regulates the flow of goods, internationally. The main objective of World Trade Organization is that there are less trade barriers the world over and the flow of goods is smooth, well managed. And for that reason, WTO has a strong say in the foreign trade policy making in all the member countries.

So, as per the understanding, all countries who are member of World Trade Organization, they have to submit their original foreign trade policies, which they are currently implementing and any modifications, any amendments, which they make later on. They have to notify within a reasonable time to World Trade Organization and World Trade Organization has a designated department which keeps track of these foreign trade policies of the member countries. Then friends, another external factor, which is very important is the the Free Trade Agreements, which countries have with other countries. So, these free trade agreements, can be between two countries, or it can be between several countries in a region, which is also called REC- Regional Economic Cooperation or there could be some trade partnerships.

Very good example of such, for such Free Trade Agreement is European Union. So, European Union has the free trade agreement, which is one of the most successful free trade agreement in the world among 28 countries of Europe. So, these kinds of agreements also dictate the Foreign Trade Policy making and further amendments.

Then Friends, geopolitical environment, which is continuously changing both on the regional front, as well as on the global front. So, for example, if we look at the geopolitical environment, which is drastically changing in recent time around India is the relationship between India and China. Because of the deteriorating situation of the relationship between India and China, because of the border skirmishes between India and China, what is happening is that Indian Government is very quickly making modifications in foreign trade policy to make sure that any wrongdoings are not done by the neighbor country, which is China, with India.

So, there can be several changing geopolitical regional environmental factors, which can have a major impact on the foreign trade policy making as well as amendments. Similarly, Friends, due to the Coronavirus also, a lot of geopolitical environment changes is happening in different parts of the world. And because of these change in the geopolitical environment, not only between India and China, but in the case of many regional equations between different countries, the geopolitical environment, regional geopolitical environment is changing very fast. And because of this, a lot of reviews, and amendments are happening in foreign trade policies of several countries at present, because of this situation. Then friends, the internal factors also play a very dominant role in the foreign trade policy making, as well as further modifications in those foreign trade policies of respective governments.

So, there can be some immediate pressing issues, which are there in the case of particular country, in the context. For example, I just gave you example of a very major pressing issue with India, which is the aggressive and bullying tactics of its neighbor, China, as well as Pakistan on other side of India. So, it has become a very major pressing issue for India, and it will definitely have an impact in the near future on the foreign trade policy making and amendments.

Similarly, friends, the economic status also have a strong bearing on the foreign trade policy making. If the unemployment rate in a country is very, very high, obviously it will have an impact on foreign trade policy making where the objective will also be - how to generate employment? So foreign trade policy will have a lot of incentives for investment in India, in the sectors of exports. And also for developing special economic zones, Free Trade Zones, so that the employment opportunities for the people of the country increases. So, the economic status of any country, also plays a very, very important role on foreign trade policy making and its maintenance.

Then friends, internal political environment of a country also plays a very important role in the foreign policy making. For example, if you compare the political environment in China and in India, they are drastically different. If we compare the political environment in India and in China, you will find a lot of differences in the political environment because of the differences in the ideologies, political ideology of China and political ideology of India.

Which is quite different. And if we compare these two countries, two large economies, you will see that internal and political environment in both cases is quite different. And because of this difference, there is a lot of difference in the foreign trade policies of China and India. Similarly, the changing political environment in any country also have a strong bearing on the changes which are happening in the foreign policy of that country.

Friends, let us now try to understand what are the main objectives of making foreign trade policies of different countries. One very important objective of making foreign trade policy of any government is to strengthen the rule of law. So rules and regulations, which governs the external trade of a country, overseas payments, international investments. So, those rules and regulations are defined and clarified in foreign trade policies, because they have a direct impact on the economic, political and demographic structure of a country.

So these rules and regulations definitely vary from country to country, and those differences are seen in the foreign policy of different countries. The second objective of any foreign policy of any country is to provide information and to explain the procedures and documentation required for carrying out external trade and investments. So this kind of information and this kind of procedures which may relate to the act of exporting or act of importing

1. how to deal with the government?

2. how to deal with these central banks?

3. how to deal with the controller of export and import or the director general of export and import?

4. And what are the compliance required?

5. What what are the obligations of exporters? and

6. what are the obligations of importers and how to deal with the banks?

7. What is the role of banks in the act of exporting and the act of importing?

So this kind of information procedures, customs related information, customs related procedures, clearing of goods and the use of port facilities for sending your goods by air or by sea. So this kind of information and procedures friends are the main idea behind the formulation of foreign trade policies, which gives a lot of explanation of the kind of information which exporter must know and the procedures which exporters and the importers must know.

Then Friends third objective of any foreign trade policy in any of the countries is to broadcast and announce to the general public and the business community the various schemes, incentives and support which government of that particular country provides to exporters, as well as to the importers to facilitate external trade of the country and to benefit the economy from such overseas trade and also to manage foreign exchange for the country.

So these schemes, incentives, programs and support is very well defined, clarified, listed in most of the foreign Trade policies of different countries. Then Friends, fourth very important objective of making foreign trade policies, is to list out what is prohibited for export, what is prohibited for imports.

What are the different types of restrictions which are applied to certain goods for export and certain goods for imports. So friends to convey this list of goods and services which are prohibited or which are restricted, foreign trade policies are very, very important. And it very clearly defines what are the things which an exporter can export and what other things which an exporter cannot export.

Similarly, what other things which am importer can import and what other things which an importer cannot import. So these things are very clearly mentioned in foreign trade policies. Then friends fifth objective of any foreign trade policy is to announce the various customs duties, tariffs and non tariff barriers, which are the respective government applies on goods and services for external trade.

So these duties, tariffs, non tariff barriers. are very well explained and defined in foreign policies, and from time to time, amendments are made to these rates of customs duties, tariff structure, the method of import, various non tariff barriers which are applied on certain products by the respective government.

So these things are notified by the governments through the amendments and notifications of their respective foreign trade policies. Friends then last but not least is one of the major objectives of foreign trade policy is to be able to manage the foreign exchange of a country. Because, as I had explained to you earlier, in an earlier lesson, that the foreign exchange is very, very important for the economy of a country.

And all the governments, they keep an eye on the flow of foreign exchange into the country and outside the country. So such foreign exchange management requires special acts and rules and regulations, which are normally called as Foreign Exchange Management Acts. For example, in India, we have the Foreign Exchange Management Act 1999, which is enforced with time to time modifications and rectification. This act still applies to all the foreign exchange transactions and payments. And Friends, the main objective of these foreign exchange management acts are two major objectives.

The first is facilitating the external trade and overseas payments. So this becomes one of the major objectives out of these two objectives. And the second objective is the development of foreign exchange market in the domestic context of any country. Because a very dynamic, resilient, and a progressive financial market is required in every country in line with the international financial market, which governs the international agreements. Then Friends, let us try to understand that what is the general impact of such policies which are related to the foreign trade, external trade and the foreign exchange management?

So Friends, if these policies are liberal, open, modern, proactive, inclusive, it helps the economy of a country very much. If you take the example of India, the trade policy, foreign policy of India before 1991 was very narrow-minded. It was very restrictive. It was very stern and strict.

And the result was that before 1991, the Indian economy suffered a lot. But after 1991, the government of India came out with the liberation, privatization, and globalization and which was reflected in the new foreign trade policy, which was ratified in the year 1991. And since then, India has not looked back. Its economy has grown. Its food production has increased. The scarcity of employment, the scarcity of food, the scarcity of consumer goods has been totally wiped out.

The living standards, the GDP per ca pita, and the life of consumers in India has improved a lot after this ratification of new foreign trade policy, which was very conducive to both exports as well as imports. And the approach was for the development of the trade rather than restriction of the trade. So friends, if the trade policies of respective governments are open, it has a very positive impact on the external trade of that country. And the overall different types of foreign trade policy in different countries with different hues and colors and with different types of approaches to external trade, the result is the higher or lower international trade barriers, which is the domain of World Trade Organization.

So WTO want to bring down International trade barriers, both tariff as well as non tariff barriers. So if the policies of different countries are made open, the objective of the World Trade Organization is to bring down the international trade barriers. And this objective can be achieved by having good foreign trade policies in line with the regional as well as internal environment of respective countries, internal status of the respective countries, internal situation of the respective countries. And World Trade Organization encourages governments to address their internal affairs also when they form foreign policy.

But at the same time they make sure, WTO make sure that the policies are open, liberal and globalized. And then friends, the nature of these foreign trade policies of different countries also have a very strong bearing on the investment scenario and the flow of investments from one country to another country. So these policies can have barriers to international investments. As I explained to you in the example, recent example of the skirmishes and a standoff between India and China border standoff.

And because of this, the government of India has also put in certain investment barriers with regard to the Chinese firms in India. So due to certain current events, due to certain immediate breaking events which are happening at the country level and the regional level, there can be certain amendments, modifications in the foreign trade policies, which have a strong bearing on the investment scenario of that region.

Indian Trade Portal offers the most organized resources to update yourself on India's foreign trade policy. It has several sections on the policy including policy provisions, policy statements, policy highlights, schemes, incentives, tariffs, etc. As an example of the ways of accessing the FTP related information online, the next lecture will serve as a template for exporters from across the world.

OK, now friends, I will show you as an example that how you can get hold of all the text documents and the notifications and the changes which are made by taking an example of the initiative by the government of India, which is in the form of an Indian trade portal. So, friends, we are here at the website of India Trade portal and in this website, which I had explained to you earlier also, we have very interesting information that can be obtained from this particular portal, and that is with respect to the foreign trade policy of India.

So this we will take an example. Most of the countries have such kind of online portals, where the exporting and importing communities of those countries can go and download and see the different provisions and amendments, notifications, addendum, and access to those policies and the export promotion schemes.

So this information is available on India trade portal on the sidebar. And there is a button called Foreign Policy Export Promotion Schemes. So, friends, if we look at this particular section of this website, which is called India Trade Portal, and we click here, we will see that the various policy documents, highlights and the description of different types of export promotion schemes are available on this website.

So

• it has got policy documents.

• It has got the procedure documents.

• It has got the amendments and appendices of foreign policies.

• It has got the policy statement and

• it has the highlights of the foreign policy,

which is the current policy, whatever is the current policy of the government of India with regard to foreign trade. So those highlights are also there. So anybody can just go here, click the button and they can get hold of all the documents, all the information which is available on India's Foreign Trade policy.

So this Friends this portal is very, very useful. The information available on this portal is absolutely free. And if you are a member of the Federation of Indian Exporters organization, you have better access to this website. You can go to a certain portion of this website where you can get some privileged information with respect to foreign trade policy of India. But the majority of the important policy documents, procedure documents or schemes, and appendices are available free of cost for download on this.

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