International Business Test - 4

International trade is the exchange of capital, goods, and services across international borders or territories. It is the exchange of goods and services among nations of the world.

The World Trade Organization (WTO) is the only global international organization dealing with the rules of trade between nations.

Under a franchise, the owner (franchisor) retains control of the brand and licenses (that is, grants permissions to) the franchise to use its successful business model and brand. In exchange, the franchisee puts up the initial capital for the business, helps to promote the brand and pays a licenses.

Contract manufacturing is a type of outsourcing in international business where a firm enters into a contract with a single or a few local manufacturers in foreign countries to get certain components or goods produced as per its given specifications. 

The import order should be carefully drafted so as to avoid any ambiguity and conseqdent conflict between the importer and exporter.

Bill of entry is not a part of export documents. Bill of entry An account of goods entered at a customhouse, of imports and exports, detailing the merchant, quantity of goods, their type, and place of origin or destination. It is issued by the customs presenting the total assigned value and the corresponding duty charged on the cargo.

Trade enquiry is a written request by an importer to the exporter for supply of required information. Import trade procedure starts with Trade enquiry.

The firms which are engaged in exporting activities generally work primary in their domestic nation so it is understood that they have a limited presence in foreign market that signifies their disadvantage in foregin market not advantage. 

Licensing refers to permitting another party in a foreign country to produce and sell goods under trademarks. patents or copy rights in lieu of some fee. Example: Lay's are produced and sold all over the world by local retailers in foreign countries through licensing. 

A letter of credit is a guarantee issued by the importer's bank that it will honour up to a certain amount the payment of export bills to the bank of the exporter. 

Major duty draw-backs include refund of excise duties paid on goods meant for exports, refund of customs duties paid on raw materials and machines imported for export production. 

The shipping bill is the main document on the basis of which customs office grants permission for the export. The shipping bill contains particulars of the goods being exported, the name of the vessel, the port at which goods are to be discharged, country of final destination, exporter's name and address, etc. 

In a joint venture, both the foreign and local entrepreneurs jointly form a new firm. The foreign business firm benefits from a local partners knowledge of the host countries regarding the competitive conditions, culture, language and other enivronmental variables, thus bringing the firm closer to international markets. 

A joint venture is a commercial enterprise undertaken jointly by two or more parties which otherwise retain their distinct identities.

It is the main document for which custom officials grants authority for export purpose. So, it has not much to do with import transactions.

India was New Zealand’s 10th largest trading partner in the year to June 2016, with total trade in goods and services worth more than NZ$2.5 billion.

A pro forma invoice is a document that states a commitment on part of the seller to deliver the products or services as notified to the buyer for a specific price. It is thus not a true invoice.

A mate receipt is a receipt issued by the commanding officer of the ship when the cargo is loaded on board and contains the information about the name of the vessel, berth, date of shipment. description of packages, marks, and numbers, condition of the cargo at the time of receipt on board the ship, etc. 

The Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) is an international legal agreement between all the member nations of the World Trade Organization (WTO).

The method of obtaining payment from the importer will depend on the contract entered into between the exporter and the importer. Payment can be obtained through various methods like:

1. By getting Letter of Credit

2. By Foreign Draft

3. By getting bill of exchange and discounting the bills

4. Bank Draft etc..

Foreign investment can be of two types: The two types are: (1) Foreign Portfolio Investment, and (2) Foreign Direct Investment.

Foreign firms entering into joint ventures share the technology and trading secrets with local firms in foreign countries, thus always establishing the risks of such a technology and secrets being disclosed to others apart from the risks associated with entry into foreign markets with dynamic business environments. 

The prime reason behind this radical change is the development of communication, technology, infrastructure etc. Emergence of newer modes of communication and development of faster and more efficient means of transportation have brought nations closer to one another.

Oil and petroleum products

Ironically, India holds 2nd rank overall in the world in exporting ayurvedic medicines.Thus, India doesn't import herbal/ayurvedic medicines at all.

documents required for obtaining a export license:-

• Opening a bank account in any bank authorised by the Reserve Bank of India (RBI) and getting an account number.

• Obtaining Import Export Code (IEC) number from the Directorate General Foreign Trade (DGFT) or Regional Import Export Licensing Authority.

• Registering with appropriate export promotion council.

• Registering with Export Credit and Guarantee Corporation (ECGC) in order to safeguard against risks of non payments.

The degree of mobility of factors of production like labour and capital is relatively more within a country. Domestic markets are relatively more homo- geneous in nature. Business systems and practices are relatively more homogeneous within a country.

The parent company acquires complete control over the foreign company by making 100% investment in the firm and making it wholly owned subsidiary.

The International Bank for Reconstruction and Development (IBRD), and the International Development Association (IDA). The World Bank is a component of the World Bank Group. The World Bank's stated official goal is the reduction of poverty. The International Monetary Fund is an international organization headquartered in Washington, D.C., of "189 countries working to foster global monetary cooperation, secure financial stability, 

A portfolio investment is an investment made by an investor who is not involved in the management of a company. This is in contrast to direct investment, which allows an investor to exercise a certain degree of managerial control over a company.