MP Board Class 11th Business Studies Important Questions Chapter 11 International Business

MP Board Class 11th Business Studies Book Solutions व्यवसाय अध्ययन Chapter 11 International Business
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MP Board Class 11th Business Studies Important Questions Chapter 11 International Business

Question 1.
Choose the correct answer:

Question 1.
Which document is not necessary for getting license –
(a) IPC number
(b) Credit letter
(c) Registration cum membership certificate
(d) Bank account number.
Answer:
(b) Credit letter

Question 2.
Which document is not required for import –
(a) Shipping builty
(b) Shipping bill
(c) Certificate of origin
(d) Loading information.
Answer:
(a) Shipping builty

Question 3.
Which is not related to money refund policy –
(a) Refund of production expenses
(b) Refund of excise duty
(c) Refund of export duty
(d) Duty at loading port
Answer:
(d) Duty at loading port

Question 4.
Which is not a part of custom documentation process –
(a) Shipping bill
(b) Export license
(c) Insurance letter
(d) Proforma invoice.
Answer:
(d) Proforma invoice.

Question 5.
Which is not a part of export related documents –
(a) Commercial invoice
(b) Certificate of origin
(c) Entry bill
(d) Mate’s receipt
Answer:
(c) Entry bill

Question 6.
When goods are loaded on the ship, then the captain of the ship issues a receipt which is called –
(a) Shipping receipt
(b) Mate’s receipt
(c) Loading receipt
(d) Receipt of rent of bill.
Answer:
(b) Mate’s receipt

Question 7.
Which document is made by the exporter which contains details of the goods to be sent by ship like name of the sender, number of packages, shipping bill, destination port, name of ship, etc –
(a) Shipping bill
(b) Packaging list
(c) Mate’s receipt
(d) Bills of exchange.
Answer:
(c) Mate’s receipt

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Question 8.
The document in which the bank gives guarantee to make the payment of exporter’s bill:
(a) Mortgage letter
(b) Credit letter
(c) Shipping builty
(d) Bills of exchange.
Answer:
(b) Credit letter

Question 9.
Which is not a member of World Bank group:
(a) International Bank of Development and Reconstruction
(b) Multiple Investment Guarantee Agency
(c) International Development Union
(d) International Monetary Fund.
Answer:
(d) International Monetary Fund.

Question 10.
TRIP is one of the WTO agreements that deals with –
(a) Agricultural trade
(b) Service trade
(c) Trade related investment measures
(d) None of these.
Answer:
(d) None of these.

Question 11.
In which of the following modes of entry, does the domestic manufacturer give the right to use intellectual property such as patent and trade mark to a manufacturer in a foreign country for a fee –
(a) Licensing
(b) Contract manufacturing
(c) Joint venture
(d) None of these.
Answer:
(a) Licensing

Question 12.
Outsourcing a part of or entire production and concentrating on marketing operations in international business is known as –
(a) Licensing
(b) Franchising
(c) Contract manufacturing
(d) Joint venture.
Answer:
(c) Contract manufacturing

Question 13.
When two or more firms come together to create a new business entity that is legally separate and distinct from its parents it is known as –
(a) Contract manufacturing
(b) Franchising
(c) Joint ventures.
(d) Licensing.
Answer:
(c) Joint ventures.

Question 14.
Which of the following is not an advantage of exporting –
(a) Easier way to enter into international markets
(b) Comparatively lower risks
(c) Limited presence in foreign markets
(d) Less investment requirements.
Answer:
(c) Limited presence in foreign markets

Question 15.
Which one of the following modes of entry requires higher level of risks –
(a) Licensing
(b) Franchising
(c) Contract manufacturing
(d) Joint venture.
Answer:
(d) Joint venture.

Question 16.
Which one of the following modes of entry permits greatest degree of control over overseas operations –
(a) Licensing/franchising
(b) Wholly owned subsidiary
(c) Contract manufacturing
(d) Joint venture.
Answer:
(d) Joint venture.

Question 17.
Which one of the following modes of entry brings the firm closer to international markets –
(a) Licensing
(b) Franchising
(c) Contract manufacturing
(d) Joint venture.
Answer:
(d) Joint venture.

Question 18.
Which one of the following is not amongst India’s major export items –
(a) Textiles and garments
(b) Gems and jewellery
(c) Oil and petroleum products
(d) Basmati rice.
Answer:
(c) Oil and petroleum products

Question 19.
Which one of the following is not amongst India’s major import items –
(a) Ayurvedic medicines
(b) Oil and petroleum products
(c) Pearls and precious stones
(d) Machinery.
Answer:
(a) Ayurvedic medicines

Question 20.
Which one of the following is not amongst India’s major trading partners –
(a) USA
(b) UK
(c) Germany
(d) New Zealand.
Answer:
(d) New Zealand.

Question 21.
Which is related to World Bank –
(a) ICICI
(b) Ex – Im Bank
(c) IDA
(d) Asian Development Bank.
Answer:
(c) IDA

Question 22.
Which is not correct –
(a) India is not primary member of World Bank
(b) UNCTAD is organization of UNO
(c) UNCTAD Secretariat is at Geneva
(d) India became member of GATT in 1947.
Answer:
(a) India is not primary member of World Bank

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Question 23.
GATT was implemented on –
(a) 30 October, 1947
(b) 15 March, 1947
(c) 26 April, 1945
(d) 12 May, 1947.
Answer:
(a) 30 October, 1947

Question 24.
GATT came to an end in the year –
(a) 1944
(b) 1997
(c) 1995
(d) 1985.
Answer:
(c) 1995

Question 25.
The scope of WTO as compared to GATT is –
(a) Wide
(b) Narrow
(c) Equal
(d) None of these.
Answer:
(a) Wide

Question 26.
India became member of World Bank in the year –
(a) 1950
(b) 1948
(c) 1945
(d) 1949.
Answer:
(c) 1945

Question 27.
For membership of World Bank it is necessary to be the member of –
(a) Member of IMF
(b) Member of UNCTAD
(c) Member of WTO
(d) Member of UNO.
Answer:
(a) Member of IMF

Question 28.
In international trade CIF includes –
(a) Cost
(b) Cost and insurance
(c) Cost and rent
(d) Cost, rent and insurance.
Answer:
(d) Cost, rent and insurance.

Question 29.
Characteristics of EPZ –
(a) Established in special region
(b) Established by government
(c) Entry in good industrial units
(d) All the above.
Answer:
(d) All the above.

Question 2.
Fill in the blanks:

The trade which is undertaken within two country is called as …………….
Goods sending by a country to other country is called as …………….
Goods purchased by a country from another country is called as …………….
The documents which is related to ownership is in International business is called as …………….
The World Bank is established in ……………. year.
The trade which exist in within the boundary of a country is called …………….
The head office of World Trade Center in …………….
The head office of I.M.F. is in …………….
The number of members in world trade organisation is …………….
Indent is system of importing of …………….
International invoice is prepared by …………….
Shipping receipt is ……………. document of bills of exchange.
GATT organisation converted in …………….
The world trade organisation held ……………. ministerial conference up to 2013.
Answer:

External trade
Export,
Import
Shipping receipt
1945.
Internal trade
Geneva
Washington
151
Indirect
Importer
Half
World Trade Organisation
9
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Question 3.
Write true or false:

Shipping receipt is contract.
Indent is sent to direct producer.
Captain gives shipping receipt to captain.
Indent is also called demand draft.
Export promotion means import is more then export.
Charter party contract is two types.
Mates receipt is used in export.
External trade give foreign exchange.
In external trade the payment is easy.
Nav Bhatak and charter party are different document.
For promoting export business India start devaluation of money in 1991.
Shipping receipt is issued by captain.
Indent send to producers.
The head office of World Trade Organisation is in Geneva.
Number of member in World Trade Organisation is 164.
Answer:

True
False
True
True
False
False
True
True
False
False
True
False
False
True
True.
Question 4.
Match the columns:
MP Board Class 11th Business Studies Important Questions Chapter 11 International Business 1
Answer:

  1. (b)
  2. (c)
  3. (d)
  4. (a)
  5. (j)
  6. (i)
  7. (h)
  8. (g)
  9. (e)
  10. (f).

Question 5.
Give answer in one word / sentence:

Question 1.
Trade between two countries.
Answer:
Foreign trade.

Question 2.
When World Bank was established?
Answer:
1945.

Question 3.
Sending of goods from one country to another country.
Answer:
Export trade.

Question 4.
Document related to ownership in foreign trade?
Answer:
Shipping builty.

Question 5.
Establishment of WTO?
Answer:
1995.

Question 6.
Office at port for collection of tax?
Answer:
Custom house.

Question 7.
Order for goods in foreign trade?
Answer:
Indent.

Question 8.
When one country purchases goods from other country then it is called?
Answer:
Import.

Question 9.
The document which contains information of the imported goods?
Answer:
Entry bill.

Question 10.
The document which contains incomplete details of the imported goods?
Answer:
Sight bill.

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Question 11.
Number of copies made of shipping builty?
Answer:
4 (four).

Question 12.
When the whole ship is hired for the export then by which name it is called?
Answer:
Charter party.

Question 13.
Write other name of charter party?
Answer:
Travel or time charter.

Question 14.
Write different types of foreign trade?
Answer:
Import, export, entreport.

Question 15.
WTO stands for?
Answer:
World Trade Organization.

Question 16.
Objective of WTO?
Answer:
Implementation of new trade policy.

Question 17.
Headquarter of WTO is situated at?
Answer:
Geneva (Switzerland).

Question 18.
One function of WTO?
Answer:
Working for business liberalization.

Question 19.
Two MNC’s in India?
Answer:
LG, Samsung.

Question 20.
WTO members meeting is held after every year?
Answer:
2 year.

International Business Very Short Answer Type Questions

Question 1.
What is international trade?
Answer:
The exchange of goods and services for money’s worth among different countries is known as foreign trade.

Question 2.
Why there is need of international trade?
Answer:
Division of labour and specialization, depending of one country on other country for goods and services so the economies have now got working on global level leading to the need of international trade.

Question 3.
What is Dead Rent?
Answer:
The exporter for exporting goods hire the shipping company by means of con-tract, but it due to some reason, if the exporter is not able to send the goods, then also the shipping company get the claim of the transportation charges which is called as Dead Rent.

Question 4.
What is certificate of origin?
Answer:
Some importing countries provide tariff concessions or other exemptions to the goods coming from a particular country. If such benefits are available, the importer may ask the exporter to send a certificate of origin.

Question 5.
What is bill of entry?
Answer:
Bill of entry is a form filled by the importer for assessment of customs import duty. One appraiser examines the document carefully and gives the examination order.

Question 6.
What do you understand by shipping order?
Answer:
The forwarding agent arranges for obtaining order for loading the goods on the ship. Hie shipping order is an order to the captain of the ship directing him to accept and load the goods on the ship.

Question 7.
What is Mate’s Receipt?
Answer:
The shipping order, shipping bill, insurance policy, dock receipt, etc., are given to the captain of the ship. After verification, he orders that the goods may be loaded into the ship. He also issued a receipt to this effect. This is known as Mate’s Receipt.

Question 8.
What is Shipping bill?
Answer:
After entering into contract with the shipping company, the forwarding agent prepares a shipping bill. Three copies of this bill are prepared. These copies are of different colours. One copy is kept by the customs department and the remaining two copies are given to the exporters.

Question 9.
Write about the documents which are used in the import business?
Answer: Following are the documents used in the import business:

Import license
Delivery of indent
Foreign B/E
Delivery of entry bill
Dock challan
Dock warranty
Order
Railway/Motor Receipt.
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Question 10.
How many types of Mate’s Receipt are there? Why it is received?
Answer:
There are two types of Mate’s Receipt:

Clean Mate’s Receipt
Foul Mate’s Receipt.
It is received as the consent of the captain of the ship or his assistant.

Question 11.
What are bonded warehouses?
Answer:
If the import duty is not paid on the imported goods they are kept in the special warehouses and they are called as ‘bonded warehouses’.

Question 12.
Write the meaning of foreign trade?
Answer:
Legal trade between two or more countries is called as foreign trade.

Question 13.
What is Indent?
Answer:
When any exporter send order for the purchaser of goods then this demand letter is called as indent.

Question 14.
Explain Charter Party?
Answer:
The exporter can hire the whole vessel or a large part of the ship for shipping the goods to the importer. The agreement made by the hirer with the ship owner for such an arrangement is known as ‘Charter Party’.

Question 15.
What is dock challan?
Answer:
Like railway platform, there is a platform at ports which is called dock and where the goods are dumped before loading them on the ship. For this purpose, a dock challan is i filled up in duplicate by the forwarding agent and submitted to the dock officer enclosing one copy of shipping order and one copy of shipping bill.

Question 16.
Name the act passed by the government to check the quality of goods to be exported?
Answer:
Export Quality Control and Inspection Act, 1963.

Question 17.
Under which act the payment of the excise duty is done on the goods used for the reconstruction?
Answer:
As per central excise duty.

Question 18.
What is Bitty?
Answer:
After delivering the good the receipt issued by the officer certifying it called as Bilty.

Question 19.
Name the document on the basis of which the custom office give permission of export?
Answer:
Shipping bill.

Question 20.
How many copies of shipping bill is submitted to the custom officer?
Answer:
Five copies.

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Question 21.
What is Air – way bill?
Answer:
When the goods are to be sent by the air route then the shipping company is required to sent the goods upto the required destination is called as Air – way bill.

Question 22.
From where the exporters/importers get the Exam code?
Answer:
Ministry of Foreign Trade.

Question 23.
For ensuring die quality control in the export, what step has been taken by the government?
Answer:
Establishment of Export Quality Control and Inspection Act, 1963.

International Business Short Answer Type Questions

Question 1.
List the items which are exported by the India?
Answer:
The items which are exported by the India are:

Cloths and ready made clothes
Pearls and ornaments
Engineering products and chemical items
Agricultural and its equipment’s.
India share 0 – 8% of world export.

Question 2.
List the country to which India trade?
Answer:
The countries which India trade are: America, England, Belgium, Germany, Japan, Switzerland, Hong Kong, UAE, China, Singapore, Malaysia.

Question 3.
Write three profits of international trade?
Answer:
Profits from international trade is as under:

  1. Indifferent distribution of natural resources:
    Each and every country is not gifted by the nutural resources. This indifference is solved by having trading with different nations.
  2. Division of labour and specialization:
    Due to difference in availability of natural resources, use of these also differs from place to place. Each and every country produces those goods which have favourable condition in their country through the labour and its specialization.
  3. Different in currency:
    Due to difference in currency, it is only possible through the foreign or international trade.

Question 4.
Write limitation of manufacturing through the contract
Answer:
Followings are the limitations of manufacturing through the contract:

Local firms do not produce standard goods.
Other country local manufacturers do not have any control on production process.
Question 5.
Differentiate between the International trade and international business?
Answer:

International trade have narrow scope and international business have wide scope.
International trade include export import of goods and services while in international business along with trading other factors are also included.
Question 6.
Why it is called that licensing is a simple path to global expansion? Clarify.
Answer:
Licensing is a simple path to global expansion because under it there is no need of any firm or businessmen to invest any capital also they are not required to take risk. By means of licensing a firm gives right to other firm either in country or abroad to work and against that they get the royalty from it. If the goods are not produced as per order then the license can be cancelled. But under this the businessmen need not required to suffer any loss.

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Question 7.
Why country do trade ? Explain.
Answer:
Because of following reason country do business:

Comparative cost principle – As per this principle every country should try to produce that commodity which is skilled because of this specialization production will increase and it can exchange it with other goods and services.
Increase in national income – Through the trading people get profit and also profit is available for the country also.
Profit of geographical location – Each and every country have own internal and external geographical location.
Question 8.
Differentiate between contract manufacturing to foreign countries and full ownership production subsidiary company.
Answer:

Contract manufacturing:
Under it contract is given to other country producer for production.
Full ownership production subsidiary company:
Under it goods and services are produced under self supervision by the company.
Question 9.
What are the reasons of trade between two countries?
Answer:
The reasons of trade between two countries are:

Export of die extra production.
Labour division and supervision.
Increase in the living standard
Facility of trade education.
Question 10.
Differentiate between licensing and franchising?
Answer:
Licensing:
Related to purchase and sale of goods and it is flexible to operate.

Franchising:
Related to purchase and sale of services and it is complicated to operate.

Question 11.
Write limitations of contract manufacturing?
Answer:
Followings are the limitations of contract manufacturing:

Local firms do not produce goods as per international standards.
No control on production process.
Manufacturing firm can not sell the commodity produced as per their will.
Question 12.
Differentiate between contract manufacturing and setting up wholly owned production subsidiary abroad?
Answer:
Contract manufacturing refers to a type of international business where a firm enters into a contract with one or a few local manufacturers in foreign countries to get certain components or goods produced as per its specifications while in a wholly owned subsidiary the parent company acquires full control over the foreign company by making 100% investment in its equity capital.

Question 13.
Explain the procedure of getting payment under export?
Answer:
Importer writes a bill on exporter in order to receive the payment. Bills of exchange is an order of payment of certain amount to the certain person. It is of two types:

Sight bill
Time bill.
Question 14.
What is shipping bill?
Answer:
The bill which is prepared after entering into contract with the shipping company, the forwarding agent prepare it which is called as shipping bill. It is prepared in 3 copies of different colour.

Question 15.
What is World Bank? Write its functions.
Answer:
The International Bank for Reconstruction and Development (IBRD), commonly known as World Bank, emerged from the Bretton Woods Conference. The main objectives of World Bank were to aid the task of reconstruction of the war-affected economies of Europe and assist in the development of the underdeveloped nations of the world. At present, the World Bank is a group of five international organizations responsible for providing finance to different countries. Its headquarters is situated at Washington DC.

World Bank is entrusted with the task of economic growth and widening the scope of international trade. During its initial years of inception, it placed more emphasis on developing infrastructure facilities like energy, transportation and others but the results were not found to be very satisfactory due to poor administrative structure, lack of institutional frame work and non – availability of skilled labour in under developed countries.

World Bank also extends assistance to different countries for raising cash crops so that their incomes rise and they may export the same for earning foreign exchange. The bank has also been providing resources for education, sanitation, health care and small scale enterprises.

Question 16.
Why it is necessary to get registered in Export Promotion Council?
Answer:
It is necessary to get registered in Export Promotion Council in order to get the profit which made available by the government.

Question 17.
What is Export – Import code number?
Answer:
Export – Import code number is that number which every export firm should have in order to deal in foreign trade which is generally issued by DGFT or regional export import licensing authority.

Question 18.
Write the names of main organization related to World Bank.
Answer:
The names of main organization related to World Bank are:

IBRD
IFC
EDA
MIGA
ICSID.
Question 19.
What is letter of credit? Why this document is necessary for the exporter?
Answer:
Letter of credit is a guarantee letter issued by the bank in which the payment to the exporter bank guarantee is given. It is required by the exporter because:

It is safe method of payment in foreign trade.
Exporters do not have to wait for the payment.
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Question 20.
Why there was need of making WTO?
Answer:
After first and second world war almost all the economics got affected due to large destruction of.life and assets. Due to faulty currency system of different economies also led to adverse effect on the international trading system. Under these conditions almost 40 countries under the chairmanship of J.M. Keynes made 3 international organizations.

(1) IMF
IBRD
ITO.
Question 21.
Discuss the formalities to be fulfilled in getting the export license.
Answer:
Following formalities are to be performed in getting the export license:

Getting account opened and receiving of account number in any bank authorized by RBI.
Getting license from DGFT and receiving IEC code.
Submission of documents to export council.
Registration with ECGL for non-receipt of payment risks.
For get IEC number applying to the DGFT.
Question 22.
Write different steps of import?
Answer:
Different steps of import are as under:

Trade enquiry
Procurement of import license
Obtaining foreign exchange or currency
Placing order or indent
Acknowledgement of indent
Dispatching letter of credit
Obtaining shipping documents
Appointment of clearing agent
Endorsement of shipping bill
Payment of custom duty
Payment of dock charges
Taking delivery of goods.
Question 23.
Write different steps of export?
Answer:
The steps of export are:

Receipt of letter of enquiry
Sending quotation
Receipt of order/indent
Acknowledgement of indent
Obtaining export license
Collection of goods
Packing of goods
Appointment of forwarding agent
Preparation of invoice
Information to importer
Payment.
Question 24.
Differentiate between the following:

Sight and usance drafts
Bill of lading and airway bill
Pre – shipment and post – shipment finance.
Answer:

  1. Sight and usance drafts:
    In the case of sight draft, the drawer instructs the bank to handover the relevant documents to die importer against payment But in the case of usance draft, the drawer instructs the bank to handover the relevant documents to the importer against acceptance of the bill of exchange.
  2. Bill of lading and airway bill:
    Bill of lading is a document prepared and signed by the master of the ship acknowledging the receipt of goods on board. It contains terms and conditions on which the goods are to be taken to the port of destination. On the other hand, Airway Bill is a document wherein an airline/shipping company gives its official receipt of the goods on board its aircraft and at the same time gives an undertaking to carry them to the port of destination.
  3. Pre – shipment and post – shipment finance:
    Pre – shipment finance is provided to an exporter for financing the purchase, processing, manufacturing or packaging of goods for export purpose while the post-shipment finance is provided to the exporter from the date of extending the credit after the shipment of goods to the export country.

Question 25.
What is pre – shipment finance?
Answer:
Pre – shipment finance is provided to an exporter for financing the purchase, processing, manufacturing or packing of goods for export purpose.

Question 26.
Why it is important for a export firm to get pre – shipment inspection?
Answer:
In order ensure that only quality goods should be export the country to the other country.

Question 27.
Discuss the procedure related to excise clearance of goods?
Answer:
The exporter has to apply to the concerned Excise Commissioner in the region with an invoice because according to the Central Excise Tariff Act, excise duty is payable on the materials used in manufacturing goods. If the Excise Commissioner is satisfied, he may issue the excise clearance.

Question 28.
Explain briefly the process of customs clearance of export goods.
Answer:
The goods must be cleared from the customs before these can be loaded on the ship. For obtaining customs clearance, the exporter prepares the shipping bill which 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. Five copies of the shipping bill along with the following documents are submitted to the Customs . Appraiser at the Customs House for clearance:

Export Contract or Export Order
Letter of Credit
Commercial Invoice,
Certificate of Origin
Certificate of Inspection, where necessary
Marine Insurance Policy.
After submission of these documents the superintendent of the concerned port trust is approached for carting order and after obtaining it, the Cargo is physically moved into the port area and stored in shed.

Question 29.
What is Multinational Investment Guarantee Agency?
Answer:
It is established in 1988 in order to help in functions of World Bank and I. L. C.

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Question 30.
Write the important agreements of WTO?
Answer:
The WTO officially commenced on 1 January, 1995 under the Marrakesh Agreement signed by 123 nations on 15 April, 1994. Following agreement were made:

ATC – This was made on 1 January, 2005 to regulate the clothing trade.
AA – It was made to have proper trading in the agricultural sector.
GATS – It is made to regulate the services which cannot seen but only can be felt.
Question 31.
What is bill of lading? How does it differ from bill of entry?
Answer: Bill of lading is issued by the shipping company after the receipt of freight, it serves as an evidence that the shipping company has accepted the goods for carrying to the designated destination. In case the goods are being sent by air, this document is referred to as airway bill.

On the other hand “Bill of entry” is filled by the importer for assessment of customs import duty. One appraiser examines the document carefully and gives the examination order. The importer procures the said document prepared by the appraiser and pays the duty, if any. After payment of the import duty, the bill of entry has to be presented to the dock superintendent.

International Business Long Answer Type Questions – I

Question 1.
Explain the meaning of the following documents used in connection with import transactions:

Trade enquiry
Import licence
Shipment of advice
Import general manifest
Answer:

  1. Trade enquiry:
    A trade enquiry is a written request by an importing firm to the exporter for supply of information regarding the price and various terms and conditions on which the letter is ready to exports goods.
  2. Import licence:
    Licence which permits the import of goods that cannot be im-ported freely is called an import licence. The importer needs to consult the Export – Import (EX – IM) policy in force to know whether the goods that he or she wants to import are subject to import licensing. In case goods can be imported only against the licence, the importer needs to procure an import licence.
  3. Shipment of advice:
    Shipment advice contains information about the shipment of goods. The information provided in the shipment advice includes details such as invoice number, bill of lading/airways bill number and date, name of the vessel with date, the port of export, description of goods and quantity, and the date of sailing of vessel. The overseas supplier dispatches the shipment advice to the importer after loading the goods on the vessel.
  4. Import general manifest:
    Import general manifest is a document that contains the details of the imported goods. It is a document on the basis of which unloading of cargo takes place. It is provided by the person in charge of the carrier (ship or airway) to the officer in charge at the dock.

Question 2.
Write short notes on the following:

UNCTAD
MIGA
World Bank
ITPO
IMF.
Answer:

  1. UNCTAD:
    The United Nations Conference on Trade and Development (UNCTAD) was established in 1964 as a permanent intergovernmental body. It is the principal organ of the United Nations General Assembly dealing with trade, investment and development issues.

The organization’s goals are to “maximize the trade, investment and development opportunities of and developing countries and assist them in their efforts to integrate into the world economy on an equitable basis”. UNCTAD was created to address the concerns of developing countries over the international market, multinational corporations, and the disparity between developed nations and developing nations.

The primary objective of the UNCTAD is to formulate policies relating to all aspects of development including trade, aid, transport, finance and technology. The conference ordinarily meets once in four years. UNCTAD has 194 member states and has its permanent secretariat in Geneva.

  1. MIGA:
    The Multinational Investment Guarantee Agency (MIGA) was established in April, 1988 to supplement the functions of the World Bank and IfC with the fol-lowing objectives:

To encourage flow of direct foreign investment into the less developed member countries.
To provide insurance cover to investors against political risks.
To provide guarantee against non – commercial risks (like currency transfer risk, war and civil disturbances and breach of contract).
To insure new investments, expansion of existing investments, privatisation and financial restructuring.
To provide promotional and advisory services.
To establish credibility.

  1. World Bank:
    The International Bank for Reconstruction and Development (IBRD), commonly known as World Bank, emerged from the Bretton Woods Conference. The main objectives of World Bank were to aid the task of reconstruction of the war – affected economies of Europe and assist in the development of the underdeveloped nations of the world. At present, the World Bank is a group of five international organizations responsible for providing finance to different countries. Its headquarter is situated at Washington DC.

World Bank is entrusted with the task of economic growth and widening the scope of international trade. During its initial years of inception, it placed more emphasis on developing infrastructure facilities like energy, transportation and others but the results were not. found to be very satisfactory due to poor administrative structure, lack of institutional frame¬work and non-availability of skilled labour in under developed countries.

  1. TPO:
    Indian Trade Promotion Organization (ITPO) was set up on 1st January, 1992 under the Companies Act. 1956 by the Ministry of Commerce, Government of India. Its headquarter is at New Delhi. ITPO was formed by merging the two erstwhile agencies viz Trade Development Authority and Trade Fair Authority of India. ITPO is a service organization and maintains regular and close interaction with trade, industry and government.

It serves the industry by organizing trade fairs and exhibitions within the country as well as abroad. It helps export firms in participating in international trade fairs and exhibitions, developing exports of new items and providing support and updated commercial business information. ITPO has five regional offices at Mumbai, Bengaluru, Kolkata, Kanpur and Chennai and four international offices at Germany, Japan, UAE and USA.

  1. IMF:
    International Monetary Fund (IMF) came into existence in 1945 and has its headquarters located in Washington DC. In 2005 it had 191 countries as its members. The major idea underlying the setting up of the IMF is to evolve an orderly international monetary system to facilitate the system of international payments and adjustments in exchange rates among national currencies.

Some of the important functions of IMF include:

Acting as a short – term credit institution.
Providing machinery for the orderly adjustment of exchange rates.
Acting as a reservoir of the currencies of all the member countries from which a borrower nation can borrow the currency of other nations.
Acting as a lending institution of foreign currency and current transaction.
Determining the value of a country’s currency and altering it, if needed, so as to bring about an orderly adjustment of exchange rates of member countries.
Providing machinery for international consultations.
Question 3.
Write advantages of foreign trade?
Answer:
Advantages of Foreign Trade:

  1. Advantages of geographical facilities:
    Every country has different natural and geographical facilities. Their production, minerals, agriculture and industries are different. Foreign trade helps to obtain goods which are not produced.
  2. Specialization and efficiency in production:
    Foreign trade enables a country to produce only such goods which can be most efficiently and economically produced. As a result the cost of production will be reduced.
  3. Availability of goods not produced in the country:
    Foreign trade enables a country to enjoy the possession of goods which it is not producing.
  4. Ability to face natural calamities:
    The production in a country is affected due to draught, earthquake, flood, epidemic, war and such other natural calamities. Such calamities are faced by importing goods from other countries.
  5. Advantage to agricultural and industrial countries:
    Agricultural countries can easily exchange their raw materials with finished goods or machinery from other countries.

MP Board Solutions

Question 4.
Explain the nature of Indian foreign trade. Which goods are traded by India with the foreign countries?
Answer:
India had very small percentage of the total foreign trade. Due to fast development in the Indian economy since few years there had been tremendous growth in the foreign trade. As a result the share of foreign trade in GDP in 1990 – 91 was 14-6% which rised to 24.1% in 2003 – 04. The level of export in 1950 – 51 was Rs. 606 crore which rosed to Rs. 293367 in 2003 – 04. Import has also raised from Rs. 608 crore (1950 – 51) to Rs. 359108 in 2003 – 04. Now GDP is 20% of the foreign trade which include the trade of cloth, ornaments, chemical and agricultural products.

Question 5.
Explain:

IDA
IFC
MIGA
IMF.

Answer:

  1. IDA:
    IDA is agency working under the World Bank. It provides finance on easy terms, help in poverty alleviation, provides help in economic development programmes and also extend macro economic management services.
  2. IFC:
    It was established in July 1956 for providing the finance to the private sector. It is also separate organization related to World Bank having its separate existence with legal entity, fund and functions. All the member of World Bank can also be the member of IFC.
  3. MIGA:
    The Multinational Investment Guarantee Agency (MIGA) was established in April, 1988 to supplement the functions of the World Bank and IfC with the following objectives:

To encourage flow of direct foreign investment into the less developed member countries.
To provide insurance cover to investors against political risks.
To provide guarantee against non – commercial risks (like currency transfer risk, war and civil disturbances and breach of contract).
To insure new investments, expansion of existing investments, privatisation and
financial restructuring.
To provide promotional and advisory services.
To establish credibility.

  1. IMF:
    International Monetary Fund (IMF) came into existence in 1945 and has its headquarters located in Washington DC. In 2005 it had 191 countries as its members. The major idea underlying the setting up of the IMF is to evolve an orderly international monetary system to facilitate the system of international payments and adjustments in exchange rates among national currencies.

Question 6.
Write a detailed note on features, structure, objectives and functioning of WTO?
Answer:
GATT was transformed into World Trade Organisation (WTO) with effect from 1st January 1995. The headquarter of WTO is situated at Geneva, Switzerland.

Features of WTO:

WTO is a permanent organisation created by an international treaty ratified by the governments and legislatures of member states.
It governs trade not only in goods,”but also in services and intellectual property rights.
It is a‘member driven rule based organisation in the sense that all the decisions are taken by the member governments on the basis of a general consensus.
It is the principal international body concerned with solving trade problems between countries and providing a forum for multilateral trade negotiations.
It has a global status similar to that of the IMF and the World Bank.
As on 11th December 2005, there were 149 members in WTO.
Structure of WTO:

  1. WTO comprises of The Ministerial Conference, which is composed of international trade ministers from all member countries and is responsible for setting the strategic direction of the organization and making all final decisions on agreements under its wings. The Ministerial Conference meets atleast once every two years.
  2. The General Council is composed of senior representatives of all members responsible for overseeing the day – to – day business and management of the WTO.
  3. The Trade Policy Review Body is also composed of all the WTO’members. It periodically reviews the trade policies and practices of all member states.
  4. The Dispute Settlement Body is also composed of all the WTO members and over – sees the implementation and effectiveness of the dispute resolution process for all WTO agreements.
  5. The Councils on Trade in Goods and Trade in Services operate under the policy of the General Council and are members. They provide a mechanism to oversee composed the details of all of the general and specific agreements on trade in goods and services.

Major Objectives of WTO:

To ensure reduction of tariffs and other trade barriers imposed by different countries.
To engage in such activities which improve the standards of living, create employment, increase income and effective demand and facilitate higher production and trade.
To facilitate the optimal use of the world’s resources for sustainable development.
To promote an integrated, more viable and durable trading system.
Functions of WTO:

Promoting an environment that is encouraging to its member countries to come forward to WTO in mitigating their grievances.
Laying down a commonly accepted code of conduct with a view to reducing trade barriers including tariffs and eliminating discriminations in international trade relations.
Acting as a dispute settlement body.
Ensuring that all the rules and regulations prescribed in the Act are duly followed by the member countries for the settlement of their disputes.
Question 7.
Discuss the principal documents used in exporting?
Answer:
Following are the principal documents used in exporting:

  1. Documents Related to Goods:

(a) Export Invoice:
Export invoice is a sellers’ bill for merchandise and contains information about goods such as quantity, total value, number of packages, marks on packing, port of destination, name of ship, bill of lading number, terms of deli very and payments, etc.

(b) Packing List:
A packing list is a statement of the number of cases or packs and the details of the goods contained in these packs. It gives details of the nature of goods, which are being exported and the form in which these are being sent.

(c) Certificate of Origin:
This is a certificate which specifies the country in which the goods are being produced which entitles the importer to claim tariff concessions or other exemptions on goods originating from certain pre – specified countries.

(d) Certificate of Inspection:
For ensuring quality, the government has made it compulsory for certain products to be inspected by some authorised agency like Export Inspection Council of India (EICI) which issues the certificate that the consignment has been inspected as required under the Export (Quality Control and Inspection) Act 1963, and satisfies the conditions relating to quality control and inspection as applicable to it, and is export worthy.

  1. Documents Related to Shipment:

(a) Mate’s Receipt:
The mate’s receipt indicates 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. and is given by the commanding officer of the ship to the exporter after the cargo is loaded on the ship.

(b) Shipping Bill:
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. It is the main document on the basis of which customs office grants permission for the export.

(c) Bill of Lading/Airway Bill:
Bill of lading is issued by the shipping company after receipt of the freight, which serves as an evidence that the shipping company has accepted the goods for carrying to the designated destination. In the case the goods are being sent by air, this document is referred to as airway bill.

(d) Marine Insurance Policy:
It is a certificate of insurance contract whereby the insurance company agrees in consideration of a payment called premium to indemnify the insured against loss incurred by the latter in respect of goods exposed to pennies of the sea.

  1. Documents Related to Payment:

(a) Letter of Credit:
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 letter of credit is the most appropriate and secure method of payment adopted to settle international transactions.

(b) Bill of Exchange:
Bill of exchange is a written instrument drawn by exporter on the importer asking the tatter to pay a certain amount to a certain person or the bearer of the bill of exchange. The documents giving title to the export consignment are passed on to the importer only when the importer accepts die order contained in die bill of exchange.

(c) Bank Certificate of Payment:
Bank certificate of payment is a certificate that the necessary documents relating to the particular export consignment has been presented to the importer for payment and the payment has been received in accordance with the exchange control regulations.

MP Board Solutions

Question 8.
Explain the procedure of Export trade?
Answer:
Procedure of Export Trade:
The procedure of export trade commences with the receipt of inquiry letter following procedure is followed in export trade:

  1. Receipt of letter of inquiry:
    The export receives a letter of inquiry from the importer inquiring about die availability of goods, quantity and of goods, price, delivery time, other terms and conditions, etc.
  2. Sending quotation:
    In response to the inquiry letter the export sends a letter of quotation containing all details inquiry about the goods and other terms and conditions.
  3. Receipt of order / indent:
    The exporter either receives order directly from the importer or receives an indent through indent house agent. The order / indent is received in response to the quotation letter sent by the exporter.
  4. Acknowledgement of indent:
    The exporter acknowledges the receipt of indent which enables the importer to know that the procedure of export is going to start.
  5. Obtaining export licence:
    The next step is to obtain export licence from the authority concerned. For instance, if the exporter belong to India, he would receive permission from the controller of export, Ministry of Finance Government of India. He will have to submit an application in a prescribed form along with requisite fee mentioning the type, quality and quantity of goods, name of importing country, etc. The export licence is valid for three months which is extendable for a period of 1 month more.
  6. Collection of goods:
    As per the indent, the exporter starts collecting the goods. If the goods are not available in sufficient quantity in his inventory, he arranges the goods from the various suppliers of his country. Emphasis is levied on quality and quantity of goods as per the indent.
  7. Packing of goods:
    Goods are packed according to the instructions maintained in the indent or as per the prevalent methods. The name of sender and receiver is written along with the precautions. The trade symbol is to be compulsorily printed on the packed goods in order to facilitate easy identification of goods and their proper arrangement on the ships by the shipping personnels.
  8. Appointment of forwarding agent:
    The job of sending goods is performed by the forwarding agent on behalf of the exporter. He has to perform the following tasks:

Accepting goods from trader.
Obtain permit from custom officials.
Arrangement of ship.
Obtain shipping order.
Obtain shipping bill.
Payment of export duty.
Obtain dock challan.
Loading goods on ship.
Obtain mates receipt.
Insurance of goods.
Obtaining certificate of origin and consular invoice.

  1. Preparation of invoice:
    After receiving the various documents and expenditure details, the exporter prepare invoice of the goods. It is prepared in triplicate. It is most important document and base of all other expenses and final payment
  2. Information to importer:
    The exporter inform is the importer regarding sending of goods. It is informed in two ways:

Through a letter known as letter of advice other documents are also sent.
The invoice is sent along with the letter of advice through post and other documents are sent through the bank of exporter to the bank of importer.

  1. Payment:
    If the documents are sent through bank, the payment is received through bank itself else the payment is done according to other terms and conditions mentioned in the indent.

Question 9.
Write the difficulties which comes in path of foreign trade?
Answer:
Difficulties of Foreign Trade:

  1. Difficulties relating to language:
    Language of every country is different, therefore it is difficult for businessmen of various countries to understand each other.
  2. Distance:
    Due to long distance between the countries goods take long time to reach from one country to another and payment for the goods may also be delayed.
  3. Difficulties of payment:
    Each country businessman wants to get payment of goods in the currency of his own country. Thus, there are lot of difficulties in making payments.
  4. Difficulty to get right type of goods:
    It is often difficult to get the right type of goods because of the absence of personal contact and inspection.
  5. Difficulty of sea – perils:
    There are various hazards in sea routes. The cyclone or sea winds overturn the ships, which may lead to the loss of ship and goods both.
  6. Local and foreign duties:
    Many local and foreign duties are imposed on foreign goods. It increases the cost of goods. Therefore, the markets are spoiled.

Question 10.
Differentiate between Inland trade and Foreign trade?
Answer:
Differences between Inland and Foreign trade:
MP Board Class 11th Business Studies Important Questions Chapter 11 International Business 2

International Business Long Answer Type Questions – II

Question 1.
Your firm is planning to import textile machinery from Canada. Describe the procedure involved in importing?
Answer:
Following is the procedure involved in importing textile machinery from Canada:

  1. Trade Enquiry:
    The importing firm approaches the textile machinery export firms in Canada with the help of trade enquiry they collecting information about their export prices and terms of exports. After receiving a trade enquiry, the exporter will prepare a quotation called proforma invoice and send it to our firm.
  2. Procurement of Import Licence:
    We will consult the Export Import (EXIM) policy in force to know whether the textile machinery imports are subject to import licensing. In case, it can be imported only against the licence, we will procure an import licence.
  3. Obtaining Foreign Exchange:
    As payment for imports will be made in Canadian dollars, our firm will have to make an application to a bank authorised by RBI to issue foreign exchange.
  4. Placing Order or Indent:
    After obtaining the import licence, our firm will place an import order or indent with the exporter for supply of the specified products containing information about the price, quantity, grade and quality of machinery and the instructions relating to packing, shipping, ports of shipment and destination, delivery schedule, insurance and mode of payment.
  5. Obtaining Letter of Credit:
    If the payment terms agreed between us and the overseas supplier then our firm should obtain the letter of credit from its bank and forward it to the overseas supplier.
  6. Arranging for Finance:
    Our firm would make arrangements in advance to pay to the exporter on arrival of goods at the port.
  7. Receipt of Shipment Advice:
    After loading the ordered textile machinery on the vessel, the overseas supplier will dispatch the shipment advice to our firm which contains information about the shipment of goods.
  8. Retirement of Import Documents:
    After shipping the machinery, the overseas supplier will prepare a set of necessary documents including bill of exchange, commercial invoice, bill of lading/airway bill, packing list, certificate of origin, marine insurance policy, etc. and will hand it over to his or her banker for their onward transmission and negotiation to our firm.

The acceptance of bill of exchange for the purpose of getting delivery of the documents is known as retirement of import documents after which the bank handover the import documents to the importer.

  1. Arrival of Goods:
    Goods will be shipped by the overseas supplier as per the contract. The officer in charge at the dock will provide the document called import general manifest on the basis of which unloading of cargo will take place.
  2. Customs Clearance and Release of Goods:
    Textile machinery imported into India will have to pass through customs clearance. Firstly, our firm will have to obtain a delivery order, pay dock dues and obtain port trust dues receipt and then fill in a form ‘bill of entry’ for assessment of customs import duty. After payment of the import duty, the bill of entry has to be presented to the dock superintendent.

The examiner will give his report on the bill of entry and we will present the bill of entry to the port authority who will issue the release order after receiving necessary charges.

MP Board Solutions

Question 2.
List and explain various incentives and schemes that the government has evolved for promoting the country’s export.
Answer:
Major export promotion measures are as follows:

  1. Duty Drawback Scheme:
    Excise and customs duties paid on export goods are refunded to exporters on production of proof of exports of these goods to the concerned authorities.
  2. Export Manufacturing Under Bond Scheme:
    This facility entitles firms to produce goods without payment of excise and other duties if the firms give an undertaking (i.e. bond) that they are manufacturing goods for export purposes and will export such products on then production.
  3. Exemption from Payment of Sales Taxes and Income Tax Goods Meant for Export Purposes are not Subject to Sales Tax: Exemption from income tax is available only to 100% Export Oriented Units (100% EOUs) and units set-up in Export Processing Zones (EPZs)/Special Economic Zones (SEZs) for select years.
  4. Advance Licence Scheme:
    It is a scheme under which an exporter is allowed to duty free supply of domestic as well as imported inputs required for the manufacture of export goods.
  5. Export Promotion Capital Goods Scheme (EPCGS):
    The main objective of this scheme is to encourage the import of capital goods for export production. This scheme allows export firms to import capital goods at very low rates of customs duties subject to actual user condition and fulfilment of specified export obligations.
  6. Scheme of Recognising Export Finns as Export House, Trading House and Superstar Trading House:
    The government grants the status of export house, trading house, star trading house to select export finns based on achieving a prescribed average export of performance in past select years and assistance is given to them in marketing their products globally.

Question 3.
What is international trade? How it is different from internal trade?
Or,
What is international business? How is it different from domestic business?

Answer:
Manufacturing and trade beyond the boundaries of one’s own country is known as international business. International business is defined as those business activities that take place across the national frontiers. It involves not only the international movements of goods and services, but also of capital, personnel, technology and intellectual property like patents, trademarks, and copyrights.

Differences between Domestic and International businesses:

  1. Nationality of Buyers and Sellers:
    In the case of domestic business, both the buyers and sellers are from the same country but in international business buyers and sellers come from different countries and their languages, attitudes, social customs and business goals and practices are not identical as in case of domestic business. This makes relatively more difficult for them to interact with one another and finalize business transactions.
  2. Nationality of Other Stakeholders:
    The other stakeholders such as employees, suppliers, shareholders/partners and general public associated with firms doing international business have different nationalities while in the case of domestic business all such factors belong to one country. Therefore, decision making in international business becomes much more complex due to wider set of values and aspirations of the stakeholders belonging to different nations.
  3. Mobility of Factors of Production:
    The degree of mobility of factors like labour and capital is generally less between countries than within a country due to legal restrictions and variations in socio – cultural environments, geographic influences and economic conditions.
  4. Customer Heterogeneity:
    Across markets since buyers in international markets hail from different countries, they differ in their socio -cultural background. Differences in their tastes, fashions, languages, beliefs and customs, attitudes and product preferences cause variations in not only’their demand for different products and services, but also in variations in their communication patterns and purchase behaviors. Such variations greatly complicate the task of designing products and evolving strategies appropriate of customers in different countries.
  5. Differences in Business Systems and Practices:
    The differences in business systems and practices are considerably higher among countries than within a country as countries differ from one another in terms of their socio – economic development, availability, cost and efficiency of economic infrastructure and market support services, etc. which make it necessary for firms interested in international business to adapt their production, finance, human resource and marketing plans as per the conditions prevailing in the international markets.

Question 4.
Differentiate between internal trade and foreign trade.
Answer:
Differences between Inland and Foreign trade:
MP Board Class 11th Business Studies Important Questions Chapter 11 International Business 2

Question 5.
How entry in foreign trade for export is more beneficial than the establishment of full owned and controlled companies in the foreign countries?
Or,
Write advantages of foreign trade
.
Answer:
Advantages of Foreign Trade:

  1. Advantages of geographical facilities:
    Every country has different natural and geographical facilities. Their production, minerals, agriculture and industries are different. Foreign trade helps to obtain goods which are not produced.
  2. Specialization and efficiency in production:
    Foreign trade enables a country to produce only such goods which can be most efficiently and economically produced. As a result the cost of production will be reduced.
  3. Availability of goods not produced in the country:
    Foreign trade enables a country to enjoy the possession of goods which it is not producing.
  4. Ability to face natural calamities:
    The production in a country is affected due to draught, earthquake, flood, epidemic, war and such other natural calamities. Such calamities are faced by importing goods from other countries.
  5. Advantage to agricultural and industrial countries:
    Agricultural countries can easily exchange their raw materials with finished goods or machinery from other countries.

Question 6.
Discuss the elements for entry in foreign trade?
Answer:
Following elements are required for entry in the foreign trade:

  1. Import and Export:
    The process of purchasing goods from the foreign countries is called as import and the process of sending or selling goods to foreign countries is called as export

Profits:

It is very simple method which can be handled singly, jointly without opening any unit in foreign countries.
No much investment is required and also time.
Risk in this is also zero.
Limitations:

Goods are purchased and sold physically. Only packaging, transport and insurance expenditure is incurred.
When in any country import is restricted then export cannot be done. Then only in such conditional unit is to be setup in those countries for trade.
Manufacturing is done in home country and then it is send to the other country for
sale.

  1. Contract manufacturing:
    It is that mode when one company makes contract with other foreign company for manufacturing of goods in other country as per the need and benefit of the both companies and the country.

Profits:

Some items like upper part of car or upper portion shoes is done under contract manufacturing.
Then those items are assembled into complete goods and sold.
Some goods are manufacture fully.
Limitations:

Under its international firm get manufacturing on large scale without much investment.
Less capital is invest and production is done.
Manufacturing on contract make costing less.

  1. Joint venture establishment.
  2. Fully owned and controlled unit can be established.

Question 7.
How business units gets profit from the international trade?
Answer:
Advantages of Foreign Trade:

  1. Advantages of geographical facilities:
    Every country has different natural and geographical facilities. Their production, minerals, agriculture and industries are different. Foreign trade helps to obtain goods which are not produced.
  2. Specialization and efficiency in production:
    Foreign trade enables a country to produce only such goods which can be most efficiently and economically produced. As a result the cost of production will be reduced.
  3. Availability of goods not produced in the country:
    Foreign trade enables a country to enjoy the possession of goods which it is not producing.
  4. Ability to face natural calamities:
    The production in a country is affected due to draught, earthquake, flood, epidemic, war and such other natural calamities. Such calamities are faced by importing goods from other countries.
  5. Advantage to agricultural and industrial countries:
    Agricultural countries can easily exchange their raw materials with finished goods or machinery from other countries.

MP Board Solutions

Question 8.
Identify various organisations that have been set – up in the country by the government for promoting country’s foreign trade?
Answer:
Various organisations that have been set-up in the country by the government for promoting country’s foreign trade are as follows:

  1. Department of Commerce:
    Department of Commerce in the Ministry of Commerce, Government of India is the apex body responsible for formulating policies in the. sphere of foreign trade, increasing commercial relations with other countries, state trading, export promotional measures and the development and regulation of certain export oriented industries and commodities.
  2. Export Promotion Councils (EPCs):
    Export Promotion Councils are non-profit organisations registered under the Companies Act or the Societies Registration Act, as the case may be. Their basic objective is to promote and develop the country’s exports of particular products falling under their jurisdiction.
  3. Commodity Boards:
    Commodity Boards are the boards which have been specially established by the Government of India for the development of production of traditional commodities and their exports and supplement the EPCs. At present there are seven commodity boards in India : Coffee Board, Rubber Board, Tobacco Board, Spice Board, Central Silk Board, Tea Board, and Coir Board.
  4. Export Inspection Council (EIC):
    Export Inspection Council of India was set – up by the Government of India under Section 3 of the Export Quality Control and Inspection Act – 1963. The council aims at sound development of export trade through quality control and pre – shipment inspection.
  5. Indian Trade Promotion Organisation (ITPO):
    Indian Trade Promotion Organisation was set – up on 1st January 1992. ITPO is a service organisation which serves the industry by organising trade fairs and exhibitions within the country and abroad and helps export firms in participating in international trade fairs and in developing exports of new items.
  6. Indian Institute of Foreign Trade (HFT):
    Indian Institute of Foreign Trade is an institution that was set – up in 1963 by the Government of India as an autonomous body. It has recently been recognised as Deemed University. It provides training in international trade, conduct researches in areas of international business and analysing and disseminating data relating to international trade and investments.

Question 9.
What is World Bank? Discuss its various objectives and role of its affiliated agencies?
Answer:
The World Bank was established in 1945, the International Bank for Reconstruction and Development (EBRD) is the common name of World Bank, which was formed as a result of the Bretton Woods Conference.

The main objectives behind setting up this international organisation were to aid the task of reconstruction of the war affected economies of Europe and assist in the development of the underdeveloped nations of the world. Till late 1950s, the World Bank remained preoccupied with the task of restoring war tom nations in Europe after which it turned its attention to the development of underdeveloped nations.

Various objectives and roles of its affiliated agencies are given below International Development Association (EDA). The main objectives of IDA are:

It provides finance on easy terms.
It provides help in poverty alleviation.
It provides help in economic development programmes.
Extend macro economic management services.
The Multinational Investment Guarantee Agency (MIGA) Major objectives of MIGA
are:

To encourage flow of direct foreign investment into the less developed member countries.
To provide insurance cover to investors against political risks.
To provide guarantee against non – commercial risks (like, dangers involved in currency transfers, war and civil disturbances and breach of contract).
To insure new investments, expansion of existing investments, privatisation and financial restructuring.
To provide promotional and advisory services.
To establish credibility.
We can conclude that the World Bank is no longer confined to simply providing financial assistance for infrastructure development, agriculture, industry, health and sanitation and is involved in areas like removal of rural poverty through raising productivity, providing technical support, and initiating research and co – operative ventures.

MP Board Solutions

Question 10.
Differentiate between Indent and Order?
Answer:
MP Board Class 11th Business Studies Important Questions Chapter 11 International Business 3

Question 11.
Give suggestion to increase foreign trade in India?
Answer:
Following suggestions should be implemented for increasing foreign trade:

Reforms in production – Quality of production should be increased in order to growth in the foreign trade.
Tax rebate – Export units should be given tax reforms so that, the exporter may get benefit of it.
Widespread market – Along with structural, there should be bi-agreement among the different nations for its spread.
Quality control – The goods which are used for foreign trade should go on strict inspection to enhance its quality.
Distribution research – There should be proper reach made for the new commodities also so that it can be dealt with.
Export subsidy – Government should give subsidy in order to promote the foreign


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