Apparel exports

INDEX
International Business 2
Export Marketing 18
Culture 89
Import 185
Export Finance 200
Letter of Credit 247
Export Procedure 300
Duty Exemption 330
Documentation 355
Shipping 389
BOL & AWB 423
Marine Insurance 438
INCO Terms 461
Export Costing 541
SEZ 582
EOU & EPZ 595 1
vasantkothari@gmail.com

The beverages you drink might be produced in
India, but with the collaboration of a USA company.
The tea you drink is prepared from the tea powder
produced in Sri Lanka.
The spares and harddisk of the computer you
operate might have been produced in the United
States of America.
The perfume you apply might have been produced
in France.
The television you watch might have been
produced with the Japanese technology.
3

The shoe you wear might have been produced in
Taiwan, but remarketed by an Italian company.
Air France and so on so forth might have provided
your airtravel services to you.
You get all these even without visiting or knowing
the country of the company where they are
produced.
All these activities have become a reality due to
the operations and activities of international
business.
4

Thus, international business is
the process of focusing on the resources of
the globe and objectives of the
organizations on global business
opportunities and threats.

5

Evolution of International Business
The business across the borders of the countries
had been carried on since times immemorial.
But, the business had been limited to the
international trade until the recent past.
The post 1990s period has given greater fillip to
international business.
In fact, the term international business was not in
existence before two decades.
The term international business has emerged from
the term international marketing, which in turn,
emerged from the term ‘export marketing’.
6

World Trade Organization

World Trade Organization (WTO) deals with the
rules of trade between nations at a global or near-
global level. But there is more to it than that.
It’s an organization for liberalizing trade.
It’s a forum for governments to negotiate trade
agreements.
It’s a place for them to settle trade disputes.
It operates a system of trade rules.

7

Born in 1995, but not so Young
The WTO began life on 1 January 1995, but its
trading system is half a century older. Since 1948, the
General Agreement on Tariffs and Trade (GATT) had
provided the rules for the system.
The last and largest GATT round was the Uruguay
Round, which lasted from 1986 to 1994 and led to the
WTO’s creation.
Whereas GATT had mainly dealt with trade in goods,
the WTO and its agreements now cover trade in
services, and in traded inventions, creations and
designs
8

The WTO agreements are lengthy and complex
because they are legal texts covering a wide range of
activities.
They deal with: agriculture, textiles and clothing,
banking, telecommunications, government
purchases, industrial standards and product safety,
food sanitation regulations, intellectual property, and
much more.
But a number of simple, fundamental principles
run throughout all of these documents. These
principles are the foundation of the multilateral
trading system.
9

WTO - The Principles

The trading system should be ...
Without discrimination
free - barriers coming down through negotiation
predictable - foreign companies, investors and
governments should be confident that trade
barriers should not be raised arbitrarily;
more competitive
more beneficial for less developed countries

10

Types of Trade Restrictions & WTO
Tariffs
A tariff is a charge on imports.
Specific tariffs are a fixed charge for each unit
of good imported (e.g. $4 per barrel of oil).
Ad valorem tariffs are charges computed as a
percentage of the value of the imports (e.g. 30%
on imported clothing).
WTO on Tariffs
When GATT was created, the average tariff on
manufactured goods was about 40%. It is now
down to about 3.8%.
Approximately 44% of international trade in
industrial products is now tariff-free.
11


Quotas
A quota is a restriction on the quantity of
imports.
Voluntary Export Restraints (VERs)
WTO on Quotas
Quotas are prohibited on most goods.
WTO on VERs
As of 1995, VERs are no longer allowed.
Countries that have them have up to 8 years to
phase them out.
12

Local Content Requirements
To avoid tariffs, companies often do the final assembly
of products within the country in which the companies
plan to sell. However, components are often
manufactured in another country.
Some countries therefore have local content
requirements. They might, for example, stipulate that an
auto company that assembles cars in the country use at
least 75% local content.
WTO on Local Content Requirements
Local content requirements are no longer allowed.
There is a 5-7 year phase-in period for developing
countries.
13

Administrative Barriers
Many countries use customs and inspection
processes to interfere with imports.
Japan had a practice of inspecting all tulip
bulbs by slicing them open (& thus ruining them).
France used to require that all imported VCR’s
be processed through a remote, under-staffed
office. The result was costly delays.
WTO on Administrative Barriers
The WTO has rules that attempt to prevent
administrative abuses. However, the rules are
unable to prevent all abuses.
14


Export Subsidies
In order to assist exporting industries, some
governments have adopted policies of subsidizing
exports.
WTO on Export Subsidies
Export subsidies are not allowed (on most
products).
However, general subsidies are allowed.

15

GATT: ‘Provisional’ for Almost Half a Century

From 1948 to 1994, the General Agreement on Tariffs
and Trade (GATT) provided the rules for much of world
trade and presided over periods that saw some of the
highest growth rates in international commerce.
It seemed well-established, but throughout those 47
years, it was a provisional agreement and organization.
The original intention was to create a third institution
to handle the trade side of international economic
cooperation, joining the two “Bretton Woods” institutions,
the World Bank and the International Monetary Fund.
16

Globalization - A Network Approach

The term “globalization” describes the increased
mobility of goods, services, labour, technology and
capital throughout the world.
Although globalization is not a new development,
its pace has increased with the advent of new
technologies, especially in the area of
telecommunications.

17

Trading among nations is a historical
phenomenon.
For thousands of years trading of goods has been
taking place among nations.
The content, structure, methods and procedures of
trading have however undergone qualitative and
structural change from age to age and from region to
region.

19

International marketing is the performance, in more
than one nations, of business activities that direct the flow
of company’s goods and services to consumers for a
profit.
The only difference, in the definition of domestic
marketing and international marketing is that international
marketing takes place in one or more foreign countries.
The apparently minor difference accounts for the
complexity and diversity found in the international
marketing environment in terms of rules / regulations /
procedures of individual nations.
20

Why Should India Globalise?
Human Resources
Wide Base
Growing Entrepreneurship
Growing Domestic Market
Niche Markets
Expanding Markets
Transnationalisation of the World Economy
NRIs
Competition
Economics Liberalisation:
21

Why An Indian Firm Should Globalise?

Profit Advantage
Growth Opportunities
Domestic Market Constraints
Competition
Government Policies And Regulations
Spin-Off Benefits

22

Importance of International marketing

Development of national economy and its rapid
growth
Development of exporter’s economy and his rapid
growth
Profitable use of natural resources and meeting
certain important obligations
Increases employment opportunities
Increases national income and standard of living
of its people

23

International Marketing
Conduct of business activities with goods and
services between more than one nation
Export Marketing
Only Export of goods and services from one
nation to another
Domestic Marketing
Conduct of business activity with in a nation

24

Difference between International Marketing
and Domestic Marketing

What is the difference between domestic and
international marketing ?
The answer lies not with difference concepts
and principles of marketing but with the
environment within which the marketing
programmes and plans must be implemented.

25

Difference between IM and DM

Conceptually there is no difference between the
fundamentals of domestic and international marketing.
The uniqueness of international marketing comes
from the different levels of uncertainty encountered in
the foreign market.
It is different from Domestic marketing because of
the different cultural influences involved and their
potential impact on the successful implementation of
marketing programs.

26


Competition, legal constraints, government controls,
weather etc. are uncontrollable elements and can be
affect the profitable outcome of sound marketing
plans.
Generally, the marketer cannot influence or control
these uncontrollable elements but instead must adjust
or adapt to them in a manner consistent with a
successful outcome.

27


The challenge of international marketing is moulding
the ‘ Controllable elements’ of marketing decisions
(price, product, promotion, advertisement, distribution
etc) within the frame work of the ‘uncontrollable
elements’ in the market place (competition, politics,
laws, level of technology, consumer behavior and so
forth) in such a way that the marketing objectives are
achieved.
Thus the difficulties created by different environments
are the international marketer’s primary concern or task.

28


Similarities
Prime importance is satisfying the basic needs
of consumers
Non-human factors like products Cost, price
are similar to that in Domestic marketing
It is mandatory to adapt Research And
Development, product development
Creates good will of the company and Nation in
the market

29


Differences
Traders have to observe restrictions of each
country due to political Entities such as quantity
restrictions Exchange control, Tariffs and
customs Duties.
Traders need not observe such restrictions

30


Differences
Difference in legal systems from nation to
nation. Laws and customs of trade are different in
each nation .
No difference in legal systems within a nation.

31


Differences
Difference in monetary systems and exchange
rates from nation to nations .
No difference in monetary systems with in a
nation

32


Differences
Less mobility of production factors such as
capital, labour etc .
More mobility of production factors such as
capital, labour etc

33


Differences
Difference in market characteristics such as
demand pattern, distribution channel, method of
market promotion etc .
Negligible difference in market characteristics
is nil

34

Difference between International
Marketing and Export Marketing
International Marketing Export Marketing
A. Scope :

1.Involves setting up of overseas branch For 1.Involves only activity of exporting goods
processing, assembling, packaging and direct and services
manufacturing through Direct investment joint
ventures and Collaborations turn-key
projects, Consultancy services etc.

B. Approach :

2.Will not counter the interest of domestic 1.It will counter domestic market competition
market. 2.To avail incentive by home government
3.Not, to avail the government's incentives 3.The exporting company is ethnocentric and
4.A proper marketing strategy is evolved home Oriented and produces and Sells
goods to foreign buyers
4.Mostly opportunistic Approach is involved.

35

Controllable Elements in IM

Product
Price
Promotion
Advertisement
Distribution

36

Uncontrollable Elements in IM

Government Controls ( towards domestic & Pvt
Sector / foreign business )
Political Considerations (stability, nature etc.,)
Legal Constraints
Economic factor (Level Of economy, Purchasing
Power etc.)
Cultural factors and Consumer behavior (Life
style, beliefs, customs habits, fashions etc.)
Weather factors (Climate Topography)

37

Domestic Environment

The main aspects of domestic environment
within the limitations of which a firm has to carry
out its foreign marketing/exports, consists of a
large variety of factors, the relative importance of
which keeps on changing from one point of time
to another.

38


These factors are broadly related to the
Domestic,
Economic and
Political conditions, including
existing and potential resources,
level and trend of economic growth,
industrial base and structure, and
the existence of facilitating and supporting
agencies for foreign trade.

39

In a fast developing economy like India, the following
aspects of national export expansion policies and
measures are gaining importance:
Development and expansion of export potential
industries and markets.
Greater processing of raw materials at source and
more emphasis on export of manufactured goods.
Planned development of an export sector and
export priority and import substitution industries.
Export incentive and support schemes
Quality control and standards
Institutional and infrastructure support.

40


Structure of India’s foreign trade can be classified
into three parts:

41

Foreign Environment

The main elements of foreign environment
affecting marketing activities of a firm in a foreign
country consist of the following.
POLITICAL DIMENSION
LEGAL DIMENSION
GEOGRAPHICAL DIMENSIONS
BUSINESS DIMENSION

42

Foreign Environment

POLITICAL DIMENSION
Attitudes towards International Buying
Political Stability
Monetary Regulations
Government Bureaucracy

43

Foreign Environment

LEGAL DIMENSION
Laws and regulations regarding product specification
Standards,
Packaging and labelling,
Copyright,
Trademark,
Patents,
Health and safety
Promotional methods,
Price control

44

Foreign Environment

GEOGRAPHICAL DIMENSIONS
Climatic features,
Altitude,
Temperature,
Humidity etc.,
which affect the use and performance of
products and equipments, transportation,
distribution etc.,

45

Foreign Environment

BUSINESS DIMENSION
Business Customs and practices,
Distribution structure and channel network,
Competitive patterns,
Means & methods of marketing environment

46

Cultural Environment

Culture is the sum total of knowledge, belief, art,
morals, laws, customs and other capabilities
acquired by humans as members of the society.
Since culture decides the style of living, it is
pertinent to study it especially in export marketing.
Every country (even regional groups within each
country) has cultural traditions, preferences and
taboos that the market must study

47

Frenchman uses almost twice as many cosmetics
and beauty aids as does his wife.
Only one Frenchman out of three brushes his teeth
The Dutch never touch Vodka.
Germans eat more spaghetti and more often than
the Italians.
Chinese don’t writes notes using Red Ink.
In Thailand, it is considered offensive to show the
sole of the shoe of foot to another.
The head is considered sacred in Thailand so never
touch the head of a Thai
48

The number 7 is considered bad luck in Kenya and
good luck in the Czech Republic. The number 10 is
bad luck in Korea, and 4 means death in Japan.
In Bulgaria a nod means no, and shaking the head
from side to side means yes.
The "okay" sign commonly used in the United States
means zero in France, is a symbol for money in Japan,
and carries a vulgar meaning in Brazil.
The use of a palm-up hand and moving index finger
signals "come here" in the United States and in some
other countries, but it is considered vulgar in others.
49

In Saudi Arabia, the law prohibits the wearing of
neck jewelry by Men.
In Argentina, do not be offended if your business
associate arrives 30-40 min. late to a meeting.
In Costa Rica, if you are invited for dinner to a
home, bring flowers, chocklets, scotch or wine.
In Germany, first names are reserved for family
members and close friends.
In India, the significance of a business arrangement
is often determined by the amount of time spent in
negotiations.
50


51


52

Economic Environment

In considering the international market, each
Exporter must consider the importing country’s
economy.
Two economic characteristics reflect the country’s
attractiveness as an export market. They are the
country’s industrial structure and the country’s
income distribution by employment industrialisation
and Socio economic Justices.
The country’s industrial structure shapes its
products and services, the requirements, income
levels, employment levels and so on.
54

Economic Environment

Four types of industrial structure can be
distinguished
Subsistence Economics
Raw - materials Exporting Economies
Industrialising Economies
Industrial Economies

55

New Opportunities in IM

Rapid world trade growth
Improving currency convertibility
Increasing trade barriers in international market
Expansion of world market and
Integration of world economy through globalisation

56

Constraints in IM
Political Risks
due to changes in political situation
Commercial Risks
due to lack of knowledge & transit-time
Credit Risks
due to realisation of export proceeds on Credit basis
Cargo Risks
due to unexpected transit disasters to Shipments
Exchange fluctuation Risks
due to invoicing in buyers currency which may
depreciate
Legal Risks
due to difference in commercial laws and
proceedings
57

Constraints in IM

Trade Barriers
Three-faced Competition
Diverse Languages, Customs and Traditions
Corruption
Technological pirating.
High cost of product and communication
adaptation.

58

Avenues of Entry into Foreign Markets
A domestic company can sell its products to
foreign buyers directly or indirectly.
For direct exports, it establishes direct contact
with foreign customers (actual users or importer
distributors) and ships the goods as per the
customer’s orders and requirement.
The exporting firm takes upon itself the entire
responsibility concerning packing, documentation,
shipment, credit exchange risks, the Government
regulations etc.,

59


Indirect exporting is more common in companies
just beginning their exporting.
First it involves less risk and investment and
second it does not have to develop an overseas
sales force.
However, Exporters who have grown sufficiently
large would like to undertake their own exporting
(direct).
The investment and risks are obviously higher but
so is the potential return.
60


61


By Licensing/Franchise arrangement
By Tie-up (Buy back) arrangements
By Investment in abroad for processing /
assembling / packaging etc.
By Offering consulting / turn key projects

62

Marketing Entry Strategies

Ethno centric Operational strategy :
(with the help of overseas Agents ) for
Product formulation
Product specification
Pricing strategy
Distribution
Promotional measures

63

Marketing Entry Strategies

Regiono Centric Operational strategy
Catering to a group of Countries having
similarity in Marketing in market characteristic
Geo Centric Operational strategy
Creating globally through well Co-Ordinated
Net work
Poly centric operational strategy
Creading to Country to country basis

64

Mechanics of Protectionism

Protection stands for restrictions imposed on the
import of foreign goods.
The theoretical and logical arguments for free trade
have equal validity in all countries, yet the international
trader must face the reality that he lives in a world of
tariffs, quotas and non-tariff barriers.
All these governmentally imposed barriers are
imposed through the political pressures of business for
protection of their markets.

65

The arguments in favour of barriers or protective
tariffs are many. But all arguments can be essentially
classified as below:
Protection of Infant Domestic Industry
Protection of Home market
Need to keep Money at Home
Conservation of Natural Resources
Reduction of Unemployment
National Defence
Retaliation and Bargaining
66


An economy with strong cost advantage in
manufactured goods or having capacity to manufacture
more goods, enjoying high standard of living will prefer
free trade.
Similarly a country with a monopoly will also prefer free
trade.
But restrictions on trade may be necessary for
developing countries to encourage its industrial production
and also to increase employment and economic activity.
In an economy depending primarily on agriculture,
protection also helps in diversification of its production
activities.
67


Arguments against protection are that it prevents
trade, prevents better productivity, results in higher
price, leads to competitive protection and wars, etc.
Protection is essential for countries that are in the
process of development and this fact has been
recognised universally.
As a result, a number of international institutions
have been established for the help of developing and
undeveloped economies.

68

Trade Barriers

Trade barriers may be
Tariff Barriers and
Non Tariff Barriers or protective barriers

69

Objectives Of Trade Barriers
To Protect Home Industries from Foreign Competition
To Promote New Industries and Research and
Development
To Conserve Foreign Exchange Reserves
To Maintain Favourable Balance Of Payments
To Protect National Economy from Dumping
To Curb Conspicuous Consumption
To Make Economy Self-reliant
To Mobilise Public Revenue
To Counteract Trade Barriers Imposed By Other
Countries
70

Tariff Barriers

Tariff barriers have been one of the classical
methods of regulating international trade.
Tariffs may be referred to as taxes on the imports.
It aims at restricting the inward flow of goods from
other countries to protect the country’s own industries
by making the goods costlier in that country.
Sometimes the duty on a product becomes so
steep that it is not worthwhile importing it.
In addition, the duty so imposed also provides a
substantial source of revenue to the importing country.

71

Tariff Barriers
Tariffs may be classified according to
the purpose
Revenue Tariff - Increases Govt. revenue
Protective Tariff - protects domestic industry
how they are levied.
Counter active Tariff-Similar to anti-dumping
Specific Tariff - based on per units/ Vol./
Length/number of goods
Ad valorem Tariff - based on certain
percentage of FOB/CIF value
72

Non Tariff Barriers

To protect the domestic industries against unfair
competition and to give them a fair chance of survival
various countries are adopting non-tariff measures.
Some of these are :
Quantity Restrictions, Quotas and
Licensing Procedures
Foreign Exchange Restrictions
Technical Regulations
Consular Formalities

73

Difference between Tariff and Non-
Tariff Barriers

74

New Tariff Barriers
New tariff barriers faced by Indian products in
various overseas markets are severely constraining
our exports. These barriers may broadly be
enumerated as
Restrictive import policy regimes (import
charges other than customs tariff, quantitative
restrictions, import licensing, custom barriers);
Standards, testing, labelling and certification,
which are set at unrealistic high levels nor
developing countries or are scientifically
unjustified;
75

New Tariff Barriers

Export subsidies (including agricultural export
subsidies, preferential export financing schemes
etc.,);
Barriers on services (visible and invisible
barriers restricting movements of service
providers, etc,);
Government procurement regimes; and
Other barriers including anti-dumping and
countervailing measures

76

Channels of Distribution
Channel of distribution: is the route through
which goods & services move from producer to
buyer
It includes producer, exporter, middle-men
Buyer, physical handling and distribution of
goods and services

77

Channels of Distribution

Factors considered in selecting channels of
distribution in international export
Product Characteristics
Market characteristics
Middlemen considerations
Company Factors

78

Product Characteristics

Perishable Products - shorter distributors channel
Unit value – diamond - direct selling (SDC) -
Computer - daily consuming items (Long Distribution
Channel) LDC
Weight and Bulky - bulky items direct selling
- light item - LDC
Standard products – LDC (In quality, Color)
New established products - direct selling (SDC)

79

Market Characteristics

No of purchase (soap /garments) - LDC
Geographical nature widely dispersed buyers
(LDC)
Size and No of orders requiring frequent purchase
LDC
Nature of Buyer and produce-Govt. buying’s
Direct selling

80

Middlemen Considerations

Service and attitude of middlemen-> higher profit-
LDC
Specialist middlemen availability
Cost of DC in overall cost will decide type of DC

81

Company Factors

Size of the company/exporter
Financial strength of the company
Marketing policy of the company

82

Channels of Distribution for
Consumer Goods

83

Channels of Distribution for
Industrials Goods

84

Major Groupings of Countries
Classification of world market is to effectively meet
their specific requirements in trade, economics,
industries etc.
Following is the division on trading block basis:
European Economic Community (EEC)
European Free Trade Area (EFTA)
Andean Common Market (ANCOM)
Caribbean Community and Common Market
(CARICOM)
COMECON (Former USSR and present
CIS coutnries)
Central American Common Market (CACM)
Association of South East Asian Nations (ASEAN)
85

World Market could also be further classified in
the following ways:
Classification based on difference in industrial
development of the countries.
Countries based on industrial development
On the basis of GNP
On the basis of Population

86


World markets are also grouped based on
favourable locations as described below:
Continental location.. Switzerland, Nigeria
Littoral location.. Spain, France
Isothermian location.. Egypt and Panama
Peninsular location.. India, Italy
Insular location.. Srilanka, Britain

87

Lastly the world market is also classified as
follows:
American Region
Eg. North America and Canada
Europe Region
Western Europe- ECM,EFTA countries
Asian & Oceanic Region
China, Afghanistan, Australia, New Zealand,
Thailand, Vietnam, India, Pakistan, Philipens
African Region
88

Business executives who hope to profit from their
travel should learn about the history, culture, and
customs of the countries they wish to visit.
Flexibility and cultural adaptation should be the
guiding principles for traveling abroad on business.
Business manners and methods, religious customs,
dietary practices, humor, and acceptable dress vary
widely from country to country.
It is recommended that business travelers prepare
for country visits by reading travel guides.

90

What is Culture?

Set of values, beliefs, rules and institutions held by
a specific group of people

Ethnocentricity Cultural literacy
Belief that one’s own Detailed knowledge of a
ethnic group or culture culture that enables a
person to function

X
is superior to that of

√
others effectively within it

91

Nations and Culture

National culture
Nation states build museums and monuments to
preserve the legacies of important events and people

Subculture
Group of people that share a unique
way of life within a larger culture
(language, race, lifestyle, attitudes, etc.)

92

Components of Culture

Aesthetics
Physical Values &
environments attitudes

Manners &
Education Culture customs

Personal
communication Social structure
Religion

93

Aesthetics

Music
Painting
Dance
Drama
Architecture

94

Values and Attitudes

Values Attitudes
The Ideas, beliefs and Positive or negative
evaluations, feelings and
customs to which people tendencies people hold
are emotionally attached toward objects or concepts

• Freedom • Time
• Responsibility • Work
• Honesty • Cultural change

95

Manners and Customs

Manners Customs
Appropriate behavior, Traditional ways or
speech and dressing behavior in specific
in general circumstances

96

Social Structure

Social structure
Culture’s groups, institutions, social
positions and resource distribution

Social stratification
Process of ranking people into social layers

Social mobility
Ease of moving up or down a culture's
"social ladder"

97

World Religions

Christianity
Islam
Hinduism
Origin of
Buddhism
Human Values
Confucianism
Judaism
Shinto

98

Mixed Signals

"Okay" "It's a secret" "Crazy"

"Vulgar gesture" "Very nosey" "Very clever"

99

Education

Cultures pass on traditions, customs, and values through
schooling, parenting, group memberships, etc.

Education level
Well-educated attract high-paying jobs, while poorly educated
attract low-paying manufacturing jobs

Brain drain
Departure of highly educated people from one profession,
geographic region or nation to another

100

Problem of Illiteracy

101

Physical and Material Culture

These influence a culture’s development and pace of change

Topography
Physical features characterizing the surface of a geographic region

Climate
Weather conditions of a geographic region

Material Culture
Technology used to manufacture goods and provide services

102

Punctual
Attitudes toward punctuality vary greatly from one
culture to another and, if misunderstood, can cause
confusion and misunderstanding.
Romanians, Japanese, and Germans are very
punctual, whereas people in many of the Latin
countries have a more relaxed attitude toward time.
The Japanese consider it rude to be late for a
business meeting, but acceptable, even fashionable,
to be late for a social occasion.
In Guatemala, on the other hand, one might arrive
any time from ten minutes early to 45 minutes late for
a luncheon appointment.
103

Greeting

When cultural lines are being crossed, something as
simple as a greeting can be misunderstood.
Traditional greetings may be a handshake, a hug, a
nose rub, a kiss, placing the hands in praying position,
or various other gestures.
People around the world use body movements and
gestures to convey specific messages.
A misunderstanding over gestures is a common
occurrence in intercultural communication, and
misinterpretation along these lines can lead to business
complications and social embarrassment.

104

Greeting
Men are safe in extending a hand to another man.
However, the rules may change when a man greets a
woman; or a woman greets a man, or even another
woman.
Germany and the United States have firm
handshakes, with the German being very brief and the
US being about three to four seconds
France, Guatemala, and Japan have more limp
handshakes
Singapore has a longer handshake (10+ seconds)

105

Greeting

Women should be the first to offer a hand for a
handshake in New Zealand, Singapore, South Korea,
or Taiwan
Women may greet other women by patting the
right forearm or shoulder in Chile, Costa Rica, El
Salvador, Honduras, Mexico, Nicaragua, or Panama
Women should wait for a man to offer his hand
first in a Hindu or Muslim country, if a western
handshake is going to be used

106

Greeting
In South Korea, more respect is shown by cupping
your left hand under your right forearm, as if supporting
your right forearm during the hand shake
A traditional bow may be used in China, Hong Kong,
or Japan
Traditional greeting in India is namaste -place the
hands in a praying position, palms together with the
fingers just beneath the chin, bow and say namaste
Traditional greeting in Thailand places the hands,
palms together, in front of the chin, bow the head to
touch the top of the fingers, and say Sawasdee - the
word that means “Good Luck”
107

Title
Proper use of names and titles is often a source of
confusion in international business relations.
In many countries (including the United Kingdom,
France, and Denmark) it is appropriate to use titles until
use of first names is suggested.
Thais, address one other by first names and reserve
last names for very formal occasions and written
communications.
In Belgium it is important to address French-speaking
business contacts as "Monsieur" or "Madame," while
Flemish-speaking contacts should be addressed as "Mr."
or "Mrs." To confuse the two is a great insult.
108

Gift
It is also important to understand the customs
concerning gift giving.
In some cultures, gifts are expected and failure to
present them is considered an insult, whereas in other
countries offering a gift is considered offensive.
Business executives also need to know when to
present gifts - on the initial visit or afterwards; where to
present gifts - in public or private; what type of gift to
present; what color it should be; and how many to
present.
It’s very important in Asia and the Middle East to only
use your right hand, or both hands, to offer or accept a
gift. In Japan and Hong Kong, use both hands.
109

Gift
Gift giving is an important part of doing business in
Japan, where gifts are usually exchanged at the first
meeting.
In sharp contrast, gifts are rarely exchanged in
Germany and are usually not appropriate.
Gift giving is not a normal custom in Belgium or the
United Kingdom either, although in both countries,
flowers are a suitable gift when invited to someone's
home.
In Singapore a recipient may “graciously refuse three
times” before accepting your gift. But in Chile, gifts are
accepted and opened immediately. And in Indonesia,
small gifts are given on a frequent basis.
110

Gift

Countries in which a gift is expected:
Europe
Czech Republic, Poland, Russia, Ukraine
Latin American
Bolivia, Columbia, Costa Rica
Pacific Rim
China, Hong Kong, Indonesia, Japan,
Korea, Taiwan, Malaysia, Philippines, and
Thailand

111

Gift
Countries in which a gift is not expected on the
first visit, but would be expected on a subsequent
visit:
Europe
Portugal, Spain
Latin American
Brazil, Chile, Guatemala, Nicaragua,
Panama, Peru, Venezuela
Pacific Rim
Malaysia, Singapore
Scandinavia
Finland, Norway
112

Gift

Countries in which a gift is not expected, or
gifts are less frequent exchanged:
Africa
Australia
Europe - England, France, Hungary, Italy
Latin America – Uruguay
Scandinavia – Denmark
Middle East – Pakistan, Saudi Arabia
United States

113

Business Cards
Customs concerning the exchange of business
cards also vary.
Although this point seems of minor importance,
observing a country's customs for card giving is a key
part of business protocol.
In Japan, for example, the Western practice of
accepting a business card and pocketing it immediately
is considered rude. The proper approach is to carefully
look at the card after accepting it, observe the title and
organization, acknowledge with a nod that the
information has been digested, and perhaps make a
relevant comment or ask a polite question.
114

Negotiation
Negotiating is a complex process even between
parties from the same nation.
It is even more complicated in international
transactions because of the potential
misunderstandings that stem from cultural
differences.
It is essential to understand the importance of rank
in the other country, to know who the decision
makers are, to be familiar with the business style of
the foreign company, and to understand the nature of
agreements in the country, the significance of
gestures, and negotiating etiquette.
115

Australia
Appearance
Men wear a conservative dark business suit
and tie.
Women may wear a dress, or skirt and blouse,
for business.
Informal clothing is appropriate when not
attending business functions. Casual pants are
fine for both men and women.
Men should not become physically
demonstrative with another man, or wink at a
woman.
116

Australia
Behavior
Being punctual is critical.
Maintain good eye contact during meetings and
conversations.
A single, male passenger using a taxi should sit in
the front seat.
Gift giving is not a common practice in business.
You may bring a small gift of chocolate, wine or
flowers if invited to someone's home.
Should you approach a line/queue, go to the
end/back and wait your turn.
Do not litter.
117

Australia
Communications
Shake hands when meeting and when leaving.
Although uncommon, some women may greet each
other with a kiss on the cheek.
Exchanging business cards is common among
professional workers.
Australians are friendly and open, but directness and
brevity are valued.
Opinions are respected,
Be an active listener, and ask if you do not understand
something in the conversation.
Do not hype yourself, your company or your
information.
Sightseeing and sports are good conversational topics
118

USA
Appearance
Business suit and tie are appropriate in all major
cities. Wear dark colored business suits in classic
colors of gray and navy. For an important formal
meeting, choose a white dress shirt, for less formal
a light blue shirt will still give you a conservative
appearance.
Women should wear a suit or dress with jacket in
major cities. Wearing classic clothing and classic
colors of navy, gray, ivory, and white will ensure
you give a confident and conservative appearance.
119

USA
Behavior
Business conversation may take place during
meals. However, many times you will find more
social conversation taking place during the actual
meal.
Business meetings may be arranged as
breakfast meetings, luncheon meetings, or dinner
meetings depending on time schedules and
necessity. Generally a dinner, even though for
business purposes, is treated as a social meal
and a time to build rapport.
120

USA
Behavior
Gift giving is discouraged or limited by many
US companies. A gracious written note is always
appropriate and acceptable.
If you do give a gift, it should not appear to be a
bribe.
An invitation for a meal or a modest gift is
usually acceptable.
Do not use or chew on a toothpick in public.
Many public places and private homes do not
allow smoking. In some areas laws have been
passed to prevent smoking in public places.
121

USA

Communications
Offer a firm handshake, lasting 3-5 seconds,
upon greeting and leaving. Maintain good eye
contact during your handshake. If you are
meeting several people at once, maintain eye
contact with the person you are shaking hands
with, until you are moving on the next person.
Good eye contact during business and social
conversations shows interest, sincerity and
confidence.
122

USA
Communications
Introductions include one's title if appropriate,
or Mr., Ms, Mrs. and the full name.
Business cards are generally exchanged
during introductions. However, they may be
exchanged when one party is leaving.
A smile is a sign of friendliness, and in rural
areas you may be greeted with a "hello" rather
than a handshake.
Ask permission to smoke before lighting a
cigarette or cigar. Due to health concerns, you
may or may not be given permission.
123

India
Appearance
Men are generally expected to wear a suit and
tie for business, although the jacket may be
removed in the summer. Women should wear
conservative dresses or pantsuits.
When dressing casual, short-sleeved shirts and
long pants are preferred for men; shorts are
acceptable only when exercising. Women must
keep their upper arms, chest, back, and legs
covered at all times.
Women should wear long pants when
exercising.
124

India
Behavior
The head is considered the seat of the soul.
Never touch someone else’s head, not even to
pat the hair of a child.
Beckoning someone with the palm up and
wagging one finger can be construed as in insult.
Standing with your hands on your hips will be
interpreted as an angry, aggressive posture.
Whistling is impolite and winking may be
interpreted as either an insult or a sexual
proposition.
125

Never point your feet at a person. Feet are

India
Behavior
Never point your feet at a person. Feet are
considered unclean. If your shoes or feet touch
another person, apologize.
Gifts are not opened in the presence of the
giver. If you receive a wrapped gift, set it aside
until the giver leaves.
Business lunches are preferred to dinners.
Hindus do not eat beef and Muslims do not eat
pork.
126

India
Communications
There are more than fourteen major and three
hundred minor languages spoken in India. The
official languages are English and Hindi. English is
widely used in business, politics and education.
The word "no" has harsh implications in India.
Evasive refusals are more common, and are
considered more polite. Never directly refuse an
invitation, a vague "I’ll try" is an acceptable refusal.
Do not thank your hosts at the end of a meal.
"Thank you" is considered a form of payment and
therefore insulting.
127

China
Appearance
Conservative suits for men with subtle colors
are the norm.
Women should avoid high heels and short
sleeved blouses. The Chinese frown on women
who display too much.
Casual dress should be conservative as well.
Men and women can wear jeans. However,
jeans are not acceptable for business meetings.
Revealing clothing for women is considered
offensive to Chinese businessmen.
128

China
Behavior
Do not use large hand movements. The Chinese
do not speak with their hands. Your movements
may be distracting to your host.
Personal contact must be avoided at all cost. It is
highly inappropriate for a man to touch a woman in
public.
Do not point when speaking. To point do not use
your index finger, use an open palm.
It is illegal to give gifts to government official
however; it has become more commonplace in the
business world.
129

China
Behavior
It is more acceptable to give gifts either in private
or to a group as a whole to avoid embarrassment.
The most acceptable gift is a banquet.
Quality writing pens as considered favored gifts.
The following gifts and/or colors are associated
with death and should not be given:
Clocks
Straw sandals
A stork or crane
Handkerchiefs
Anything white, blue or black
130

China
Behavior
Always arrive on time or early if you are the guest.
Do not discuss business at meals.
Do not start to eat or drink prior to the host.
As a cultural courtesy, you should taste all the
dishes you are offered.
Sample meals only, there may be several courses.
Never place your chopsticks straight up in your bowl.
By placing your sticks upright in your bowl your will
remind your host of joss sticks which connotes death.

131

China
Behavior
Do not drop the chopsticks it is considered bad
luck.
Do not eat all of your meal. If you eat all of your
meal, the Chinese will assume you did not receive
enough food and are still hungry.
Women do not usually drink at meals.
Tipping is considered insulting, however the
practice is becoming more common.

132

China
Communications
Bowing or nodding is the common greeting;
however, you may be offered a handshake. Wait
for the Chinese to offer their hand first.
Applause is common when greeting a crowd; the
same is expected in return.
Introductions are formal. Use formal titles.
Being on time is vital in China.
Appointments are a must for business.
Contacts should be made prior to your trip.
Allow the Chinese to leave a meeting first. 133

China
Communications
Bring several copies of all written documents for your
meetings.
The decision making process is slow.
Many Chinese will want to consult with the stars or
wait for a lucky day before they make a decision.
Present and receive cards with both hands.
Never write on a business card or put it in your wallet
or pocket. Carry a small card case.
The most important member of your company or
group should lead important meetings. Chinese value
rank and status. 134

South Africa

Appearance
South Africans of Urban cultures generally
wear western dress.
Dress well in public, it will be expected by your
South African host.
African women wear a sari.

135

South Africa
Behavior
Gift giving is not the norm in business.
Do not present gifts with the left hand.
Use either both hands or the right hand when
giving and presenting gifts.
Gifts will be opened upon receipt.
Business meetings can be held over lunch or
dinner in a good restaurant.
Meals at the home of a white South African will
include a barbecue by the pool--called a
braaivleis (Afrikaans for roasted meat) or braai. 136

South Africa
Communications
The handshake is the most common greeting.
There are a variety of handshakes between ethnic
groups.
Use titles and surnames to address people.
Appointments should be made starting at 9 a.m.
Do not rush deals. South Africans are very
casual in their business dealings.
Business cards have no formal exchange
protocol.
South Africans prefer a "win-win" situation.
137

Brazil
Appearance
Three-piece suits carry an "executive" connotation,
whereas two-piece suits are associated with office
workers. Conservative attire for women in business is
very important. Also make sure your nails are
manicured
The colors of the Brazilian flag are yellow and green.
Avoid wearing this combination in any fashion
Touching arms and elbows and backs very common
Flicking the fingertips underneath the chin indicates
that you do not know the answer to a question 138

Brazil
Behavior
Make appointments at least two weeks in advance.
Be prepared to commit long term resources (both in time
and money) toward establishing strong relationships in
Brazil. This is the key to business success
Never start into business discussions before your host
does. Business meetings normally begin with casual
'chatting' first
If entertained in the home, it is polite to send flowers to
the hostess the next day, with a thank-you note
Purple flowers are extensively used at funerals, so be
cautious when giving someone purple flowers. Violets are
OK to give
Tipping is typically 10% in Brazil
139

Brazil
Communications
Handshaking, often for a long time, is common. Shake
hands for hello and goodbye; use good eye contact;
When women meet, they exchange kisses by placing
their cheeks together and kissing the air
First names used often, but titles important
Music and long, animated conversation are favorite
Brazilian habits. When conversing, interruptions viewed as
enthusiasm. Brazilians enjoy joking, informality, and
friendships
Portuguese is the language of Brazil
Good conversation topics: soccer, family, and children
Bad conversation topics: Argentina, politics, poverty,
religion, and the Rain Forest
140

Costa Rica
Appearance
Business dress: Men should wear a conservative
dark suit. In warmer climates, a jacket is optional.
Women can wear a dress or skirt and blouse for
formal business meetings, but it is far more common
for women to wear pants to work. Costa Ricans are
much more formal and serious than other Latin
Americans.
Local people bathe frequently because of the heat,
and guests are expected to bathe at least once daily

141

Costa Rica

Appearance
Making a fist with the thumb sticking out
between the middle an index fingers is obscene.
This gesture is known as the "fig"
Most North American gestures will be
understood is Costa Rica
Don’t put your feet up on any furniture except
items expressly designed for that purpose
Fidgeting with your hands or feet is considered
distracting and impolite
142

Costa Rica
Behavior
Costa Ricans are by far the most punctual people in
Central America.
Since Costa Ricans allow themselves only a limited time
for their midday break, everyone is expected to be on time
for a business lunch
Most business entertaining takes place in the evening,
since lunch is the main meal of the day.
Gifts frequently exchanged on all kinds of special
occasions
If you are invited for dinner to a home, bring flowers,
chocolates, scotch, or wine.
Have business cards, proposals, and other material
printed in both English and Spanish
143

Costa Rica
Communications
Handshaking the common greeting.
Titles are important and should be included on
business cards. Address a person directly by using his
or her title only. For persons who do not have
professional titles it is common to call a gentleman Don
(plus his firstname) and a lady Dona.
Most Hispanics have two surnames: one from their
father, which is listed first, followed by one from their
mother. Only the father’s surname is used when
addressing someone
Politics are freely discussed because of stability
Good conversation topics: children, history, art
Bad topics: any personal criticism, religion
144

France
Appearance
The French are very conscientious of their
appearance.
Dress conservative and invest in well-tailored
clothing.
Patterned fabrics and dark colors are most
acceptable, but avoid bright colors.
French businessmen do not loosen their ties or
take off their jackets in the office.
Women should also dress conservatively
Women should also avoid any glitzy or
overpowering objects, such as flashy jewelry.
145

France

Behavior
Punctuality is treated very casually in France.
France is a highly stratified society, with strong
definition and competition between classes.
The French handshake is brief, and is
accompanied by a short span of eye contact.
Always shake hands when meeting someone,
as well as when leaving. French handshakes are
not as firm as in the United States.
Gift giving is left to the foreigner’s discretion.
146

France
Behavior
The French have a great respect for privacy.
Knock and wait before entering into a room.
Always give notice before your arrival.
Business can be conducted during any meal, but
lunch is best.
Avoid drinking hard liquor before meals or
smoking cigars between courses. The French
believe this permeates the taste buds,
compromising the taste of the meal.
Good gifts to present include books or music, as
they demonstrate interest in intellectual pursuits.
147

France
Communications
French is the official language in France.
If you do not speak French, it is very important
that you apologize for your lack of knowledge.
Most individuals in business speak English.
The French have a great appreciation for the art
of conversation.
The French frequently interrupt each other, as the
argument is a form of entertainment.

148

Germany
Appearance
Business dress in Germany is very
conservative.
Businessmen wear dark suits; solid,
conservative ties, and white shirts.
Women also dress conservatively, in dark suits
and white blouses.
Chewing gum while talking to someone is
considered rude.
Don't be surprised if occasionally you see a
fashion statement with white socks being worn
with a dark suit.
149

Germany
Behavior
Germans are strongly individualistic.
The German thought process is extremely
thorough, with each aspect of a project being
examined in great detail. This process is often
times very time-intensive. However, once the
planning is over, a project will move very quickly
and deadlines are expected to be honored.
Germans do not like surprises. Sudden
changes in business transactions, even if they
may improve the outcome, are unwelcome.
150

Germany
Behavior
German citizens do not need or expect to be
complimented. In Germany, it is assumed that
everything is satisfactory unless the person hears
otherwise.
Punctuality is necessity in Germany. Arrive on
time for every appointment, whether for business
or social. Being late, even if it is only by a few
minutes, is very insulting to a German executive.
When being introduced to a woman, wait to
see if she extends her hand.
151

Germany
Behavior
In business situations, shake hands at both the
beginning and the end of a meeting. Additionally, a
handshake may be accompanied with a slight bow.
Reciprocating the nod is a good way to make a good
impression, as failure to respond with this nod/bow
(especially a superior) may get you off to a bad start.
Be sure to look directly into the person's eyes while
shaking hands.
Business is viewed as being very serious, and
Germans do not appreciate humor in a business
context. 152

Germany

Behavior
In business meetings, age takes precedence
over youth. If you are in a group setting, the
eldest person enters first.
Germans keep a larger personal space around
them, approximately 6 inches more space than
North Americans do.
People that have worked together for years still
shake hands each morning as if it were the first
time they met.
153

Germany
Behavior
German men frequently great each other with 'last
name', even when they know each other very well.
Germans are able to consume large quantities of
beer in one evening, but public drunkenness is not
acceptable.
Typically, you do not wait to be seated in German
restaurants, and it is not uncommon to share a table
with strangers. However, most Germans will think it
odd if you try to initiate a conversation with them
beyond just establishing that the chairs are available.
154

Germany
Communications
German is the official language.
Germans love to talk on the telephone. While
important business decisions are not made over the
phone, expect many follow up calls or faxes.
Germans guard their private life, so do not phone
a German executive at home without permission.
Titles are very important to Germans. Do your
best to address people by their full, correct title, no
matter how extraordinarily long that title may seem
to foreigners. This is also true when addressing a
letter.
155

Hong Kong

Appearance
The color red is considered a lucky color in
Hong Kong.
When dressing for a business meeting select a
red tie to impress your host.
The color white is synonymous with death.

156

Hong Kong

Behavior
The toast is an integral part of the culture in
Hong Kong.
All countries have a standard toast however
each country has a different pronunciation for the
word toast.
Everyone is expected to drink a toast.
The guest of honor makes the first toast.
Follow the lead of your host when dining.
Do not blow your nose at the table or in public.
157

Hong Kong

Behavior
Do not rub your chopstick together before dining. It
implies that you have been given poor quality
chopsticks that may have splinters.
It is impolite to refuse to drink. Even if you do not
drink, accept it and toast with your host.
Drinking helps to relax the host and is an important
part of the relationship building phase in Chinese
business culture.
Gift giving is a very important part of Chinese culture.
At close of trip, have a dinner for your host as show of
respect.
158

Hong Kong

Communications
The handshake is fairly common in Hong Kong,
however a slight bow will show a sign of respect.
A round of applause may greet you during your
visit. The Chinese like to applaud. You are expected
to return the applause out of respect.
Because Hong Kong is so densely populated the
Chinese tend to converse very closely together.
Silence is held in high regard in Hong Kong.
Allow your host to contemplate without interruption.
159
Names are usually written in the following order the

Hong Kong
Communications
Names are usually written in the following order
the last name first, middle name second and the
first name last.
Use titles with names whenever possible.
Appointments are recommended.
Punctuality is expected.
Use only black and white materials for
presentations, as colors are very significant.
Patience is important. The Chinese do not make
business decisions quickly.
160

New Zealand
Appearance
When conducting business in New Zealand, you
want to dress conservatively and tending toward a
more formal look.
Men should wear darker colored suits with a
conservative tie. To maintain formality, a white shirt
would be worn.
Women should wear a suit, a dress, or skirt and
blouse with a jacket. The wardrobe should
incorporate classic styles and colors (navy and
gray).
161

New Zealand

Appearance
Umbrellas and raincoats are necessary most of
the year because of the climate and rainfall. The
climate is temperate, not tropical.
When not involved in business meetings and
activities, your wardrobe may be casual.
Do not use the "V for victory" sign while in this
country.

162

New Zealand
Behavior
Always be on time or early for all appointments.
Punctuality is part of the culture. "Fashionably late" is
not an option in this country as most social events start
on time.
Maintain a reserved, formal demeanor, especially
when first meeting someone. Take your lead to become
more relaxed by following the behavior of your New
Zealand hosts.
Talking is minimal while you are eating a meal.
Dinners are reserved for social interactions only,
therefore not business is discussed at these occasions.
Lunch is used for business conversations.
163

New Zealand
Behavior
Boisterous behavior is always inappropriate,
even when you are drinking. Pace yourself to
maintain the proper reserved and polite behavior.
A tip may be refused, as tipping is rare.
Entertaining is frequently done in a person's
home. A small thank you gift of flowers,
chocolate, or whiskey may be taken to the host
Cover your mouth if you must yawn, and do not
chew gum or toothpicks in public.
Ask permission before you attempt to
photograph someone.
164

New Zealand
Communications
The official language is English.
When meeting someone, and when leaving,
use a firm handshake with good eye contact.
Men generally wait for a woman to be the first
to extend her hand for a handshake. Women do
shake other women's hands.
When your are meeting someone, say "How do
you do?" A more relaxed greeting, such as
"Hello", is reserved for the meetings after you've
had the opportunity to get to know the person. 165

New Zealand
Communications
The people are reserved, but always very warm
and polite when you meet them.
Address a person using his/her title, or Mr.,
Mrs., Miss plus the full name.
Honesty is the best policy. Don't hype your
product or service, and don't be a braggart.
Do not allow your voice to get loud. Maintain a
reserved manner.
Politics, sports, and weather are good
conversational topics, and may be hotly debated.
166

Russia
Appearance
Businessmen in Russia usually wear suits that are
dark and well tailored along with good dress shoes.
Do not stand with your hands in your pockets. This
is considered rude.
Women dress rather conservatively, avoiding
overly flashy or gaudy outfits.
Women should always cover their heads when
entering into any Russian Orthodox Churches.
Skirts should be worn rather than pants.
When attending dinner in a citizen’s home, casual
dress are appropriate.
167

Russia
Behavior
As a foreigner, you are expected to be on time to
all business appointments. However, your Russian
counterpart may be late, as this may be a test of your
patience. Do not expect an apology from a late
Russian, and do not demonstrate any kind of attitude
if your business appointments begin one or two hours
late. This may also be a test of your patience.
Social events are more relaxed. It is acceptable
for foreigners to be 15 to 30 minutes late.
Patience is an extremely important virtue among
Russians; punctuality is not.
168

Russia
Behavior
Russians are known as great "sitters" during
negotiations, this demonstrates their tremendous
patience.
As a foreigner, you should realize that "Final
Offers" are often not actually the end of the
negotiations, and that often times the outcome will be
more beneficial and attractive if you can hold out.
There is a Russian term meaning "connections" or
"influences. It is extremely difficult to do business in
Russia without help from a local.
169

Russia
Behavior
To help with this, gifts, money or other items are
often a good idea when doing business in Russia.
If attending dinner at a family residence, it is
appropriate to bring a gift, such as a bottle of wine,
dessert, or a bouquet of flowers.
When shaking hands with someone, be sure to
take off your gloves, as it is considered rude not to.
When attending any formal engagements such as
the theatre, it is appropriate to check your coat and
other belongings at the front door of the
establishment.
170

Russia
Behavior
Do not show the soles of your shoes, as this is
considered impolite. They are considered dirty, and
should never come in contact with any type of seat
(like on a subway or bus).
Be sure to have plenty of business cards with
double sides of information. One side should be
printed in English, the other side in Russian.
Be alert and open to taking a drink or having a
toast, as refusing to do so is a serious breach of
etiquette.
171

Russia
Communications
Russian is the official language.
Speaking or laughing loudly in public is considered
rude, as Russians are generally reserved and
somber.
Many Russians speak English, as it is often taught
beginning in the third grade.
Russians are highly literate, and have almost a
100% literacy rate.
Good topics of conversation include peace, the
current changes taking place in Russia, and their
current economic situation.
172

Saudi Arabia

Appearance
Never show bare shoulders, stomach, calves
and thighs.
Visitors are expected to abide by local
standards of modesty however, do not adopt
native clothing. Traditional clothes on foreigners
may be offensive.
Despite the heat, most of the body must always
remain covered.

173

Saudi Arabia
Appearance
A jacket and tie are usually required for men at
business meetings. Men should wear long pants
and a shirt, preferably long-sleeved, buttoned up
to the collar. Men should also avoid wearing
visible jewelry, particularly around the neck.
Women should always wear modest clothing in
public. High necklines sleeves at least to the
elbows are expected. It is a good idea to keep a
scarf handy, especially if entering a Mosque.

174

Saudi Arabia
Behavior
It is common to remove your shoes before
entering a building. Follow the lead of your host.
Alcohol and pork are illegal.
In the Muslim world, Friday is the day of rest.
There are several styles of greetings used; it is
best to wait for your counterpart to initiate the
greeting. Men shake hands with other men. Some
men will shake hands with a woman; it is
advisable for a businesswoman to wait for a man
to offer his hand. 175

Saudi Arabia

Behavior
The left hand is considered unclean and reserved
for hygiene avoid gestures with the right hand.
Men walking hand in hand is a sign a friendship.
Try not to cross your legs when sitting. Never
show the bottom of your feet.
The "thumbs up" gesture is offensive.
Gifts are not necessary, but appreciated
Women in Saudi Arabia are not permitted to drive
vehicles.
176

Saudi Arabia

Communications
Do not discuss the subject of women, not even
to inquire about the health of a wife or daughter.
The topic of Israel should also be avoided. Sports
is an appropriate topic.
Names are often confusing. It’s best to get the
names (in English) of those you will meet, speak
to, or correspond with before hand. Find out both
their full names and how they are to be
addressed in person.
177

Saudi Arabia

Communications
Communications occur at a slow pace. Do not
feel obligated to speak during periods of silence.
"Yes" usually means "possibly".
Your Saudi host may interrupt your meeting or
conversation, leave the room and be gone for 15
to 20 minutes for the purpose of his daily prayers.
At a meeting, the person who asks the most
questions is likely to be the least important. The
decision maker is likely a silent observer.
178

UK
Appearance
Business attire rules are somewhat relaxed in
England, but conservative dress is still very
important for both men and women.
Men's shirts should not have pockets; if they
do, the pockets should always be kept empty.
Additionally, men should wear solid or patterned
ties, while avoiding striped ties.
Men wear laced shoes, not loafers.
Businesswomen are not as limited to colors
and styles as men are, though it is still important
to maintain a conservative image.
179

UK
Behavior
Always be punctual in England. Arriving a few
minutes early for safety is acceptable.
Decision-making is slower in England than in
the United States; therefore it is unwise to rush
the English into making a decision.
A simple handshake is the standard greeting
(for both men and women) for business
occasions and for visiting a home.
Privacy is very important to the English.
Therefore asking personal questions or intensely
staring at another person should be avoided. 180

UK
Behavior
Eye contact is seldom kept during British
conversations.
To signal that something is to be kept
confidential or secret, tap your nose.
Personal space is important in England, and
one should maintain a wide physical space when
conversing. Furthermore, it is considered
inappropriate to touch others in public.
Gifts are generally not part of doing business
in England.
181

UK

Behavior
A business lunch will often be conducted in a
pub and will consist of a light meal and perhaps a
pint of ale.
When socializing after work hours, do not bring
up the subject of work.
When dining out, it is not considered polite to
toast those who are older than yourself.

182

UK
Communications
"America and Britain are two nations divided
by a common language" George Bernard was
once quoted as saying.
In England, English is the official language, but
it should be noted that Queen’s English and
American English are very different.
Often times ordinary vocabulary can differ
between the two countries.
Loud talking and disruptive behavior should be
avoided
183

UK
Communications
One gesture to avoid is the V for Victory sign,
done with the palm facing yourself. This is a
very offensive gesture.
If a man has been knighted, he is addressed as
"Sir and his first name" example: Sir John. If
writing a letter, the envelope is addressed "Sir
First name and Last name" example: Sir John
Roberts.

184

Imports, exports and its related activities
together are referred to as foreign trade. Hence the
rules and regulations concerning export and import in
India fall under an Act called Foreign Trade
(Development & Regulation) Act 1992.

186

In recent years the Indian Government's stance on
imports into the country has eased considerably.
Prior to liberalisation during the days of the
"license raj" importing was a tedious and expensive
proposition governed by repetitive procedures, a host
of licenses and exorbitant customs duties.
With the thrust on globalisation and exports,
cognisance of the need for imports has
simultaneously increased.

187

This recognition that import of certain products is
essential to fuel the growth of exports has resulted in
a number of export oriented schemes under which
imports against an export obligation have been
permitted.
The government has freed imports considerably,
smoothened import procedures and brought down
customs duties on various categories of imports.
Against export obligations imports are often duty
free.
Finally the foreign exchange essential for imports
is now more easily available.
188

Import Licensing

As stated in the EXIM policy all goods are freely
importable except those falling in the negative list of
imports.
Before we go on to look at import licensing let us
first take a look at the negative list of imports as
contained in the EXIM policy.

189

Import Licensing
The negative list of imports consists of three parts.
Prohibited goods in the negative list of imports
that cannot be imported (Prohibited Goods)
Goods the import of which are restricted by
licensing and can be imported only in accordance
with a license issued in this behalf. (Restricted
Goods)
Goods, the import of which is canalised may be
imported by the canalising agency specified in the
negative list. The Director General of Foreign Trade
may however grant a license to any other person to
import any canalised goods. (Canalised Goods).
190

Import Licensing

As mentioned earlier for import of goods falling in
the negative list (restricted goods) a license has to be
procured from the licensing authorities.
An application form (refer index of forms) needs to
be submitted to the concerned regional licensing
authority.
The completed application form has to be
submitted along with two copies of the bank
receipt/bank draft) as proof of remittance of the
prescribed fee (refer table below for fee structure).
191

Import Licensing

The import licensing authority can issue the
license, subject to one or more of the following
conditions
that the goods covered by the license shall not
be disposed of export in accordance with the
provisions of the Policy or in the manner specified
by the licensing authority in the license.
that the applicant shall execute a bond for
complying with the terms of the license

192

Import Licensing
Categories of Users
Actual user means an user ( person / business /
industry ) that will employ the goods for his/its own use -
and may be either industrial or non-industrial.
Actual user (Industrial) means a person who utilises
the imported goods for manufacturing in his own
industrial unit or manufacturing for his own use in
another unit including a jobbing unit.
Actual user (Non-Industrial) means a person who
utilises the imported goods for his own use in
commercial establishment, any laboratory, Scientific or
(R&D) institution university or other educational
institution or hospital; any service industry
193

Imports - The Process

Import registration
As per the Foreign Trade Act 1992, "No
person shall make any import or export except under
an Importer-Exporter Code (IEC) number granted by
the Director General or the officer authorised by the
Director General in this behalf in accordance with the
procedure specified in this behalf by the Director
General."

194

Apparel exports

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