A good slide on export vs import it will help you more to understand about export vs import. just look at this slide and you automatically see how worthy this slides are . Thank you
3. MEANING OF ‘EXPORT’
The commodities (goods & services) sold to a
foreign country is called export
MEANING OF ‘PROMOTION’
Encouragement of the progress, growth or
acceptance of something.
MEANING OF “EXPORT PROMOTION”
Refers to the policy of the govt that offers
encouragement to the exporters with a view to
enhance the exports of the country.
4.
5. Devaluation of rupee by 36.5% in gold in
June 1965
Govt. expressed hope for expansion in
export earnings because
Indian goods would be cheaper in
International market
Lasted upto 1972-73
6. This phase began in 1973 and lasted upto
a decade
Import substitution could not bring viability
in BOP
Govt undertook steps to increase exports
7. Recent phase
The govt. of India has framed various
schemes so as to promote exports &
improve the country’s exchange earnings
8. The Export Promotion Council Of India was
established under Companies Act 1956
Focuses on promotion of exporters and
producers to export goods
To achieve higher level of export
performance & foreign exchange earnings
9. To promote & develop the exports of the
country
Each council is responsible for the promotion
of a particular group:
1. Products
2. Projects
3. Services
4. Assistance
Assists members in taking advantage of
opportunities
Helps in expansion & diversifying exports
12. Neglect of factors other than price
Other factors like quality of product
Ability of the exporters
Delivery schedule & other imp factors are
more imp influencing foreign buyers
Wasteful formalities
Availing of promotional measures &
procedural formalities are long, complicated
& time consuming
Wrong focus
We often focus on selected products
Other products should be promoted.
13. Trading problems
Developing countries find problems due to
tarrifs
Tarriif rates become higher as one moves
from raw material to manufactured products
Production problems
Lack of sophisticated technology
Inspite of changes in industrial & trade policy
Indian firms continue to produce outdated
products by outdated technology
15. Government built up various organizational
structures to promote exports such as:
EPCs
Commodity Boards
The Trade development authority
Indian Institute of Packaging
Trade Fair Authority of India
17. Growth can be thought of as expanding the size
of the community through the use of land and
other natural resources.
Development, on the other hand, can be thought
of as improving liveability through, jobs,
education, cultural preservation, public safety, and
sense of community.
Fortunately, there exist ways for communities to
develop without growing. One of those ways is
through Import Substitution.
18. Import substitution is a trade policy aimed to promote
economic growth by restricting imports that competed
with domestic products in developing countries.
The import substitution approach substitutes
externally produced goods and services with locally
produced ones.
Import substitution can also be discussed as a policy
strategy that attempts to utilize underused capacities,
reduce regional unemployment or protect infant
industries.
19. leaky bucket” model.
Money circulates within the region when money that is earned
locally is also spent locally. This requires that some money exists in
the bucket to begin with
—one way this happens is when local goods and services
are purchased by consumers outside the region.
— Another source of inflow comes from businesses which
decide to set up shop locally and generate jobs that pay
local workers.
The “leak” in the bucket that allows money to escape from the
community is created when goods and services from outside the
region are purchased with local money
20. Plugging the Leaks
One way to prevent money from leaving the local economy is to connect
local demand for goods and services with the local suppliers of those goods
and services.
Many of the things that individuals or businesses need
can be found from suppliers within the area but, due to
lack of adequate information or convenience, those
things are often purchased from the outside. This
represents another flow of capital leaving the system.
By substituting demand for externally produced things with locally
produced things, communities can retain capital for use within the
community.
21. The notion of import substitution was
popularized in the 1950s and 1960s as a strategy
to promote economic independence and
development in developing countries
This initial effort failed due in large part to the
relative inefficiency of 3rd world production
facilities and as a result their inability to compete
in a globalizing marketplace.
Thus an export oriented approach has became the
norm.
22. Promotion of Domestic Industry
Employment Generation
Promotion of Industrialization
Production of consumer’s goods
Improvement in Balance of Payment
23. Advantages
• Increase in domestic employment.
• Reduced dependence on labor non intensive industries.
• Resilience in the face of global economic shock (recessions &
depreciations)
• Less long distance transportation of goods.
Disadvantages
• The IS industries are inefficient as they are not exposed to
internationally competitive industries.
• Increase in unemployment internationally as world GDP
decreases through promotion of inefficiency.
24. Import Licenses: - Import license is an important
instrument. There can be a large variety of licenses- for users
or for wholesalers they can be obtained by direct permission
from some ministry or the central bank. They can be
combined with specific import programs and they might be
combined with lists of prohibited import products.
Guarantee Deposits: - Other means are guarantee
deposits which have to be made by the importer for the right
to import an item. Foreign firms can be restricted in their
right to repatriate dividends and profits. Domestic exporters,
on the other hand may be allowed to resell part of their
foreign earnings at advantageous exchange rates.
25. Tariff Walls: - Tariffs and surcharges are common protection devices. Tariff
rates differ between countries and also vary over time. It is convenient to
characterize a country’s control over foreign
trade according to the policy implemented.
Physical Restrictions:- The method of physical restriction on import or even
outright banning of import is used in cutting out imports. Reduction in imports
is brought out by such devices as quotas, licensing, ban on certain imports etc.
It is a sure way of protecting the domestic producers from the foreign
competition.
