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International business law and practices

STUDY MATERIAL
PROFESSIONAL PROGRAMME

INTERNATIONAL
BUSINESS – LAWS AND
PRACTICES
MODULE 3
ELECTIVE PAPER 9-5

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ii


INTERNATIONAL BUSINESS - LAWS AND PRACTICES
Today globalization has dramatically re-shaped the markets and has changed the way business is being done.
One has to keep pace with the customer’s requirement and has to bring in services and products as per global
standards. International trade has become a vital component of development strategy, which can be used as an
effective instrument of economic growth. Moreover the establishment of institutions like World Trade Organisation
has ushered a new era of global economic co-operation reflecting the widespread desire to operate in a more
open multilateral trading system. Participation in international trade has become necessity for all countries and
as well as companies for growth.
Thus it becomes important for professionals to acquire knowledge and skill to help work in international companies
and in global environment. Having updated knowledge of international business laws and procedures becomes
key requisite for professionals. So, in this study broad aspects related to international business environment,
export management, FDI policy, FTP policy, international trade theories, international trade bodies like WTO,
UNCTAD, international logistics and supply chain etc. has been discussed in detail. Added emphasis has been
laid on strategic alliances, foreign collaborations and joint ventures abroad, to enable the students to discharge
efficient services and to tackle practical situations.
In this study every efforts has been made to give a comprehensive coverage of all the topics relevant to the
subject. At the end of each study lesson a brief about the lesson have been given under the caption ‘Lesson
Round Up’ as well as questions have been given under the caption ‘Self Test Questions’ for the practice of
students to test their knowledge.
This study material has been published to aid the students in preparing for the INTERNATIONAL BUSINESS –

LAWS AND PRACTICES paper of the CS Professional Programme. It is part of the education kit and takes the
students step by step through each phase of preparation stressing key concepts, pointers and procedures.
Company Secretaryship being a professional course, the examination standards are set very high, with emphasis
on knowledge of concepts, applications, procedures and case laws, for which sole reliance on the contents of
this study material may not be enough.
Therefore, in order to supplement the information/contents given in the study material, students are advised to
refer to the Suggested Readings mentioned in the study material, Student Company Secretary, Business Dailies
and Journals.
In the event of any doubt, students may write to the Directorate of Academics and Perspective Planning in the
Institute for clarification at iblp@icsi.edu or sudhir.dixit@icsi.edu.
Although due care has been taken in publishing this study material yet the possibility of errors, omissions and/
or discrepancies cannot be ruled out. This publication is released with an understanding that the Institute shall
not be responsible for any errors, omissions and/or discrepancies or any action taken in that behalf.
Should there be any discrepancy, error or omission noted in the study material, the Institute shall be obliged if
the same are brought to its notice for issue of the corrigendum in the Student Company Secretary bulletin.

iii


SYLLABUS
ELECTIVE PAPER 9-5 : INTERNATIONAL BUSINESS - LAWS AND PRACTICES
Level of Knowledge: Expert Knowledge
Objective: To acquire specialized knowledge in International business, law, procedure and practices.

Detailed Contents:
1. Introduction
– International Business - Nature and Scope,
– Globalization - Meaning, Levels, Merits, Limitations and irreversibility of Globalization
– Need to go global
– Internationalization Decisions (entry modes)
– SEZ features
2. International Business Environment
– Meaning of Environment
– Dimensions - PEST to STEEPLE
– Internal Environment and External Environment
– SWOT Analysis
– Various approaches to Assess competitiveness including Michael Porter’s 5- Forces Model
– Global Competitiveness Index
3. Multi National Enterprises (MNEs) and Foreign Direct Investment (FDI)
– Meaning and Characteristics
– Role of MNEs in host economy
– Trends in Global FDI
– Trends in FDI with reference to India
– Issues with MNEs - Taxation, Restrictive Trade Practices, Currency, Jurisdiction and Technology Transfer
4. Foreign Trade Policy and Procedures
– Introduction to Foreign Trade Policy
– Institutional Framework for Export Promotion
– Export Incentives and Facilities
– EPZ/FTZ/100% EOUs
– Quality Control for Exports
– Export Prospects for Select Products and Services
– INCO Terms

iv


– International Commercial Arbitration-Shipment and Post Shipment Finance
– SEZ-Incentives and Benefits
– Method of Realizing Export Payments and Ensuring Guaranteed Export Payment
– Central Excise Clearance Formalities
– Customs Regulations and Clearance Formalities for Exports & Imports
– Duty Draw Back Claims Procedure
– Foreign Trade Financing - Export & Import
– Foreign Exchange Risk Management
– International Credit Management
– Warehousing
– Instruments of Trade Policy and India’s Trade Policy
5. International Trade and Regional Economic Integration
– Theory - Mercantilism, absolute advantage and comparative advantage
– Trends in Global Trade
– Trends in India’s Trade
– Types of Regional Economic Integration - Free Trade Area, Custom Union, Common Market, Economic
Union, Monitory Union and Political Union etc.
– Trading Blocks- ASEAN,SAFTA,SAARC,NAFTA,EU
6. Institutional Environment
– Pre WTO Scenario, difference between GATT and WTO
– Trade Related Institutions - WTO and UNCTAD
– WTO - Basic Principles, various agreements, Functions and Areas of Operations, Dispute Settlement
Mechanism (rules and procedures)
– IMF, IBRD, ADB
– Commodity Agreements
7. Anti-Dumping Duties
– WTO Provisions on Anti-Dumping-, Anti-Dumping Duties, Procedure and Developments
– Regulatory Framework for Anti Dumping in India
– Recent Anti Dumping Cases in India
8. Subsidies and Countervailing Duties
– WTO Provisions
– Administration
– Procedure and Emerging Trends
– Regulatory Framework for Subsidies & Countervailing duties in India
– Doha Development Round
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9. Foreign Collaborations and Joint Ventures
– Foreign Direct Investment Policy, Industrial Policy
– Kinds of Collaboration and Joint Ventures
– Drafting of Agreement
– Restrictive Clauses in the Foreign Collaboration/Joint Venture Agreements
– International Commercial Arbitration
10. Strategic Alliances
– Meaning, Rationale, Types, Trends in Alliances in New Competitive Environment, Strategic Alliance
Failures, Managing Strategic Alliances.
11. Logistics Management
– Logistics Framework- Concept, Objective and Scope
– Transportation, Warehousing, Inventory Management, Packing and Unitization, Control and
Communication
– Role of IT in Logistics, Logistics Service Firms and Third Party Logistics

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LIST OF RECOMMENDED BOOKS
MODULE 3
ELECTIVE PAPER 9-5 : INTERNATIONAL BUSINESS - LAWS AND PRACTICES
The students may refer to the given books and websites for further knowledge and study of the subject :
Books :
– International Trade and Export Management by Francis Cherunilam , Himalaya publishing House
– International Business by K Awasthappa, Mc Graw Hill
– Foreign Trade Policy and Handbook of Procedures by R.K.Jain (17th Edition 2012)
– Anti Dumping Law and Procedures by R.K.Gupta (4th Edition 2013)
– International Business – Justin Paul, PHI Publications
– A Guide to Export-Import Consultancy & Registration Services V.K.Pamecha, Paper Bac
– Export Management, P.K.Khurana, Paper Back
Websites :
– www.wto.org
– www.imf.org
– www.adb.org
– www.unctad.org
– www.worldbank.org
– www.finmin.nic.in
– www.commerce.nic.in
– www.saarc-sec.org
– www.iccwbo.org
– www.rbi.org.in
– www.asean.org
– www.europa.eu
– www.sapta.co.in
– www.naftanow.org

vii


CONTENTS
INTERNATIONAL BUSINESS - LAWS AND PRACTICES
LESSON 1
INTRODUCTION TO INTERNATIONAL BUSINESS
Business

2

International Business

2

Drivers of International Business

2

Benefits of International Business

4

Scope of International Business

5

Difference between Domestic and International Business

5

Globalisation

8

Benefits of Globalisation

9

Criticisms of Globalisation

10

Myths about Globalization

10

Stages of Globalisation

11

Risks in Global Business

13

Issues in Global Business

13

Globalisation and International Trade

14

Globalisation and Financial Markets

15

Globalization, Income Inequality and Poverty

15

Globalisation and Strategic Management

16

The Future of Globalization

18

India and Globalisation

18

Needs to go Global

22

From an individual company’s viewpoint

22

From the governments viewpoint

23

Modes of Entry and Operation in International Business

24

Exporting

25

Licensing

25

Franchising

26

Special Modes

28

Foreign Direct Investment without Alliances

29

Foreign Direct Investment with Strategic Alliances

30

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Page

LESSON ROUND UP

30

SELF TEST QUESTIONS

31
LESSON 2
INTERNATIONAL BUSINESS ENVIRONMENT

Concept of International Business Environment

34

Internal and external environment

34

Economic Environment

36

Technological Environment

39

Political – Legal Environment

40

Socio-Cultural Environment

42

Global Environment

43

Physical Environment

44

Tools for Environmental Analysis

44

Pest Analysis

44

PEST Analysis Template

47

PESTEL Model

50

SWOT Analysis

51

SWOT Analysis Template

54

Porter’s Five Forces model

57

Global Competitiveness index

61

The 12 Pillars of Competitiveness

62

The Global Competitiveness Index of India 2012–2013

67

LESSON ROUND UP

68

SELF TEST QUESTIONS

69
LESSON 3

MULTINATIONAL ENTERPRISES (MNEs) AND FOREIGN DIRECT INVESTMENTS (FDI)
Multinational Enterprises/Multinational Corporations

72

Characteristics of Multinational Corporations

73

Forms of Multinational Corporations

74

Role of Multinational Corporations

75

Benefits to Host Country

75

Benefits to Home Country

76
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Criticism of Multinational Corporations

76

Issues with Multinational Corporations

77

Foreign Direct Investment

78

Importance of FDI

79

Advantages of FDI

80

Disadvantages of FDI

80

Trends in global FDI

80

FDI trends in INDIA

87

Industrial policy of India

90

Industrial Policy Resolution, 1948

91

Industrial Policy Resolution, 1956

91

New Industrial Policy, 1991

92

FDI Policy Framework in India

92

Role of Department of Industrial Policy & Promotion

93

FDI Policy of India

94

Key Changes in Consolidated FDI Policy 2013

103

Foreign Investment Implementation Authority (FIIA)

111

FDI Policy: The International Experience

112

Cross-Country Comparison of FDI Policies

115

LESSON ROUND UP

118

SELF TEST QUESTIONS

118
LESSON 4

FOREIGN TRADE POLICY AND PROCEDURES PART I – EXPORT PROMOTION
Introduction

122

Foreign Trade Policy 2009-14

123

Export promotional measures

127

Assistance to States for Developing Export Infrastructure and Allied Activities (ASIDE)

127

Market Access Initiative (MAI)

127

Market Development Assistance (MDA)

128

Meeting Expenses for Statutory Compliances in Buyer Country for Trade Related Matters

128

Towns of Export Excellence (TEE)

128

Brand Promotion and Quality

129
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Test Houses

129

Quality Complaints/Disputes

129

Trade Disputes affecting Trade Relations

129

Export and Trading Houses

129

Focus Market Scheme (FMS)

130

Focust Product Scheme (FPS)

130

Duty Exemption & Remission Schemes

130

Advance Authorisation Scheme

131

Duty Free Import Authorisation Scheme

131

Export Promotion Capital Goods Scheme

131

Export Oriented Units

131

Special Economic Zones

134

Setting up of SEZ

137

Free Trade and Warehousing Zones

138

Facilities available in a FTWZ

139

Some FTWZ in India

140

Institutional Framework for Promotion of Exports

140

Ministry of Commerce

141

Autonomous Bodies/ Public Sector Undertakings/ Export Promotion Councils/other Organizations
under Ministry of Commerce

144

Commodity Boards

144

Marine Products Export Development Authority, Cochin

145

Agricultural and Processed Food Products Export Development Authority, New Delhi

145

Export Inspection Council

145

Indian Institute of Foreign Trade, New Delhi

146

Indian Institute of Packaging, Mumbai

146

Public Sector Undertakings Ministry of Commerce

146

State Trading Corporation of India Limited (STC)

146

MMTC Limited

147

PEC Limited

147

Export Credit Guarantee Corporation of India Limited (ECGC)

147

India Trade Promotion Organization (ITPO)

148

Export Promotion Council

148
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Registered Export Promotion Councils

149

EPCS under the Administrative Control of the Department of Commerce

149

Other Organisations under Ministry of Commerce

151

Federation of Indian Export Organisations

151

Indian Council of Arbitration, New Delhi

152

Indian Diamond Institute, Surat

152

Footwear Design & Development Institute (FDDI)

152

National Centre for Trade Information

152

Price Stabilization Fund Trust

153

GS1-India

153

Advisory Bodies

153

Board of Trade (BOT)

153

Terms of reference of the Board of Trade

153

Inter State Trade Council

154

Attached and Subordinate Offices

154

Directorate General of Foreign Trade (DGFT)

154

Directorate General of Supplies and Disposal (DGS&D)

154

Directorate General of Anti-Dumping & Allied Duties (DGAD)

154

Directorate General of Commercial Intelligence and Statistics (DGCI&S)

155

Offices of Development Commissioner of Special Economic Zones (SEZs)

155

Pay and Accounts Office (Supply)

155

Pay and Accounts Office (Commerce & Textiles)

156

Exim Bank of India

156

LESSON ROUND UP

158

SELF TEST QUESTIONS

159
LESSON 5

FOREIGN TRADE POLICY AND PROCEDURES PART II – EXPORT MANAGEMENT
Concept of Export

162

Reasons for Export

162

Planning for Export

162

Product Selection

163

Market Selection

164
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General Provisions Regarding Imports and Exports

165

Registration of Exporters

165

Registration with Reserve Bank of India (RBI)

165

Registration with Director General of Foreign Trade (DGFT)

165

Registration with Export Promotion Council

165

Registration with Commodity Boards

166

Registration with Income Tax Authorities

166

Importer Exporter Code Number (IEC)

166

Export License

170

Inquiry and Offer for Exports

171

Sample Exports

171

Export Pricing

172

Incoterms

173

Export Documents

175

Pre-shipment Documents

176

Post-shipment Documents

176

Documents Related to Goods

177

Documents Related to Payment

178

Documents Related to Inspection

178

Documents Related to Excisable Goods

179

Certificates Related to Shipment

179

Terms of payment or methods of payment

180

Payment in advance

181

Open account

181

Documentary collections

182

Documents Against Payment (D/P)

183

Documents Against Acceptance (D/A)

183

Letter of credit

184

Parties to Letters of Credit

185

Types of Letter of Credit

189

Export Financing

190

Pre-shipment / Packing Credit

192

Stages of Granting Pre Shipment Credit to Exporter

193
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Page

Types of Pre-shipment Rupee Export credit

194

Rupee Export Packing Credit to Manufacturer Suppliers

194

Rupee Export Packing Credit to Sub-Suppliers

194

Rupee Pre-shipment Credit to Construction Contractors

194

Pre-shipment Credit to Floriculture, Grapes and Other Agro-based Products

195

Packing Credit Facilities to Deemed Exports

195

Pre-shipment Credit in Foreign Currency (PCFC)

196

‘Post-shipment Credit’ 

197

Types of Post Shipment Rupee export credit

197

Export Bills Purchased/ Discounted (DP & DA Bills)

197

Export Bills Negotiated (Bill under L/C)

197

Advance against bills for collection

198

Advances against Undrawn Balances on Export Bills

198

Post-shipment Advances against Duty Drawback Entitlements

198

Advances against Retention Money

198

Advance against export on consignment basis

198

Post-shipment Credit In Foreign Currency

199

Factoring and Forfaiting

199

Export Factoring

200

Forfaiting

201

Quality Control & Pre-shipment inspection

203

Documents Required for Quality Control & Pre-shipment Inspection

204

ISI Certification

204

Agmark Certification

204

In-Process Quality Control (IPQC)

204

Self-Certification Scheme

205

ISO 9000

205

Packaging

205

Labeling

206

Central Excise Clearance Procedure for Export

206

Procedure for Export to all Countries (Except Nepal and Bhutan) under Payment of Duty

206

Procedure for Export to all Countries (Except Nepal and Bhutan) without Payment of Duty

208

Customs Procedure for Export

210
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Export Risk Management

213

Types of Risks

213

Methods and Instruments to Manage Risks

213

Forfaiting

214

Hedging

214

Export Credit Insurance

215

Export Credit Guarantee

216

LESSON ROUND UP

217

SELF TEST QUESTIONS

219
LESSON 6

INTERNATIONAL TRADE AND REGIONAL ECONOMIC INTEGRATION
International Trade – Meaning

222

Difference between International and Domestic Trade

222

Reasons for International Trade

222

Theories of International Trade

224

Mercantilism

224

Theory of Absolute Advantage by Adam Smith

225

Theory of Comparative Advantage by David Ricardo

225

Hecksher Ohlin Model

227

New Trade Theory: by Paul Krugman

227

Recent Trends in Global Trade

228

India’s Trade Performance

230

Regional Economic Integration

240

Regional Trading Blocs

241

Types of Regional Trading Blocs

241

Advantages of Regional Trading Blocs

242

Disadvantages of Regional Trading Blocs

242

Association of South-East Asian Nations (ASEAN)

243

European Union

245

North American Free Trade Agreement (NAFTA)

248

South Asian Association for Regional Cooperation (SAARC)

250

South Asian Preferential Trading Area

252
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Page

South Asian Free Trade Area (SAFTA)

252

LESSON ROUND UP

255

SELF TEST QUESTIONS

255
LESSON 7
INSTITUTIONAL ENVIRONMENT

World Trade Organization

258

Principles of the Trading System

259

History and Formation of WTO

261

GATT: ‘Provisional’ for Almost Half a Century

261

The Tokyo Round: A First Try to Reform the System

262

Did GATT Succeed?

263

The Uruguay Round

263

A Round to End all Rounds?

264

What happened to GATT?

265

The Post-Uruguay Round Built-in Agenda

265

How is the WTO Different From GATT?

266

Dispute Settlement Mechanism

266

WTO Structure

271

WTO Secretariat

272

The WTO Agreements

272

1. Agreement on Tariffs

273

2. The Agriculture Agreement

274

3. Agreement on Standards and safety

274

4. Agreement on Textiles

275

5. Agreement on Trade in Services

276

6. Agreement on Intellectual Property

277

7. Agreement on Safeguards

279

8. Agreements on Non-tariff Barriers: Red Tape, Etc

281

9. Agreement on Plurilaterals

282

10. Agreement on Trade Policy Reviews

283

United Nations Conference on Trade and Development (UNCTAD)

285

Members

285
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Page

UNCTAD Conferences

287

History of UNCTAD

287

Main Goals

289

Main Activities

290

Relationship with other Agencies

291

UNCTAD and civil society

291

UNCTAD´s Programme Budget and Financing of Technical Cooperation Activities

292

Evaluation at UNCTAD

292

International Commodity Agreements

293

International Buffer Stock Agreements

293

International Export Quota Agreement

294

International Grains Agreement

294

International Coffee Agreement

295

International Tropical Timber Agreement

295

International Cotton Advisory Committee

295

International Cocoa Agreement

296

International Sugar Agreement

296

World Bank

296

Members

296

Organisation

297

Functioning of the World Bank

297

Contributions of the World Bank

297

India and the World Bank

298

International Monetary Fund (IMF)

301

Fast Facts on the IMF

302

Goals of IMF

302

Surveillance

302

Financial assistance

303

SDRs

303

Technical assistance

303

Resources

303

Governance and organization

303

India and the IMF

304
xvii


Page

Asian Development Bank

304

Members

305

Regional Members

306

Nonregional Members

307

Board of Governors

308

Board of Directors

308

Management

308

Policies and Strategies

308

History

308

Working of ADB

309

India and ADB

310

LESSON ROUND UP

312

SELF TEST QUESTIONS

313
LESSON 8
ANTI DUMPING DUTIES

Dumping

316

Anti Dumping

316

Difference between Anti Dumping duty and Normal Customs duty

316

WTO – Provisions on Anti Dumping

316

Article VI of GATT and the Anti-Dumping Agreement

317

Anti-Dumping Agreement

318

Basic principles of the Anti Dumping Agreement

318

Committee on Anti-Dumping Practices

318

Dispute settlement

319

Notifications

319

Dumping

319

Determination of Normal Value

320

Determination of Export Price   

321

Calculation of Dumping Margins

322

Refund or Reimbursement

323

Determination of Injury and Casual Link

323

Like Product (Article 2.6)

323
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Page

Injury  

324

Types of injury

324

Basic Requirements for Determination of Material Injury

324

Basic Requirements for Determination of Threat of Material Injury

325

Elements of Analysis  

325

Consideration of Volume Effects of Dumped Imports

325

Consideration of Price Effects of Dumped Imports

325

Evaluation of Volume and Price Effects of Dumped Imports

325

Examination of Impact of Dumped Imports On the Domestic Industry

325

Demonstration of Causal Link

326

Cumulative Analysis

326

Investigation 

326

Initiation

326

Conduct

326

Provisional Measures and Price Undertakings  

327

Imposition of Provisional Measures

327

Price Undertakings

327

Collection of Duties  

327

Imposition and Collection of Duties

327

Retroactive Application of Duties

327

Review and Public Notice  

328

Duration, Termination and Review of Anti-Dumping Measures

328

Public Notice

328

Regulatory Framework for Anti Dumping in India

328

Legal Framework

329

Institutional Arrangement in India for Anti Dumping

329

Anti Dumping Duties – Procedures in India

329

Recent Anti Dumping Cases in India

337

Case Study

340

The Indian Shrimp Industry Organizes to Fight the Threat of Anti-Dumping Action

340

LESSON ROUND UP

346

SELF TEST QUESTIONS

347

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Page

LESSON 9
SUBSIDIES AND COUNTERVAILING DUTIES
Subsidy

350

Difference between Dumping and Subsidy

350

Countervailing Duty

350

Anti Dumping Duty and Countervailing Duty

350

WTO Provisions on Subsidies and Countervailing Duties

351

Agreement on Subsidies and Countervailing Measures

352

Structure of the Agreement

352

Definition of Subsidy

353

Definition of Specificity

354

Categories of Subsidies

354

Countervailing Measures

356

Parameters Determining Countervailing Measures

357

Determination of Injury

357

Definition of Injury

357

Causal Link

358

Assessment of Subsidy

358

Guidelines for Determination of Subsidy

358

Transition Rules and Special and Differential Treatment

358

Notification

359

Countervailing Legislation and Measures

359

Dispute Settlement

359

Procedural Matters

359

Making an Application for Investigation into Countervailing Measures

359

Time-Limit to Conduct the Investigation

360

Transparency in Investigation Process

360

Manner under which the Investigation is Conducted

361

Legal Framework with Respect to Imposition of Anti-Subsidy In India

361

Implementing Authorities in India

361

Doha Development Round

362

Recent Case Studies

364
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Page

LESSON ROUND UP

366

SELF TEST QUESTIONS

366
LESSON 10
FOREIGN COLLABORATIONS AND JOINT VENTURES

Foreign Collaboration

368

Examples of Foreign Collaboration

369

Features of Foreign Collaboration

370

Objectives of Foreign Collaboration

371

Types of Foreign Collaboration

372

Foreign Collaborations in India

373

Foreign Technology or Technical Collaborations in India

373

Joint Venture

376

Reasons for Forming a Joint Venture

378

Basic Elements of a Joint Venture

378

Structuring the Joint Venture

379

Managing the Joint Venture

380

Modes of Joint Venture

381

Equity Joint Venture

381

Contractual Joint Venture

381

Advantages of Joint Venture

383

Disadvantages of joint venture

384

Termination of Joint Ventures

384

Examples of Joint Ventures

385

Joint Venture Agreements

386

Drafting of a Joint Venture or Foreign Collaboration Agreement

390

Specimen Joint Venture Agreement

391

Joint Ventures Abroad by Indian companies

395

International Commercial Arbitration

399

Benefits of International Commercial Arbitration

400

LESSON ROUND UP

402

SELF TEST QUESTIONS

403
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LESSON 11
STRATEGIC ALLIANCES
Introduction

406

Meaning and Definition

407

Advantages of Strategic Alliances

407

Disadvantages of Strategic Alliance

408

Types of Strategic Alliances

408

Strategic Alliance on the basis of Type of Industry

408

Strategic Alliance on the basis of Capital Commitments

408

Stages of Alliance Formation 

409

Reasons for Creating Strategic Alliances

409

Managing Strategic Alliances

411

Strategic Alliance Failures

413

Trends in Strategic Alliances

415

Case Studies

415

LESSON ROUND UP

418

SELF TEST QUESTIONS

418
LESSON 12
LOGISTICS MANAGEMENT

Logistics Management – Meaning and Definition

422

Objective of Logistics Management

423

Role of Logistics Management in an Organization

424

Stages in Logistics Management

424

Scope of Logistics Management

425

Transportation

426

Components of Transportation Network

426

Types of transport modes

426

1. Air

427

2. Sea

427

3. Rail

427

4. Road

428
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5. Pipeline

428

Transport provides

429

(1) Common & Private Carriers

430

(2) Freight Forwarders

430

(3) Third Party Logistics (3PL) Providers

430

3PL Industry in India

432

Fourth Party Logistics Providers (4PL)

433

Warehousing

434

Types of warehouses

434

Role of IT in Warehousing

436

Advantages of IT Warehousing

436

Warehouse Management Systems

437

Barriers to IT Adoption in Warehousing

438

Warehousing in India

439

Warehouse (Development and Regulation) Act, 2007

439

Logistics Park

440

Free Trade Warehousing Zones (FTWZ)

440

Central Warehousing Corporation (CWC)

441

Inventory Management

442

Packaging

443

Packaging Types

443

Containerisation/Unitization

444

Container

445

Types of Containers

445

Container Unit - ‘Teu’ Twentyfoot Equivalent Unit

447

Container Seal Numbers

447

Concepts of FCL & LCL

447

Procedure for Selection of the Container

447

Container Ship

448

Container Yard (CY)

448

Container Terminal

448

Sequence of Operations & Documentation Procedures in Container Terminal

448

Benefits of Containerisation

449
xxiii


Page

Containersation in India

449

Container Corporation of India Ltd.

449

Control and Communication

450

The Role Information Technology in Logistics

450

Emerging Trends in Application of IT for Logistics Management

452

LESSON ROUND UP

453

SELF TEST QUESTIONS

454
TEST PAPERS

Test Paper 1/2013

459

Test Paper 2/2013

460

Test Paper 3/2013

461

xxiv


Lesson 1

Introduction to International Business

Lesson 1
Introduction to International Business
LESSON OUTLINE

LEARNING OBJECTIVES

– Business

Globalisation is the order of the day with most
countries eliminating trade barriers and paving
the way f or gr owth and expansion of
international business. During the last 15
years, world exports for goods have grown
on average 6% a year. International business
has become lifeline of every economy and
country. For countries to flourish economically
it is very important for them to encourage
international business. T he benefits of
international busines s are im m ens e.
International business when undertaken with
spec ific obj ec tives by c om panies and
promoted by governments of nations can lead
to overall economic growth of the world at
large. Every corporate and government has
numerous and concrete reasons to take their
busines s inter national. However it is
necessary to keep in view various limitations
of the globalisation also.

– International business
– Drivers of international business
– Benefits of international business
– Scope of international business
– Difference between domestic and
international business
– Globalization
– Meaning of globalisation
– Benefits of globalisation
– Criticisms of globalisation
– Myths about globalisation
– Risks in global business
– Issues in global business
– Globalisation and international trade
– Globalisation and financial markets

In this chapter we will learn about globalisation
its positive and negative impacts and how
globalisation of economy is taking place. There
are different methods of entering foreign
markets such as exporting, licensing,
franchising, FDI, management contracts and
turnkey projects. The choice of method of entry
would depend on the long term corporate
strategy taking into consideration various
environmental factors in the host country and
home country.

– Globalisation, income inequality, and
poverty
– The future of globalisation
– Needs to go global
– Modes of entry and operation in
International Business
– LESSON ROUND UP
– SELF TEST QUESTIONS

“Globalisation is creating rich countries with poor people.”
Joseph Stiglitz
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