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4th Sem – International Business – Spring 2016


PROGRAM Master of Business Administration- MBA




IB0015- Foreign Trade of India


  1. Discuss the Theory of Absolute Advantage and Ricardo’s Theory of Comparative Advantage.

Absolute Advantage and

Ricardo’s Theory of Comparative Advantage


Answer: Theory of Absolute Advantage

In the late 18th and early 19th centuries, first Adam Smith and subsequently David Ricardo, explored the basis for international trade as part of their efforts tomake a case for free trade. Their



  1. Discuss in detail Foreign Trade in India since Independence.

Foreign trade in India


Answer: Foreign Trade in India since Independence

For the study of trends of India’s foreign trade during post-independence period,it is convenient to divide the entire period into seven phases.

  • 1948-49 to 1950-51— The Eve of Planning: On the eve of planning, theforeign trade of India





  1. Explain the Main Features of India’s Foreign Trade Policy

Main Features of India’s Foreign Trade Policy


Answer: Main Features of India’s Foreign Trade Policy

Trade encourages the foreign earnings as well as stimulates greater economicactivities. The main objectives of Import-export policy of the Indian Governmenthave been to:

(i) Provide further impetus to exports;




  1. Write short notes on India’s trade with:
  2. Special Economic Zones (SEZ)
  3. Free Trade Warehousing Zones


Answer:  a) The SEZ policy was announced in April 2000. The objective was to make theSEZs an engine of economic growth by developing quality infrastructure andoffer attractive fiscal package at the Central and State level with a single windowclearance. All the areas providing a holistic economic development have beenaddressed and the scheme provides for further



  1. Discuss in detail the various Sectoral Performance of India’s External Sector

Sectoral Performance of India’s External


AnswerSectoral Performance

Gems & Jewellery

India’s gems and jewellery industry is a bright star of the economy, and one ofthe important foundations of the country’s export-led growth. The consumptionof gold and jewellery products in India has grown rapidly over the years at therate of 10-15 per cent per annum and today, the



  1. What are PTA and FTA? Identify the key difference between the two.

PTA meaning

FTA Meaning

Key difference


Answer: PTA (Preferential Trade Agreement): A preferential trade area (also preferential trade agreement, PTA) is a trading bloc that gives preferential access to certain products from the participating countries. This is done by reducing tariffs but not by abolishing them completely. A PTA



PROGRAM Master of Business Administration- MBA




IB0017 –International Business Environment and International



1 Discuss the Driving Forces for Globalization in detail?

Driving Forces for Globalization


Answer: Driving Forces for Globalization

  • Liberalization: One of the most important factors, which have given a greatimpetus to globalization since the 1980s are the almost universal economicpolicy liberalizations which are fostering a borderless business world. Whilemost liberalization is due to the multilateral negotiations between countries thatare members of the WTO, substantial liberalization



2 Discuss in detail various business environment?

Economic Environment

Social and Cultural Environment

Demographic Environment

Political Environment

Legal Environment


Answer: Business Environment

Economic Environment

The economic environment has much to do with the scope of business, businessprospects and business




3 Explain the Relationship between Law and Business?

Relationship between Law and Business


Answer: Relationship between Law and Business

Law and business are essential components for successful running ofcompanies in the public and private spheres. In a way, business is more relatedto law as it is regulated by laws, for instance, the Contract Law, Corporate Lawand Tax Law, etc. What is the connection between law and business? Howdoes it grow? How does it affect business? This unit may not be able to answerall of



4 Write short notes on:

  1. Foreign Exchange Management Act (FEMA)
  2. Industries (Development and Regulation)
  3. Foreign Exchange Management Act (FEMA)
  4. Industries (Development and Regulation)


Answer: a) Foreign Exchange Management Act (FEMA)

Foreign exchange transactions were regulated in India by the Foreign Exchange(Regulations) Act (FERA), 1973. This Act also sought to regulate certain aspectsof the conduct of business outside



5 How does the TRIPs agreement protect IPRs? What are the 7 Intellectual Properties defined in TRIPs?


7 intellectual properties


Answer: The Trade Related Aspects of Intellectual Property Rights (TRIPS) is considered a controversial outcome of the UR. TRIPs, in conjunction with TRIMs and services were known as the new issues discussed in the UR. Intellectual Property Rights (IPRs) are defined as information with a


6 What are the cultural problems associated with international negotiation? Write a note on government versus company strength in negotiations

Cultural problems associated government versus company strength


Answer: Government vs Company Strength in Negotiations

Many times government is a participant in international business negotiations.There are many governmental factors which are hard to alter and consequentlyare to be taken as expected. Nevertheless, the comparative negotiating powerscan influence the terms. There are two





PROGRAM Master of Business Administration- MBA




IB0018 – Export-Import Finance


1 Discuss the role of EXIM bank in promoting foreign trade.





Answer: Export-Import Bank of India (Exim Bonk, In short) is a wholly cerement-owned financial institution, set up for the purpose of financing, facilitating and promoting Indian’s ‘foreign trade. Exim Bank plays a four-pronged role with ‘regard to India’s foreign trade: those of




2 Explain the Mechanism for Disbursal of Pre Shipment Finance?

Mechanism for Disbursal of Pre Shipment Finance


Answer: Pre shipment finance to exporters goes through following stages from sanction to its liquidation.

  • Appraisal and Sanction of Limits: Banks check various aspects while making an appraisal and sanction of export credit to exporters. Some of the important aspects that banks check are




3 What are the various trade financing schemes?

Trade Financing Schemes


Answer: Trade financing schemes

Export Credits

The EXIM Bank regularly offers credit facilities for exports to be availed by companies in India and abroad as well as commercial banks. The export credits offered by EXIM Bank of India can be divided in the following manner:

  • Companies in




4 What are the various Risks Coverage under ECGC Policies? Discuss in detail.

Risks Coverage under ECGC Policies


Answer:ECGC policies protect the exporters from a wide range of commercial and political risks and provide an exporter a competitive edge in dealing in international trade and:

  • Helps in expansion of sales
  • Helps in



5 Discuss the Methods of Import Finance And Import Financing Schemes.

Methods of Import Finance

Import Financing Schemes


Answer: Methods of Import Finance

  • Financing Import under L/C: After the L/C is opened, the issuing bank sends it to the advising bank in the exporter’s country. The exporter is known as a beneficiary while the importer is known as an applicant. If the beneficiary is satisfied by the terms and conditions specified in the



6 What is Foreign Exchange Market? Discuss the Participants in Foreign Exchange Markets?




Answer: The foreign exchange market or currency market exists wherever international currencies are traded for another. Foreign exchange market, known also as forex market, is by far the largest market in the world. No other market of the world is comparable to forex markets in terms of cash value traded every day. Forex market transactions include trading between large banks, central banks, foreign exchange dealers, currency speculators, transnational


DRIVE- winter 2015




Q1 Describe the role of global logistics operator in global trade.

Write a note on the difference between national and internationalLogistics.

  • Role of global logistic
  • Difference between national and international


Role of global logistics operator in global trade:

International logistics play an important role. Logistics is a continuous process. The word logistics has been derived from the French word. Logistics involve efficient management of raw materials from source of supply to production line till the delivery of final goods to the consumers. Logistics involve activities like transportation, warehousing, inventory control and order processing and information monitoring.

The importance of



Q2. Analyze and discuss market-accommodation flow with respect to operational, planning and control and behavioral context.

(Analysis of market accommodation flow in: Operational, Planning and control, Behavioral)4, 3, 3(10 marks


Market accommodation flow, which reflects post-sales service administration and reverse logistics, including product recalls and recycling. Market accommodation also enables effective supply chain planning through


Q3. Write short notes on:

  1. a) Bulk cargo
  2. b) Container vessel

(Meaning and examples of bulk cargo-4 marks, meaning and types of container vessels-6 marks)10 marks


Bulk Cargo

Bulk Cargo – is a cargo which can be carried and stored in large quantities. Market demand of such goods does not change frequently.Such cargoes are low unit value. There is no risk of deterioration orobsolence in case of bulk cargo. Commodities like food grains,fertilizers,building materials and petroleum products are



Q4. How is ocean liner conferences formed? What are the types of liner associations?

(Ocean liner conference-5 marks, Types of liner conference-5 marks)10 marks


Ocean liner conference


A Liner Conference can be defined as “a group of two or more vessel operating carriers which provide internationa liner services for the carriage of cargo on a particular route or routes within specific geographical limits and which has an agreement or arrangement within the framework of which they operate under uniform or common freight rates and any other agreed conditions with respect to the provisions of the



Q5. What are logistics intermediaries? Explain the different types of intermediaries and their strategic approaches.

(Meaning-3 marks, Functions-3 marks, Types-4 marks)10 marks

Answer. Meaning

Logistics intermediary: A party who arranges shipping, warehousing, distribution and other goods movement on behalf of goods providers and shipping companies.

Function of Intermediaries

  • Distribution of goods takes place by means of channels, and the intermediaries are the


Q6. Describe the various measures that must be taken while transporting the hazardous materials.

(A Safety measures for hazardous materials) 10 marks


These 11 rules are presented in no particular order. They are all top priorities for chemical handlers. However, feel free to rearrange them in whatever order you think is best for your workplace, your workers,


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