IMPORTANCE OF ISO CERTIFICATION

The ISO 900 certification benefits the company both internally as well as externally.

*  The Internal benefits include :

1. Improvement in Efficiency :-
                                  ISO 900 certification facilitates improvement in efficiency of the organisation. The organisation can get higher returns at lower costs. ISO 900 certification firms make every possible effort to improve quality and to reduce costs.
   
   
2. Lower Rejects :-
                            ISO 900 certified firms get the benefits of low or no rejects. This is because; they conform to high quality standards. Naturally, the defects in the final products would be either nil or negligible.
   
   
3. Better Relations :-
                           ISO 900 facilitates better relations in the organisation, i.e., between the management and the employees, superior and subordinates, between different departments, and so on. This is because; ISO 900 certified firms have to work in a systematic manner with clear plans and policies.
   
   
4. Team Work :-
                        There can be good teamwork between the various departments, employees, and the managers. This is because of good relations prevailing in the organisation, Secondly, the rewards of good performance are shared with the employees throughout the organisation, which in turn can facilitate teamwork.
   
   
5. Optimum Use of Resources :-
                         There can be optimum utilization of resources-physical resources, human resources, and financial resources. The optimum utilization of resources is possible due to clear plans and policies, and also due to the harmonized relations and teamwork in the organisation. 
   
   
6. Motivation of Personnel :-
                          The employees of ISO 900 certified firms are motivated. This is because; they get proper incentives-monetary incentives, and non-monetary incentives.
   
   

*  The external benefits includes :

1. Customer Satisfaction :-
                         There can be customer satisfaction. This is because; the customers are provided with better quality goods and at right prices. This is because of higher efficiency of the firm.
   
   
2. Corporate Image :-
                         Firms obtaining ISO 900 certification earn a good corporate image in the domestic as well as international markets. The customers, suppliers, investors, and others trust ISO 900 certified firms.
   
   
3. Effectively Facing of Competition :-
                         ISO 900 certified firms could face the competition effectively in the market. This is because of high quality goods at right prices, and also efficient delivery and after-sale-service.
   
   
4. Increase in Sales :-
                         Due to customer satisfaction, and good corporate image, the company can face effectively the competition in the market. This in turn helps the firm to increase the market share and sales.

TOWNS OF EXCELLENCE

          Industrial clusters are given recognition as 'Towns of Excellence' is order to maximize their export potential. In August 2006, 11 towns as the country have emerged as dynamic industrial clusters contributing significantly to India's exports. They were given the status of 'Towns of Excellence' These 11 towns include :

• Tirupur, Tamil Nadu for hosiery.
• Karur, Tamil Nadu - Handlooms
• Madurai, Tamil Nadu - Handlooms
• Ludhina, Punjab - Woolen knitwear
• Panipat, Haryana - Woolen blankets
• Kanoor, Kerala - Handlooms
• Alleppey, Kerala - Coir products
• Aroor, Ezhupunna, Kodanthuruthu, & Kuthiathodu, (AEKK), Kerala - Seafood
• Kekhra, UP - Handlooms
• Dewas, MP - Phamaceuticals
• Jodhpur, Rajasthan - Handicrafts.

              In the FTP 2004-09, the Government of India announced the threshold limit of designed 'Towns of Export Excellence'. The limit has been reduced from Rs.1000 crores to Rs. 250 crore for the thrust sectors such as agriculture, handlooms, handicrafts, gems and jewellery, leather goods, and marine products.

              The Towns of Excellence get the benefits of ASIDE scheme for developing infrastructure in the industrial clusters. The units in the Towns of Excellence also get the facility of common service and EPCG scheme. They also get the benefit of MAI scheme for creating focused technological services.
              In the FTP 2009-14, about 7 Towns of Export Excellence are announced by the Govt :

• Jaipur, Srinagar and Anantnag for handicrafts.
• Kanpur, Dewas and Ambur for leather products.
• Malihabad for horticultural products.

TRENDS IN WORLD EXPORTS

          The years 2008 and 2009 were tumultuous ones for global trade. The sub-prime crisis of USA in 2007 led to the global financial crisis in September 2008. The financial crisis resulted in full blown global recession which resulted in considerable fall in global trade. World trade volume (goods and services) grew by only 2.8% in 2008 compared to 7.3% in 2007. The world trade growth tumbled down month after month from September 2008 onwards. While the fall seems to have been stalled with the recovery in the later part of 2009, but the world trade continues to vulnerable given the nature of recovery and the EU crisis (beginning with Greece Crisis in the beginning of 2010).

*  IMF Estimates :-

           The world recession in 2008-09 had deep impact on world trade. The global trade of about 16U$ trillion in 2008 collapsed. In the first half of 2009, the world trade was 5.8 US $ trillion compared to 8.2 US $ trillion in the corresponding first half of 2008. According to IMF, growth of world output and trade volume of goods and services fell to (-) 0.8% and (-) 12.3% respectively in 2009. 

            The crisis seems largely to have petered out in the second half of 2009 with global trade recovering from the downtrend. The IMF projects a better-than-expected growth in world trade volume of 5.8% for 2010 and 6.3% for 2011. Consequently, world output growth is estimated to increase to 3.9% in 2020 and 4.3% in 2011.

*  WTO Estimates :-

              In March 2009, WTO estimated a decline of 9% in global trade for 2009, the largest in over 60 years. 

*  World Bank Estimates :-

              The World Bank estimates world real GDP growth to fall by 2.2% and world trade volume to fall by 14.4% in 2009. As per World Bank, the dollar value of world trade plummeted by 31% between August 2008 and its low point in March 2009.

              Examination of the month- wise exports and imports for the world, India and some major trading partners of India from 2008 onwards indicate a recovery in trade with export growth becoming positive in November 2009 over November 2008.

              The following table indicates export growth and import growth of some of the leading countries between November 2008 and November 2009 (per cent).

              The export and import growth has become less negative in the countries mentioned above. For instance, the export growth of India has increased by 18.2% and the import growth has become less negative by (-) 2.6% between November 2008 and November 2009.

*  Conclusion :-

              Though we are still not our of the crisis, there is greater degree of confidence, particularly in countries with strong fundamentals like India and China which have weathered the crisis with great dexterity and spearheaded the recovery. 

PROBLEM FACED BY INDIAN EXPORTERS

           In recent times, Indian exporters face a number of problems. The problems demotivate the business firms to enter into foreign marketers. Some of the problems are as follows :

1. Recession in World Markets :-
                              The world markets faced recession in 2008 and in the first half of 2009. The recession was triggered due to sub-prime crisis of USA in Sept 2007. Due to recession, the demand for several Indian items such as gems and jewellery, textiles and clothing, and other items were badly hit. During recession, exporters get low orders from overseas markets, and they have to quote lower prices. Therefore, exporters get low profits or suffer from losses.
   
2. Protectionist Measures by Developed Countries :-
                                The developing countries like India have to face the problem of protectionist measures by developed countries. For instance, in 2009, USA Govt provided a bailout package to General Motors and other firms to overcome from financial crisis. The bailout package contained 'Buy American Clause' which means the firms getting financial assistance from the Govt have to use domestic content rather than importing from other countries. Since USA is the major importer from India, some of the exporters such as auto parts suppliers have to face problems.
   
3. Reduction in Export Incentives :-
                                  Over the years, the Govt of India has reduced export incentives such as reduction in DBK rates, withdrawal of income tax benefits for majority of exporters, etc. The reduction in export incentives demotivates exporters to export in the overseas markets.
   
4. Competition from China :-
                                   India is facing stiff competition form China in the world markets, especially in the OECD markets. As a result, India's share of exports to OECD markets has declined from 53% of total exports in 2001-01 to about 38% in 2007-08. Some of the Indian exporters have lost their overseas contracts due to cheap Chinese goods and supplies.                            
   
5. Problem of Product Standards :-
                                    Developed countries insist on high product standards from developing countries like India. The products from developing countries like India are subject to product tests in the importing countries. At times, the importing countries items on the grounds of excessive toxic content. Therefore, Indian exporters lose markets especially in developed countries.    
   
6. Problem of Anti-dumping Duties :-
                                     Developed countries impose anti-dumping duties on certain goods imported from developing countries like India, Brazil, China and so on. For instance, USA had imposed anti-dumping duties on Indian steel items in 2008. Quite often, the anti-dumping duties are also justified. Therefore, India has to approach the dispute settlement body of WTO to resolve the dispute regarding anti-dumping duties. Till the dispute is resolved, Indian exporters lose business opportunities.
   
7. Problem of Sea Pirates Attacks :-
                                    A major risk faced by international trade is attack by pirates in the Gulf of Aden. More than half of India's merchandise trade (exports and imports) passes through the piracy infested Gulf of Aden. New exporters and importers are facing problems because of increased pirate attacks as they find it difficult to get insurance cover.
   
8. Problem of Subsidies by Developed Countries :-
                                        The developed countries like USA provide huge subsidies to their exporters. For instance, in case of agriculture exporters. USA, UK and others provide huge subsidies to their exporters. Therefore, the exporters of developing countries like India find it difficult to face competition in the wold markets.
   
9. Documentation Formalities :-
                                         There are a number of documents to be prepared in export trade. In India, there are as many as 2.5 documents (16 commercial documents and 9 regulatory documents) to be filled in. However, aligned documentation system (ADS) has simplified export documentation procedure.
   
10. Foreign Exchange Regulations :-
                                            Export marketing is subject to foreign exchange regulations. For instance, in India, the exporters have to give a declaration in Form GR to the Reserve Bank of India (RBI) that they will realise the full value of exports within a period of 180 days.

REASONS FOR INDIA'S POOR SHARE IN WORLD TRADE

                 India's export performance is poor. Over the years, since Independence, India's share of the world export trade has been very low. At present, India's share of the world export trade is 1%. The share of export of other developing countries of Asia, namely China, South Korea, Malaysia, Singapore and Thailand is much more than of India.
                 There are several reasons for poor performance of India's export trade. The reasons or causes can be broadly divided into two groups, as shown below :

*   CAUSES OF POOR SHARE OF INDIA'S EXPORTERS :-

   I.  Exporter-Related Problems                                  

• Poor Quality 
• High Prices 
• Inadequate Promotion
• Poor Follow-up of Sales 
• Poor Negotiation Skills 

  II.  General Causes

• Poor Infrastructure 
• Presence of Good Domestic Market 
• Documentation and Formalities
• Negative Attitude of Overseas Buyer
• Problem of Trading Blocs

 
I.  EXPORTER-RELATED PROBLEMS :

1. Poor Quality :-
                     One of the main reasons for poor performance of India's exporter trade is due to the poor quality of products. A good numbers of Indian exporters, especially, the small-scale exporters do not give much importance to quality control. Due to problems in quality, the Indian exporters do not get orders from foreign buyers. There are also cases, where Indian goods are rejected and sent back to India by foreign buyers.
   
2. High Prices :-
                     The price of Indian goods is higher as compared to other Asian countries. The price of Indian exports is high due to :
    (i)   Higher value of Indian rupee is vis-a-vis the value of some of the other Asian countries such as            Malaysia, Thailand, Philippines, etc.
    (ii)  Some of the Indian exporters quote higher prices in order to make higher profits per unit sold.
    (iii) The price of Indian goods is also affected by high transaction costs, and documentation        
          formalities.
   
3. Inadequate Promotion :-
                         Promotion is vital for export marketing. However, a good number of Indian exporters do not give much importance to promotion. Apart from advertising, and sale promotion, Indian exporters must participate in trade fairs and exhibitions. But in reality, a good number of Indian exporters are not professional in advertising and sale promotion. They also do not take part in trade fairs and exhibitions, and if they do so, they lack professional approach in handling the visitors at the trade fairs and exhibitions.
   
4. Poor Follow-up of Sales :-
                         There is often poor follow-up of sales. The Indian exporters do not bother to find out the reactions of the buyers after the sale. They are also ineffective in providing after-sale-service. As a result, there is poor performance of India's exporter trade.
   
5. Poor Negotiation Skills :-
                            Indian exporters, especially the small exporters lack negotiation skills. Due to poor negotiation skills, they fail to convince and induce the foreign buyers to place orders. The lack of negotiation skills is mainly due to poor training in marketing and negotiation skills.
   

 II.  GENERAL CAUSES :

1. Poor Infrastructure :-
                            The infrastructure required for export of goods is poor. Due to poor infrastructure facilities, Indian Exporters find it difficult to get orders, and also to deliver the goods at the right time. The poor infrastructure facilities include :
     (i)   Poor port-handling facilities.
     (ii)  Inadequate warehousing facilities.
     (iii) Poor transport facilities, etc.
   
2. Presence of Good Domestic Market :-
                          In India, there is a good domestic market. Sellers find a ready market for their goods within the country. Therefore, they do not take pains to get orders form overseas markets. However, from the long-term point of view, India marketers should look beyond domestic markets, and enter in the export markets.  
   
3. Documentation and Formalities :-
                         In India, there are number of documentation and other formalities. Due to the various formalities, some of the marketers do not enter the export field. Therefore, there is a need to simplify and reduce formalities and documentation work on the part of government authorities.
   
4. Negative Attitude of Overseas Buyers :-
                         Some of the overseas buyers, especially from developed nations have a negative attitude towards Indian goods. They are of the opinion that Indian goods are of inferior quality, and that the Indian exporters provide poor service after sales. Therefore, there is a need to correct this negative attitude through effectively promotion and good marketing practices.
   
5. Problem of Trading Blocs :-
                        Indian exporters are affected due to the presence of trading blocs. There are some powerful trading blocs in the world such as NAFTA, European Union and ASEAN. The training blocs reduce or eliminate the trade barriers on non-members. Since India is not a member of the powerful trading blocs, Indian exporters do face problems to export good to the member countries of the trading blocs. 

INDIAN COUNCIL OF ARBITRATION (ICA) New Delhi

               

                              ICA was set up in 1965. It is an autonomous non-profit organisation registered under the Societies Registration Act. It was set up for promoting and encouraging amicable settlement of commercial disputes between exporters and importers. The main objectives are :

1. To develop arbitration consciousness in foreign trade.
2. To provide facilities for the amicable settlement of commercial disputes by arbitration.
3. To settle trade complaints arising out of non-compliance with arbitration awards between Indian and foreign parties.
4. To conduct tradinding courses and seminars on commercial arbitration and international law.
5. To publish information of commercial arbitration and allied matters.
6. To collaborate with such international organisations and arbitral bodies in matters concering internatioanl commercial arbitrations.

                 At the international level, the International Chamber of Commerce through its Court of Arbitration, is the most important organisation that provides facilites for settling disputes in international business through conciliation and arbitration. Exporters in their own interest should take core to ensure that specific provisiions are made in the contracts for amicable and quick settlement of disputes. In India, the help of ICA can be taken only if there is a clause in the contract that in case of dispute the matter would be referred to the ICA, otherwise both parties should agree to refer the dispute to ICA.

*  Importance Features of ICA :-

1. Membership :-
                        The council's membership comprises of Foundation members, Ordinary Associates, Individual and Honorary members.
    
2. Initiation and Arbitration :-  
                       The either party or any party can apply for dispute settlement. The applicant allong with application should pay the registration fee and furnish to the secretary a statement containing. (a) the names and address of the parties to the disputes, (b) full details of the case, (c) original or certified copy of documents and relevant information.
3. Fees/Expenses :-  
                       The fees, costs and expenses incidental to the reference and award shall include
   (i) registration fee
   (ii) admission fee
   (iii) arbitration fee.
                  The amount of registration fee is fixed whereas, the amount involved and the time that would be spent to decide it. In addition, any travelling expenses incurred by arbitrator or secretary of the council as determined by the Bench shall be payable.
4. Constitution of Bench :-  
                        Secretary of ICA makes arrangement on the recept of application to constitute a Bench consisting of one or three arbitrators selected from a panel of Arbitration.
5. Venue :-   
                       The proceeding shall be held at place (s) in India as the Bench may decide.
6. Awards :-  
                       When arbitrator (s) sign (s) the award, the secretary sahll give notice in writing to the parties concerned in respect of fees and chrges payable and true copy of the award is supplied to the partes on receipt of fees/charges. The award is binding on both the parties, if not ICA do follow legal remedies to enforce the award. 

                        

INDIAN INSTITUTE OF PACKAGING (IIP) MUMBAI

                         With a view to improve the packaging and packing standards, the IIP was set up in 1996 at Mumbai. The main functions of IIP are :

    1.   Training Programme :-
                              IIP is primarily engaged in training programmes relating to packaging industry. This institutes makes the trainees familiar with packaging technology, packaging materials, and current trends in packaging in the world markets.

    2.   Improvement in Quality of Packaging :-

                               IIP makes constant efforts to upgrade and improve the design and quality of packaging, so as to promote India products abroad.

    3.   Collection of Information :-

                                IIP collects information on latest trends in the packaging in respect of raw materials, design etc.

    4.   Supply of Information :-

                                The information collected on packaging is provided to the exporters by IIP, so that exporters can upgrade their packaging standards.

    5.   Organizing Seminars and Workshops :-

                                 IIP organised seminars and workshops on packaging designs and quality. Exporters can take the advantage of such seminars and workshops.

    6.   Consultancy Services :-

                                  It provides consultancy services to the exporters in the field of packaging .

    7.   Develops Packaging Consciousness :-

                                   Export packaging is vital as it not only protects and preserves the product, but also promotes the product in international markets. Therefore, IIP develops consciousness of the need for good packaging among Indian exporters.

    8.   Publications :-

                                   It publishes two quarterly magazines, one devoted to the technological aspects of packaging and the other to techno economic aspects of packaging.

    9.   Testing Facilities :-

                                   It provides testing facilitates in respect of packages and packaging material to the exporters.

                             The IIP is one of the founder members of the Asian Packaging Federation established for exchange of all information of packaging and for chalking out common programmes for the development of packing standards in the Asian region.

EUROPEAN UNION (UA)

                     The European Union was formerly called as European Common Market(ECM). The ECM was formed by signing the Treaty of Rome in March 1957 by six countries - France, Italy, Germany, Belgium, Netherlands, and Luxembourg.  It came into force form 1.1.1958. Between 1973 and 1995, another 9 countries joined ECM - such as Denmark, Ireland, UK, Finland, Austria, Sweden, Greece, Spain and Portugal. In 2004, another 10 countries joined the group. The 10 countries belonged to the former communist bloc - Hungary, Poland, Czech Republic, Slovenia, Slovakia, Lithuania, Latvia, Cyprus, Malta and Estonia. In 2007, two more countries are likely to join EU, i.e., Bulgaria and Romania. At present, there are 27 members nations of EU.

*  The Main Objectives of EU are :

• To eliminate trade barriers on member nations.
• To assist member nations during the times of emergencies.
• To develop cultural and social relations. 
• To promote free transfer of labour and capital among member nations. 
• To bargain collectively with the non-members by means of collective strength.
• To impose common external barriers on non-member.

*  Policies of European Union :

1. Common Agriculture Policy :-

                                           It aims at improving the agricultural productivity, and to improve the position of the EU farmers. It also aims to make available food products at reasonable rates. It allows free movement of food products among member nations.

2. Common Fisheries Policy :-
                                      It provides equal access to fishing areas to all nationals of EU. It adopts common market standards for marine products.

3.  Common Transport Policy :-
                                      It aims at integration of transport facilities of the entire community. It monitors organisation and control of transport system within the community.

4.  Fiscal Policy :-
                   It aims at unification of tax rates, and other fiscal matters. It common value added tax on products in the member states.

5.  Industrial Policy :-
                      It facilitates research and development among member nations. It aims at improving international competitiveness of industries of EU member states.

6.  Competition Policy :-
                      It prohibits agreements which lead to prevention, or restriction of competition within the EU. It aims to promote competition within the EU by restricting anti-competitive practices.