BA35C Matching Type Finals

International Business

Business transaction taking place

within the geographical boundaries

of a nation is known as domestic or

national business. It is also referred

to as internal business or home trade.

Merchandise Trade

exports

and imports, also known as trade in

goods, include only tangible goods and

exclude trade in services.

invisible trade

Service exports and imports involve

trade in intangibles. It is because

of the intangible aspect of services

that trade in services is also known

as

Licensing

is a contractual arrangement

in which one firm grants access to its

patents, trade secrets or technology to

another firm in a foreign country for a

fee called royalty.

Franchising

is a term very similar

to licensing. One major distinction

between the two is that while the

former is used in connection with

production and marketing of goods,

the term franchising applies to service

business.

Direct Investment

takes place

when a company directly invests

in properties such as plant and

machinery in foreign countries with a

view to undertaking production and

marketing of goods and services in

those countries.

Portfolio Investment

is an investment that a company

makes into another company by the

way of acquiring shares or providing

loans to the latter, and earns income by

way of dividends or interest on loans.

Joint Ventures

is a very common

strategy for entering into foreign markets. means
establishing a firm that is jointly
owned by two or more otherwise
independent firms. In the widest sense
of the term, it can also be described
as any form of association which
implies collaboration for more than a
transitory period.

Export

refers to sending of goods

and services from the home country

to a foreign country. In a similar

vein, importing is purchase of foreign

products and bringing them into

one’s home country.

Import

means bringing tangible

goods from a foreign country to one’s

own country.

trade enquiry

is a written request by an importing

firm to the exporter for supply of

information regarding the price and

various terms and conditions on which

the latter is ready to exports goods.

Certificate of Origin

acts as a proof that the goods

have actually been manufactured in

the country from where the export

is taking place. This certificate can

be obtained from the trade consulate

located in the exporter’s country.

Bill Lading

is a document wherein a shipping company gives its

official receipt of the goods put on board its vessel and at the same time gives an

undertaking to carry them to the port of destination. It is also a document of title

to the goods and as such is freely transferable by the endorsement and delivery.

Bill of exchange

is an order to

the importer to pay a certain amount

of money to, or to the order of, a

certain person or to the bearer of the

instrument.

Certificate of Inspection

For ensuring quality, the government has made it

compulsory for certain products that these be inspected by some authorised agency.

Certificate of Origin

This is a certificate which specifies the country in which the
goods are being produced. This certificate entitles the importer to claim tariff
concessions or other exemptions such as non-applicability of quota restrictions
on goods originating from certain pre-specified countries.This certificate is also
required when there is a ban on imports of certain goods from select countries.
The goods are allowed to be brought into the importing country if these are not
originating from the banned countries.

Marine Insurance Policy

It is a certificate of insurance contract whereby the

insurance company agrees in consideration of a payment called premium to

indemnify the insured against loss incurred by the latter in respect of goods exposed

to perils of the sea

Proforma Invoice

is a document that

contains details as to the quality,

grade, design, size, weight and price

of the export product, and the terms

and conditions on which their export

will take place.

Letter of Credit

is a guarantee issued by the

importer’s bank that it will honour

payment up to a certain amount of

export bills to the bank of the exporter. It is also the most appropriate
and secure method of payment adopted
to settle international transactions.

Export Processing Zone

are industrial

estates, which form enclaves from the

Domestic Tariff Areas (DTA). These

are usually situated near seaports

or airports. They are intended to

provide an internationally competitive

duty free environment for export

production at low cost.

Order

also known

as indent, contains a description of

the goods ordered, prices to be paid,

delivery terms, packing and marking

details and delivery instructions.

Sight Draft

It is a type of bill of exchange wherein the drawer of the bill of exchange

instructs the bank to hand over the relevant documents to the importer only against

payment.

Usance Draft

It is a type of bill of exchange wherein the drawer of the bill of exchange

instructs the bank to hand over the relevant documents to the importer only against

acceptance of the bill of exchange.

Customs Clearance

is a somewhat tedious process and

calls for completing a number of

formalities. It is, therefore, advised that

importers appoint C&F agents who are

well- versed with such formalities and

play an important role in getting the

goods customs cleared.