On November 6th, go4WorldBusiness organized its first webinar in 3 years to a great reception with many of the attendees participating from different corners of India.
The topic for the webinar –How to screen, identify and select export markets was chosen based on the hundreds of question we receive everyday on our member interaction page. The Guest Speaker of the Webinar, Dr. Rajendra Prasad Sharma, needs no introduction in India’s academic landscape. An Asst. Professor at IIFT (Indian Institute of Foreign Trade), Kolkata, Dr. Sharma’s immense knowledge in the field of international trade underlined the success of the webinar.
Kickstarting the webinar with self-created acronym –SIS that abbreviates to Screen, Identify and Select, Dr. Prasad emphasized on the importance of selecting countries based on several factors. Understanding the enormity and diversity of the potential global export markets that suit one’s product/s, Dr. Sharma discussed the various rules and regulations and International trade protocols that come into play. Hence knowing the right web tools and databases could help one in identifying foreign markets for exports. Commercial risks, currency risks or even cultural risks are all important aspects that need to be looked into when selecting a particular country.
Talking about commercial risks, stable economy and lower corruption index scale are hallmarks for a suitable economy to engage in trade with. Thus, using the web tool democracy Index rankings, one can select a handful of countries with relatively lower political and governmental risks. Countries like Australia, New Zealand, Chile, Uruguay, Norway, Iceland, Sweden are your best bet and similarly, you can also check lower performing democracies on the basis of ranks and eliminate them from your personal list.
Corruption Perception Index is another marker to check the performance of an active working economy by throwing in heat map of the best and worst performing countries on corruption index. The higher ranks along with scores help you select better countries to eventually make an informed decision.
Another popular web tool to identify where a particular product/s are in demand is the DGCIS (Directorate General of Commercial Intelligence and Statistics) website. This is where you can post your data query and get hold of reports and statistics about your product in a particular country/countries. In short, DGCIS is a government body that collects data on behalf of Indian importers and exporters.
Trade Maps, an essential tool of International Trade Centre, is an excellent repository for various statistics and insights on export and import
Following are some of the important questions answered by Dr. Sharma –
Export Potential Map (International Trade Centre)
Mr. Sharma, while answering the perennial question – What Items should one ideally export from India? recommended referring to the Export Potential map by ITC (International Trade Centre) https://exportpotential.intracen.org/en/ of India that helps traders find the export potential of products. That database catalogues products, markets and suppliers with untapped export potential among other things. He explained, in detail, the process of how to key in the desired product and country and find out about its export potential. This way he also guided to find products for which India has highest export potential. Dr. Sharma also advised to deal in products that suppliers are familiar with and not blindly follow high traction products like diamonds- that have high export potential from India. Building on further, he also went on to explain about the other web tools provided by ITC like Market Access Map to identify custom tariffs, tariff rate quotas and other regulatory requirements by specific countries. The higher the score the better they fair in terms of transparency and bureaucracy.
How to handle disputes arising out of quality or quantity deficiency in cross border trade?
Mr. Sharma emphasized on the importance of contract being honored by 2 trading parties. He also talked about National Sales of Goods and CISG (Contract for International Sale of Goods) being statues formulated by UN conventions. Disputes and misunderstanding should be handled through those clauses as mentioned in contract. Later, he also added that one should be careful enough to not let a need for such disputes arise by ensuring transparency in sample provisioning. He emphasized on the need for third party inspection where a person nominated by the importer offers to check the sample goods whether they are meeting requirements as specified in the contract before the actual deal takes place and green flags it. Thirdly he emphasized on the specifics of Incoterms used and that to be very important in such matters and that an exporter should know about freight, duties and Insurance cost.
Can multiple products be added on a single HS code for exports?
Multiple products can’t be added on a single HS code because every product is unique and requires unique Identification no matter how closely they are related and hence one can’t engage in exporting
Safest payment method in International trade
As per Mr. Sharma, 100% payment against documents i.e. LC (Letter of Credit) Let the buyer open a letter of credit and that should easily be honored by the bank in India. Once the goods are shipped, you can submit documents like bill of lading to the bank and realize your payment as per the incoterms specified.
Where can one find the list for certification requirements for food commodities/ products to be exported to US & EU. How does an exporter get such certifications?
Talking strictly in Indian context, as per him, all products are part of some Export promotion organization or the other. Citing examples he pointed out how APEDA can ask for certain requirement while exporting food products. He listed Indian Trade portal to be an excellent website https://www.indiantradeportal.in/ to look through various certifications of food products by simply keying the HS code. He demonstrated it by sharing his screen.
In a nutshell, Democracy Index Infographic, Corruption Perception Index, Trade maps are important web tools to adhere to while looking for credible insights in foreign export markets. Also DGCIS, http://www.dgciskol.gov.in/ to get relevant and genuine information on India’s Trade and Commercial Statistics.
The complete webinar can be viewed in the video linked below-
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Thanks for agnatical post regarding export markets