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INTERNATIONAL BUSINESS LAWS

NATURE, SCOPE, NEED AND PROBLEMS FOR INTERNATIONAL BUSINESSInternational Business is the process of focusing on the resources of the globe and objectives of theorganizations on global business opportunities and threats.International business defined as global trade of goods/services or investment. More comprehensive view

does not focus on the firm but on the exchange processFree Trade occurs when a government does not attempt to influence, through quotas or duties, what its

citizens can buy from another country or what they can produce and sell to another country. The Benefitsof Trade allow a country to specialize in the manufacture and export of products that can be producedmost efficiently in that country.

Nature of International Business

Nature of international business environment is quite dynamic. Everyday changes at the global horizonimpact it and sometimes a shock at international level entirely changes it. For example if a powerful

country attacks at an oil-producing country the entire oil market of the world receives its hit because ofits outcome. The oil supply in international market is due to be affected owing to war and eventually oilprices would move up. We can analyze the nature of international business environment from four points

of view. These are:

Economic Political Social NaturalEconomic nature of international business environment

The economic nature of international business environment revolves around twin blades of demand and

supply. If the global demand of a commodity soars obviously its prices would rise and vice versa.Likewise in case of huge supply prices would dive and vice versa. There may be several reasons of upsand downs in the demand and supply of any particular commodity in the international market but itseffect would directly hit the international business environment and make it pleasant or panicky.

Political nature of international business environment

Global politics is based on global economy. As a matter of fact politics both national and internationalfocuses their economic success more devotedly and remain concerned on economic failure. Which leader

usually fails to deliver? The one, who fails to bring prosperity in the country which is obviously aneconomic fact, so in global politics main focus of the powerful nations is to raise their political clout allaround the world and get more access in the international market. In this way their actions directlyimpact the nature of international business environment either negatively or positively depending uponthe nature of their action.

Social nature of international business environment

Social nature of international business environment has long lasting effects. It is related to overall norms,

trends and mood of the societies all across the world. The rising trend of automation has boosted up theuse of machine at every level. As a result the manufacturing of every product got a boost. People started

adopting a luxurious lifestyle and for it they need more and more electronic products. As a result we arewatching a big boom in industrialization and overall global markets are expanding enormously. In thisway the social nature of international business environment prove its power of huge impact.

Natural aspect of the nature of international business environment

Any kind of natural disaster sometimes entirely shakes the nature of international business environment.A huge disaster causing destruction of infrastructure in any region gives an extra ordinary lift to the

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construction sector of the global market because of the rehabilitation phase after the disaster. Therefore,

natural aspect of the nature of business environment has its own enormous impact on the internationalmarket.

Hence we can say that nature of international business environment is volatile and mostly dependentupon several factors. Therefore, every business concern which is exposed to the international market

must keep in view of its every aspect while venturing at the global level.

Scope of International Business1. International Marketing2. International Finance and Investments3. Global HR4. Foreign Exchange

Need for International Business1. To achieve higher rate of profits2. Expanding the production capacity beyond the demand of the domestic country3. Severe competition in the home country

4. Limited home market5. Political conditions6. Availability of technology and managerial competence7. Cost of manpower, transportation8. Nearness to raw material9. Liberalisation, Privatisation and Globalisation (LPG)

10. To increase market share11. Increase in cross border business is due to falling trade barriers (WTO), decreasing costs intelecommunications and transportation; and freer capital markets

Reasons of Recent International Business Growth

1. Expansion of technology2. Business is becoming more global becauseTransportation is quicker

Communications enable control from afarTransportation and communications costs are more conducive for international operations3. Liberalization of cross-border movements4. Lower Governmental barriers to the movement of goods, services, and resources enable Companies totake better advantage of international opportunities

Problems in International Business1. Political factors2. High foreign investments and high cost3. Exchange instability

4. Entry requirements

5. Tariffs, quota etc.6. Corruption and bureaucracy7. Technological policy

FOREIGN EXCHANGE MANAGEMENT ACT

When a business enterprise imports goods from other countries, exports its products to them or makesinvestments abroad, it deals in foreign exchange. Foreign exchange means 'foreign currency' andincludes:- (i) deposits, credits and balances payable in any foreign currency; (ii) drafts, travellers'

cheques, letters of credit or bills of exchange, expressed or drawn in Indian currency but payable in any

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foreign currency; and (iii) drafts, travellers' cheques, letters of credit or bills of exchange drawn by banks,

institutions or persons outside India, but payable in Indian currency.

In India, all transactions that include foreign exchange were regulated by Foreign Exchange RegulationsAct (FERA),1973. The main objective of FERA was conservation and proper utilisation of the foreignexchange resources of the country. It also sought to control certain aspects of the conduct of business

outside the country by Indian companies and in India by foreign companies. It was a criminal legislationwhich meant that its violation would lead to imprisonment and payment of heavy fine. It had many

restrictive clauses which deterred foreign investments.

In the light of economic reforms and the liberalized scenario, FERA was replaced by a new Act called

the Foreign Exchange Management Act (FEMA),1999.The Act applies to all branches, offices and agenciesoutside India, owned or controlled by a person resident in India. FEMA emerged as an investor friendlylegislation which is purely a civil legislation in the sense that its violation implies only payment ofmonetary penalties and fines. However, under it, a person will be liable to civil imprisonment only if hedoes not pay the prescribed fine within 90 days from the date of notice but that too happens after

formalities of show cause notice and personal hearing. FEMA also provides for a two year sunset clausefor offences committed under FERA which may be taken as the transition period granted for moving from

one 'harsh' law to the other 'industry friendly' legislation.

Broadly, the objectives ofFEMAare: (i) To facilitate external trade and payments; and (ii) To promote

the orderly development and maintenance of foreign exchange market. The Act has assigned animportant role to the Reserve Bank of India (RBI) in the administration of FEMA. The rules, regulationsand norms pertaining to several sections of the Act are laid down by the Reserve Bank of India, inconsultation with the Central Government. The Act requires the Central Government to appoint as manyofficers of the Central Government as Adjudicating Authorities for holding inquiries pertaining tocontravention of the Act. There is also a provision for appointing one or more Special Directors (Appeals)to hear appeals against the order of the Adjudicating authorities. The Central Government also establishan Appellate Tribunal for Foreign Exchange to hear appeals against the orders of the AdjudicatingAuthorities and the Special Director (Appeals). The FEMA provides for the establishment, by the CentralGovernment, of a Director of Enforcement with a Director and such other officers or class of officers as it

thinks fit for taking up for investigation of the contraventions under this Act.

JOINT VENTURES

A joint venture is a strategic alliance where two or more parties, usually businesses, form a partnership toshare markets, intellectual property, assets, knowledge, and, of course, profits.

A joint venture differs from a merger in the sense that there is no transfer of ownership in the deal.

This partnership can happen between goliaths in an industry. Cingular, for instance, is a strategic alliancebetween SBS and Bellsouth. It can also occur between two small businesses that believe partnering willhelp them successfully fight their bigger competitors.

Companies with identical products and services can also join forces to penetrate markets they wouldn't orcouldn't consider without investing tremendous resources. Furthermore, due to local regulations, somemarkets can only be penetrated via joint venturing with a local business.

In some cases, a large company can decide to form a joint venture with a smaller business in order to

quickly acquire critical intellectual property, technology, or resources otherwise hard to obtain, even withplenty of cash at their disposal.

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PATENT, TRADEMARK AND COPY RIGHTS

Copyrights, trademarks, and patents are confusing. All three are registered with an agency of the federalgovernment. Each is often referred to as intellectual property. When someone uses a copyright or

patent or trademark without permission, we talk about infringement. Most importantly, each one givesthe owner exclusive rights to the work, meaning the owner has the right to prevent anyone else fromusing their work. What exactly is the difference between these three forms of intellectual propertyprotection?

A copyright protects the expression of a persons ideas. Copyright protection is given to creative workslike writing, computer programs, music, lyrics, graphic designs, sculpture, photographs, movies, andsound recordings. The expression must be original, which, in this context, means a work that is not an

exact copy of another work.

Patents protect inventions. In order to qualify for a patent, an invention must be novel, which means thatit is something that is different in an important way from all previous inventions. The invention must alsobe usefulnot necessarily important, but it must have some useand it must also be non-obvious. Non-

obvious means that someone who understands the technical area of the invention would see theinvention as a surprising and significant development in the field.

A trademark protects something that is used to identify where a product or a service comes from. Atrademark describes something and is not the thing being described. An example of a trademark would

be a corporate identity, such as a logo, which is placed on products to inform consumers that the productcame from that particular company.

CUSTOM VALUATION

Customs valuation is a customs procedure applied to determine the customs value of imported goods. If

the rate of duty is ad valorem (ad valorem: A tax, duty, or fee which varies based on the value of theproducts, services, or property on which it is levied), the customs value is essential to determine the dutyto be paid on an imported good. Therefore it is the process where customs authorities assign a monetary

value to a good or service for the purposes of import or export. Generally, authorities engage in thisprocess as a means of protecting tariffconcessions, collecting revenue for the governing authority,implementing trade policy, and protecting public health and safety. Beginning near the end of the 20thcentury, the procedures used throughout most of the world for customs valuation were codified in theAgreement on Implementation of Article VII of the General Agreement on Tariffs and Trade (GATT) 1994.

E-COMMERCE

Electronic commerce, or e-commerce, refers to economic activity that occurs online. E-commerce includesall types of business activity, such as retail shopping, banking, investing and rentals. Even small

businesses that provide personal services, such as hair and nail salons, can benefit from e-commerce byproviding a website for the sale of related health and beauty products that normally are available only totheir local customers.

Easy for Businesses

Although e-commerce once required an expensive interface and personal security certificate, this is nolonger the case. Virtual storefronts are offered by a variety of hosting services and large Internet

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presences that offer simple solutions to vendors who have little or no online experience. Tools for running

successful e-commerce websites are built into the hosting servers, eliminating the need for theindividual merchant to redesign the wheel. These tools include benefits such as virtual shopping

carts, inventory and sales logs and the ability to accept a variety of payment options, includingsecure credit card transactions.

Security ImprovementsEarly e-commerce was stunted by security fears, but improved technology has made millions of peopleworldwide feel comfortable buying online. Seeing the vast potential in online commerce, most credit cardcompanies helped allay fears by guaranteeing that cardholders would not be held responsible forfraudulent charges as a result ofonline shopping. All of these factors have helped e-commerce become abooming industry.

GENERAL AGREEMENT ON TARIFFS AND TRADE (GATT)

General Agreement on Tariffs and Trade (GATT) was a multilateral agreement regulating international

trade. According to its preamble, its purpose was the "substantial reduction of tariffs and other tradebarriers and the elimination of preferences, on a reciprocal and mutually advantageous basis." It wasnegotiated during the United Nations Conference on Trade and Employment and was the outcome of the

failure of negotiating governments to create the International Trade Organization (ITO). GATT wassigned in 1947 and lasted until 1994, when it was replaced by the World Trade Organization in 1995.

The World Trade Organization (WTO) is an organization that intends to superviseand liberalize international trade. The organization officially commenced on January 1, 1995 under

the Marrakech Agreement, replacing the General Agreement on Tariffs and Trade (GATT), whichcommenced in 1948. The organization deals with regulation of trade between participating countries; itprovides a framework for negotiating and formalizing trade agreements, and a dispute resolution process

aimed at enforcing participants' adherence to WTO agreements, which are signed by representatives ofmember governments and ratified by their parliaments. Most of the issues that the WTO focuses onderive from previous trade negotiations, especially from the Uruguay Round (19861994).

The organization is attempting to complete negotiations on the Doha Development Round, which waslaunched in 2001 with an explicit focus on addressing the needs of developing countries. As of June

2012, the future of the Doha Round remains uncertain: the work programme lists 21 subjects in whichthe original deadline of 1 January 2005 was missed, and the round is still incomplete. The conflict

between free trade on industrial goods and services but retention ofprotectionism on farm subsidies todomestic, agricultural sector (requested by developed countries) and the substantiation of theinternational liberalization offair trade on agricultural products (requested by developing countries)

remain the major obstacles. These points of contention have hindered any progress to launch new WTOnegotiations beyond the Doha Development Round. As a result of this impasse, there has been anincreasing number of bilateral free trade agreements signed As of July 2012, there are variousnegotiation groups in the WTO system for the current agricultural trade negotiation which is in thecondition of stalemate.

Functions of WTO

The former GATT was not really an organization; it was merely a legal arrangement. On the other hand,the WTO is a new international organization set up as a permanent body. It is designed to play the roleof a watchdog in the spheres of trade in goods, trade in services, foreign investment, intellectual property

rights, etc. Article III has set out the following five functions of WTO;

(i) The WTO shall facilitate the implementation, administration and operation and further the objectivesof this Agreement and of the Multilateral Trade Agreements, and shall also provide the frame work forthe implementation, administration and operation of the plurilateral Trade Agreements.

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(ii) The WTO shall provide the forum for negotiations among its members concerning their multilateral

trade relations in matters dealt with under the Agreement in the Annexes to this Agreement.

(iii) The WTO shall administer the Understanding on Rules and Procedures Governing the Settlement ofDisputes.

(iv) The WTO shall administer Trade Policy Review Mechanism.

(v) With a view to achieving greater coherence in global economic policy making, the WTO shallcooperate, as appropriate, with the international Monetary Fund (IMF) and with the International Bankfor Reconstruction and Development (IBRD) and its affiliated agencies.

Objectives of WTO

Important objectives of WTO are mentioned below:

(i) To implement the new world trade system as visualised in the Agreement;

(ii) To promote World Trade in a manner that benefits every country;

(iii) To ensure that developing countries secure a better balance in the sharing of the advantages

resulting from the expansion of international trade corresponding to their developmental needs;

(iv) To demolish all hurdles to an open world trading system and usher in international economic

renaissance because the world trade is an effective instrument to foster economic growth;

(v) To enhance competitiveness among all trading partners so as to benefit consumers and help in globalintegration;

(vi) To increase the level of production and productivity with a view to ensuring level of employment inthe world;

(vii) To expand and utilize world resources to the best;

(viii) To improve the level of living for the global population and speed up economic development of themember nations.

TRIM

TRIMs are rules that restrict preference of domestic firms and thereby enable international firms tooperate more easily within foreign markets.

The Trade Related Investment Measures Agreement came into effect on 1 January 1995 as part of theUruguay Round negotiations. It addressed investment measures that were trade related and which

violated Article III (National Treatment) or Article XI (general elimination of quantitative restrictions).Basically it prohibited member countries making the approval of investment conditional on compliance

with laws, policies or administrative regulations that favoured domestic products.

FranchiseThe International Franchise Association (IFE) defines a full business format franchise as follows:A franchise operation is a contractual relationship between the franchisor and the franchisee in which

the franchisor offers or is obliged to maintain continuing interest in the business of the franchisee in suchareas as know-how and training, wherein the franchisee operates under a common trademark, format or

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procedure owned or controlled by the franchisor, under which the franchisee has or will make a

substantial capital investment in his business from his own resources.It is apparent that the key elements of the definition include:

(1) a contractual relationship,(2) the franchisor offers or is obliged to maintain a continuing interest in relation to the know-howand training,

(3) the franchisee operates under a common trademark, format or procedure,(4) owned or controlled by the franchisor, and(5) the franchisee has or will make a substantial capital investment from his own resources.

Types of franchises

Although it is often said that there are two main types of franchising, namely (i) product andtrademark or trade name franchising and (ii) business format franchising, this is not an accurateexplanation. A more correct approach is to view a product or trademark franchise, as franchising in a

simpler form in that the franchisee is only entitled to use the franchisors name or trademark andproduct. This type of franchising is prevalent amongst motor vehicle dealers, soft drink bottlers and

certain fuel service stations. Thus in a product or trademark franchise only a single or a limited number ofintellectual property rights are used.

The opposite end of the scale is a full business format franchise in terms of which the franchisee uses thefranchisors entire business concept, which includes the name, trademarks, copyright, goodwill, know-how, trade secrets, trade dress and similar intellectual property. It is clear that in a full business formatfranchise numerous intellectual property rights are licensed to the franchisee to use. The two customarytypes of franchises are therefore at opposite ends of a continuum. It is of course for the franchisor or

proprietor of the intellectual property to decide precisely what makes commercial sense and what he isgoing to allow the franchisee to use.

FRANCHASING AGREEMENT :A Franchise Agreement is a legal, binding contract between a franchisorand franchisee. A Franchise Agreement is a sophisticated form of Licence Agreement. It is therefore

necessary to first look briefly at what a license is and what can be licensed. A license agreement is acontractual business relationship between a licensor and licensee. The licensor is either the proprietor or

a holder of certain intellectual property rights or technology, which he allows the licensee to use in returnfor some sort of remuneration or other advantage.

Intellectual property rights that can be licensed include statutory or non-statutory intellectual propertyrights. Statutory intellectual property rights include patents, designs, trademarks and copyright whereasnon-statutory intellectual property rights include know-how, trade secrets, customer lists, formulas,

business methods, personnel training and manuals.

The object of a license is almost invariably to commercially exploit technology or intellectual property. Toensure the long term success of a License Agreement, in other words, to achieve a win/win situation, thelicense must be structured in such a way that it is to the mutual benefit of both parties.

Contract of Sale -A contract of sale of goods is a contract whereby the seller transfers or agrees to

transfer the property in goods to the buyer for a price. There may be a contract of sale between onepart-owner and another. [Section 4(1)]. A contract of sale may be absolute or conditional. [Section4(2)]. The term contract of sale is a generic term and as such includes both a sale as well as an

agreement to sale.

Thus, following are essentials of contract of sale

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There must be at least two parties:- To form a contract, there must be at least two parties i.e aseller and a buyer. One person cannot act both as a seller and a buyer.

The subject matter of the contract must be goods: - Goods means every kind of movableproperty other than actionable claims and money, and includes stock and shares, growing crops,grass which are agreed to be removed before sale. Even standing trees can be sold as goods.Actionable claims are claims which can be enforced only by an action or suit e.g. debt. A debt is

not movable property or goods.

Price: A price in money (not in kind) should be paid or promised. Money means currency incirculation. However, goods may be sold for consideration which may partly be in the form ofmoney and partly of goods. But it cannot be in the form of kind alone as it will be a barter orexchange and not sale.

Ascertainment of price - The price in a contract of sale may be fixed by the contract or may be leftto be fixed in manner thereby agreed or may be determined by the course of dealing between the

parties. [section 9(1)]. Where the price is not determined in accordance with the foregoing provisions,the buyer shall pay the seller a reasonable price. What is a reasonable price is a question of fact

dependent on the circumstances of each particular case. [section 9(2)].

Transfer of property:- Property in goods means ownership. A transfer of property in goods fromseller to the buyer must take place. Property (ownership) is of two types

(a) General Property:- It means ownership of goods which is transferred from seller to the buyer(b) Special property: It means interest in the property which is transferred by the pledgor to the

pledgee in case of Pledge.

It is aptly said that risk prima facie follows the ownership. Thus three things are transferred along withthe ownership. (i) Title (ii) Possession (iii) Risk (of loss/damage)

Besides the above a contract of sale must be absolute or conditional (Sec 4 (2)) and all other essentialelements of a valid contract must also be present in the contract of sale.

FOB

A trade term requiring the seller to deliver goods on board a vessel designated by the buyer. The sellerfulfills its obligations to deliver when the goods have passed over the ship's rail.When used in trade terms, the word "free" means the seller has an obligation to deliver goods to anamed place for transfer to a carrier.

CIF (Cost Insurance and Freight)

CIF(or Cost, Insurance, and Freight) is another shipping term used in international circles.Internationally, it is used to indicate a method of shipment by water. In this case, the sellersresponsibility is toward the costs, Insurance and freight to take the goods to its point of destination. The

buyer is responsible for any loss or damage from the point that the goods are delivered off of the ship atits destination point, and once the goods pass the ships rails. The buyer is then responsible for any costsincurred once the goods reach their destination and are loaded on dock.

International business taxationInternational taxation is the study or determination oftax on a person or business subject to the tax

laws of different countries or the international aspects of an individual country's tax laws. Governmentsusually limit the scope of their income taxation in some manner territorially or provide for offsets totaxation relating to extraterritorial income. The manner of limitation generally takes the form of a

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territorial, residency, or exclusionary system. Some governments have attempted to mitigate the differing

limitations of each of these three broad systems by enacting a hybrid system with characteristics of twoor more.

Many governments tax individuals and/or enterprises on income. Such systems of taxation vary widely,and there are no broad general rules. These variations create the potential for double taxation (where the

same income is taxed by different countries) and no taxation (where income is not taxed by any country).

Income tax systems may impose tax on local income only or on worldwide income. Generally, whereworldwide income is taxed, reductions or foreign credits are provided for taxes paid to other jurisdictions.

Limits are almost universally imposed on such credits. Multinational corporations usually employinternational tax specialists, a specialty among both lawyers and accountants, to decrease their

worldwide tax liabilities.

With any system of taxation, it is possible to shift or recharacterize income in a manner that reducestaxation. Jurisdictions often impose rules relating to shifting income among commonly controlled parties,

often referred to as transfer pricing rules. Residency based systems are subject to taxpayer attempts todefer recognition of income through use of related parties. A few jurisdictions impose rules limiting

such deferral ("anti-deferral" regimes). Deferral is also specifically authorized by some governments forparticular social purposes or other grounds. Agreements among governments (treaties) often attempt todetermine who should be entitled to tax what. Most tax treaties provide for at least a skeleton

mechanism for resolution of disputes between the parties.

SUBSIDIES

Asubsidy is a grant or other financial assistance given by one party for the support or development ofanother. Subsidy has been used by economists with different meanings and connotations in different

contexts. A subsidy is a measure that keeps prices for consumers below market levels, or keeps pricesfor producers above market levels or that reduces costs for both producers and consumers by givingdirect or indirect support." The most common definition of a subsidy refers to a payment made by the

government to a producer. Subsidies can be direct cash grants, interest-free loans or indirect taxbreaks, insurance, low-interest loans, depreciation write-offs, rent rebates. This form of support can be

legal, illegal, ethical or unethical. Subsidies are used for a variety of purposes, including employment,production and exports. A subsidy can also be you keeping any portion of your paycheck.

Subsidies are often regarded as a form of protectionism or trade barrier by making domestic goods andservices artificially competitive against imports. Subsidies may distort markets, and can impose largeeconomic costs. Financial assistance in the form of a subsidy may come from one's government, but the

term subsidy may also refer to assistance granted by others, such as individuals or non-governmentalinstitutions.

FDI

The Foreign Direct Investment means cross border investment made by a resident in one economy inan enterprise in another economy, with the objective of establishing a lasting interest in the investeeeconomy.FDI is also described as investment into the business of a country by a company in another

country. Mostly the investment is into production by either buying a company in the target country orby expanding operations of an existing business in that country. Such investments can take place for

many reasons, including to take advantage of cheaper wages, special investment privileges (e.g. taxexemptions) offered by the country.

Why Countries Seek FDI ?(a) Domestic capital is inadequate for purpose of economic growth;(b) Foreign capital is usually essential, at least as a temporary measure, during the period when the capital

market is in the process of development;(c) Foreign capital usually brings it with other scarce productive factors like technical knowhow, business

expertise and knowledge

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What are the major benefits of FDI :(a) Improves forex position of the country;

(b) Employment generation and increase in production ;(c) Help in capital formation by bringing fresh capital;(d) Helps in transfer of new technologies, management skills, intellectual property

(e) Increases competition within the local market and this brings higher efficiencies(f) Helps in increasing exports;(g) Increases tax revenues

Why FDI is Opposed by Local People or what are Disadvantages of FDI :(a) Domestic companies fear that they may lose their ownership to overseas company(b) Small enterprises fear that they may not be able to compete with world class large companies and may

ultimately be edged out of business;(c) Large giants of the world try to monopolise and take over the highly profitable sectors;(d) Such foreign companies invest more in machinery and intellectual property than in wages of the local

people;(e) Government has less control over the functioning of such companies as they usually work as wholly

owned subsidiary of an overseas company;

Brief Latest Developments on FDI (all sectors including retail):-

2012 October: In the second round of economic reforms, the government cleared amendments toraise the FDI cap

(a) in the insurance sector from 26% to 49%;

(b) in the pension sector it approved a 26 percent FDI;Now, Indian Parliament will have to give its approval for the final shape,"

2012 - September : The government approved the(a) 51% foreign investment in multi-brand retail,(b) Relaxed FDI norms for civil aviation and broadcasting sectors. FDI cap in Broadcasting was raised to

74% from 49%;(c) Allowed foreign investment in power exchanges

2011 December:

(i) The Indian government removed the 51 percent cap on FDI into single-brand retail outlets and thus

opened the market fully to foreign investors by permitting 100 percent foreign investments in this area.

What is Scope of FDI in India? Why World is looking towards India for Foreign DirectInvestments:

India is the 3rd largest economy of the world in terms of purchasing power parity and thus looks

attractive to the world for FDI. Even Government of India, has been trying hard to do away with theFDI caps for majority of the sectors, but there are still critical areas like retailing and insurance where

there is lot of opposition from local Indians / Indian companies.Some of the major economic sectors where India can attract investment are as follows:-

DUMPINGIn international trade, the export by a country or company of a product at a price that is lower in theforeign market than the price charged in the domestic market. As dumping usually involves substantial

export volumes of the product, it often has the effect of endangering the financial viability ofmanufacturers or producers of the product in the importing nation. Dumping is also a colloquial term thatrefers to the act of offloading a stock with little regard for its price.

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While the World Trade Organization reserves judgment on whether dumping is unfair competition, most

nations profess to be against the practice. Dumping is legal under World Trade Organization rules unlessthe foreign country can reliably show the negative effects of the exporting firm on the domestic

producers. In order to counter dumping, most nations use tariffs and quotas to protect their domesticindustry from the negative effects of predatory pricing.

In an increasingly global economy, consumers in a nation that has been the target of dumping activitymay have few qualms about consuming products that have been dumped, as long as they are ofcomparable quality to local merchandise but are priced much lower. Over time, dumping may have anegative impact on the local economy by driving domestic producers out of business, which would resultin job losses and a higher rate of unemployment.

BILATERAL TAX AGREEMENT

An arrangement between two jurisdictions that mitigates the problem of double taxation that can occurwhen tax laws consider an individual or company to be a resident of more than one jurisdiction. Abilateral tax agreement can improve the relations between two countries, encourage foreign investmentand trade, and reduce tax evasion. Bilateral tax agreements can deal with many issues such as taxation

of different categories of income (business profits, royalties, capital gains, employment income, etc.),methods for eliminating double taxation (exemption method, credit method, etc.), and provisions such asmutual exchange of information and assistance in tax collection.

EXIM ORFOREIGN TRADE POLICY

Exim PolicyorForeign Trade Policyis a set of guidelines and instructions established by the DGFTinmatters related to the import and export of goods in India.

TheForeign TradePolicyof India is guided by the Export Import in known as in shortEXIM Policyof the Indian

Government and is regulated by theForeign Trade Development and Regulation Act, 1992.DGFT (Directorate General of Foreign Trade)is the main governing body in matters related to EximPolicy. The main objective of the Foreign Trade (Development and Regulation) Act is to provide thedevelopment andregulation of foreign trade by facilitating imports into, and augmenting exports from

India. Foreign Trade Act has replaced the earlier law known as the imports and Exports (Control) Act1947.

IndianEXIM Policy contains various policy related decisions taken by the government in the sphere ofForeign Trade, i.e., with respect to imports and exports from the country and more especiallyexport promotion measures, policies and procedures related thereto. Trade Policy is prepared andannounced by the Central Government (Ministry of Commerce). India's Export Import Policy also know asForeign Trade Policy, in general, aims at developing export potential, improving export performance,encouraging foreign trade and creating favorable balance of payments position.

History of Exim Policy of IndiaIn the year 1962, the Government of India appointed a special Exim policy Committee to review the

government previous export import policies. The committee was later on approved by the Government ofIndia. Mr. V. P. Singh, the then Commerce Minister and announced the Exim Policy on the 12th of April,1985. Initially the EXIM Policy was introduced for the period of three years with main objective to boosttheexport businessin India

Objectives Of The Exim Policy : -

Government control import of non-essential items through the Exim policy. At the same time, all-outefforts are made to promote exports. Thus, there are two aspects of Exim Policy; the import policy whichis concerned with regulation and management of imports and the export policy which is concerned with

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exports not only promotion but also regulation. The main objective of the Government's EXIM Policy is to

promote exports to the maximum extent. Exports should be promoted in such a manner that theeconomy of the country is not affected by unregulated exportable items specially needed within the

country. Export control is, therefore, exercised in respect of a limited number of items whose supplyposition demands that their exports should be regulated in the larger interests of the country. In otherwords, the main objective of the Exim Policy is:

To accelerate the economy from low level of economic activities to high level of economic activities bymaking it a globally oriented vibrant economy and to derive maximum benefits from expanding globalmarket opportunities.

To stimulate sustained economic growth by providing access to essential raw materials, intermediates,components,' consumables and capital goods required for augmenting production.

To enhance the techno local strength and efficiency of Indian agriculture, industry and services,thereby, improving their competitiveness.

To generate new employment. Opportunities and encourage the attainment of internationally accepted standards of quality. To provide quality consumer products at reasonable prices.INTERNATIONAL LICENSING

Licensing is the process of leasing a legally protected (that is, trademarked or copyrighted) entity a name, likeness, logo, trademark, graphic design, slogan, signature, character, or acombination of several of these elements. The entity, known as the property or intellectual

property, is then used in conjunction with a product. Many major companies and the mediaconsider licensing a significant marketing tool.

Licensing is a marketing and brand extension tool that is widely used by everyone from majorcorporations to the smallest of small business. Entertainment, sports and fashion are the areas oflicensing that are most readily apparent to consumers, but the business reaches into the worldsof corporate brands, art, publishing, colleges and universities and non-profit groups, to name afew.

Licensing can extend a corporate brand into new categories, areas of a store, or into new storesoverall. Licensing is a way to move a brand into new businesses without making a majorinvestment in new manufacturing processes, machinery or facilities. In a well-run licensingprogram, the property owner maintains control over the brand image and how it's portrayed (via

the approvals process and other contractual strictures), but eventually reaps the benefit inadditional revenue (royalties), but also in exposure in new channels or store aisles.

ECONOMIC INTEGRATION

An economic arrangement between different regions marked by the reduction or elimination of tradebarriers and the coordination of monetary and fiscal policies. The aim of economic integration is to

reduce costs for both consumers and producers, as well as to increase trade between the countries

taking part in the agreement.There are varying levels of economic integration, including preferential trade agreements (PTA), free

trade areas (FTA), customs unions, common markets and economic and monetary unions. The moreintegrated the economies become, the fewer trade barriers exist and the more economic and politicalcoordination there is between the member countries.By integrating the economies of more than one country, the short-term benefits from the use of tariffsand other trade barriers is diminished. At the same time, the more integrated the economies become, theless power the governments of the member nations have to make adjustments that would benefit

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themselves. In periods of economic growth, being integrated can lead to greater long-term economic

benefits; however, in periods of poor growth being integrated can actually make things worse.

TRIPS

The Agreement on Trade Related Aspects of Intellectual Property Rights (TRIPS) is an international

agreement administered by the World Trade Organization (WTO) that sets down minimum standards for

many forms ofintellectual property (IP) regulation as applied to nationals of other WTO Members.[2]Itwas negotiated at the end of the Uruguay Roundof the General Agreement on Tariffs and Trade (GATT)

in 1994.

The TRIPS agreement introduced intellectual property law into the international trading system for the

first time and remains the most comprehensive international agreement on intellectual property to date.In 2001, developing countries, concerned that developed countries were insisting on an overly narrowreading of TRIPS, initiated a round of talks that resulted in the Doha Declaration. The Doha declaration is

a WTO statement that clarifies the scope of TRIPS, stating for example that TRIPS can and should beinterpreted in light of the goal "to promote access to medicines for all."

Specifically, TRIPS requires WTO members to provide copyright rights, covering content producersincluding performers, producers of sound recordings and broadcasting organizations; geographical

indications, including appellations of origin; designs; integrated; patents; new plantvarieties; trademarks; trade dress; and undisclosed or confidential information. TRIPS alsospecify enforcement procedures, remedies, and dispute resolution procedures. Protection and

enforcement of all intellectual property rights shall meet the objectives to contribute to the promotion oftechnological innovation and to the transfer and dissemination of technology, to the mutual advantage of

producers and users of technological knowledge and in a manner conducive to social and economicwelfare, and to a balance of rights and obligations.

TRIMS

TheAgreement on Trade Related Investment Measures (TRIMs) are rules that apply to thedomestic regulations a country applies to foreign investors, often as part of an industrial policy. Theagreement was agreed upon by all members of the World Trade Organization. (The WTO wasn'testablished at that time, it was its predecessor, the GATT (General Agreement on Trade and Tariffs). The

WTO came about in 1994-1995. Policies such as local content requirements and trade balancing rulesthat have traditionally been used to both promote the interests of domestic industries and combatrestrictive business practices are now banned.

Trade Related Investment Measures is the name of one of the four principal legal agreements ofthe WTO trade treaty.

TRIMs are rules that restrict preference of domestic firms and thereby enable international firms tooperate more easily within foreign markets.

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