Name of Institution

1

AMITY BUSINESS SCHOOLMBA

Dr. Namrata Pancholi

Name of Institution

• Incoterms 2010 The Incoterms rules or International Commercial terms are a series of pre-

defined commercial terms published by the International Chamber of Commerce (ICC) widely used in international commercial transactions

The eighth published set of pre-defined terms, Incoterms 2010 defines 11 rules,

reducing the 13 used in Incoterms 2000 by introducing two new rules

("Delivered at Terminal", DAT; "Delivered at Place", DAP) that replace four rules of the prior version ("Delivered at Frontier", DAF; "Delivered Ex Ship", DES; "Delivered Ex Quay", DEQ; "Delivered Duty Unpaid", DDU)

2

Name of Institution

• In the prior version, the rules were divided into four categories, but the 11 pre-defined terms of Incoterms 2010 are subdivided into two categories based only on method of delivery.

• The larger group of seven rules applies regardless of

the method of transport, with the smaller group of four being applicable only to sales that solely involve transportation over water.

3

Name of Institution

• Rules for Any Mode(s) of Transport

• The seven rules defined by Incoterms 2010 for any mode(s) of transportation are:

• EXW – Ex Works (named place of delivery)

The seller makes the goods available at its premises. This term places the maximum obligation on the buyer and minimum obligations on the seller.

EXW means that a seller has the goods ready for collection at his premises (works, factory, warehouse, plant) on the date agreed upon.

4

Name of Institution

• The buyer pays all transportation costs and also bears the risks for bringing the goods to their final destination.

• The seller doesn't load the goods on collecting vehicles and doesn't clear them for export. If the seller does load the good, he does so at buyer's risk and cost.

5

Name of Institution

FCA – • Free Carrier (named place of delivery)

The seller hands over the goods, cleared for export, into the disposal of the first carrier (named by the buyer) at the named place.

The seller pays for carriage to the named point of delivery, and risk passes when the goods are handed over to the first carrier.

6

Name of Institution

• CPT - Carriage Paid To (named place of destination) The seller pays for carriage. Risk transfers to buyer upon handing goods over to the first carrier.

• CIP – Carriage and Insurance Paid to (named place of destination)

• Seller pays for carriage and insurance to the named destination point, but risk passes when the goods are handed over to the first carrier

7

Name of Institution

• DAT – Delivered at Terminal (named terminal at port or place of destination).

• Seller pays for carriage to the terminal, except for costs related to import clearance, and assumes all risks up to the point that the goods are unloaded at the terminal.

• DAP – Delivered at Place (named place of destination)

Seller pays for carriage to the named place, except for costs related to import clearance, and assumes all risks prior to the point that the goods are ready for unloading by the buyer.

8

Name of Institution

• DDP – Delivered Duty Paid (named place of destination)

• Seller is responsible for delivering the goods to the named place in the country of the buyer, and pays all costs in bringing the goods to the destination including import duties and taxes.

• This term places the maximum obligations on the seller and minimum obligations on the buyer.

9

Name of Institution

10

Name of Institution

Rules for Sea and Inland Waterway Transport

• The four rules defined by Incoterms 2010 for international trade where transportation is entirely conducted by water are:

• FAS – Free Alongside Ship (named port of shipment) The seller must place the goods alongside the ship at the named port. The seller must clear the goods for export. Suitable only for maritime transport but NOT for multimodal sea transport in containers (is the transportation of goods under a single contract, but performed with at least two different means of transport)

11

Name of Institution

• FOB – Free on Board (named port of shipment) The seller must load the goods on board the vessel nominated by the buyer. Cost and risk are divided when the goods are actually on board of the vessel.

• The seller must clear the goods for export. The term is applicable for maritime transport only but NOT for multimodal sea transport in containers.

12

Name of Institution

• The buyer must instruct the seller the details of the vessel and the port where the goods are to be loaded, and there is no reference to, or provision for, the use of a carrier or forwarder.

• This term has been greatly misused over the last three decades ever since Incoterms 1980 explained that FCA should be used for container shipments.

13

Name of Institution

• CFR – Cost and Freight (named port of destination) Seller must pay the costs and freight to bring the goods to the port of destination.

• However, risk is transferred to the buyer once the goods are loaded on the vessel (this rule is new!).

• Maritime transport only and Insurance for the goods is NOT included.

14

Name of Institution

• CIF –

• Cost, Insurance and Freight (named port of destination)

• Exactly the same as CFR except that the seller must in addition procure and pay for the insurance. Maritime transport only.

15

Name of Institution

• The Export Credit Guarantee Corporation of India Limited (ECGC) is a company wholly owned by the Government of India based in Mumbai, Maharashtra.

• It provides export credit insurance support to Indian exporters and is controlled by the Ministry of Commerce. Government of India had initially set up Export Risks Insurance Corporation (ERIC) in July 1957.

• It was transformed into Export Credit and Guarantee Corporation Limited (ECGC) in 1964 and to Export Credit Guarantee of India in 1983.

16

Name of Institution

• Provides a range of credit risk insurance covers to exporters against loss in export of goods and services.

• Offers guarantees to banks and financial institutions to enable exporters to obtain better facilities from them.

• Provides Overseas Investment Insurance to Indian companies investing in joint ventures abroad in the form of equity or loan

17

Name of InstitutionProducts and Services

• Credit Insurance Policies

• Service Policy

• Where Indian companies conclude contracts with foreign principals for providing them with technical or professional services, payments due under the contracts are open to risks similar to those under supply contracts.

• In order to give a measure of protection to such exporters of services, ECGC has introduced the Services Policy.

• Guarantees to Banks Packing Credit Guarantee

• Special Schemes Exchange Fluctuation Risk Cover

18

Name of Institution Special Economic Zone (SEZ)

• A Special Economic Zone (SEZ) is a geographical region that has economic and other laws that are more free-market-oriented than a country's typical or national laws. "Nationwide" laws may be suspended inside a special economic zone.

• The category SEZ covers, including free trade zones (FTZ), export processing Zones (EPZ), free Zones (FZ), industrial

• parks or industrial estates (IE), free ports, free economic zones urban enterprise zones and others.

• Usually the goal of a structure is to increase foreign direct investment by foreign investors, typically an international business or a multinational corporation (MNC), development of infrastructure and to increase the employment.

19

Name of InstitutionInternational Monetary Fund

20

Name of Institution

International Monetary Fund (IMF)

The International Monetary Fund (IMF) is an international organization that was created on July 22, 1944 at the Bretton Woods Conference (Bretton Woods is an area within the town of Carroll, New Hampshire, USA, and came into existence on December 27, 1945 when 29 countries signed the Articles of Agreement.

21

Name of Institution

•  The IMF's stated goal was to assist in the reconstruction of the world's international payment system  post–World War II. Countries contribute funds  to a pool through a quota system from which countries with payment imbalances temporarily can borrow money and other resources.

22

Name of Institution

• As of the 14th General Review of Quotas in late 2010 the fund stood at or about US$755.7bn at then-current exchange rates.

• Through this fund, and other activities such as surveillance of its members' economies and the demand for self-correcting policies, the IMF works to improve the economies of its member countries.

23

Name of Institution

Surveillance of Global Economy

The IMF is mandated to oversee the international monetary and financial system and monitor the economic and financial policies of its 188 member countries. This activity is known as surveillance and facilitates international co-operation. 

Surveillance has evolved largely by way of changes in procedures rather than through the adoption of new obligations.

-24

Name of Institution

Conditionality of loans

IMF conditionality is a set of policies or conditions that the IMF requires in exchange for financial resources. 

The IMF does not require collateral from countries for loans but rather requires the government seeking assistance to correct its macroeconomic imbalances in the form of policy reform. If the conditions are not met, the funds are withheld. Conditionality is perhaps the most controversial aspect of IMF policies

25

Name of Institution

• Structural adjustment

• Further information: Structural adjustment

• Some of the conditions for structural adjustment can include:

• Cutting expenditures, also known as austerity.

• Devaluation of currencies, Trade liberalisation, or lifting import and export restrictions,

• Increasing the stability of investment (by supplementing foreign direct investment with the opening of domestic stock markets),

26

Name of Institution

• Balancing budgets and not overspending,

• Removing price controls and state subsidies,

• Privatization, or divestiture of all or part of state-owned enterprises,

• Enhancing the rights of foreign investors vis-a-vis national laws,

• Improving governance and fighting corruption.

• These conditions have also been sometimes labelled as the Washington Consensus.

27

Name of Institution

Technical Assistance

-Special drawing rights

28

Name of Institution

• The IMF describes itself as “an organization of 188 countries.

The organization's stated objectives are :

• to promote international economic cooperation,

• international trade, employment, and exchange rate stability,

• including by making financial resources available to member countries to meet balance of payments needs.

Its headquarters are in Washington, D.C.

29

Name of Institution

30

Name of Institution

• Main functions of IMF

-Surveillance of Global Economy

-Technical Assistance

-Special drawing rights

31

Name of InstitutionWorld Trade Organization

• The WTO's predecessor, the General Agreement on Tariffs and Trade (GATT), was established after World War II in the wake of other new multilateral institutions dedicated to international economic cooperation — notably the World Bank and the International Monetary Fund.

• The GATT was the only multilateral instrument governing international trade from 1946 until the WTO was established on January 1, 1995.

• The World Trade Organization (WTO) is an organization that intends to supervise and liberalize international trade.

• Most of the issues that the WTO focuses on derive from previous trade negotiations, especially from the Uruguay Round (1986–1994).

32

Name of Institution

• Objectives:

1. Raising standards of living.

2. Ensuring full employment and a large and steadily growing volume of real income and effective demand.

3. Expansion of production and international trade.

4. Developing full use of the resources of the world.

33

Name of Institution

• For the realization of the objectives, it adopted the following principles:

Non Discrimination

Prohibition of quantitative restrictions

Consultations

34

Name of Institution

Full Form GATT WTO

Year of Creation 1948 1995

Purpose To strengthen international trade. To govern GATT and international trade practices.

Framework Has a permanent structure with a permanent framework.

Has a permanent structure with a permanent framework.

Scope Trade in goods. Trade in goods; trade in services and trade-related aspects of intellectual property rights.

Dispute Resolution

Has a permanent appellate body to review findings and settle disputes.

Disputes are resolved faster as settlement system has a select time frame.

Less powerful Strong dispute settlement machinery

35

Name of Institution

36

Name of Institution

• The WTO has 160 members.

• Russia became a member in August,2012.

• China became a member in 2002.

37

Name of Institution

• The WTO launched the round of negotiations, the Doha Development Round, at the fourth ministerial conference in Doha, Qatar in November 2001.

• An ambitious effort to make globalization more inclusive and help the world's poor, particularly by slashing barriers and subsidies in farming.

• Disagreements still continue over several key areas including agriculture subsidies, which emerged as critical in July 2006.

38

Name of Institution

• On 13 February 2012, India requested consultations with Turkey under the dispute settlement system concerning the latter’s safeguard measures on import of cotton yarn (other than sewing thread).

• On 6 March 2012, the United States requested consultations with India under the dispute settlement system concerning the latter’s import restrictions on agricultural products from the United States.

• On 12 April 2012, India requested consultations with the US under the dispute settlement system concerning the latter’s countervailing duties on certain steel products from India.

39

Name of Institution

• Organization Structure

-Top level decision –making body is the ministerial conference meets atleast once in 2 years.

-Below is the General Council Meeting

to

(Dispute settlement, trade policy review body , trade negotiations committee.)

-Councils- goods council, services and intellectual property council report to general council.

40

Name of InstitutionThe World Bank

• The World Bank was created at the 1944 Bretton Woods Conference, including the International Monetary Fund (IMF). The World Bank and the IMF are both based in Washington, D.C., and work closely with each other.

• The United States and United Kingdom were the most powerful in attendance and dominated the negotiations

41

Name of Institution

• The World Bank is a United Nations international financial institution that provides loans to developing countries for capital programs. The World Bank is a component of the World Bank Group, and a member of the United Nations Development Group.

• The World Bank's official goal is the reduction of poverty.

by promotion of foreign investment and international trade and to the facilitation of capital investment.

42

Name of InstitutionMembers

• The International Bank for Reconstruction and Development (IBRD) has 188 member countries, while the International Development Association (IDA) has 172 members.

• Each member state of IBRD should be also a member of the International Monetary Fund (IMF) and only members of IBRD are allowed to join other institutions within the Bank (such as IDA).

43

Name of Institution

Voting power

• In 2010, voting powers at the World Bank were revised to increase the voice of developing countries, notably China. The countries with most voting power are now the United States (15.85%), Japan (6.84%), China (4.42%), Germany (4.00%), the United Kingdom (3.75%), France (3.75%), India (2.91%), Russia (2.77%), Saudi Arabia (2.77%)

and Italy (2.64%). 

44

Name of Institution

• The changes were brought about with the goal of making voting more universal in regards to standards, rule-based with objective indicators, and transparent among other things.

45

Name of Institution

• United States would nominate Jim Yong Kim as the next president of the Bank.

• Jim Yong Kim was elected on 27 April 2012.

46

Name of Institution

THANKS

47