KARPAGAM COLLEGE OF ENGINEERING (Autonomous)

COIMBATORE-32
Degree: / Branch: MBA /Business Administration
Semester: / Year: III Semester/ II Year
19BC55 EXIM MANAGEMENT

Roll no Name Case Study

20B101 Abdul Hai M M Case 1
20B102 Abdul Yasar B Case 1
20B104 Anandha Kumar M Case 1
20B106 Chan Be A Case 1
20B107 Hari Hara Sudhan Case 1
20B109 Immanuel Bevinson D Case 2
20B111 Jaya Krishnan R Case 2
20B115 Keerthana Kiruba B Case 2
20B117 Lignesh B Case 2
20B118 Madhan Kumar B Case 2
20B119 Manoj Venkat M Case 3
20B120 Mohammed Ibrahim A Case 3
20B121 Mohan Prasanth P Case 3
20B125 Praveenkumar G Case 3
20B127 Raghul R Case 3
20B128 Raji N Case 4
20B129 Ranjithkumar R Case 4
20B131 Sam Immanual A Case 4
20B132 Santhana Moorthi M Case 4
20B134 Suba Priya Case 4
20B135 Surendernath B Case 5
20B136 Surya S Case 5
20B140 Yasar Sharieff E S Case 5
20B201 Abdul Sukkoor Case 5
20B205 Bharathi Kannan .S Case 5
20B206 Deepak P Case 6
20B208 Heshwarana N S Case 6
20B209 Irban Yusuf K B Case 6
20B210 Jacinth Jose J Case 6
20B211 Joel Lee Fort Y Case 6
20B212 Kalaiyarasan N Case 8
20B214 Keerthana Ak Case 8
20B216 Madan Venkat M Case 8
20B217 Manikandan V Case 8
20B218 Mohamed Imran U M Case 8
20B219 Mohammed Rejiw Rasith J Case 9
20B223 Prabhakar N Case 9
20B224 Prasath V Case 9
20B225 Pravinkumar P Case 9
20B226 Prithivraj T Case 9
20B233 Sherin Sabu Case 10
20B235 Surendran C Case 10
20B238 Vasudevan S Case 10
20B239 Vikashini V Case 10

Case studies
1. XYZ Ltd., a manufacturer entered into a contract of significant value for the FAS
Antwerp supply of a customised machinery subject to heavy duty payable on the
same. The buyer proposed to go for documentary credit (D/C) method of payment.
Before deciding to accept the D/C as the payment method, the supplier consulted his
bank. The bank confirmed that D/C is a safe instrument for both the export and import
firms. For further assurance, the supplier consulted the authors on documentary credit,
who said that the exporter would be fully protected only when he received an
irrevocable and confirmed documentary credit.
The parties decided to adopt the irrevocable confirmed documentary credit payment
method. This stipulated a commercial invoice and buyer’s confirmation of receiving
the machinery at Antwerp. Relying on the aforementioned advises, the supplier was
sure that by obtaining an irrevocable confirmed credit he had taken all the necessary
precautions to get full payment security. The machinery was ready to be shipped but
on arrival at Antwerp, the buyer was not present to take it. The supplier could not
receive the payment under the credit without producing the buyer’s certificate. A
round of negotiations took place between the parties, some amount of compensation
was paid to the supplier but that was not sufficient to make up the financial loss
suffered by the buyer.

Discussion Questions
1. Identify the problem that led to the huge loss suffered by XYZ Ltd.
2. Advise XYZ to avoid such problems in future while exporting to a foreign buyer.

2. In recent times, India has witnessed a major growth in the export and import of goods
and services. Encouraged by this positive change, more and more entrepreneurs or
startups are venturing into this area. Leather industry in India is one such industry
which has been explored by many start-ups in the recent past. A large number of
small and medium-sized companies are already doing this business successfully. India
 has held a strong position for years in exporting leather products like wallets, belts,
toys, and handbags.
Radhey, an engineer by profession, has been supplying leather products to corporate
clients in the domestic market. He is keen to expand his business outside geographic
boundaries through exports. However jumping into the export of leather products
without having complete understanding of the export import business in India may
turn out to be a nightmare experience.

Question
Advise Radhey the procedures to start the export business of leather products and
other compliances to be followed. Prepare a pre-checklist for this purpose and explain
the purpose of each item in the list.

3. XYZ is a big exporter from Goa exporting sea food to various countries. The
company had a contract with a French company for the export of cuttlefish. The
French importer was concerned about the quality of goods forming the subject matter
of the contract; hence, he hired an agency to conduct an inspection of the cuttle fish at
the premise of XYZ. After conducting a thorough examination, the agency certified
that the goods forming the subject matter of the contract were meeting all the
requirements of export order. Despite all precautions, an error was committed in the
bill attached to L/C pertaining to the description of goods.
The French importer received the goods in his country, but did withhold the
payment for the price of goods as the description of goods in the bill was different
from that of export order. The importer intimated the same to the bank of XYZ in
India; however, the bank did not communicate this information with XYZ for next six
months.
XYZ did not enquire about this incident as the export firm had already got the
payment by discounting the bill. After six months, XYZ was surprised to know that
the Bank in India debited the money of equal sum from its account and issued a letter
informing about the concerns of the French importer and withholding of payment at
his end. Disappointed with the act of its bank, XYZ filed a complaint in the National
Consumer Commission and alleged that the bank was guilty of negligence and
deficient service. XYZ claimed the refund of the amount debited by the bank with
interest on the same. It also claimed compensation for the inconvenience caused to the
company by the deficient services of the Bank. The Bank denied any negligence or
deficient service at their end and stated that XYZ was verbally informed about the
concerns of the French importer.

Discussion Questions
1. Was the bank guilty of negligence and deficient service?
2. What precautions should the company take to avoid such incident in future?

4. Y.M.R.A. Fashions is a leading manufacturer and exporter in the garment industry,

based in Pune. The organisation was incorporated in the year 2000, in the name and
 style of “Y.M.R.A. Fashions”. Initially the business was started in the name of M/s
Ram Lal Dev Raj, in the year 1944 with the efforts of Late Shri Dev Raj, dealing in
yarns and knitted cloth and then the business expanded and the firm diversified its
activities in a phased manner.
Since then the organisation has never looked back and has been moving
towards its objective of success. This organisation has a manpower of around 550
people engaged in various activities. The firm is a major manufacturer and exporter of
products including knitted fabric in cotton, blends, lycra or polyester, fleece blankets,
single jersey, double jersey, jacquards, pique, fleece, rib, dyed stripers, single jersey
jacquard, sherpa, terry, coral knits, all types of T-shirts, bermudas, capri, lowers,
sweat shirts, summer track suits, winters track suits and sando nicker-sets.

Question
1. The company is currently exporting to the United Arab Emirates. They look
forward to expanding their market in Europe. Keeping in view the company’s size,
age and experience in export trading, suggest a strategy to select an appropriate export
trading house to expand its business in Europe.

5. Ms. Sheena Ahluwalia is the CEO of a company dealing in consumer electronics. Her
company leads the domestic industry in production of computer tablets. Sheena’s
company has been an exporter and has successfully exported its tablets all over the
world, including Canada, Mexico, the European Union, Australia and several
countries in Asia. As we know, companies will often import goods or components
that can be more effectively and cheaply produced by another company may be from
a different country and focus on producing and exporting the goods in which it excels.
For similar reasons, Sheena’s company has decided to import different components
necessary to manufacture its computer tablets from other countries.
Importing goods from outside the country is a new activity for Sheena’s
company and Sheena is aware that documentation plays a vital role in import export
activities as it facilitates the smooth flow of physical goods and payments thereof
across national frontiers. Documentation is, however, complex as the number of
documents to be filled in is large, so also is the number of concerned authorities to
whom the relevant documents are to be submitted. Sheena needs your services to help
in understanding the process of importing goods and also preparing documents
necessary for importing goods.

Question
1. Prepare a detailed project report to be referred by Sheena for understanding import
procedure and documentation.
6. R. S. P. Pvt. Ltd. is a twenty-year-old company dealing in manufacturing of leather
items in India. The company imports leather from South Africa. The company
selected Ex-Works Incoterms for importing a sizable amount of leather.
The company wants to know from you the impact of selection of Ex-Works
Incoterms on the total landing cost of imported leather. Also prepare a summary of
Incoterms 2020, providing the classification of Incoterms Rules on the basis of
responsibility and cost distribution between seller and buyer in international trade.

7. MNO Pvt. Ltd. is a ten-year-old company dealing in manufacturing of electronic

items in India. The company imports electronic components from China. The
company selected FOB Incoterms for importing a sizable number of electronic
components.
The company wants to know from you the impact of selection of FOB
Incoterms on the total landing cost of imported electronic components. Also prepare a
summary of Incoterms 2020, providing the classification of Incoterms Rules on the
basis of responsibility and cost distribution between seller and buyer in international
trade.

8. iWalkfree: Exploring Distribution Channels for a New product

People having lower leg non-weight-bearing injuries who wish to remain ambulatory
have long used standard crutches. The use of standard crutches is dependent upon the
person’s ability to use their arms and hands to support their weight as they move
around in their surroundings. The use of standard crutches does not allow the free use
of ones hands and arms for other activities.
XYZ Ltd. (the company) noted that there was a need for a device that allowed
one to remain ambulatory while still allowing them to freely use their arms and hands.
The company developed a device named as iWalkfree which was a hands-free crutch
substitute. It was a first of its kind mobility device that frees one from the limitations
of conventional crutches. Rather than marketing this new device directly to the
consumer, the company chose to market the device directly to clinicians who would
ordinarily be fitting the target population with standard crutches.
Common misconceptions from just looking at ‘iWalkfree’ were that it was
unstable and one might be injured using it, or that it would be difficult to learn and
use. So how was this addressed for both the clinician and the consumer? First, the
company developed a highly informative website to be served as a reference for the
clinicians and consumers. Next, the company personally taught each retailer about the
device, how to sell it, and how to fit it. The company provided a webinar and certified
clinicians (dealers) could become ‘iWalkfree’ fitters.
The product typically outperformed consumer expectations, so the dealer had
to be armed with the knowledge to disarm consumer misconceptions. The ‘iWalkfree’
distribution channel was a direct selling by the manufacturer to trained dealers who in
turn sold the product to the consumer. There was no promotion strategy other than
competing with other new medical devices at various trade shows throughout the
nation, and winning them.
 Discussion Questions
1. When choosing a distribution channel for a new product what are the questions to
be
answered first?
2. What could have been an alternative distribution channel for ‘iWalkfree’?
3. Would you suggest the same distribution channel for ‘iWalkfree’ when it is to be
sold in international markets? Why or why not?

9. Ramaiya is a medium-sized garment exporter from Mysore. She just got an export
order from a buyer in France for supply of 10,000 linen shirts at $110 each. Ramaiya
will need to buy linen fabric and manufacture shirts from it. She can either import or
buy it locally. She currently imports duty-free using the EPCG scheme. In return, she
needs to undertake the export of garments six times the value of the duty saved
amount in six years. Alternatively, if she decides to buy a machine from an
indigenous manufacturer, she will have to export 25 per cent less compared to the
amount she would have had to if she had imported the machine. In this way the EPCG
scheme nudges exporters to use indigenous machines. Post-GST, imports under
EPCG will become expensive. Her manager tells her that the total customs duty
would be 24 per cent of the import value of the linen.
Some relevant facts for Ramaiya’s business are as follows:
GST will usher in a new regulatory regime for India’s exports. For the
manufactured product exporters, the most significant impact would be the increased
requirement and blockage of working capital. For manufacturing a product, a business
firm buys locally or imports raw material and machinery. The current export schemes
permit firms to buy these without payment of applicable duties through ab-initio
exemption or subsequent refund of duties. The proposed GST system mandates that
all duties have to be paid at the time of a transaction while refund for these can be
obtained after exports. This means the exporter will have to arrange money for the
inputs, manufacturing and payment of duties and taxes.
Ramaiya can use the advance authorisation scheme for import of the required
quantity of linen from Italy. Currently, she is not required to pay any duty on imports.
However, post-GST, while she will get an exemption from payment of only basic
customs duty (7%), she has to pay integrated GST which (let us assume) will be
around 18 per cent of the import value. However she can get the refund of this duty
only after the exports and realisation of money. Considering a value addition of 15 per
cent and cost of capital at 12 per cent, Ramaiya’s working capital equals 15.65 per
cent of export value, and will be blocked for six to 12 months.
Post-GST, Ramaiya cannot use the two regularly used variants of advance
authorisation. One, currently she can buy linen from a domestic manufacturer who
will supply without payment of duty. Post-GST, the domestic manufacturer cannot
supply without charging duties.
 Discussion Question
1. Keeping the post-GST scenario in view, have a look at the current export options
available to Ramaiya and suggest the best exporting option.

10. The formation of SEZs was not welcomed by all groups and people of the country. In
the year 2003, the government had to face strong protests from the farmers against the
decision of formation of the Polepally SEZ. The farmers were not ready to give their
lands to government for this purpose. The protestors blocked the Hyderabad-
Bangalore national highway in protest against land acquisition. The protest continued
and an alliance against the Polepally SEZ was formed under the name Polepally SEZ
Vyathireka Aikya Sanghatana. Saurabh, an old man of 55 years and a father of three
sons belonged to a backward caste farming community. His elder son was doing a
technical course after completing his 12th class and another one also had passed the
12th class. Saurabh after losing his 12 acres land was very disappointed and his pain
could be seen on his face all the time. Out of frustration, he used to show his land to
everyone, which was still there but no longer under his control. He explained about
everything he used to grow and how well they lived.
Saurabh was one of the most active members of the group protesting against
the land acquisition for the SEZ. He attended all the meetings held for this purpose
and questioned the officers about the land acquisition process. Many other villagers of
his village trusted his advice and supported him in the struggle. For him the most
painful moment was losing his old good friends in the village who either left the
village after the land acquisition process, or became very busy in arranging an
alternate source of income for their families. The involvement of middlemen and local
politicians had divided the entire village on caste lines. Any one approaching these
people used to become the talk of the village. Some of the active group members who
were also his fellow caste members tried to take control of the village committee and
reunite the villagers but failed to do so.
After receiving a relatively good compensation from the government for
acquiring his land, Saurabh continued with his caste-based occupation, which was the
toddy business. He never invested the money received as compensation. His elder son
had to pick up the job of a security guard, since farming was no more an option for
the family. The family used to recollect the good old days when they used to spend
days and nights in the fields. In those times, food was plentiful in their house, with the
availability of many fruits like mangoes, guava, and banana. Now the family is not
comfortable buying rice, jowar, pulses, fruits and vegetables from the market as all
was grown in their fields. Every time he asked, “Why the government lies and
occupies our
lands? We the poor were never dependent on them. If they do not give us money we
are fine with that. Unfortunately, instead of giving and supporting us, they took away
our land which was our culture, our dignity and our life.”

Discussion Questions
1. Analyse the socio economic impact of the land acquisition process to build Special
Economic Zones in various parts of the country.
2. “Was it displacement in the name of development”? Discuss.