India’s Foreign Trade

Q1) What does foreign trade refer to and why is it important for any country to participate in foreign trade. State which guiding factor and reform measures can the Government of India leverage to further boost the international trade prospects of India’s agriculture sector.

Q2) Essence of international trade lies in comparative difference rather than absolute difference in cost. State the rationale, assumptions, limitations and advantages of this doctrine in International Business. How does this lead towards international specialization?

Q3) Explain the three rules for any organization to decide on its choice of entry strategy in International markets.

a. An International food company wishes to enter India to start their operations.

b. Suggest the choice of entry strategy and which of the three rules they should follow.

India’s Foreign Trade

Q1) What does foreign trade refer to and why is it important for any country to participate in foreign trade. State which guiding factor and reform measures can the Government of India leverage to further boost the international trade prospects of India’s agriculture sector.

Q2) Essence of international trade lies in comparative difference rather than absolute difference in cost. State the rationale, assumptions, limitations and advantages of this doctrine in International Business. How does this lead towards international specialization?

Q3) Explain the three rules for any organization to decide on its choice of entry strategy in International markets.

a. An International food company wishes to enter India to start their operations.

b. Suggest the choice of entry strategy and which of the three rules they should follow.

1. ABC Limited was doing well in the local market and was planning to expand its business in the foreign market as well but was worried about how will they collect the payment from the importers located in other countries. Is it possible for the company not to face credit risk in the foreign market, if yes, how? Explain using examples.

2. A chemical company was planning to enter into strategic alliance with another chemical company for growth. Elaborate the reasons for the company to engage in strategic alliance.

3. Alpha Ltd was in the business of manufacturing ayurvedic products and was performing well in the Indian Market. The company had broad range of products currently selling in the market. Looking at the growing demand of ayurvedic products in the foreign market as well, the company was planning to export its goods to other countries as well. If you are the manager of the company, prepare a report highlighting:

a) Reasons that would motivate the company for entering foreign market.

b) Benefits that would be available to Alpha Ltd as exporters.