Exporting

Categories of good for export

Prohibited goods
Restricted goods
Canalised Goods
Free Goods
Prohibited goods
These goods are not permitted to
be exported. An export license will
not be given in normal course for
goods in the prohibited category.
E.G., Narcotic Drugs, Antiquities,
Aero models, Human Skeleton etc.
Restricted goods
These goods can be permitted for
export under and / or are subject to
compliance of stipulated
procedures / conditions.
E.G., Fire arms and ammunition,
Live birds or animals, Gold or
silver, Medicines etc.
Canalised goods
These goods are permitted to
be exported through state
trading enterprises (STE).
E.G., Petroleum products, Mica
Waste, Mineral ores etc.
Free goods
Free goods are other
than those indicated in
the export licensing
schedule and are freely
exportable.
Methods of Exporting
There are two types of
exporting and one exporter
can opt for any one of them:
Direct Exporting
Indirect Exporting
Direct Exporting
Direct exports represent the most
basic mode of exporting,
capitalizing on economies of scale
in production concentrated in the
home country and affording better
control over distribution. Direct
export works the best if the
volumes are small.
Types of direct exporting
There are two types of direct
exporting and those are:
Sales representatives - that represent
foreign suppliers/manufacturers in their local
markets for an established commission on
sales. Provide support services to a
manufacturer regarding local advertising,
local sales presentations, customs
clearance formalities, legal requirements.
Types of direct exporting
There are two types of direct
exporting and those are:
Importing distributors - purchase
product in their own right and resell
it in their local markets to
wholesalers, retailers, or both.
Advantages of direct exporting
+ Control over selection of foreign markets
and choice of foreign representative
companies;
+ Good information feedback from target
market;
+ Better protection of trademarks, patents,
goodwill, and other intangible property;
+ Potentially greater sales than with
indirect exporting.
Disadvantages of direct exporting
- Higher start-up costs and
higher risks as opposed to
indirect exporting;
- Greater information
requirements;
- Longer time-to-market as
opposed to indirect exporting.
In the next class we will start
discussion from Indirect Exporting