Page 18 - DMGT545_INTERNATIONAL_BUSINESS
P. 18

Unit 1: International Business: An Overview




             According to Food Processing Minister Subodh Kant Sahay, “It should be done in such a way   notes
             that it would boost our agriculture. Our farmers must also get benefits of economic liberalization”.
             The Investment Commission, set up by the Prime Minister in 2004 to boost investments,
             made recommendations to the government on both policies and procedures to facilitate
             greater FDI inflows. The report said, “Foreign food retailers could help in the transmission
             and  adoption  of  better  practices  throughout  the  supply  chain  and  could  also  facilitate
             access to export markets.”
             Agreeing with the panel’s suggestion, Mr. Sahay said “there was a need to bring market
             discipline in procuring agro products from farms. FDI in food retail is the need of the
             hour. It would mean use of latest technology in the sector, more yield per hectare and
             optimum usage of arable land. Allowing FDI will create demand across all levels, from
             raw material to finished products, and, at the same time, maintaining every level of quality
             and standards.”
             After permitting 51 percent FDI in single-brand retailing, allowing FDI in select food items,
             fresh and processed fruit and vegetables is the next step. It would include retailing of farm
             and dairy produce, marine and poultry products, besides fruit and vegetables. While 100
             percent FDI is allowed in food processing, investment is restricted in retailing.
             Today,  barely  6  percent  of  fruit  and  vegetables  produced  in  India  are  processed.  The
             country  has  targeted  20  percent  processing  within  the  next  few  years  and  is  keen  on
             enhancing  export  of  these  items  from  less  than  1-3  percent.  The  government  was  also
             considering opening up the $330 billion retail market with adequate provisions to protect
             neighbourhood stores. The commerce department is waiting for the report being prepared
             by ICRIER on the impact of retail on local Kirana outlets. The study was commissioned to
             the Delhi-based think-tank after the Congress party voiced its concerns over the effects of
             FDI on retail in the unorganized sector.
          Source: The Economic Times (ET), April 22, 2008.

          1.5 Differences between Domestic and international Business


          Difference  between  domestic  trade  and  foreign  trade  and  their  peculiar  problems.  Trade,  no
          doubt, implies exchange of goods between persons, but there are marked differences between
          domestic trade and international trade. The differences and the complications arise therein are
          as follows:
          1.   Distance: The distance involved in export of goods in external trade is generally greater
               than on the domestic trade.
          2.   Language differences: There are differences in the languages of the nations of the world. The
               overseas traders should be very careful in preparing the publicity material in the languages
               of the trading country.
          3.   Cultural  difference:  A  producer  should  have  full  knowledge  about  the  market  of  his
               products. For exporting goods particularly a thorough research is undertaken.

          4.   Technical difference: In the national market the difference in the technical specification for
               goods and their requirements is not wide.
          5.   Tariff barriers: In the national trade, there are no custom duties, exchange restrictions,
               fixed quotas or other tariff barriers.
          6.   Documentations: In the home trade there are few documents involved in the exchange of
               goods.







                                           lovely Professional university                                    13
   13   14   15   16   17   18   19   20   21   22   23