Consider the case of John Smith by HC120425104812


                                     Indian Foreign Trade
                                          Assignment No.I

Assignment Code: 2012IB02A1                              Last Date of Submission: 15th April 2012
                                                         Maximum Marks:100

Attempt all the questions. All the questions are compulsory and carry equal marks.

Ques. 1       Highlight main points of liberalization of India’s external trade sector in the last 10
Ques. 2       What are the distinguishing features of Special Economic Zone (SEZ)? How SEZ is
              being used as an instrument to enhance foreign investment and promote exports in
Ques. 3       What are the objectives of the formation of European Union? Describe main market
              and major trade agreements of European Union.
Ques. 4       Write a detailed note on India's principal imports and show how the composition of the
              import basket has changed over time.

Case Study:

Although antidumping duties are intended to protect domestic producers from unfairly priced imports,
they can be an inconclusive weapon.         Consider the case of John Smith, Inc., which won several
antidumping cases from the 1970s to the 1990s but had little to show for it.

Trouble erupted for John Smith in the 1970s when it encountered ferocious competition from Brother
Industries Ltd. of Japan, which flooded the Indian market with its portable typewriters. Responding to
John Smith’s dumping complaint, in 1980 the Indian Government imposed antidumping duties of 49
percent on Brother portables. John Smith antidumping victory proved to be hollow, however, because
Brother realized that the anti dumping ruling applied only to typewriters without a memory or calculating
function. Through the tactic of product evolution, Brother evaded the duties by upgrading its typewriter
to include a tiny computer memory. It took until 1990 John Smith to get this loophole plugged. By that
time, Brother had found a more permanent method of circumventing antidumping duties: it began
assembling portable typewriters in India from components manufactured in Malaysia and Japan. These
typewriters were no longer “imported,” and thus the 1980s duties did not apply.

Then competition shifted to another product, the personal word processor.             By 1990, John Smith
complained that Brother and other Japanese manufacturers were dumping word processors in India.
This led to Indian government to impose import duties almost 60 percent on Japanese word processors
in 1991. But that victory was also hollow, because it applied only to word processors in 1991. But that

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victory was also hollow, because it applied only to word processors manufactured in Japan; the
Japanese firms assembled their word processors in India.

Undeterred, John Smith filed another complaint, invoking a provision in Indian trade law that was
designed to deter foreign firms from evading antidumping duties by importing components and
assembling them in India. But the provision assumed that imported components would come from
domestic (Japanese) factories, so it did not cover components produced in third countries. Recognizing
this loophole, Brother demonstrated that its imported components cane from third countries, and
therefore its word processors were not subject to antidumping duties. All in all, obtaining relief from
foreign dumped goods was a difficult process for John Smith.


   1.      What do you mean by dumping of goods?            What protective measures are taken by
           government to protect the country from foreign dumped goods?
   2.      Why was the process of obtaining relief from foreign dumped goods difficult for John Smith?

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                                    Indian Foreign Trade
                                          Assignment No.II

Assignment Code: 2012IB02A2                            Last Date of Submission: 15th May 2012
                                                       Maximum Marks:100

Attempt all the questions. All the questions are compulsory and carry equal marks.

Ques. 1       Write a note on Indo-African trade, highlighting the major initiatives taken for increasing
              trade relations.
Ques. 2       Outline the contribution of the computer software and IT related services to India's
              export performance.
Ques. 3       Write a comprehensive note on India's trade with ASEAN
Ques. 4       Gems and Jewellery sector has emerged as a major force in India's foreign trade.
              Analyse the reasons for our success in this sector.


Case Study:

Despite the dramatic increases in international flows of Foreign Direct Investment over the past two
decades, the countries of sub-Saharan Africa have largely missed out on this trend. As a result, the
problem of extensive and increasing levels of poverty among the populations of the sub – Saharan
nations                          has                           been                           exacerbated.
Historically, many of these nations have suffered from inadequate regulatory and administrative
practices with respect to the treatment of foreign investors and the protection of their investments,
which sharply diminished the attractiveness of these nations for receiving incoming FDI.
There is some reason for hope, however, as the past decade has seen changes in attitudes toward FDI.
The majority of African nations have introduced FDI liberalizing legislation as well as entering into trade
agreements with other nations from Africa and other continents. State-owned enterprises are being
privatized, often in conjunction with investment by foreign firms, although the pace of privatization lags
behind that of other parts of the world. Regulatory conditions in many African nations are comparable
with those in other developing nations.

The introduction of sound standards for FDI is a positive step forward for attracting foreign investment.
However, much work remains.            Most countries have fiscal regimes that lack international
competitiveness in terms of FDI for export-oriented activities. Many countries lack good regulations

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with regard to the management of labor relations and dispute resolutions, an essential factor in a
nation’s attractiveness for investment in labor-intensive export manufacturing sectors.
Many countries lack updated systems for providing work and residence permits for expatriate personnel
who are often critical resources for the foreign investor during the early stages of an investment project,
due to the managerial and technical expertise they provide.
Despite these and other problems that continue to hinder FDI inflows, there are promising signs that
political and economic changes currently under way may be able to be sustained. Combined with the
rich resource base found in many of the nations, this could provide a stronger foundation for future
improvements in international investment and trade by African nations and improvements in the human
condition on this vast continent.


Q1.    What issues were hindering the growth of Foreign Direct Investment inflows in African
       countries? Should FDI be encouraged in countries like India? And Why?

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