Financial Project Report on Importance of Export Incentives in promoting Export from India
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BHAVAN?S COLLEGE, ANDHERI (2009-10)
IMPORTANCE OF EXPORT INCENTIVES IN PROMOTING EXPORTS FROM INDIA
NAME TARUSH GORADIA SUSHIL AGRAWAL KARUNA SRIDHAR RUCHI BAROT DIVISION 2 2 2 2 ROLL NO. 184 124 219 134
TABLE OF CONTENTS
y y y LETTERHEAD OF THE COMPANY INTRODUCTION COMPANY PROFILE y COMPANY?S NAME AND INTRODUCTION y PRODUCT EXPORTED , PRODUCT DEMAND & PRODUCT COST y MARKET SHARE OF THE COMPANY IN THE COUNTRIES EXPORTED AND COMPETITORS y FUTURE PROSPECTS INCENTIVES y INCENTIVES RECIEVED BY THE COMPANY y GENERAL INCENTIVES UNDER EXIM POLICY AND GOVT. OF INDIA PROCEDURE TO GET INCENTIVES DOCUMENTS REQUIRED TO APPLY FOR INCENTIVES PROBLEMS FACED BY THE EXPORTERS SUGGESTIONS FOR THE PROBLEMS FACED BY THE EXPORTERS TESTIMONIALS BY THE DIRECTOR OF MUKUND INDUSTRIES BALANCE SHEET OF M/S MARVES WINES & CO.
y y y y y y
Export plays a vital role in the economic development of a nation. To increase export earnings, there is a need for efficient marketing and good incentives for the same. Thus, Government of India under EXIM Policy has been giving number of incentives for encouraging exports from India. There are trade related incentives as well as money back or subsidy based incentives due to which the exporters from India earn high earnings .Some of the incentives are like Exemption from excise duty, exemption from Sales Tax or VAT or subsidised rates for imports of plant and machinery etc. For a better study of these incentives and to understand the procedure to get these incentives, M/S Marve Wines & Co. which is a part of Mukund Pvt. Ltd helped us. Our group visited the field, in Malad and got to know the insight of this larger to life Export and Import Business.
NAME OF THE COMPANY: M/S MARVE WINES (A Part of Mukund Private Limited) COMPANY OWNER: Mr. T.M. KAMBLE Mrs. NANDA KAMBLE Mr. KANISHKA KAMBLE
INTRODUCTION OF THE COMPANY Mukund Private Limited was established in the year 1992, it started with two partners with a nominal investment of rupees 10 Lakhs and now it?s a company worth more than 20 crores. Mukund Private Limited has spread its business over many fields such as construction, media, printing press, exports etc. M/s Marve Wines is one of its companies which exports various alcohol and also sells some of the biggest brands of alcohol in the market. It has turnover of Rs. 6 Crores in the year 2008-09. Marve Wines is located in Malad, Mumbai and handled by Mr. Gupta. M/s Marve Wines exports in many countries suc h as Nigeria, Uganda and other part of Africa along with some countries of Europe and Canada. M/S Marve Wines now plans to open a new branch at the happening zone of south Mumbai and expand its business to countries such as Kenya and Australia in the year 2011.
PRODUCT EXPORTED , PRODUCT DEMAND & PRODUCT COST
TYPE OF PRODUCT EXPORTED: Alcohol and Spirits BRANDS EXPORTED: Kingfisher, Chantilli, Smirnoff, Royal Stag, Hayward?s and many others. COUNTRIES EXPORTED : Nigeria, Uganda and some parts of Canada , Europe and African Countries also. PRODUCT DEMAND Alcohol and Spirits have a very high demand in countries of African Continent as well as Europe says Kanishka Kamble, Director of Mukund Private Limited. He says that they export over 1,00,000 containers of Kingfisher beer to Uganda. The clients of the product in Uganda KIAMUSU, and in Nigeria Liquor Enrgy Supplier, Romania AMARETT ITALIANO are selling the product at a profit margin of 10-15%, still the product is sold at a full swing. According to the survey report of Nigeria?s News Digest , Kingfisher and Smirnoff are planning to setup their own shops in Nigeria since there is quite a good market there. The product demand in Canada and Europe cannot be determined because the company exports accordingly to the order placed by their clients which is worth around $ 100,000. PRODUCT COST The product cost in Indian markets are as follows: Brand Name Kingfisher Haywards Chantilli Wines Smirnoff Price /Litre 68* 74* 1500* 450*
*Price indicated at the price mark.
PRODUCT DEMAND IN THE YEAR 2007-2008
Fosters Local rand
MARKET SHARE OF THE COMPANY IN THE COUNTRIES EXPORTED AND COMPETITORS. Since there is a huge demand for such products in other countries many export firms have a eye on these countries to earn high profits as well as the import country try to strike a deal with a firm which gives them the best rate for the product. Thus, there are many competitors to M/S Marve Wines. Namely, 1.) Rama Exports, Bengaluru 2.) Gupta Wines, Mumbai 3.) Akash Traders 4.) Ocean Distributors and many more. Since there are many companies exporting to this country not only from India but from other countries as well with their brand, the market share of the company in the countries exported is mere 2%. As mentioned above, there are many competitors of the co mpany but the main competitors of M/S Marve Wines are Rama Exports based in Bengaluru, Gupta Wines, Mumbai , Akash Traders and Ocean Distributors. Ocean Distributors have the highest market control in exporting of products in African Countries. Thus, there is a perfect competition in the export business. Thus, the price determinant or the price maker is the importer.
FUTURE PROSPECTS OF THE COMPANY
Marve Wines as a company has a huge goodwill in the export business of alcohol. Marve Wines now plans to open a new branch at the happening zone of south Mumbai and expand its business to countries such as Kenya and Malaysia in the year 2011 and increase its production value by exporting more brands to different countries. Marve Wines, Owner, Kanishka Kamble says there is a huge market in third countries but it is not explored by many exporters. He says there is huge market for Indian liquor in countries like Bahamas and Jamaica but due to government reforms and restrictions cant export the products. Thus, along with its union they are sending petitions for liberalisation for trade in such countries thereby increasing export earnings.
INCENTIVES RECIEVED TO THE COMPANY BY GOVT. OF INDIA UNDER EXIM POLICY 1.) Company receives a subsidy of an average of 15% on products exported to the country as well as receives subsidy on same product of international brand. 2.) Company receives exemption on excise duty for import of plant and machinery for its business. 3.) Company also receives a bank loan at very low rate of interest . 4.) Company also is exempted from paying sales tax or VAT.
GENERAL INCENTIVES ARE AS FOLLOWS
PROCEDURE TO GET INCENTIVES
DOCUMENTS REQUIRED TO APPLY FOR INCENTIVES
PROBLEMS FACED BY THE EXPORTER
SUGGESTIONS FOR THE PROBLEMS FACED BY THE EXPORTERS
TESTIMONIALS BY THE DIRECTOR OF MUKUND PRIVATE LIMITED
?Mukund Industries started when my Grandfather, Mr.Mukund Kamble dreamt of having a huge industry having all people of different walks of life to work for us. Thus, Mukund Industries was established by my father Mr.T.M.Kamble in the year 1992, with an investment of Rs. 10,00,000 and within 17 years our company is worth around 20 Crores. We are doing business in diverse fields from construction to media to printing to import and exports. Marve Wines was established in the year 1997 in Malad where there were hardly any people living there but a visionary my father, invest ed a huge money in Marve Wines making a huge profits for our company. Marve Wines not only exports its product we also sell it to retailers all over Mumbai. Our clientele include Mainland China, Sheesha, etc. T o conclude with, I say Import-Export business surely is a profit engaging business but it also comes with huge risks involved.?
CONCLUSION Incentives in Export helps the exporters to earn high profits as well it encourages exporters to engage in more exports thus increasing countries exports earnings. Thus, if there is more exports from a country , in the international market there becomes a goodwill as well as it ter ms a country self-sufficient by making the export ?import ratio higher in export side. Incentives in export only increases exporters to involve in export products outside the home country and making a home product successful in the international markets. Companies like Philips, Videocon have made a mark in international market because of liberalisation and globalisation in its terms and conditions of exports . Incentives such as Duty Drawback, Exemption from excise duty and sales tax, Financial Assistance also helps export companies to expand themselves and export goods in more safe and innovative way. Incentives has also given artists a homage as well as appreciation of its work world wide due to liberalisation and exemption of taxes and low rate of shipment. Still, there are problems faced by the exporters such as which has to be work upon. Here we cconclude by saying have a safe business because, As Mr. Kamble said export import business is a huge business but involves very high risk from rejection of goods exported to fraudulent companies.
, export derives
Description: This term export derives from the conceptual meaning as to ship the goods and services out of the port of a country. The seller of such goods and services is referred to as an "exporter" who is based in the country of export whereas the overseas based buyer is referred to as an "importer".