Import of Chinese Products in India

Import of Chinese Products in India Seminar Report submitted for Requirements For the Degree of MBA By Sheenam Parveen (09-MBA-52) Under the Supervision of Mr. Vivek Bansal

Department of Management Studies UNIVERSITY COLLEGE OF ENGINEERING RAJASTHAN TECHNICAL UNIVERSITY, KOTA MAY 2010

Acknowledgement I feel great pleasure in submitting this seminar report on “Import of Chinese products In India.” I wish to express a true sense of gratitude towards my seminar guide Mr. Vivek Bansal who at a very discrete step in study of this seminar contributed his valuable guidance and help to solve every problem that arose and opening the doors of the department towards the realization of the seminar report. Most likely I would like to express my sincere gratitude towards my family for always being there when I needed them the most. With all respect and gratitude, I would like to thank all the people, who have helped us directly or indirectly, I owe my all success to them.

Date 24.5.2010

(Sheenam Parveen)

Certificate

This is to certify that the seminar entitled “Impact of Chinese products in India” submitted by Sheenam Parveen (09/MBA/652) in the partial fulfillment for the award of Master of Business Administration degree, to Department of Management Studies, Rajasthan Technical University, Kota, is carried out under my guidance.

(Mr. Vivek Bansal) Date: 24.5.2010

Chapter – 1 PROFILE (1.1) CHINA COUNTRY PROFILE Country Facts Area: 9,956,960 sq km (3.7m sq miles) Population: 1.29 bn Capital City: Beijing People: Han Chinese make up around 92% of the population. The remaining 8% is comprised of 55 minority ethnic groups. Official Language: Mandarin (Putonghua) with many local dialects. Religion(s): China is officially atheistic, but there are 5 State-Registered religions: Daoism, Buddhism, Islam, Catholic and Protestant Christianity. Currency: Yuan or Renminbi (RMB) Major political parties: Chinese Communist Party Government: There are 4 major hierarchies in China: the Chinese Communist Party (CCP), the National People's Congress (China's legislature), the government and the military. The supreme decision-making body in China is the CCP Politburo and its 9member Standing Committee, which acts as a kind of 'inner cabinet', and is headed by the General Secretary of the Chinese Communist Party. The National People's Congress (NPC) is China's legislative body. It has a 5-year membership and meets once a year in plenary session. However, in practice it is the CCP who takes all key decisions. Head of State and General Secretary of the CCP: President Hu Jintao Chairman of the Standing Committee of the NPC: Wu Bangguo Premier of the State Council: Wen Jiabao State Councillor (Foreign Affairs): Dai Bingguo Foreign Minister: Yang Jiechi Membership of international groups/organisations: United Nations (including permanent membership of the UN Security Council), ASEAN Regional Forum (ARF); Asia-Pacific Economic Cooperation Forum (APEC); Asian Development Bank (ADB); Shanghai Cooperation Organisation; World Trade Organisation (WTO).

ECONOMY

Economic indicators GDP: US $3,250.8bn (est.) (2007) GDP per capita: US $2,461 per capita (est.) (2007) Annual Growth: 11.9% (2007) Consumer prices: 7.1% 2007 Exchange rate: 13.7 Renminbi = £1 China has been one of the world's economic success stories since reforms began in 1978. In purchasing power parity terms, China is the world's second biggest economy. Official figures show that GDP has grown on average by 9% a year over the past 25 years with an estimate of 10.4% recorded for 2007. The current growth model, and policy underlying it, remains heavily skewed towards exports and investment, with little emphasis on private consumption. China has started to adjust its economic policies to better promote sustainable growth. The Government has highlighted its intention to: Undertake more bank reform (and encourage banks to provide finance to rural areas and smaller firms) develop the capital markets (to give firms more opportunity to raise finance) engage in deeper reform of the insurance sector (to expand the options available to savers), and provide a sounder regulatory structure (aimed at promoting financial integration). A growing share of China's economic growth has been generated in the private sector as the government has opened up industries to domestic and foreign competition, though the role of the state in ownership and planning remains extensive. China's entry into the World Trade Organisation in December 2001 is further integrating China into the global economy.

GEOGRAPHY China is twice the size of Western Europe. It is the third largest country in the world, after Russia and Canada. Its terrain varies from plains, deltas and hills in the east to mountains, high plateaux and deserts in the west. To the south its climate is tropical, whilst to the north it is sub-arctic. Less than one-sixth of China is suitable for agriculture. The most fertile areas lie in the eastern third of the country, which is economically the most developed region. INTERNATIONAL RELATIONS

Relations with the International Community China has said that it wishes to pursue an independent foreign policy of peace in order to preserve its independence, sovereignty and territorial integrity. The concept of ‘harmonious’ development, at the heart of China’s domestic policy, has been extended to its foreign policy as China aims to create a favourable international environment to continue its agenda of reform and opening up. To date, China has focused on developing close relations with its neighbours, major partners and international organisations. In support of its desire to promote a foreign policy of peace, China is playing an increasingly active role in international affairs. It has supported the international war against terrorism, including in the UN Security Council (where it holds one of the five Permanent Seats) and voted in favour of limited sanctions on North Korea. China has played a mainly constructive role in supporting UN Special Envoy Gambari’s mission to Burma. China moved from more or less unconditional support of Sudan, supporting UNSCR 1769 which mandated a hybrid peacekeeping force in Darfur, and has deployed 315 peacekeepers. China voted for UNSCR 1803, which mandated a third round of sanctions on Iran, and has begun to put the squeeze on financial transactions with Iran. However, China’s recent use of its veto (only the third since 1999) over a UNSCR on Zimbabwe demonstrates its increasing confidence to protect its own interests. EU-China Relations EU relations with China were established in 1975 and are currently governed by the 1985 EU-China Trade and Cooperation Agreement. The EU is important for China’s vision of a multipolar world and China is arguably the EU’s most important relationship outside its own neighbourhood and the US. In January 2007 the EU and China launched negotiations on a single and over-arching Partnership and Co-operation Agreement (PCA) to reflect the breadth and depth of today’s strategic partnership. The PCA will set a broad framework for the EU’s relationship with China across a wide range of areas and, in part, will replace the 1985 Trade and Economic Co-operation Agreement. Areas of cooperation currently under negotiation include issues such as non-proliferation, human rights and climate change. Today, the EU is China’s second largest trade partner and China is the EU’s largest partner. This is reflected in the rapidly growing trade in goods in recent years, rising by 20% per annum to reach €302 billion in 2007. There is however, increasing concern in the EU at the growing size of China’s trade surplus with the EU. At the 2007 EU-China Summit, both sides agreed to hold an annual High Level Dialogue Mechanism, to discuss issues affecting the trade imbalance, in order to find concrete means to increase trade in a balanced way. The first of these meetings took place in April 2008, establishing a framework for future exchanges. Within the maturing EU-China comprehensive strategic partnership, dialogue and cooperation have been increased on key international issues (e.g. Iran, Sudan and Burma), and on key issues of globalization, such as climate change and Africa/development. Apart from regular political, trade and economic dialogue meetings, there are over 24 sect oral dialogues and agreements ranging from Human Rights to industrial policy, education and culture. UK-CHINA BILATERAL RELATIONS

Bilateral relations are excellent and have undergone a period of rapid expansion since May 2004 when the former Prime Minister, Tony Blair and Premier Wen Jiabao signed a Joint Statement announcing a “comprehensive strategic partnership” and a commitment to hold annual Summit meetings between the two Premiers. Britain remains China’s largest European investor, Chinese students make up the largest number from any single nation in the UK, and China publishes more joint scientific research papers with the UK than any other European country.

(1.2) INDIA COUNTRY PROFILE Country Facts Area: 3,287,623m sq km (1,269,219 sq miles) Population: 1,136,000,000 (Sept 2007 est) Capital City: New Delhi Languages: The official language of India is Hindi, written in the Devanagari script and spoken by some 30% of the population as a first language. Since 1965 English has been recognised as an 'associated language'. In addition there are 18 main and regional languages recognised for adoption as official state languages. Religions: India is a secular state and freedom of religion is protected under the Constitution. The main religious groups are Hindus (81.3%), Muslims (12%), Christians (2.3%), Sikhs (1.9%). Currency: Rupee Government: United Progressive Alliance, a Congress-led 20-party coalition. Head of State: President Pratibha Patil Prime Minister: Prime Minister Manmohan Singh Membership of international groupings/organizations: Commonwealth; United Nations and the United Nations Human Rights Council; World Trade Organisation; South Asian Association for Regional Co-operation (SAARC); ASEAN (dialogue partner); G4.

ECONOMY Basic Economic Facts GDP: $1,090 billion (2007) GDP per head: $714 per head (2006) Annual Growth: 8.4% (2005-2006) Inflation: 5.6% (2006 est.) Major Industries: Textiles, chemicals, food processing, steel, transportation equipment, cement, mining, petroleum, machinery, software, gems and jewellery, leather manufactures. Major trading partners: Exports for 2005: USA (19.1%); China (9.4%); UAE (8.4%); UK (4.9%) Imports for 2005: China (7.3%); USA (6.5%); Belgium (5.2%); Singapore (4.8%) Aid & development: Foreign aid was approximately $3.8 billion (2005-2006) Exchange rate: Indian rupees per UK Pound Sterling – 78.8 (end January 2008).

GEOGRAPHY India forms a natural sub-continent with the Himalayas to the north. The Arabian Sea and the Bay of Bengal, which are sections of the Indian Ocean, lie to the west and east respectively. India's neighbours are China (Tibet), Bhutan and Nepal to the north, Pakistan to the north-west, and Burma to the north-east. To the east, almost surrounded by India, is Bangladesh. Near India's southern tip, across the Palk Strait, is Sri Lanka. India has 28 states with constitutionally defined powers of government. The states vary greatly in size, population and development. Each state has a Governor appointed by the President for 5 years, a legislature elected for 5 years, and a Council of Ministers headed by a Chief Minister. Each state has its own legislative, executive and judicial machinery, corresponding to that of the Indian Union. In the event of the failure of constitutional government in a state, the Union can impose President's Rule. There are also 7 Union Territories including the National Capital Territory of Delhi, administered by Lieutenant Governors or Administrators, all of whom are appointed by the President. The Territories of Delhi and Pondicherry also have elected chief ministers and state assemblies. The 28 states are: Andhra Pradesh, Arunachal Pradesh, Assam, Bihar, Chhattisgarh, Goa, Gujarat, Haryana, Himachal Pradesh, Jammu and Kashmir, Jharkhand, Karnataka, Kerala, Madhya Pradesh, Manipur, Maharashtra, Meghalaya, Mizoram, Nagaland,

Orissa, Punjab, Rajasthan, Sikkim, Tamil Nadu, Tripura, Uttar Pradesh, Uttarakhand, and West Bengal. The Territories are: Andaman and Nicobar Islands, Chandigarh, Dadra and Nagar Haveli, Daman and Diu, Delhi, Lakshadweep, and Pondicherry.

TRADE AND INVESTMENT Trade and Investment with the UK: Total two-way trade (goods) grew by 24.4% in 2008 compared to 2007. Major items of trade in goods: UK exports- Metalliferous ores and metal scrap, non-metallic mineral manufactures, non-ferrous metals, power generating machinery and equipment, machinery specialised for particular industries, general industrial machinery and equipment, electrical machinery & appliances, transport equipment. UK imports-Textile yarn and fabrics, petroleum, petroleum products & related materials, power generating machinery & equipment, general industrial machinery & equipment, iron & steel, manufactures of metal not elsewhere specified, electrical machinery, apparatus and appliances, articles of apparel and clothing accessories, footwear, miscellaneous manufactured article. Over 25541.3 new Indo-British joint ventures have been approved by the Government of India since April 1996. For the period August 1991 to October 2008, the number of technical collaborations approved from UK stands at 868, which is 10.8% of the total technology transfer approvals (Fourth after U.S.A., Germany and Japan). Between January and November 2008, the highest number of FDI approvals in India was in service sector (eight) where as the highest value of FDI approvals was in drugs and pharmaceuticals (Rs 2500 mn). For the period August 1991 to October 2008, the number of technical collaborations approved from UK stands at 868, which is 10.8% of the total technology transfer approvals (Fourth after U.S.A., Germany and Japan). The UK is the four largest investor in India (after Mauritius, Singapore and USA) for the period April 2000 to December 2008 POLITICS The Indian Constitution provides a system of parliamentary and cabinet government both at the centre and in the states. The Indian Parliament consists of the President, currently President Smt Pratibha Devisingh Patil, (elected for a 5-year term as the constitutional

head of the executive) and 2 Houses: The Lower House - Lok Sabha ('House of the People') - directly elected on the basis of universal adult suffrage; and the Upper House Rajya Sabha ('Council of States') - indirectly elected by the members of state legislative assemblies. The Bharatiya Janata Party (BJP) and the Congress Party are the 2 main forces in the current Indian political scene, but neither can command a clear Parliamentary majority. The balance of power is held by a loose collection of regional and other parties (1.3)CHINA EXPORT IMPORT DATA TO INDIA

Year

China's Exports to India

China's Imoprts from India

2000

1560.75

1353.48

2001

1896.27

1699.97

Percent Growth

21.5

25.6

2002

2617.73

2274.18

Percent Growth

40.9

33.8

2003

3343.59

4251.49

Percent Growth

22.2

87

2004

5926.67

7677.43

Percent Growth

77.3

80.6

Chapter -2 Introduction to Import (2.1)Introduction: Starting an import business is a goal of more than thousands of merchants and businessman. Like an export business, import business is also very profitable business, if an importer proceeds with the right strategies. However, the long term success and profitability of an import business greatly depends on the importer’s knowledge and understanding about the international market and foreign market analysis. Today, importing goods from abroad has becomes a big business. Everything from beverages to cars--and a staggering list of other products that one might have never imagined has now become the part of the global import. Millions of products are bought, sold, represented and distributed somewhere in the world on a daily basis. (2.2)Definition: Import: Generally an import means bringing goods into one country from another country in a legitimate manner, typically for use in trade. Import of goods and services are provided to domestic consumers by foreign producers import of commercial quantities of goods normally requires involvement of the customs authorities in both the country of import and country of export. As per the customs act 1962 import means bringing goods into India from a place outside India. (2.3)Reasons for Import There are number of supporting reasons why import business and services is growing at such a fast rate:Availability: An individual or business man or an importer needs to import because there are certain things that he can’t grow or manufacture in his home country. For example Bananas in Alaska, Mahogany Lumber in Maine and Ball Park franks in France.

Cachet: A lot of things, like caviar and champagne, pack more cachet, more of an "image," if they're imported rather than home-grown. Think Scandinavian furniture, German beer, French perfume, Egyptian cotton. It all seems classier when it comes from distant place. Price: Price factor is also an important reason for import of products. Some products are cheaper when imported from foreign country. For example Korean toys, Taiwanese electronics and Mexican clothing, to rattle off a few, can often be manufactured or assembled in foreign factories for far less money than if they were made on the domestic country. (2.4)Import in India The rising middle income groups of consumers in India and their increasing levels on expenditure on various products has resulted a faster rising demand of the Indian import business. Major imports of India include cereals, edible oils, machineries, fertilizers and petroleum products. Total import from India estimated to be around US$187.9 billion. India is also a bulk importer of edible oil, sugar, pulp and paper, newsprint, crude rubber and Iron and steel. (2.5)Import of Chinese product in Indian: The flood of Chinese imports has raised temperatures all around, questions have been asked in Parliament, and the many chambers of commerce have be seeched the government to protect Indian domestic industry from the new Chinese invasion. Quite naturally, Indian producers claim the Chinese are “dumping” their products in Indian markets. Dumping refers to the practice of selling products abroad at artificially low prices. Under the World Trade Organization, the recipient country can levy antidumping duties in order to protect domestic industry. It is also true that most Chinese goods are sold at dirt-cheap prices. For instance, a Chinese Fan with a built-in invertor is available for Rs. 800-900, whereas Indian Fan costs about Rs. 1150. Bicycles are about Rs. 500 cheaper than Indian ones. Similarly, most electronic goods are significantly cheaper than products of comparable quality available in India. Third, it is also undeniably true that the sheet volume of Chinese imports will soon have an adverse effect on Indian manufacturing industries. A newspaper report mentions that Bajaj Electricals has started importing items like Chinese Toasters and fans into India and providing brand support and after-sales service. While this is good news for the Indian Consumer, this can only be disastrous for the Indian worker. Of course, the difference in price is not a sufficient proof of dumping. Chinese labour is certainly cheaper than in countries such as India, from where we import significant volumes of electronic items. China also has a much lower rate of indirect taxes on inputs. These could well account for a large part of the difference in prices. Another contributory

factor underlying the price differential is the general inefficiency of Indian manufacturing. A recent confederation of Indian Industry seminar in Calcutta focussed on the large distance which Indian manufacturing industries have to traverse in order to catch up with international norms in prices and quality. India has a rather dismal rating in competitiveness. It ranks a low 53 out of 59 countries ranked by the World Economic Forum and 40 out of 46 countries ranked by World Bank.

As a wide range of cheap Chinese products flooded the Indian market, some local industries were adversely affected, while others benefited by using these products as raw materials The Chinese are exporting to India a wide range of low-cost consumer goods that have a mass market in India such as kitchen-ware, textiles, electronic items, furniture, toys, cosmetics, footwear and accessories. In fact in the last four years, there has been a deluge of cheap imports From China tyres, bicycles, watches and clocks, toys, plastics and dyes, and bulk drugs In the very near future Indian scooter and motorcycle manufacturers are going to face stiff competition from the Chinese. The sector that will be worst hit will be the smallscale sector. The Chinese export import corporations are financially stronger, have more efficient processes and turn out goods at extreme (2.6)For the purpose of import goods have been divided into following categories: Prohibited goods are not permitted to be import at all. Restricted goods can be imported against a license or subjected to certain conditions. Canalized goods are permitted to be imported only through state trading enterprises. Free goods are goods which can be import it without any license or conditions.

Chapter- 3

IMPORT DOCUMENTS (3.1). Importer Exporter Code (IEC) Number: No person can import goods without obtaining an Importer-Exporter Code (lEC) Number unless he has been specifically exempted. The IEC Number is obtained from the Regional Licensing Authority. You have already learnt the procedure of obtaining IEC Number in Unit. (3.2). Bill of Entry: It is a document on which clearance of imported goods is affected. All goods discharged from a vessel, from foreign or coastal ports are cleared on Bill of Entry in the prescribed form. The Bill of Entry form has been standardized by the Central Board of Excise and Customs. Four copies of bill of entry are submitted. Original and duplicate for customer departments, triplicate is owner's copy and the fourth copy is for the purpose of foreign exchange to be submitted to bank. There are three types of Bill of Entry as discussed below: I) Bill of entry for home consumption (white in colour): where an importer wants to get his goods cleared in one lot, he has to present the Bill of entry for home consumption. ii) Bill of entry for warehousing (into bond, yellow in colour): Where an importer wants to shift goods to a warehouse and thereafter gets his goods cleared in small lots, he has to present 'into bond' bill of entry. Reason may be that he is unable to pay duty leviable on all goods at one instance or may be because of storage problem. iii) Ex.-Bond Bill of Entry (Green in Colour): When an importer wants to remove goods from the warehouse, he has to present an Ex-bond bill of entry which is green in colour. a. Bill of Entry is not required in the following cases: b. passengers baggage favour parcels c. Mail box and post parcels D. boxes, kennels of cargos containing live animals or birds E. unserviceable stores, e.g. dunnage wood, empty bottles, drums etc. of reasonable value F. ship’s stores in small quantities for personal use G. cargo by sailing vessels from customs ports when landed at open bundles only For imports through the medium of post there is no bill of entry. Instead a way bill is prepared by the foreign post office for assessment of duty. (3.3)RETIREMENT OF IMPORT DOCUMENTS:

(a) Loading of Goods and Receipt of Shipment Advice: - On loading of goods the overseas supplier dispatches the shipment advice to the importer informing him about the shipment of goods. The shipment advice contains invoice number, bill of lading, airways bill number and date, name of the vessel with date, the port of export, description of goods and quantity and the date of sailing of the vessel.' (b) Retirement of Import Documents: - After shipping the goods, the overseas. 40' supplier prepares the necessary documents as per the terms of contract’ and letter of credit and hands them over to his bank for their onward negotiation to importer in the manner as specified in the L/C. The set normally contains bill of exchange, Commercial invoice, bill of lading, packing list, certificate of origin, marine insurance policy, etc. For the retirement of documents, the importer is required to submit the following documents to his bank: (a) A letter authorizing his bank to debit the equivalent Indian rupees to the value of documents including bank charges. (b) Exchange control copy of the Import Licence, if applicable. Form Al duly completed for the remittance in foreign excl1ange. c) Acceptance of the bill of exchange: - bill of exchange accompanied by the above documents is known as the Documentary Bill of Exchange. It is of two types:Documents against Payment (Sight Drafts):- In case of sight draft, the drawer instructs the bank to hand over .the relevant documents to the importer only against payment. Documents against Acceptance (Usance Draft):- In case of usance draft, the drawer instructs the bank to hand over the relevant documents to the importer against his 'acceptance' of the bill of exchange. (d) Scrutiny of Documents Received under L/C:- After receipt of import documents from the exporter's bank, the importer's bank will scrutinise the documents as to their correctness as per the terms and conditions of L/C and hands over them to the importer after payment. The importer should also scrutinise the documents and ensure that there are no discrepancies. (e) Appointment of C & F Agent: - In India, the procedure for clearance of imported goods is very lengthy, time consuming and involves lots of legal formalities. Therefore, it is advisable to hire the services of C&F agents who are well versed with such formalities. The C&F Agent prepares the bill of entry containing details of goods to be cleared from the customs. In case, the C&F agent does not have relevant information about the goods to be cleared, he prepares a bill of sight in order to enable himself to physically check the goods imported and prepare bill of entry on that basis.

(3.4) CLASSIFICATION OF GOODS FOR IMPORT POLICY & ASSESSMENT OF DUTY Most of the goods imported are assessed and valued for calculation of import duty provided they are imported in terms of the Import Policy and evaluated for calculation of customs duty by virtue of the nature of goods or by virtue of its end use. The imported goods, which do not fall in parameter of the Import Policy, are' normally confiscated or allowed to be cleared only on payment of heavy penalty. Types of Customs Duties The following types of Customs Duties are levied on goods imported into or exported out of India: (a) Basic Duty; - Basic duty is levied on all goods imported into India as prescribed in Schedule-I of Customs Tariff Act. This duty is levied as a percentage of value of goods imported or at a specified rate. (b) Auxiliary Duty; - This duty was levied in addition to the basic duty prescribed under the Finance Act every year. However, with effect from 28th February 1993, the government has withdrawn auxiliary duty. (c) Additional or Countervailing Duty; - This duty is levied on the total cost of imported goods at the rate equal to excise duty on like goods when manufactured in India. This duty is levied to protect the domestic industry. (d) Specific Duty: - This duty is levied in order to counter balance the excise duty leviable on the imports going into the production of such goods in India. (3.5) Mode of Levy of Customs Duty: (a) Specific Duties: - Specific duty is a duty imposed on each unit of a commodity imported or exported. For example, Rs.5 on each meter of cloth imported or Rs.500 on each T.V. set imported. In this case, the value of commodity is not taken into consideration. (b) Advalorem Duties: Advalorem duty is a duty imposed on the total value of a commodity imported or exported. For example, 5% of F.O.B. value of cloth imported or 10% of C.LF. Value of T.V. sets imported. In this case, the physical units of commodity are not taken into consideration. (c) Compound Duties: - Compound duty is the combination of specific and Advalorem duties. In this case, the quantities as well as the value of the commodity are taken into consideration while computing tariff. For example, 5% of F.O.B. value plus, 50 paisa per meter of cloth imported. (3.6) Valuation of Goods:

Valuation of goods is done as per principles and down in Customs Valuation Determination and Prices. Of Imported Goods) Rules, 1998.

(3.7) Demurrage Charges The goods imported and discharged in the Customs area are stored in the warehouses of CWC or Port Trusts or other designated authority. Initially, such goods are allowed to be stored freely for few days and thereafter demurrage or storage charges are levied. The “Free Period" for different cargo is different as under:(a) Commercial and Non-commercial Cargo: - 7 calendar days from date of landing. (b) Unaccompanied Baggage: - 14 calendar days from date of landing. Direct Delivery Facility for Imports by Air: - The facility of 'Direct Delivery' of goods imported by air-is allowed in certain cases: (a) Goods like fresh fruits, frozen food, life saving drugs and appliances, TV films; (b) Any cargo requiring special handling or storage; and (c) Any cargo in respect of which order of the Deputy Collector of Customs, Air Cargo Unit, have been obtained in advance permitting direct delivery. (3.8)BILL OF ENTRY The bill of entry is a document, prepared by the importer or his clearing agent in the prescribed form under Bill of Entry Regulations, 1971, on the strength of which clearance of imported goods can be made. When goods are imported in a particular country, the importer has to pay the necessary import duty. For this purpose, necessary information about the goods imported must be given to the customs authorities in a prescribed form called bill of entry form. Bill of entry is a document, which states that the goods of the stated values and description in the specified quantity have entered into the country from abroad. The bill of entry is drawn in triplicate. The customs authorities may ask the importer to supply other documents like invoice, broker's note and insurance policy, etc., in' order to verify the correctness of the information supplied in the bill of entry form.

Types of Bill of Entry:

For the purpose of giving information in the bill of entry form, goods are classified into three categories namely: (a) Bill of Entry for Goods Imported for Home Consumption (White colored):- This kind of bill of entry is used for clearing imported goods by paying customs duty at the port. (b) Bill -of Entry for Bonded Goods' (Yellow colored):- This kind of bill of entry is used when no duty is paid on imported goods and, therefore, they are transferred to customs recognized bonded warehouses. (c) Bill of Entry for Ex-bond Clearance for Home Consumption (Green colored):- This kind of bill of entry is used where the importer intends to clear the dutiable goods, either in part or full, from a bonded warehouse by paying necessary duty. Contents of Bill of Entry The main contents of the Bill of Entry are: (a) Name and address of the importer. (b) Name and address of the exporter. . (c) Import licence number of the importer. (d)Name of the port/dock where goods are to be cleared. (e) Description of goods. (f) Value of goods. (g) Rate and amount of import duty payable. (h) Other relevant documents. However, no bill of entry is required in the following cases: (a) Passengers' baggage; (b) Favour parcels; (c) Mail bags and Post parcels; (d) Boxes, kennels of cages containing live animals or bird~; (e) Post parcels ship stores in small quantities for persona, use. (f) Un-serviceable stores, such as, dunnage wood, empty bottles, drums, etc., of reasonable value (below Rs. 50); (g) Cargo by sailing vessels from Customs Ports when landed at open bunders only. PROCESSING OF THE BILL OF ENTRY Once the Bill of Entry is completed by the Appraiser, and the same has been countersigned by the Assistant Collector, then it is forwarded to the License Department for debit and audit, and thereafter returned to the importers for payment of duty in the Accounts / Cash department. After recovery of duty, the original Bill of Entry is retained in the Accounts Department and the duplicate and other copies are returned to the importers for getting the goods examined in the docks. In the Docks, Shed Appraiser / Examiner shall examine the goods, and if the consignment is in order, he will give the out of charge for payment of the Port Trust Charges. This procedure under which 80 to 90%

of the consignments are being cleared is known as the Second Check Procedure. As against this, in the alternative procedure what is known as the First Check Procedure, the Scrubnising Appraiser in the Group gives the examination order. The goods are then examined in the docks and the Bill of Entry returned to the Scrutinizing Appraiser for completion and licence debit. In this case, the Customs out of charge is given by the Accounts Department soon after the recovery of duty. This procedure is resorted to only in cases where the appraisers or the assessing Group finds it difficult to complete the assessment on the basis of the documents made available. The import consignment can be opened only by the proper officer of the customs for examination of the goods lying in a Customs Area. Examination of cargo for assessment \ purpose is chiefly the function of the Appraising Department having special staff of Examiners in the docks / Air Cargo shed. 'The result of the examination or weighment is noted on the reverse of the Bill of Entry. It is absolutely essential that records of examination and weighment should be made, attested and dated at the time of examination or weighment. If examination or weighment takes place on more than one day, the result of examination or weighment made on each is clearly recorded. The Officer at the same time, obtains on the documents the importer's or his accredited representative's signature on the entries made from day-today showing the result of weighment. (3.9) A NOTE ON FORWARD CONTRACT International contracts are either concluded in Indian rupees or in foreign currency. If the contract is concluded in terms of Indian rupees, all relevant documents are prepared in Indian rupees and hence no conversion is involved. However, if the contract is concluded in some internationally accepted currency then the importers have to pay Indian rupees equivalent. To the amount of foreign currency. Where the international contract has been concluded in foreign currency, an importer is always at risk due to adverse fluctuations in the exchange rates in the international market. Such risks can be avoided by the following methods: (a) Invoicing the Goods in Indian Rupees: - The first remedy to adverse movements in exchange rates is invoicing goods in Indian rupees. However, foreign seller may not agree to invoicing goods in Indian rupees. (b) Entering into a Forward Exchange Contract: - This is the most commonly practiced alternative for insuring the risks arising out of adverse movements in exchange rates. Under this adjustment, the importer enters into contract with its bank to purchase from the bank, foreign exchange at a future date or period and the bank agrees to sell the firm the foreign exchange on that date or during the agreed period at certain predetermined rate agreed upon at the time of entering into contract. Thus, the importer knows in advance the exchange rate that he is going to pay on delivery of import documents.

Chapter-4 Import Products From China

(4.1) Introduction: We are importing many products from China because products are very cheaper than Indian market and they fullfill the needs of our citizens Because of cheaper prices products made in China are becoming more popular among the Indian masses. Cheap chinese products are kind of relief to the lower middle class in India. Companies operating in India are facing a good competition against these chinese products as In india middle class consumer market is very big which got badly affected because of these products.Well consumer are basically two types -one who wants best features at affordable prices, and the others who go with quality and brand tag. Chinese product have benifitted the consumers of first category. There is a huge demand in India for low-cost, less durable consumer goods, from China. These goods are very popular with people who wish to buy the fake versions of their favorite brands at throwaway prices. These products are being sold at the cheapest rate and wages of poor people has not beein raised, therefore, they stick to these products due to their poverty. (4.2) There are many types of products which we Import such as: Products • Agriculture & Food • Apparel & Accessories • Arts & Crafts • Auto Parts & Accessories • Bags, Cases & Boxes • Chemicals • Computer Products • Construction & Decoration • Consumer Electronics • Electrical & Electronics • Furniture & Furnishing • Health & Medicine • Industrial Equipment & Components • Instruments & Meters • Light Industry & Daily Use • Lights & Lighting • Manufacturing & Processing Machinery • Metallurgy, Mineral & Energy • Office Supplies • Security & Protection • Service • Sporting Goods & Recreation • Textile

• • •

Tools & Hardware Toys Transportation

Some Important Products which we import in huge quantity are as : (4.3) Agriculture and food products:Introduction: China is the world’s sixth largest economy and its most populous country, home to 1.3 billion people or 21% of the Earth’s total population. But it faces a major challenge in providing its people with food – China has only 10% of the world’s arable land and only one quarter of the average world water resources per person.

Agricultural reform has therefore been a major pillar of the fundamental economic reforms undertaken by China since 1978, resulting in a gradual transition from a centrally planned economy towards a socialist market economy. The commune system was replaced by one where individual families lease land from the collectives, ensuring that almost all rural households have access to land. Then, rural industries started to expand and absorbed a large part of farm labour. The reforms have achieved a sharp rise in agricultural production together with a dramatic fall in poverty and a significant improvement in the amount and quality of food available.

Related products are: (4.3.i) Frozen Vegetables :

(Frozen Vegetables ) Frozen green bean, frozen broccoli, frozen green peas, frozen green asparagus, frozen spinach, frozen chopped spinach, frozen taro, frozen green pepper slices, frozen cauliflower, frozen lotus root, frozen Romano beans, frozen black fungus, frozen diced

(4.3.ii) Food Plastic Bag

Product Description Features Specifications: Plastic Lamination Pouch/plastic bag/lamination bag/food bag/ Vacuum pouch/packaging bag 1) Material: Lamination from high quality BOPP, PET, PA, CPP, AL, PE for the packaging bag 2) Suitable for dozens of food packaging, pet food, beverage, agriculture, daily Chemical products and tea packaging 3) Good printing quality, low temperature heat sealing property, high transparency, Excellent moisture, oxygen and gas barrier.

(4.4) Electrical & Electronics products :Introduction: : India is heavily dependent on imports of electronic goods from countries like the US and China to meet its domestic demand. "Meagre spending on R&D by electronics industry has increased India’s dependence on electronics imports . India had imported electronics goods worth USD 19.77 billion in the recent times, while the export earnings were USD 3.17 billion, the study said adding that more than 70 percent of electronics appliances demand is met through imports."...more than 35 percent of electronics appliances imports in India are sourced from China,"

Related products: (4.4.i) AC Motor (YB2 Seires Explosion Proof Motor)

Introduction: AC Motor (YB2 Seires Explosion Proof Motor) Model NO.: YB2 Standard: IEC Productivity: 5000/month Unit Price/Payment:TT or L/C at sight Trademark: kailida Usage: Industrial Power Source: AC Motor Structure: Asynchronous Motor Function: Driving Product Description AC Motor (YB2 Seires Explosion Proof Motor)

(4.4.ii) Car Refrigerator (DC-22Y)

Introduction: Car Refrigerator (DC-22Y) Packing: normal standard package Model NO.: DC-22Y Standard: W509*D310*H394MM Productivity: 2000pcs/month Unit Price/Payment:FOB Foshan, guangdong Trademark: colku Origin: foshan, guangdong, china Min. Order: 1*20'GP Transportation: ocean shipping Capacity: 11-20L Certification: CE Voltage: 12V Product Description Car cooler/mini cooler/cooler box/car fridge/Compressor refrigeratro/car refrigerator/mini refrigerator/portable refrigerator/outdoor cooler Features Extremely powerful DC compressor cooling system. Boundless independence for all outdoor enthusiasts Silent and convenient cooling comfort anywhere. Multifunctionally, fridge and freezer all in one, Extremely high reliability and long life expectancy. Polyethylene rotomoulded body, unbreakable & rust free, Digital control with LEC display. Compact overall size, easily accommodate anywhere. Item no. DC-22Y Temperature -18~10° C(40~45° C below ambient) Rated Voltage AC 230V/50~60Hz or 110V/60Hz Power Input DC 63W Cooling type DC Compressor cooling system Refrigerant R134a (CFC-Free) Isolation C-pentane (CFC-Free) Weight 13KG/net, 15KG/gross

Unit Size W509*D310*H394MM Packing Size W532*D376*H455MM Loading Quantity 330pcs/20GP, 660pcs/40GP, 660pcs /40HQ0.

(4.4.iii) Air Conditioner

Air Conditioner Product Description COP>4.5, powered by 48/24VDC, * This series products can be widely deployed for elclosed area climate control such as wireless communication caniet, battery cabinet, industry control cabinet etc. * the internal and external interface of product is IP 55 level to avoid moisture, dust, water penetrating into inside of enclosure, inside electronics equipemnt is completely well protected. * applicable for severe ambient environment, such as high temperature, high humidity, high corrpsion atmosphere. Product design feature * less dehumidifying comparing traditional air conditioner * environmental friendly refreigerant such as R134A * heat pressure smart control function to enable active cooling work in winter season * completely safety protected accordingly UL, EN, CCC norms * alarming output to monitoring system * interchangeable and visual display adapter for service * automatic self start after power recovery * remote control through RS485 comm. Port * proper design for easily intallation and service * side/door mounting * applicable for T3 condition

(4.4.iv) Bluetooth Car Kit (ESB302)

Introduction: Bluetooth Car Kit (ESB302) Packing: Blister Model NO.: ESB302 Standard: CE, ROHS Productivity: 100K/Months Origin: Shenzhen, China Min. Order: 500PCS Type: Bluetooth Car Kit Export North America, South America, Eastern Europe, Eastern Asia, Western Markets: Europe,India Product Description - Safe Driving with entertainment - Steering wheel Bluetooth Car Kit with DSP, support Bluetooth hands-free phone call - CRS Bluetooth version 2.0+EDR - LCD Display for caller ID, frequency, sequence, etc - Support last phone call redial - Built-in speaker and Micro-phone for phone talking - Wireless headset for privacy phone call also with earphone jack - Built-in re-chargeable battery - Built-in FM Transmitter with 206 preset channels - Play MP3 from TF or SD card in With TF or SD card slot in car stereo system

(4.4.v) Solar System Battery Series 12V100S

Introduction: Solar System Battery Series 12V100S Model NO.: 12v100S Trademark:LONGWAY Product Description Model: 6fm100g(12v100ah/10hr) size: 327*170*216 (total height 223 ) mm more size available terminal: b 10hr: 105ah packing qty: 1 pcs/ctn 750 pcs/container lead-time: 15 days for one container application: ups, inverter, solar system oem acceptable battery 12v100ah: 105ah/10hr hs code: 85072000 trademark: long way model:12v100ah standard:jis iec productivity: 40,000 pcs unit price/payment: fob cif cnf/tt or l/c at sight origin: guangdong, china packing: 1pcs/ctn min. Order: 60 pcs transportation: by sea

(4.4.vi) Offset Dish Antenna (YH45KU-IV)Satellite 45cm

Introduction: 45cm Offset Satellite Dish Antenna (YH45KU-IV) Model NO.: YH45KU-IV Standard: CE & UL Productivity: 200, 000pcs/month T/T in advance or Unit Price/Payment: L/C Trademark: Yoohon Product Description Material: Steel board Surface: Polyester powder coating Short axle: 45cm Long axle: 49.5cm Ku waveband gain at 12.5GHz: 34.22dB F/D radio: 0.6 Focal distance: 270mm Stand: Wall and/or ground mount Angle of elevation: 0 to 90º C Level: 0 to 360º C Wind speed: Can receive: 25m/sec Can replace: 40m/sec Working temperature: -40 to +60 C Top of Form Bottom of Form

(4.4.vii) Radio With USB And SD (GF-723)

Introduction:

Radio With USB And SD (GF-723) Model NO.: GF-723 Min. Order:1600pcs Product Description: Am/fm 2 band radio USB function, with sd DC: 6v

(4.4.viii) Appliance World and Home Theater - The World Of Electronic Goods!

Appliance and World and Home Theater is the safest option if they are looking for electronics and other appliances. The store known for its quality products is one of the leading electronic stores . The store offers the best prices and products to its customers. The products of almost all the leading brands can be found here. From Whirlpool to LG to GE, the products of all big brands are available here. The staff is very friendly and cooperative and they make sure that their customers get the best offers. Appliance World and Home Theater is thus the obvious choice for the people of our country. Its products are of supreme quality and extremely durable. It's hard to find better products than what one gets at this store. From dishwashers to microwaves to refrigerators, the store offers the best in everything. The latest models are displayed here and customers can carefully look at all of them before choosing what suits them the best. Everything related to their stores can be found out on the website. From the store's address, nearby landmarks to its phone number, everything can be traced from the site. A site map is also present which describes the routes in detail. All this makes it easier for the customers to locate the store. The site also tells the timings of the store so that people can plan their visit accordingly. It mentions the days on which the stores are closed to avoid any inconvenience.

(4.5) Other Products (4.5.i) Fake Brand Shoes

Detailed Product Description Beautiful seasons,fresh products! With our fashionable brand shoes, you will make this season more wonderful. The shoes of Dunk, Nike, Jordan, Bap Air force can give your feet a comfortable and easy home! Popular shape, fashion design and various colors show you a perfect picture. Many choices are prepare for you,no matter you are men, women or kids. So pls quickly visit to our website for these lovable leisure prodcucts. and tell me your idea with by your convenience.

Chapter – 5 Chinese Market in India (5.1) Introduction: Been to a market which glows with Bright Red Color in the morning and light bulbs in the night. If not, then this is the market where you should go. Filled with Red color products, be it electronic items, toys, dolls, dresses, carpets or curtains. A variety of

products can be found in the Chinese Market. With the Indian Market flooding with Chinese Goods, this is one place where Chinese Goods are sold at length. Brightly colored, cheaply priced and good to use for a couple a months, these are liked by the people who cannot afford very highly priced products or by those who do not have a long term use of the particular item. (5.2) Location : Chinese Market is located near the Kirti Nagar Mall of Old Delhi. It can be easily reached by cabs or taxis. Fast Facts City Name - New Delhi Market Name - Chinese Market Famed For - Chinese Products. Language Spoken - Hindi, English, Chinese Best Time to Visit - November to February (5.3) Shopping Spree in Chinese Market : » Meena Bazar- This Market opened by Noor Jahan for the ladies, still stands today; though the look and the products sold here have changed with the time. Perfumes, Artificial Jewellery, Leather Products, Souvenirs and Traditional Dresses are the main attractions of Meena Bazar. » Chinese Bizaree- The first name which comes with the Chinese Market is the Toys. Bright red colored toys with the combination of yellow and Green, its one of the places where you can really buy Cheap Toys for almost all ages. Then there are the clothes polyesters and tervinyls are names here to be found in every second cloth shop. There is another thing for which Chinese Market is famous for - Electronic goods. Almost every electronic good can be found here - spare parts, sockets, wires, full pieces all are here. The prices of these items are also very cheap but there is no warranty for these goods. How long they will work is no ones headache. But there is one Guarantee - even if the Electronic good works for a day, then it will be the best ! Chinese Market is usually crowded, with lots of people coming here on an average. With them comes the noise and the voices of thousands of feet - but that is the main attraction of the Delhis Chinese Market. (5.4) Suggestions: Chinese Market is all about second grade Chinese Products. None of the Indian Products can be found in the Chinese Market.

Chinese Products are cheaply priced but they have no guarantees. Its upto you to buy them. All the Electronic items sold in the Chinese Market, come with one agenda - use and throw. Toys can be purchased from here. Some of the average Restaurants and eating Joints can be found here. But its preferable to have food in your Hotel. If you are coming to the Chinese Market, then make a half day plan to see the entire Market. As there will be all time walking, then there should be some time to rest. If you are shopping in the months of March to June end, then its best to shop in the evenings after 6 o'clock. Beware of the Thugs in the Chinese Market. Things once lost cannot be recovered because of the huge Crowd in the Market. Its better to leave the Valueables like passport in the Hotel Locker. Money Converters can be easily found in Delhi City. However, its difficult to find them in Chinese Market and the around areas. However, you may find one or two Branches of Western Union in the corners or else you can go to Bank of India and State Bank of India for Money Conversion.

Chapter 6 Impact of Chinese products in India: Introduction (6.1) Impact on our Economy:

Cheaper prices products made in China are becoming more popular among the Indian masses. This has had a very negative effect on our own manufacturing units and as a result many of them have had to shut shop. The Chinese goods have invaded almost all the sectors of Indian market and seem to be bringing tougher times for the Indian Industry. Because of wide availability of cheap and apparently technologically advanced Chinese goods, many economists fear decline of local manufacturing units or the small-scale industry in India. The rise in demand and sudden popularity of Chinese products, which are available at cheaper prices, is giving nightmares to the Indian industry to the extent that they have started sticking “Made in China” stickers on their products to boost their sales. Chinese manufacturing units produce goods on a large scale. They are using the big Indian market merely to dump their products and by doing so they are killing the Indian units. For example last year during Diwali, China made crackers were sold in the Indian market. These crackers reportedly contained Sulphur. Sulphur is more harmful than Nitrate, which is used in India to make crackers. Since the Chinese crackers were cheaper than the Indian crackers, so they managed to attract gullible and largely illiterate Indian lot. As a result the Indian cracker industry saw a decline in the revenue. China is our major competitor in sectors like software, hardware, electronics etc. We should not allow China to dump their excess produce here. The small-scale industry (SSI) contributes 35-40 per cent to the total manufacturing in India. So it is the SSI, which suffers most because of Chinese goods. For instance, data reveals that 60 per cent of the industrial units in the industrial belts of Thane and Bhivandi near Mumbai have been closed down. Many small-scale Indian companies have stopped manufacturing their own goods as now they import them from China. That’s why many Indian workers have lost their jobs. This shows that the objective of SSIs of providing employment to the rural youth of India is defeated completely. In the last one decade Chinese labour has developed the skills of manufacturing electronic goods like semi-conductors, telecom equipment, power equipment etc, which helped them to capture big markets of America and Europe. It is no surprise that they have been successful in capturing the Indian market too. Although Indian labour can meet these challenges by improving their skills, the Indian manufacturing scenario is hampered due to stringent and weak labour policies. It is the high time that our political leaders change their mindset and bring about the right kind of reforms without losing precious time in endless discussions. We must take necessary steps so that we do not fall prey to the DRAGON’s designs of capturing a major share of our growth, which could prove to be a setback for our economy in the future. (6.2) Cheap imports may hit India's steel market:

India — China’s decision to cancel export duty on some 102 steel products could see it flood Indian markets with cheap priced steel items, the Indian steel industry feels. The industry is already reeling from falling demand, crashing prices and high production costs. China, the world’s largest steel producer, announced two weeks ago that it would remove the 5 percent levy on steel exports from December 1, to boost its steel industry, which has been severely hit by the global slowdown. According to industry sources in India, exporters in China have started shipping steel to India at “ridiculously low prices,” in a bid to clear stock. Due to the removal of the export duty, Chinese steel prices, currently, the cheapest in the world will encourage already sliding local demand to shift to Chinese imports. “The current global economic slowdown has led to a decline in the demand for steel and thereby the prices, whereas, the prices of raw materials for steel industry have remained firm over the period, affecting the viability of the sector. Leading steel companies like Steel Authority of India and JSW Steel have reported 25 to 30 percent dip in consumption demand and have, consequently, resorted to production cuts. However, the local steel industry faces a much harder blow from imports. According to the steel ministry, India’s steel imports have shot up 50 percent to about 3 million tons from April to September last year, compared to the same period last year, out of which at least a million ton came from China. “The fear is that with China taking measures to boost exports and with no adequate protection within the country, much more of Chinese steel will start entering in the next few months impacting the local market severely.. In a recent address to the industry, minister for steel, Ram Vilas Paswan said that at the current rate of imports, India may end up importing 6 million tons of steel by March 2009 accounting for over 10 percent of its current steel production, which is 58.64 million tons. The reason why India is scared of China the most compared to other steel exporters -after all India also imports steel from Ukraine and Taiwan where prices are almost as cheap -- is the fact that China’s steel industry too is suffering from excess production and falling consumption, which are forcing it to adopt aggressive measures to ship out existing stocks. According to Market Avenue, a Beijing based business intelligence outfit, China will add 50 million tons to its steel production capacity this year, which will take its total output to 400 million tons by the end of the year. But, even as China is producing capacity relentlessly, its consumption is taking a hit. Steel Business Briefing, a China-based steel consultancy outfit predicts that steel consumption in China will grow by only 8-10 percent in the second half of next year, as little as half the 16 percent growth seen in 2008. Nevertheless, heeding the industry pleas for taking it out of a “serious situation,” India reimposed a duty of 5 percent on steel imports last week. The duty was removed six months ago to stall steel prices in the country that were ruling at all-time highs of over US$1,100 per ton. Moreover, import restrictions were also imposed on some items of finished steel products like seamless tubes and pipes from China. Still, the industry says, that’s hardly enough. “The 5 percent (import) duty may not be adequate because despite the duty, the landing cost (of imports) is lower than the production cost of local steel makers. While China is offering steel at US$440 per ton,

domestic prices in India are ruling at almost US$700. So, the latest duty would push import cost by just US$22 per ton.

(6.3) Cheap Chinese goods harming Indian industry: The government is taking measures to counter the threat posed to the domestic manufacturing sector in India, especially from the small and medium scale segment, from cheap and subsidised Chinese products, the commerce ministrys said today. India imposed anti-dumping duty on Chinese goods in 22 cases, including final duty in 12 cases and provisional duty in 10 cases, during 2008-09 and 2009-10 (up to November 2009). Final safeguard duty was imposed in 4 cases during the two years, a government release said today. These duties are in accordance with the Agreement on Anti-Dumping (the agreement on the implementation of Article VI of GATT, 1995), the agreement on subsidies and countervailing measures, and the agreement on safeguards, the release said. These provisions are aimed at offsetting the adverse effects of 'dumped' imports, 'subsidised' imports or 'increased' imports, it added. India's merchandise imports from China doubled during the last 3 years to Rs1,47,605 crore ($32.05 billion) during the financial year 2008-09 from Rs1,09,116 crore ($23.69 billion) in 2007-08 and Rs79,008 ($17.16 billion) in 2006-07. The government said trade defence measures are available to the domestic industry to counter unfair trade practices followed by exporters of goods from other countries. In case a product is imported into the country at less than its normal value, and it causes injury to the domestic industry, the domestic industry can make an application to the Directorate General of Anti-Dumping and Allied duties (DGAD) in the department of commerce for imposition of anti-dumping duty, the release said. Alternatively, the affected industry or unit can make an application for imposition of safeguard duty to the Directorate General of Safeguards under the ministry of finance, in case there is serious injury/market disruption, or threat of series injury/threat of market disruption to the domestic industry, as a consequence of increased imports of an article into the country, the release added. Under section 3 (2) of Foreign Trade (Development and Regulation) Act, 1992, the central government has an inherent power to impose restrictions on import of goods. The Customs Tariff Act, 1975 includes provisions for providing relief to the domestic producers against injury caused to them by imports.

(6.4) Why are we Importing electronic products from china? Wholesale Electronic Products - Reasons to Buy From China China is now being considered as one of the biggest giants in producing electronics items in reasonable price range. Therefore, those in trading business of imported electronic items may find it convenient to have electronics goods buy from China. Even international locations like USA and some European traders are importing electronics items from China at regular basis. Consistent supply, good quality, and reasonable price are three pillars of electronics export market of China. If a business unit wants to buy from China at wholesale rate, it has to follow some easy methods of import. Because of the flexible import policies, business with China is easy and hardly needs any special effort to run the business under smooth spell. The electronics goods from China are of good quality and highly affordable thus proves costefficient for trading. The market trend of China has reached at its full pace due its wide array of goods, especially of electronics items, which is manufactured at the fraction of its regular cost with accuracy and precision. However, in case of electronics products, the one of the prime reasons to buy from China for the importers is its good and consistent quality in spite of its low cost. In the same category products from Japanese origins are costlier as well as import policies are not that flexible as China policies. If an importer approaches China ship agents to coordinate the import sale deal it has provision for minimizing over all cost for the entire business transaction. However, it is always better to skip the involvement of middlemen in the course of the import business otherwise unit price for the electronics item will be higher. While planning to purchase from China, it is always recommended to contact China vessel agents and they can help the importer to find out the best possible deal in terms of price in electronics products. In short, for running import business, the involvement of shipping agent will help to keep the wholesale electronic goods prices at the lowest range. On the other hand, the combo of quality and aesthetics has kept the demand of China electronics products ahead of other products of the same category. Recent research and study have shown the fact that the technological advancement of China electronics industry has made the production quality of China with South Korea, Japan, and even with the electronic goods made in Taiwan and it has merged as one of the leaders in Asian force of electronic consumer goods industry in 21st century. Besides this ranking, China is ranked as one of the most eye-catching consumer market on electronics items from the investment point of view. These statistics has expressed the facts that China export market of consumer electronics item has taken a steady pace and it is worth importing consumer electronics item from China. China has been now tagged as the world factory of electronics goods item at reasonably lower cost; the low- set up cost to low- labor cost and corporate low tax level has helped the price tag to be on the lowest side and good quality against low price factor has

emerged as one of the main reasons to buy from China market for the importers across the world.

(6.5) Chinese Handsets Flooding the Indian Mobile Stores: The Indian mobile phone market is flooded with new handsets every week. Makers from all over the world are recognizing the potential of the Indian markets. Manufactures are adhering to the needs of the people and are customizing their handsets to suit the Indian buyers. The urban market has been exploited and the penetration is soaring this is evident with the growing number of mobile stores. The semi-urban and rural markets are next in line to avail this convergent medium of communication. The low priced Chinese handsets are becoming an easy buy for the Indian consumers. The lifestyle handsets are not yet preferred of Chinese origin but the entry-level ones are highly popular. The cheap pricing with basic functions suits the routine of the semi-urban and rural crowd in India. While most unaware of English language the Rs. 800 handset from Spice mobile has no display screen but a voice based application which helps in dialing numbers. The mid-range handsets are not yet popularized by the Chinese products and so is the higher end range. The buzzword in the Indian mobile industry is the rural market the Chinese makers are raking in business and profits. Orpat, a watch making company also entered the rural mobile market industry by manufacturing their handsets in China. It is about time when mobile handsets are extensively produced in India. While being one of the most communication hungry nations it should thrive to start production for the same. To venture into this obvious growing market mobile phone producers thought of opening manufacturing plants in India. But due to the bureaucratic structure the process was elongated. Thus many manufacturers moved their base to China for production. The Indian mobile phone market is flooded with handsets produced from China but marketed and sold in India. Even China’s big guns in mobile production like ZTE, Bird International and Kejian have forayed into the Indian mobile phone market and are expanding. ZTE has a huge share in the CDMA (Code Division Multiple Access) market. Most of the entry level, basic utility phones to mid-range phones is manufactured by ZTE. They supply handsets to players like Reliance Communications and Tata Teleservices. Even Spice mobile which has been famed for its dual-sim capacity handsets it also rolling out a series of cheap handsets. These handsets will be priced as low as Rs. 800. With the kind of technology and marketing the costs could be further lowered. It is about time we see the rural markets flaunting mobile stores and the mobiles selling like hot cakes.

(6.6) Chinese goods are creating problems: China the growing market is producing the cheaper goods and exporting to all over the world. Many goods are manufactures in china and you can always see Made in china label even you purchase an electronic DVD or LCD from USA or UK. In China the cost of manufacturing is very less because of cheaper labour and bulk quantity of the production. Hence the Chinese goods are much cheaper compare with local products Because of this every company like Sony, Panasonic etc will manufacture their goods in China and import them to their countries. Of late many countries are not allowing the Chinese goods to be imported to their countries. The examples are USA has banned Chinese toys as these creating health problems to children, the milk powder also banned Chinese goods are dumped every where, you can see China market every nook and corner of the country. The most popular goods are plastic , home appliances, watches, cell phone and even the Hindu gods photos also printed in china. Many people flock to China markets because of the cheaper cost compare with local goods. Many manufacturing companies like Auto mobile and tyre are also facing the heat. Many companies are protesting to ban the Chinese import, the import of Chinese goods are harming the local markets. The latest is Banarasi saree industry in Varanasi Scores of handloom weavers took to streets. Varanasi, famous for its world renowned Banarasi sarees, against the cheap quality Chinese imitation products flooding the market. The Banarsi saree industry has also been adversely affected due to the import of cheap Chinese fabric. Powerloom owners have been producing cheap imitation products at various places, helped by computer-assisted copying of designs. According to protestors cheap imitation products are doing roaring business while highly skilled weavers who produce the original product suffer. "Earlier we used to do good business in Banarasi sarees, but slowly it started falling, because of the Chinese sarees which are being sold at lesser price than our sarees. Banarasi sarees require more labour, money and expensive raw material, but people are selling imitation of Banarasi sarees in cheap quality Chinese material, so our business is being affected badly. After facing lot of hardship we have today decided to take to streets as for how long can we go on living in penury?" said Razia Begum, a protester. According to data available through Non-Governmental Organisations (NGO's) working with the weavers, the number of people employed in the once thriving industry has reduced from around 700,000 people to 250, 000 people only. Imports from China to India had galloped pace from $11 billion to $27 billion in the last three years. Among all the countries in the world, India imposed the maximum measures and ordered the highest number of probes (31) into dumping of goods from different countries, including China, during July 1 to December 31, 2007, according to the World Trade Organisation. Chinese products faced the maximum number of anti-dumping measures, accounting for nearly half (26) of the 58 new measures. China was most frequently subjected to new investigations, with 40 measures directed at its exports between July and December 2007, slightly up from the 39 investigations on exports from China that were reported for the

corresponding period of 2006. Sectors that are hit hard with imports from China are machinery and equipment, chemicals, textiles, base metals and auto components Solutions • Government should ban the imports of Chinese goods immediately • Under intellectual property rights patenting should be encouraged for traditional goods like Banaras saree, Tanjore painting etc • People also should not flock for cheaper goods as these good are not good as far as quality is concern If correct measures are not taken immediately the manufacturing industry, traditional industries like Banaras saree will face problems.

Chapter -7 Chinese goods: Boon or bane? (7.1) Boon or Bane:

The recent flooding of Chinese goods into the Indian market has raised a hue and cry, and the question whether we should accept this silently. From the narrow viewpoint of the average consumer, sufficiently satisfactory quality goods are available at roc k-bottom prices. For instance, the prices of China-made compact fluorescent lamps are less than the prices of lamps of well-established Indian brands, and of comparable quality. With the tremendous explosion of communications technology, countries are finding it increasingly difficult to maintain closed-door policies. Consumers are becoming more aware of the availability of various technologies. The inefficiencies of companies a re exposed to competition from efficient enterprises, and the market share of the laggards is diminishing rapidly. Traditional manufacturing industries in India were reaping profits at the cost of both consumers and workers till the early 1960s. With the growth of socialism, the workers started asserting themselves under the banner of trade unions. Due to this pressu re, public sector units registered tremendous growth and large private enterprises were also able to record higher profits. In the early 1980s, with liberalisation, the majority of non-Left parties, in cooperation with various industry associations and some economists with `western outlook', started supporting the idea of globalisation at the cost of national interest. One basic fact that cannot be ignored is India's large population of diverse culture and religion. Even China -- with its large area and population -- is not comparable. To keep the country together with a socially stable set-up, the Indian model of econ omic development has to be different from traditional Western models. The right economic model should provide social stability in terms of gainful employment for the masses. But the new economic model, with the advent of information technology, has given rise to a new class of people whose salary levels, on the one hand, h ave risen to dizzying heights and, on the other, reduced the employment opportunities of the middle-classes. Organised industry has resorted to employing labour contractors on a daily-wage basis, bypassing the statutory provisions of facilities and, in effect, reducing the wage levels for the majority. Even very profitable concerns have lured employees into vol untary retirement schemes. As a result, people below retirement age, who opt for superannuation, come back to the job market with the advantage of experience. This process helped capitalists exploit the toiling millions. The NPAs stand testimony to how our nationalised banks are being systematically looted to promote a few while keeping the majority of the workers below the required wage levels. The government's globalisation policy was welcomed initially by the industry associations for two reasons: To dismantle the last semblance of labour laws and to divest PSUs and nationalised banks with the supposed aim of increasing efficiency and removin g NPAs from their books. Now, when these industries face the onslaught of globalisation on home turf (in the form of cheaper Chinese products), they are again pleading that there is no labour law in China. This parochial campaign must be exposed. With the fruits of the increased sales

by these industries failing to reach the common man, the availability of cheaper Chinese items definitely spells relief for him.

(7.2) Advantage and Disadvantage of Chinese Products: Advantages: (1) Cheaper price benefits the consumer (2) Cheaper raw materials are beneficial for industries (3) Importer and trader makes money by selling goods. (4) Import business leads to some employment generation (5) Government collects tax by way of customs duty. (6) It may lead to competition which in turn may lead to better quality products.

Disadvantages: (1) Cheap imported Chinese products kill competition and local small scale industries suffer. Sometimes, may close down. (2) Closure of local industries due to Chinese imported goods, may lead to unemployment. 3) It may also lead to loss of revenue due to the closure of local industries. (4) Closure of local industries may also lead to social unrest arising out of unemployment of staff and employees (5) Cheaper goods means cheap quality and consumers may suffer on .

CONCLUSION I have completed my thesis report on IMPORT OF CHINA CHINESE and found that documentation and procedure for import is very crucial and important, without these the export-import can not be done. Good documentation and procedure of import is very necessary and it should be execute very carefully and sincerely. The documents and procedure is necessary for both importer as well as exporter.

REFERENCE Sites: www.alibab.com www.indiatrade.com www.indiatradezone.com

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