Global business is different from face-to-face business. On retail front, people got connected through ecommerce portals like Amazon, Flipkart etc. However, when a manufacturer wants to export to someone whom he doesn’t know, the question arises – Who should initiate the transaction first. Should the goods reach first or should the payment be made first. Each of these options is in favor of one of the two parties.
It is important to understand the hazards in global business and mitigate the risks before initiating a trade transaction. Also, countries will have their local laws that need to be complied by the transacting parties.
How the transactions take place and how the banks play the intermediary role to mitigate the risk is an interesting topic in itself.
The course coverage is summarized below:
- Understanding global scenario
- Types of trade transactions – Simple collections / Payment on sight / Usance collections etc.
- Inco terms (Internationally commonly user terms) – FOB / CIF etc.
- Financing of export transactions by banks – Packing Credit and Post Shipment Credit
- Regulatory framework – FEMA
- Governing bodies – DGFT. Understanding OGL (Open General License)
- Insurance – DICGC
- Understanding Risks – Currency risk / Sovereign risk etc.
- Mitigating risks – Forward contracts (hedging risks) against currency fluctuations
- Types of accounts for conducting business with other countries - advantages
- Overseas offices
- Documentary credits – Understanding Letters of credit (LC) and Bank Guarantees (BGs)
- Understanding ICC guidelines
- Understanding documents in global trade (Invoice / Bill of lading / Insurance etc.)
- Statutory compliance