INTERNATIONAL TRADE AND FINANCE

Paper Code: 
SBFS 502
Credits: 
4
Contact Hours: 
60.00
Max. Marks: 
100.00
Objective: 

Learning outcome (at course level)

Learning and teaching strategies

Assessment Strategies

  
 

On completion of this course, the students will be able to:

  1.  Analyze and evaluate the basis of international trade, and demonstrate advanced analytical skills in understanding the complexities and factors influencing global trade dynamics.
  2.  Apply advanced comprehension and evaluation skills in understanding export and import finance, including the special financial needs in international trade, INCO terms, payment terms, letters of credit, and financing methods for import of capital goods, showcasing the ability to analyze and evaluate the financial aspects of international trade transactions.
  3.  Evaluate and critically analyze the foreign exchange markets, spot prices, forward prices, and factors influencing exchange rates, showcasing advanced critical thinking and analytical skills in understanding the effects of exchange rates on foreign trade and the tools available for hedging against exchange rate variations.
  4. Apply advanced analytical and forecasting skills in understanding the determination of foreign exchange rates, forecasting methods, and the theories related to foreign exchange rate determination,  and their practical implications.
  5. Demonstrate advanced comprehension and application skills in understanding the various export trade documents required for international trade, including financial documents, commercial documents, transport documents, risk-covering documents, and official documents, showcasing the ability to synthesize and apply knowledge in preparing and managing export documentation effectively.

Approach in teaching: Interactive Lectures, Discussion, Tutorials, Practical cases Demonstration, Power point presentation.    

 Learning activities for the students:                              Self learning assignments, Effective questions, Seminar presentation, Live practical problems analysis

Class test, Semester end examinations, Quiz, Solving problems in tutorials, Assignments, Presentation, Individual and group projects

  

 

12.00
Unit I: 
International Trade

Basis of International Trade - Foreign Trade and Economic Growth – Balance of Trade – Balance of Payment – Barriers to International Trade – Indian EXIM Policy.

12.00
Unit II: 
Export and Import Finance

Special need for Finance in International Trade – INCO Terms (FOB, CIF, etc.,) – Payment Terms – Letters of Credit-
 International Norms and Conventions-Types of Letters of Credit- Parties to a Letter of Credit ,Letter of credit Facility-Letter of Credit Discounting- Bill Discounting- Margins and settlement- Pre Shipment and Post Shipment Finance , Forfeiting ,Deferred Payment Terms , EXIM Bank ,ECGC and its schemes , Import Licensing , Financing methods for import of Capital goods.

12.00
Unit III: 
Foreign Exchange Markets ,Spot Prices and Forward Prices

Factors influencing Exchange rates ,
 The effects of Exchange rates in Foreign Trade , Tools for hedging against Exchange rate variations ,
 Forward, Futures and Currency swaps and options ,
 FEMA Determination of Foreign Exchange rate and Forecasting – Law of one price , PPP theory , Interest Rate Parity , Balance of Payment Theory.

12.00
Unit IV: 
Export Trade Documents

Financial Documents – Bill of Exchange Type, Commercial Documents, Proforma, Commercial, Consular, Customs, Legalized Invoice, Certificate of Origin Certificate Value, Packing List, Weight Certificate, Certificate of Analysis and Quality, Certificate of Inspection, Health certificate. Transport Documents, Bill of Lading, Airway Bill, Postal Receipt, Multimodal Transport Document.
 Risk Covering Document: Insurance Policy, Insurance Cover Note. Official Document: Export Declaration Forms, GR Form, PP From, COD Form, Softer Forms, Export Certification, GSPS,– UPCDC Norms

12.00
Unit V: 
Export Promotion Schemes

Government Organizations Promoting Exports,
 Export Incentives: Duty Exemption, IT Concession,
 Marketing Assistance, EPCG, DEPB, Advance License,
 Other efforts- Export Promotion, EPZ , EQU, SEZ, and Export House.

Essential Readings: 

• Avadhani,V.A,” International Finance, Theory and Practice”, Himalaya Publishing Company, New Delhi.
• S.K. Mathur, “ International Trade and Finance”, Shivam Book House, Jaipur.
• Cherunilam Francis “International Economics”, Tata McGraw-Hill Publishing Company Limited, new Delhi
• Cherunilam Francis “International Business”, Tata McGraw-Hill Publishing Company Limited, new Delhi

References: 

SUGGESTED READINGS
• Maurice, Levi, “ International Finance”, McGraw Hill, Int. Ed. New York.
• Walter, Ingo: Handbook of International Business, John Wiley and Sons; New York.
• Wood, D. and J Byrne: International Business Finance, Macmillan, New York.
• Sodersten B, “International Economics”, Macmillan, London.
• Dominick, “ International Economics”, Macmillan Publication Company, New York.
• Mithani D. M. Introduction to International Economics (Latest)- Himalaya Publishing House, Mumbai

E- RESOURCES:
• https://www.indiabudget.gov.in/economicsurvey/ (Economic survey, various issues)
• https://rbi.org.in/Scripts/AnnualPublications.aspx?head=Report%20on%20Cu... (RBI Report on Currency & Finance, various issues)
• Websites: https://www.rbi.org.in/ (RBI), https://www.imf.org/en/Home (IMF), https://www.worldbank.org/en/home (WORLD BANK), https://www.wto.org/ (WTO)
• https://www.wto.org/english/res_e/reser_e/annual_report_e.htm (WTO Annual report, various reports)

Journals:
• International Journal of Financial Management
• Indian Journal of Finance
• Journal of Banking, Information Technology and Management
• World Affairs- The Journal of International Issues
• Foreign Trade Review

Academic Year: 
2023-2024
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