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Importance of Foreign Trade

In what is the Global Village that comprises our planet, trade is as small as the palm of the hand, constantly carrying out Commercial Exchanges between different countries and regions, dividing the obtaining of different Raw Materials and counting on a production that is carried out by companies at headquarters in different parts of the world, being known as Multinational Companies.

This role that International Trade occupies is closely related to the establishment of Trade Policies by the different states, which can be grouped into trade zones such as Mercosur or NAFTA, or by signing agreements for the exchange of raw materials or even Prepared Products. , Guaranteeing a monetary movement and seeking the normal functioning of the economy.

That is why in a country Foreign Trade is part as a fundamental piece of Financial Stability, having on the one hand the entry of money to the country through the Export of Products, which generates not only an important commercial operation by the Exporting Company but also through the payment of Export Taxes, these being set by laws and regulations that retain a percentage applied to the total amount of the transaction.

It is also possible to have Foreign Companies that seek to invest in the country with the objective of either attracting a large number of clients through the direct sale of their products or establishing a Commercial Headquarters based on obtaining raw materials or providing sources of work at a Lower Cost than could be obtained in the area of ​​your Headquarters, achieving a sectorization of workaround seeking a Lower Operating Cost.

The regulation of Imports and Exports is given through state policies that apply various Restrictions and Taxes, acting as a regulator of prices and costs within the same country.

Advance Authorisation Scheme

There are certain goods that can be imported duty free under this scheme. The exporter will be entitled to the facility to import the required raw materials as duty free. Raw materials here are considered to be those goods that will be required as input material for the finished goods. These raw materials could be in the form of its natural state, raw state, unrefined or finished state. This Advance license is to be applied and received so that they can be allowed to import the duty-free inputs for the processing of their finished products. These are to be utilized in the export product only. Apart from these goods, certain oils and fuels also come under this duty-free category provided it should be used in the production of these export goods.

EPCG Scheme

EPCG stands for Export Promotion Capital Goods Scheme (EPCG Schemes). This also allows the exporter to import the machinery required to manufacture such goods that he will be exporting. Capital goods can also be imported as duty-free which can be used at any stage of the production of the goods to be export.

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