Which of the following documents is not required for obtaining export license?
Letter of Credit
Understanding Export License Requirements
To engage in international trade, specifically exporting goods or services from a country, businesses typically need to obtain an Export License or registration from the relevant government authority. This license permits the business to conduct export activities legally. The process for obtaining this license involves submitting various documents to prove the legitimacy of the business and its readiness for international transactions.
Common Documents for Export License
While specific requirements may vary slightly by country, certain core documents are almost universally needed when applying for an export license:
- IEC Number (Import Export Code): This is a mandatory code required for anyone involved in import/export activities. It's like a business's ID for international trade. Obtaining this is usually a prerequisite for applying for the export license itself.
- Bank Account Number: A business needs a bank account to handle financial transactions, including receiving payments from international buyers. Proof of a registered bank account in the business name is essential for verification purposes during the license application.
Understanding Letter of Credit
A Letter of Credit (LC) is a payment mechanism used in international trade. It is issued by a bank on behalf of the buyer (importer) guaranteeing payment to the seller (exporter) if the seller meets specific conditions outlined in the LC (like shipping the goods and presenting specific documents). The LC is related to a specific trade transaction, not the general permission (license) to export.
Therefore, a Letter of Credit is an instrument used after the export license is obtained and a specific trade deal has been agreed upon. It is not a document required to apply for or obtain the initial export license itself.
Document Not Required for Export License
Based on the typical requirements for obtaining an export license, the following can be determined:
- IEC Number is required.
- Bank Account Number is required.
- Letter of Credit is a transaction-specific payment document and is not required for the license application process.
Thus, the document that is not required for obtaining an export license among the given options is the Letter of Credit.
Important Questions from International Trade
Consider the following statements about the international financial sources :
I. A Global Depository Receipt (GDR) is a bank certificate issued in more than one country for shares in a foreign country.
II. A GDR is very similar to American Depository Receipt (ADR).
Select the correct option.
_________ was set up with prime objective of professionalizing the country’s foreign trade management by providing training, research and data dissemination.
Which one of the following does not fall within the ambit of WTO operations ?
The following statements relate to Restrictive Trade Practices (RTP). Choose the correct code for the statements being correct or incorrect.
Statement I: Often the low price is the result of the predatory pricing strategy; prompting selling at prices below cost.
Statement II: This is done with an aim to drive out existing competitors because predatory pricing is a restrictive trade practice.
Given below are two statements, one labelled as Assertion (A) and the other labelled as Reason (R). Read the statements and choose the correct answer using the code given below.
Assertion (A): Growing proportion of the world output is traded internationally, causing faster growth of trade among nations.
Reason (R): This situation is bringing world economic integration, which is reinforced by cross-border capital flows and regional blocs.
