1. NIRYAT BANDHU @ Your Desktop
Session 3 & 4
Dr. Mridula S Mishra
Indian Institute of Foreign Trade
New Delhi

2. Session Plan for (16 & 17 December, 2015)
Introduction to ITC (HS) Classification
How to access markets?
From where to access data?
Sources of Data Analysis
Data Quality
Role of DGCI&S
Popular information portals for trade data
Export opportunities in potential markets
Knowledge of products with export potential
Identifying Buyers
Knowing Competition

3. HS Classification
International System of Numbering used to Classify Products

4. How Classification Helps
Helps identify potential foreign markets
Helps track activities of competitors
where similar products are being shipped,
quantities shipped,
revenue generated off the shipments.
Helps track foreign import tariffs
Needed to look up tariff rates; determine whether product qualifies for preferential treatment under trade agreement like NAFTA, ASEAN
Needed to complete shippers export declaration form, certificate of origin, etc.

5. Structure of the HS 21 Sections 96 Chapters(2 digit)
1224 Headings(4 digits)
5212 Subheadings(6digits
21 Sections – broad range of goods
96 Chapters –In use- narrow range of goods
Chapter 77 reserved for future use
98 & 99 reserved for National use
Headings- more specific
Subheadings (HS code) identified by a 6-digit code, very narrow range/very specific
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6. Principles of the arrangement of Sections
Based on material content e.g. vegetable products in Section II, Textiles and textile articles Section XI
Based on usage or function e.g. Vehicles, Aircrafts, vessels Section XVII
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7. Principles cont..d Stage of processing Live Cattle Hides Shoes
Sect.I Sect.VIII Sect.XII
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8. Numbering of Sections and Chapters
Sections are numbered in Roman numerals for example I,II,III up to XXI
Chapters are numbered in Arabic numerals for example 01,02, 10,15 up to 97
The first two digits indicate a Chapter Number for example 01 for Chapter 1 .
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9. Principles of the arrangement of Chapters
The same principles used in the arrangement of the Sections also apply to the arrangement of Chapters
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10. Principles of the arrangement of Chapters
Materials content
Example;
Rubber –Chapter 40
Wood - Chapter 44
Cotton- Chapter 52
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11. Arrangement of Chapters cont...
Usage or function
Pharmaceutical Chapter 30
Motor Vehicles Chapter 87
Arms and Ammunition- Chapter 93
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12. Principles cont..d Stage of processing or manufacture
Paper Pulp Chapter 47
Paper Chapter 48
Books Chapter 49
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13. Structure Cont..d Number of Chapters in a Section
A Section may contain one or more
Chapters e.g.
Section I has 5 Chapters
Section III has only Chapter 15
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14. Structure cont..d Number of Headings in a Chapter
The number of headings may also
vary from Chapter to Chapter e.g.
Chapter 13 has 2 headings
Chapter 84 has 87 headings
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15. Structure cont..d Division of Chapters into sub-Chapters
A Chapter may be subdivided into sub-
Chapters to identify certain classes of
goods within the Chapter.
This shows a level of processing or a
combination thereof .
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16. Division of Chapters Example; Chapter 71 is divided into 3
Sub-Chapters;
Sub Chapter I
Sub Chapter II
Sub Chapter III
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17. Structure Cont..d Headings
Provide a more specific grouping of goods and approximate description
Consist of a four digit number(01.04)
Describes the commodity (terms of the heading)
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18. Structure Cont..d Sub-Headings A heading may be further subdivided
into subheadings, where deemed
appropriate, individualizing narrower
categories of commodities.
In the case that a heading is not
further subdivided , two zeros are
added to the four digits code number.
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19. Arrangement of Headings
Stage of processing within a Chapter Example Chapter 79; 79.01,79.02 Raw material 79.03, 79.04,79.05 Semi finished and finished Finished articles e.g. Zinc tubes
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20. Structure Cont..d The Six digit only apply at International level
Regional tariff( ITC-HS) has 8 digits and
may be division into 3 groups:
Heading
Subheading
Regional subdivision
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21. Structure Cont..d For Example 84.44 Heading
Subheading (International level HS code)
Regional subheading or Tariff number
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22. HS- Code and Tariff Imposed

23. Identifying Products with Export Potential
What are the top exports from my Country?
What are the products & Services that the country manufactures/produces/?
Which are the countries that Import those

26. How many countries are
there in the world?

27. How many countries are there in the world?
189, 191, 192, 193, 194, 195 or 196 independent countries in the world today.

28. Vodafone World Foot Print

29. Reliance Communications 100 Mln 14 Orascom Telecom 93 Mln 15 AT&T
Rank
Company Name
Subscribers 1
China Mobile
522 Mln 2
Vodafone Group
333 Mln 3
Telefonica
202 Mln 4
AmericaMovil
201 Mln 5
Telenor Group
172 Mln 6
Deutsche Telecom
151 Mln 7
China Unicom
148 Mln 8
TeliaSonera 9
France Telecom
133 Mln 10
Bharti Airtel
125 Mln 11
MTN Group
116 Mln 12
Mobile Telesystems
102 Mln 13
Reliance Communications
100 Mln 14
Orascom Telecom
93 Mln 15
AT&T
85 Mln
These figures are based as of end- February 2010.

30. Airtel World Footprint
There are around 190 countries in this world and you want to target the right ones for your product or service
After the acquisition of Zain’s 42 Million subscribers in 15 African countries now coming under Bharti’s Umbrella – The Total Subscriber base of Bharti Airtel goes to 167 million Subscribers, which puts it firmly in 5th position

31. Step 1: Screen potential markets
Obtain trade statistics that indicate which countries import your type(s) of products.
Perform a thorough review of the available market research reports in the country(ies) and industries in question to determine market openness, common practices, tariffs and taxes, distribution channels, and other important considerations.
Identify five to ten large and fast-growing markets for the firm's product(s). Analyze them over the past three to five years for market growth in good and bad times.
Identify some smaller but fast-emerging markets where there may be fewer competitors.
Target three to five of the most statistically promising markets for further assessment. Consult with Export Assistance Center near you.

32. Stages of Researching Foreign Market Potential
Stage One
Preliminary Screening for Attractive Country Markets
(Which foreign Markets warrant detailed Investigation?)
Stage Two
Assessment of Industry Market Potential
(What is the aggregate demand in each of the selected
Markets?)
Stage Three
Company Sales Potential Analysis
(How Attractive is the potential demand for company
Products and services?)

33. Prospects for Diversification

34. Political Risk Analysis
Factors
Examples
Level 1
General Instability
Revolution, external aggression
Level 2
Expropriation
Nationalization, contract revocation
Level 3
Operations
Import restrictions, local content rules, taxes, export requirements
Level 4
Finance
Repatriation restrictions, exchange rates

35. Governance Index
x#reports
CURRENT
PREVIOUS
RATINGS
SCORES
Rwanda C 51 52
Niger D 63 64
Chad 67
Ecuador 60
Mozambique 54
Somalia E 86
South Africa 41
Sudan 78

36. Researching the Industry
India’s export to world
India’s export to country X
Country X’s import from world

37. Existing and potential trade between India and World in 2014
Product: 8703 Cars (incl. station wagon)
Product Code
Product Label
India's exports to world
Indicative potential trade, USD thousand
Value in 2014, USD thousand
Annual growth in value between , %, p.a.
Share in world exports, %
'870310
Snowmobiles, golf cars and similar vehicles
730
-13
'870321
Automobiles w reciprocatg piston engine displacg not more than 1000 cc
-11
6.1
'870322
Automobiles w reciprocatg piston engine displacg > 1000 cc to 1500 cc 14
4.3
'870323
Automobiles w reciprocatg piston engine displacg > 1500 cc to 3000 cc
835521 69
0.3
'870324
Automobiles with reciprocating piston engine displacing > 3000 cc
288
-49
'870331
Automobiles with diesel engine displacing not more than 1500 cc
389435 70
1.8
'870332
Automobiles with diesel engine displacing more than 1500 cc to 2500 cc
93024 19
0.1
'870333
Automobiles with diesel engine displacing more than 2500 cc
11517 2
'870390
Automobiles nes including gas turbine powered
1887
-47

38. List of importing markets for the product exported by India in 2014

39. Existing and potential trade between India and Mexico in 2014

41. Preliminary Screening
This involves rating the countries on the macro level indicators

42. Country Identification
Candidate countries could be:
Angola
Mexico
South Africa
Nigeria