CBSE Class 11 Business Studies Chapter 12: International Business-II NCERT Solutions

Reviewed by · Updated on

NCERT Solutions PDF Class 11 PDF

This chapter delves into the intricacies of International Business-II for CBSE Class 11 Business Studies. It provides detailed explanations and solutions to textbook questions covering essential export and import procedures, including the documentation required for international trade. Students will learn about various documents like the IEC number, RCMC, shipping bills, bills of lading, and letters of credit. The solutions also touch upon schemes like duty drawback and the roles of international organizations such as the World Bank and WTO. Understanding these concepts is crucial for students aspiring to work in international trade or related fields. These NCERT Solutions offer clear, step-by-step guidance, helping students grasp complex procedures and prepare effectively for their examinations by reinforcing theoretical knowledge with practical application.

Home

Quick info

BoardCBSE
ClassClass 11
SubjectBusiness Studies
Session2026
LanguageEnglish
TypeNCERT Solutions
Chapter12. International Business-II

Chapter summary

Chapter 12, International Business-II, focuses on the practical aspects of international trade for Class 11 Business Studies students. It covers the essential documentation and formalities required for export and import transactions, including obtaining licenses and registration certificates. The chapter also introduces key international organizations and trade agreements. The NCERT Solutions provide clear answers to textbook questions, simplifying the understanding of procedures like the duty drawback scheme and the significance of documents like the IEC number and shipping bills, aiding students in mastering the chapter's core concepts.

Learning outcomes

  • Understand the documentation requirements for export and import.
  • Identify key documents used in international trade.
  • Explain the purpose of an Export Promotion Council.
  • Describe the process of obtaining an export license.
  • Recognize the role of organizations like the World Bank and WTO.

Topics covered

Paper topics

  • Export License Formalities
  • Importer Exporter Code (IEC)
  • Registration-cum-Membership Certificate (RCMC)
  • Export Promotion Councils
  • ECGC Registration
  • Export Documents
  • Import Documents
  • Duty Drawback Scheme
  • Shipping Bill
  • Mate's Receipt
  • Letter of Credit
  • World Bank Group and WTO

Important topics

  • Export License Formalities
  • Key Export/Import Documents
  • Role of Export Promotion Councils
  • Importer Exporter Code (IEC)
  • Letter of Credit
  • Duty Drawback Scheme

PDF preview

Read page by page below. PDF is streamed from the official NCERT website — no download button on this page.

Loading document …
Page of
Loading page …

Questions and Solutions

Multiple Choice Questions

Question 1. Which of the following documents are not required for obtaining an export license?

(a) IEC number

(b) Letter of credit

(c) Registration cum membership certificate

(d) Bank account number

Solution: The correct answer is (b) Letter of credit. While an IEC number, Registration Cum Membership Certificate (RCMC), and a bank account number are typically prerequisites for obtaining an export license, a Letter of Credit is a financial instrument used for payment assurance during a transaction, not for obtaining the license itself.

Question 2. Which of the following documents is not required in connection with an import transaction?

(a) Bill of lading

(b) Shipping bill

(c) Certificate of origin

(d) Shipment advice

Solution: The correct answer is (b) Shipping bill. A shipping bill is primarily used for export transactions to declare goods to customs. Documents like the Bill of Lading (transport document), Certificate of Origin (to prove the origin of goods), and Shipment Advice (informing the importer about the shipment) are commonly associated with import transactions.

Question 3. Which of the following do not form part of the duty drawback scheme?

(a) Refund of excise duties

(b) Refund of customs duties

(c) Refund of export duties

(d) Refund of income dock charges at the port of shipment

Solution: The correct answer is (d) Refund of income dock charges at the port of shipment. The duty drawback scheme is designed to refund the import duties (customs duties) and excise duties paid on inputs (materials, components) used in the manufacturing of goods that are subsequently exported. It does not typically cover charges like income dock charges.

Question 4. Which one of the following is not a document related to fulfilling the customs formalities?

(a) Shipping bill

(b) Export license

(c) Letter of insurance

(d) Performa invoice

Solution: The correct answer is (d) Performa invoice. A Performa invoice is a preliminary bill of sale sent to buyers in advance of a shipment or delivery of goods, detailing the goods and their value. While useful for initial planning, it is not a mandatory document for customs clearance. Shipping bills and export licenses are crucial for customs export formalities, and a Letter of Insurance (Marine Insurance Policy) is often required to cover risks during transit.

Question 5. Which one of the following is not a part of export documents?

(a) Commercial invoice

(b) Certificate of origin

(c) Bill of entry

(d) Mate's receipt

Solution: The correct answer is (c) Bill of entry. A Bill of Entry is a document required for clearing imported goods through customs. Commercial invoices, certificates of origin, and Mate's receipts are all essential documents in the export process.

Question 6. A receipt issued by the commanding officer of the ship when the cargo is loaded on the ship is known as:

(a) Shipping receipt

(b) Mate's receipt

(c) Cargo receipt

(d) Charter receipt

Solution: The correct answer is (b) Mate's receipt. The Mate's receipt is a document issued by the ship's officer (often referred to as the 'mate') acknowledging that the specified cargo has been loaded onto the vessel. It serves as evidence of shipment and is later exchanged for the Bill of Lading.

Question 7. Which of the following document is prepared by the exporter and includes details of the cargo in terms of the shipper's name, the number of packages, the shipping bill number, port of destination, and name of the vehicle carrying the cargo?

  1. Shipping bill
  2. Packaging list
  3. Mate's receipt
  4. Bill of exchange
Solution: The correct answer is (a) Shipping bill. The shipping bill is a detailed document prepared by the exporter that provides comprehensive information about the goods being exported, including shipper details, package count, destination port, and the mode of transport, facilitating customs clearance.

Question 8. The document containing the guarantee of a bank to honour drafts drawn on it by an exporter is

  1. Letter of hypothetication
  2. Letter of credit
  3. Bill of lading
  4. Bill of exchange
Solution: The correct answer is (b) Letter of credit. A Letter of Credit (LC) is a commitment issued by a bank on behalf of an importer (buyer) to make a payment to the exporter (seller) for a specified amount, provided that the exporter presents compliant documents within a stipulated timeframe. It assures the exporter of payment.

Question 9. Which of the following does not belong to the World Bank group?

  1. IBRD
  2. IDA
  3. MIGA
  4. IMF
Solution: The correct answer is (d) IMF. The International Monetary Fund (IMF) is a separate international organization that works closely with the World Bank but is not part of the World Bank Group. The World Bank Group consists of institutions like the International Bank for Reconstruction and Development (IBRD), the International Development Association (IDA), and the Multilateral Investment Guarantee Agency (MIGA), among others.

Question 10. TRIP is one of the WTO agreements that deal with:

  1. Trade in agriculture
  2. Trade in services
  3. Trade related investment measures
  4. None of these
Solution: The correct answer is (c) Trade related investment measures. TRIP stands for Trade-Related Investment Measures. This WTO agreement addresses certain investment measures that affect trade in goods, aiming to ensure that such measures do not create unnecessary barriers to international trade.

Short Answer Type Questions

Question 1. Discuss the formalities involved in getting an export license.

Solution: To engage in export activities, businesses must fulfill several legal formalities to obtain an export license. These include:
  1. Opening a Bank Account: An exporter must establish an account with a bank authorized by the Reserve Bank of India (RBI) and obtain a unique bank account number.
  2. Obtaining an IEC Code: The Directorate General for Foreign Trade (DGFT) or a Regional Import Export Licensing Authority issues the Importer Exporter Code (IEC). To obtain this, an exporter needs to submit their profile, relevant certificates, attested photographs, and details regarding any non-resident interest in the firm.
  3. Securing a Registration-cum-Membership Certificate (RCMC): Exporters must register with the relevant Export Promotion Council (e.g., EEPC for engineering goods, AEPC for apparel). Upon successful registration, they receive an RCMC, which is crucial for accessing government benefits and incentives for exporters.
  4. Registering with ECGC: It is advisable for exporters to register with the Export Credit and Guarantee Corporation (ECGC). This provides protection against potential payment risks arising from political or commercial uncertainties in international markets.

Question 2. Why is it necessary to get registered with an Export Promotion Council?

Solution: Registration with an Export Promotion Council is a necessary step for firms intending to export goods, primarily because it is a prerequisite for obtaining an export license. These councils, established by the government, focus on promoting the export of specific categories of goods. Upon registration, the firm receives a Registration-Cum-Membership Certificate (RCMC). This certificate not only fulfills a requirement for the export license but also enables the firm to leverage various government schemes, incentives, and support mechanisms designed to boost exports. Therefore, it is essential for accessing benefits and facilitating export operations.

Question 3. What is an IEC number?

Solution: An IEC number stands for Importer Exporter Code number. It is a unique 10-digit identification code issued by the Directorate General for Foreign Trade (DGFT) in India. This code is mandatory for any individual or business entity that wishes to engage in the import or export of goods and services. The DGFT grants the IEC based on the firm's credibility and its potential for international trade activities.

Common mistakes

  • Confusing documents required for export versus import.
  • Misunderstanding the purpose of specific trade documents.
  • Not recognizing the importance of registration with Export Promotion Councils.
  • Confusing the functions of different international organizations.

Revision tips

  • Create a checklist of all export and import documents mentioned.
  • Summarize the purpose of each document in your own words.
  • Differentiate between the roles of the World Bank and the IMF.
  • Review the steps involved in obtaining an export license.
  • Practice identifying which documents are essential for specific trade scenarios.

Practice MCQs

Q1. Which document is NOT typically required for obtaining an export license?

Q2. Which of the following documents is generally NOT associated with an import transaction?

Q3. The duty drawback scheme aims to refund which of the following?

Q4. Which document is prepared by the exporter detailing cargo information for shipment?

Q5. What is the primary function of a Letter of Credit (LC)?

Q6. Which of the following is NOT a member of the World Bank group?

Frequently asked questions

What are the main formalities to get an export license in India?

To obtain an export license, an exporter must have a bank account, an Importer Exporter Code (IEC) number from DGFT, a Registration-cum-Membership Certificate (RCMC) from an Export Promotion Council, and registration with ECGC for risk protection.

What is an IEC number and why is it important?

An IEC number is a 10-digit Importer Exporter Code issued by the Directorate General for Foreign Trade (DGFT). It is mandatory for anyone involved in import or export activities in India.

Why is it necessary for an exporter to register with an Export Promotion Council?

Registration with an Export Promotion Council provides the exporter with a Registration-Cum-Membership Certificate (RCMC), which is often required for obtaining an export license and enables the firm to access various benefits and incentives provided by the government for export promotion.

What is the purpose of a Mate's Receipt?

A Mate's Receipt is issued by the commanding officer of a ship when the cargo is loaded onto it. It serves as an acknowledgement of receipt of the goods by the shipping company.

How does a Letter of Credit facilitate international trade?

A Letter of Credit is a bank's guarantee to pay the exporter the amount specified, provided the exporter fulfills the terms and conditions of the credit. This reduces the payment risk for the exporter.

Which international organizations are mentioned in relation to international trade?

The chapter mentions the World Bank Group (including IBRD, IDA, MIGA) and the World Trade Organization (WTO), specifically referencing its TRIP agreement related to trade-related investment measures.

Important links

Content reviewed by the NCERT Help team. Editorial Team and update policy

NCERT Solutions PDF PDF on NCERT Help. URL unchanged for search indexing.