Although two-thirds ofthe Indian workforce still live directly or indirectly from agriculture, services are agrowing sector and are playing an increasingly important role in the Indian e
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General Introduction
India, officially the Republic of India is a country in South Asia It is the seventh- largest country by area, the second-most populous country, and the most populous democracy in the world Bounded by the Indian Ocean on the south, the Arabian Sea on the southwest, and the Bay of Bengal on the southeast, it shares land borders withPakistan to the west; China, Nepal, and Bhutan to the north; and Bangladesh andMyanmar to the east In the Indian Ocean, India is in the vicinity of Sri Lanka and theMaldives; its Andaman and Nicobar Islands share a maritime border with Thailand,Myanmar, and Indonesia India’s capital is New Delhi, built in the 20th century just south of the historic hub of Old Delhi to serve as India’s administrative center NewDelhi is the capital city, but Mumbai is the largest city Hindi is the official language and English is a second official language English has great importance there as a common language.
Overview of the Indian economy
It is the world's fifth-largest economy by nominal GDP and the third-largest by purchasing power parity (PPP) According to the International Monetary Fund (IMF), on a per capita income basis, India ranked 142nd by GDP (nominal) and 125th by GDP (PPP)
The end of the Cold War and an acute balance of payments crisis in 1991 led to the adoption of a broad economic liberalization in India.The economy of India has transitioned from a mixed planned economy to a mixed middle-income developing social market economy with notable state participation in strategic sectors.
Since the start of the 21st century, annual average GDP growth has been 6% to 7% The economy of the Indian subcontinent was the largest in the world for most of recorded history up until the onset of colonialism in the early 19th century India accounted for 7.2% of the global economy in 2022 in PPP terms, and around 3.4% in nominal terms in 2022.
Nearly 70% of India's GDP is driven by domestic consumption The country remains the world's sixth-largest consumer market Apart from private consumption, India's GDP is also fueled by government spending, investments, and exports
India was the world's 14th-largest importer and the 18th-largest exporter (2020).India has been a member of the World Trade Organization since 1 January 1995 It ranks 63rd on the Ease of doing business index and 68th on the GlobalCompetitiveness Report Due to extreme rupee/dollar rate fluctuations India's nominalGDP too fluctuates significantly With 476 million workers, the Indian labor force is the world's second-largest India has one of the world's highest number of billionaires and extreme income inequality Because of several exemptions, barely 2% of Indians pay income taxes.
In 2021–22, the foreign direct investment (FDI) in India was $82 billion The leading sectors for FDI inflows were the service sector, the computer industry, and the telecom industry.
India is the world's sixth-largest manufacturer, representing 2.6% of global manufacturing output Nearly 65% of India's population is rural, and contributes about 50% of India's GDP It has the world's fifth-largest foreign-exchange reserves worth
$561 billion India has a high public debt with 83% of GDP, while its fiscal deficit stood at 6.4% of GDP India faces high unemployment, rising income inequality, and a drop in aggregate demand India's gross domestic savings rate stood at 29.3% of GDP in 2022.
The Indian economy is diverse and includes the following sectors: agriculture, handicrafts, textiles, manufacturing and many service sectors Although two-thirds of the Indian workforce still live directly or indirectly from agriculture, services are a growing sector and are playing an increasingly important role in the Indian economy.
The move to a digital age and a large number of young and educated, fluentEnglish-speaking populations are gradually turning India into an important destination for the back office services of the global companies when they outsource (outsourcing part or all of the work to other countries) their customer services and technical support.India is a major exporter of skilled workers in software and financial services and software engineering Other sectors such as manufacturing, pharmaceuticals,biotechnology, nanotechnology, telecommunications, shipbuilding and aviation are showing strong potential and are seeing higher and higher growth rates.
Analysis of strong economic fields of India
The Indian economy is diverse and includes the following sectors: agriculture, handicrafts, textiles, manufacturing and many service sectors
The services sector has the largest share of India's GDP, accounting for 57% in
2012, up from 15% in 1950 It is the seventh-largest services sector by nominal GDP, and third largest when purchasing power is taken into account The services sector provides employment to 27% of the workforce
Although two-thirds of the Indian workforce still live directly or indirectly from agriculture, services are a growing sector and are playing an increasingly important role in the Indian economy.
The move to a digital age and a large number of young and educated, fluent English-speaking populations are gradually turning India into an important destination for the back office services of the global companies when they outsource (outsourcing part or all of the work to other countries) their customer services and technical support. India is a major exporter of skilled workers in software and financial services and software engineering.
It can be said that the service industry in India is known to the world and has become an industry that contributes a large part to the overall growth of the Indian economy However, we will focus more on tangible export products instead of service products
Figure 1 - List of product exported by India in 2021
India has come up as a large exporting nation in recent decades, which has facilitated the Indian economy to new heights The number of commodities exported from India has significantly improved, and the market is now wider than ever Many foreign markets are heavily dependent on India for importing certain goods to their countries India's top export products contain petroleum products, engineering, jewelry, pharmaceuticals, iron and steel, cereals, textile products, etc.
As one of the high-demand products for export, petroleum is the key item for the fuel and energy requirements of the world After China, India is the second-largest refiner in Asia Petrol, diesel, gasoline, jet fuel, and LPG markets are very demanding in countries like the US, China, and the Netherlands
India has an even more central role in the global oil map, because of the year- long Russia-Ukraine war India's important role is expected to increase following new European Union (EU) sanctions on Russian exports of oil products Due to the ban, a large amount of diesel will leave the market, while more consumers, especially in Europe, will buy oil from Asia to fill the supply gap Because of the increasing demand, India's export of these products is also significantly increasing
Exporting petroleum products has helped the country a lot, yet India is heavily dependent on oil imports for its economy This country depends on imports to meet about 85% of its crude oil needs, which is why the trade balance is in deficit. The huge reliance on imports of crude oil and natural gas to meet domestic demand and the high volatility of crude oil prices are expected to drive up the price of Indian petroleum products
Petroleum products are a potential product of India at the moment, but only in the case of Western countries Vietnam is still maintaining a neutral attitude towards the parties Moreover, Vietnam is not a country too dependent on external oil supplies. Therefore, this is not a potential import product for Vietnam at the moment.
The engineering sector is the largest of the industrial sectors in India It accounts for 27% of the total factories in the industrial sector and represents 63% of the overall foreign collaborations Demand for engineering sector services is being driven by capacity expansion in industries like infrastructure, electricity, mining, oil and gas, refinery, steel, automobiles, and consumer durables India has a competitive advantage in terms of manufacturing costs, market knowledge, technology, and innovation in various engineering sub-sectors India’s engineering sector has witnessed a remarkable growth over the last few years, driven by increased investment in infrastructure and industrial production The engineering sector, being closely associated with the manufacturing and infrastructure sectors, is of huge strategic importance to India’s economy.
In FY22, India exported engineering goods worth US$ 111.63 billion, a 45.51% increase YoY India exports engineering goods mostly to US and Europe, which account for over 60% of the total exports.
The term 'jewelry' here contains gold, gemstones and similar materials Due to its natural wealth in gold, diamonds, pearls, gemstones, and other forms of jewelry, India consumes around 20 percent of the global gold production and 75 percent of that amount goes into making jewelry And because of that, India owns almost 6% of shares in global exports
The gems and jewellery industry of India contributes 7% to India’s Gross Domestic Product (GDP) The industry employs more than 5 million of skilled and semi-skilled workforce in the country The sector contributes about 10-12% of India’s total merchandise exports, accounting for the third largest commodity share During 2021-22, the gems and jewellery exports played an instrumental role in growing India’s overall exports to US$ 419 billion with a growth of 44% from 2020-21 and 34% from 2019-20.
Western Region is key exporting hub for the gems and jewellery industry contributing almost 77% of the total exports in 2021-22 Surat, a city of Gujarat state in the western region of India has more than 450 organised jewellery manufacturers, importers & exporters, making it the jewellery manufacturing hub of the world.
As per 2020 statistics, India’s gems and jewellery exports account for about 3.5% of the world’s total exports, making it the seventh highest exporter in the globe The country is ranked first in diamonds jewellery, silver jewellery and lab grown diamonds
& Synthetic stones with 29.0%, 22.0% and 32.7% share of the total world’s exports respectively The overall gross exports of gems & jewellery stood at US$ 20.58 billion in FY23 (until September 2022) The overall gross exports of cut & polished diamonds stood at US$ 12.22 billion in FY23 (until September 2022)
In the list of products exported from India, cut and polished diamonds are the most exported items Indian states such as Gujarat, Andhra Pradesh, and Madhya Pradesh are the primary locations where gold and diamonds are extracted
These jewelry items are sent to Gujarat for polishing and cutting, followed by exporting to countries such as the US, UAE, UK, and Hong Kong.
Evaluate companies in the industry and select potential cooperation company 10 1 Sun Pharmaceutical Industries Ltd
Mumbai Hyderabad Hyderabad Mumbai Pune
Table 1 - Compare companies in India pharmaceuticals industry
Figure 2 - Sun Pharmaceutical Industries Ltd
It produces and sale of chronic and acute therapies which include, API (Active pharmaceutical ingredients), ARVs (antiretroviral), OTC (over the counter), and generic drugs in India and in the United States Every year they sell 30 billion doses of therapeutic segments covering neuropsychiatry, cardiology, neurology, gastroenterology, diabetology, respiratory, anti-infective, oncology, and many more It is the first largest pharmaceutical company in India and the fourth-largest generic pharmaceutical company in the world In 2014, sun pharmaceutical procured Ranbaxy, making it the largest pharma company in India and the US They have more than 40 manufacturing API and formulation plants in more than 100 countries across the world They provide more than 2000 formulations in India and other countries.
Divi's laboratories is an Indian pharmaceutical multinational company that manufactures API, intermediates, and nutraceutical ingredients In market capitalization, it is India's second valuable pharma company The company has three manufacturing units in Hyderabad, Vishakhapatnam, and Kakinada and three research and development units in India It is one of the tenderest firms, which made the top list in leading pharma companies The countries where divi's laboratory exports products are Japan, the USA, Australia, South Africa, and the Philippines The divi's laboratories are holding divi's laboratories (USA), Inc and Divi's Laboratories Europe AG.
It is known for manufacturing a wide range of pharmaceuticals in India and overseas They have over 190 medications, 60 active pharmaceutical ingredients for drug manufacturers, diagnostics kits, critical care, and biotechnology products The notable products of Dr Reddy's include Canagliflozin Ramipril, Ibuprofen, Naproxen, Atorvastatin, Nizatidine, Naproxen Sodium, etc.
It is India's fourth-largest pharma company based on overall revenue This pharmaceutical company in India focuses on developing medicines to treat respiratory, cardiovascular diseases, arthritis, diabetes, weight control, depression, and many more. The subsidiaries of Cipla are Invagen Pharmaceuticals They are the largest manufacturer of antiretroviral drugs.
Emcure Pharmaceuticals started as a single manufacturing facility in Pune and has witnessed healthy growth throughout the years, now boasting a range of world- class manufacturing facilities spread across API, formulations, and biotechnology. Emcure is now known as a vertically integrated pharmaceutical company with commendable infrastructure, skills, and resources that are not only comparable to the best pharma companies in Mumbai, India but those that are considered as the best in the world Manufacturing of APIs, Formulations, and Biotechnology can all be summed up as strengths of Emcure.
Comparing and evaluating a few large pharmaceutical companies in India, we found that each of them has their own strengths and all manufacture and distribute pharmaceutical products on a multinational scale In which, Sun PharmaceuticalIndustries leads other enterprises in annual revenue and worldwide operation, with a number of factories that are also much higher than the rest Cipla has a much longer history than the others, but its strength is in the production of antiretroviral drugs Dr.
Reddy's Laboratories and Emcure Pharmaceuticals are also qualified and renowned for their strengths in manufacturing of APIs, Formulations, and Biotechnology But considering the company's import target and the strength in API production, we find that Divi's Laboratories is still the most potential partner Although this company has the lowest revenue among the 5 businesses and the number of units are not as much as other competitors, Divi's Laboratories is still considered the largest and pioneering API manufacturer with the number of APIs it produces annually and its reputation in providing APIs For many major partners around the world, our company realizes that no one can surpass Divi's Laboratories in providing APIs.
They manufacture APIs in 14 manufacturing facilities located in India, Hungary, US, Israel and Australia
Their list of APIs exceeds 300 which is used in house as well as marketed to customers in over 60 countries
They include genetics and complex APIs that require isolated manufacturing areas like anti-cancers, peptides, steroids, sex hormones and controlled substances, including poppy-derived opiate raw materials that are primarily used in the manufacture of analgesics, sold as both Narcotic Raw Materials (NRM) and APIs
Maintain to be a global leader in Large Volume Generic APIs
The product list includes a very selective 30 APIs that are manufactured commercially in 10’s to 100’s/1000’s of Tonnes each year.
There are additional 10 APIs that are in various stages of R&D/pilot scale development process.
Divi’s has achieved this leadership position because of various factors such as backward integration to basic starting materials, dedicated production blocks with large batch sizes and significant capacity creation ahead of time.
Committed to being a ‘Reliable supplier of APIs’ with competitive pricing and having uniform quality for all the customers around the world by continually improving the process and engineering efficiencies and implanting various Green Chemistry principles.
Manufacturing facilities have undergone several audits by Global Regulatory Authorities, various Big Pharma/Multi- National Companies, Statutory Authorities and Global Environmental, Health and Safety teams.
The Dr Reddy’s API business supplies high quality affordable APIs to leading generic formulations manufacturers across the world, enabling them to accelerate access to affordable medicines for patients worldwide.
They are the preferred API partner to pharma companies across the US, Europe, Latin America, Japan, China, Korea and emerging markets.
Their business thrives on the deep technical strengths established over the last 30 years in the development and manufacture of complex APIs such as steroids, peptides, complex long chain molecules and highly potent APIs (HPAIs /oncology drugs) This expertise is complemented by their prowess in intellectual property and regulatory affairs which helps us consistently meet and exceed regulatory standards.
They won the API Supplier of the Year Award at the Global Generics and Biosimilars Awards for three years in a row in 2019, 2020 and 2021.
Cipla Limited To maintain the gold standard in innovations, they house state-of-the-art research facilities for our API process development at three locations in India, with dedicated teams working on synthetic, organic chemistry, process engineering and analytical development at multiple locations.
Their API pipeline consists of 75+ complex developments in the therapy areas of Oncology, Hep C, ARV,Diabetology, CVS, CNS, Respiratory etc.
Manufacture Active Pharmaceutical Ingredients (APIs) at its Kurkumbh & Pune plant.
This has enabled Emcure to be vertically integrated allowing control over the supply chain and lending flexibility to its production.
Emcure constantly works towards synthesizing molecules of APIs in cost-effective and robust manner through its talented research and development team which focuses on developing innovative concepts.
The key success of Emcure’s API research and development has resulted in the creation of S-Amplodipine Besilate, Dydrogesterone, Ferric-carboxymaltose, Iron ascorbate and Erubilin.
Table 2 - Compare API manufacturing between companies
Introduction about potential partner
Divi’s has been established for more than 30 years in Hyderabad, India with two manufacturing units and is among the top pharmaceuticals companies in India.
Divi’s is recognized as a ‘Reliable Supplier of generic APIs (Active pharmaceuticals ingredients)’ and a trustworthy ‘Custom Manufacturer’ to Big Pharma and also is among the top API manufactures in the world.
Divi’s is the leading manufacturer of APIs (Active pharmaceuticals ingredients), Intermediates and Registered starting materials offering high quality products with the highest level of compliance and integrity to over 100 countries.
Divi’s recently reached the milestone of being one among the top 3 API manufacturers in the world and one among the top API companies in Hyderabad 16,500 highly trained professionals across departments and 400 scientists at Divi’s work together to bring world class products to customers.
Divi’s is a Public limited company listed on the Indian stock exchange with a revenue of ~$1.2B for the year 2021-22
Advanced manufacturing facilities both in Hyderabad and Vizag have been inspected multiple times by USFDA, EU GMP (UK, Slovenia, German, Irish authorities), HEALTH CANADA, TGA, ANVISA , COFEPRIS, PMDA and MFDS health authorities.
Introduction about product
The physiologically active component of the medicine found in various treatment forms such as tablets, capsules, injectables, creams, etc is known as the active pharmaceutical ingredient, or API Simply put, it refers to the components of a medicine that lead to the desired outcomes Due to the potency of active pharmacological substances, only a tiny amount is necessary.
Because to the rising incidence of chronic illnesses including diabetes, asthma, and cancer, the API industry has seen some appealing potential despite high production costs, rigorous regulatory laws, and legislation in many countries restricting medicine pricing.
Global Active Pharmaceutical Ingredients (API) Market, Segmentation by Type Generic
→ According to type, innovation APIs are gaining substantial momentum in a variety of end-use applications due to a marked increase in research and development programs that concentrate on offering numerous creative and affordable goods The need for new APIs on the worldwide market is also catalyzed by the rising demand for very powerful chemicals and peptides Nonetheless, due to their lower production costs than Innovative APIs and the laxer restrictions that apply to Generic Drugs, Generic APIs are predicted to grow at the quickest CAGR during the forecasted years. The Generic APIs in the upcoming scenario are so positively impacted by these considerations.
Global Active Pharmaceutical Ingredients (API) Market, Segmentation by Synthesis Type
The prevalence of chronic illnesses, the expanding use of organ-on-chip models in drug discovery, and the growing emphasis on precision medicine are all predicted to accelerate the industry's global expansion The increased prevalence of chronic illnesses and sedentary lifestyles are contributing to the increase in demand for pharmaceutical medications
With a CAGR of 6.08% during the forecast period, the worldwide active pharmaceutical ingredients (API) market is expected to rise from a value of USD185.23 billion in 2020 to USD 331.37 billion by the end of 2030 The rising prevalence of chronic illnesses, including diabetes, cardiovascular diseases (CVDs), and cancer, among others, can also be blamed for the market's expansion According to additional estimates provided by the WHO, about 17.9 million fatalities in 2019 were attributable to CVDs, whereas 1.5 million deaths were attributable to diabetes In addition, cancer will be one of the world's major causes of mortality in 2020 with an estimated 10 million fatalities Generic drugs' growing significance and the pharmaceutical industries' expanding use of biopharmaceuticals are further factors contributing to the market expansion In addition, the increased potential brought on by promising results from biosimilar clinical studies, as well as the rise in off-patent biologic pharmaceuticals, are anticipated to accelerate market expansion in the upcoming years Also, the move toward the production of complex APIs that are employed in innovative drug formulations for specialized therapeutic areas as well as the rising need for analgesics, painkillers, and antibiotics among others are projected to support market expansion.
The Indian Economical Survey estimates that the country's pharmaceutical business generated USD 42 billion in 2021 and would grow to USD 65 billion by
2024 Moreover, the market expansion over the anticipated years is being boosted by the thriving development of the biopharmaceutical industry as well as the expanding advent of biosimilars.
The active pharmaceutical ingredient market is divided into five regions based on geography: North America, Europe, Asia Pacific, Latin America, and the Middle East
& Africa Regional market expansion is being fueled by an increase in healthcare cost- containment strategies as well as an increase in R&D spending.
The market in North America among these regions produced the most revenue in
2020, at USD 71.70 billion, and is expected to increase to USD 127.61 million by the end of 2030 The growing frequency of chronic illnesses in nations like the United States, along with the availability of a robust healthcare network in the region, is one of the key factors projected to fuel market expansion in the area The Centers forDisease Control and Prevention (CDC) reported that six out of every ten persons in theUnited States had at least one chronic illness, and four of them had two or more TheUnited States and Canada are the two countries that make up the region's market segments Of of the markets in these nations, the market in the United States is anticipated to generate the biggest amount of revenue by the year 2030 and expand at the highest CAGR of 6.03%.
The market in Asia Pacific produced the second-largest amount of revenue in
2020 with USD 56.35 billion, and it is expected that it would reach USD 104.98 billion by the end of 2030 Some of the key elements predicted to foster market expansion in the next years include rising health spending and the existence of significant pharmaceutical suppliers in nations like China and India In India, Singapore, China, and Japan, the domestic general government health expenditure as a percentage of current health expenditure increased from 18.877%, 22.918%, 27.885%, and 80.964% in the year 2001 to 32.788%, 50.202%, 55.979%, and 83.857% in the year 2019 respectively, according to statistics provided by the World Bank Japan, Australia, Singapore, South Korea, India, China, and the rest of Asia Pacific are the countries into which the market in the area is further divided In terms of market revenue among these nations, China's market generated the most in 2020 with USD 19.78 billion and is projected to do so again by the end of 2030 with USD 36.90 billion in revenue On the other side, the market in India is anticipated to expand at the highest CAGR of 7.08% during the forecast period.
Throughout the projected era, Europe will see tremendous growth The large concentration of well-established biopharmaceutical businesses in this area, as well as factors like the expanding financing options for research, are expected to drive up market demand For instance, the biopharma industry attracted USD 20 million in investment in 2018 and USD 27.5 billion in 2019, an increase of 28% As a result, the expansion of the regional market is being boosted by the increasing number of biopharmaceutical R&D initiatives being undertaken by various major industry participants in Europe.
LEARN ABOUT AND ANALYZE THE CONTRACT
Contract analysis and contract structure
The content of the Goods Sale Contract is first of all the terms agreed upon by the parties On the basis of the provisions of the Civil Code and the Commercial Law, stemming from the nature of the goods sale and purchase relationship in commerce, it can be seen that the important provisions of the Goods Sale Contract include: object, quality, price, payment method, time and place of delivery Bar contracts can be divided into 3 parts:
Contract title: usually “Contract”, “Sale contract”
Information section and contract subject
Name of unit: state both full name and abbreviated name (if any)
Phone numbers: Fax, phone, email
Account number and bank name
Representative to sign the contract: it is necessary to specify the name and position of their representative
Article 1: Definition: There are concepts that the buyer and seller need to discuss together to give a single definition and understand the same content in the contract to avoid misunderstandings about the terms leading to unsuccessful negotiations
Article 2: Scope of contract: Specify the responsibilities of both parties (buyer and seller) This will detail the product as well as the seller's specifications such as item name, manufacturer, supplier, quality Need to check carefully and discuss with each other a lot in order to avoid errors to the detriment of the parties.
Article 3: Contract value (Unit price - Quantity and Total Amount): This section will specify the unit price according to the commercial terms selected by the two parties and the total payment amount of the contract, all listed in the price list of the contract and the buyer must pay the full amount corresponding to the quantity of goods purchased This is an important item because the two parties need to discuss and agree on a common price, a common currency that is suitable and beneficial to the parties, and can agree on the number of payments, the level of payment each time and payment time.
Article 4: Conditions of delivery: The parties to an international goods sale and purchase contract agree on the method of delivery and the means of delivery Usually, in contracts for the international sale of goods, the terms of delivery in Incoterms are used to easily determine the rights and obligations of the parties The buyer needs to clearly define the delivery time as a specific time or a time limit so that the buyer has information to prepare the means of transport, warehouse, preparation to open the L/C to receive the goods At the same time, for the mode of transport, the parties can agree and make their own choice about the mode of transport and the time when the risk is transferred Enterprises can choose the delivery methods specified in Incoterms such as FOB, CIF, etc When using these terms of delivery, it is important to specify the name of the delivery term, the year of the Incoterms, and pay attention to the specific provision in the contract for the full use of the specified or modified delivery terms In addition, it should be noted that the rights, obligations and responsibilities of both the person assigned to deliver the goods must be clearly defined to avoid unnecessary risks.
Article 5: Payment method: This is an important content in a commercial contract Buyer and seller need to agree carefully to offer a common payment method such as T/T, L/C, COD, Open account, to suit the purpose and ensure the safety of the couple In addition, it should be noted that the rights, obligations and responsibilities of the person assigned to deliver the goods must be clearly defined to avoid unnecessary risks.
Article 6: Chartering: When an international contract of sale agrees to apply one of the international trade conditions of Incoterms that will be the basis for determining the obligation to charter a vessel/rental means of transport that belongs to exporter or importer Under Incoterms 2010, this work will be with the importer if the contract uses one of the conditions of group E or F and will be the obligation of the exporter if the contract uses Incoterms of group C or D This is also very important to be discussed and discussed carefully between the parties, clearly identifying the risks to negotiate and make the final decision on the contract.
Article 7: Insurance: This content also needs to be discussed carefully by the parties because it is related to the quality of the goods, must choose a reputable insurance company, capable of insuring most of the risks of the good And the parties must comply with the provisions stated on the warranty card about who the insurance is bought by, under what conditions (A, B, C), and which party will receive compensation from the insurance on contract as agreed in advance.
Article 8: Inspection of goods: According to the Commercial law, the inspection of goods is the buyer's right, not the obligation, the seller has no right to require the buyer to inspect the goods, the buyer has the option to inspect or not inspect the goods. Therefore, in order to avoid disputes between the parties, the contract should take the following measures: Clearly specify the quantity, quality, design, volume, and technical criteria when conducting the purchase and sale of goods Specific regulations on the process and time of goods inspection, as well as the time limit for notification of defects, responsibility for risk.
Article 9: Warranty: The warranty period should be clearly stated in the contract.Depending on the nature of the goods that the seller commits to within the warranty period, the goods will ensure quality standards, specifications, and compliance with the provisions of the contract Buyers need to consider carefully to avoid disadvantages for themselves, need to discuss carefully between the parties to agree on a general warranty policy to avoid misunderstanding and loss of reputation between the parties.
Article 10: Contract performance guarantee: a guarantee is a commitment by a third party to the obligee to perform an obligation on behalf of the obligor (hereinafter referred to as the guaranteed party), if upon maturity performance of an obligation that obligee fails to perform or performs improperly In the sale and purchase contract, the parties must agree to write all information about the guarantor to avoid problems during the performance of the contract.
Article 11: Termination of the contract: can be understood as the termination or cessation of the performance of the agreements reached by the parties when concluding the contract The obligor is not obliged to continue to perform the obligation and the obligee cannot force the obligee to continue to perform the obligation under the contract or will incur liability for damages, contractual penalties copper The parties must discuss this item carefully in order to jointly perform their obligations in the contract and avoid mistakes.
Article 12: Liability / Penalty for late delivery: Delivery time, mode of delivery, transportation and loading and unloading of goods shall be mutually agreed upon by the two parties, but must not be contrary to the regimes , regulations on delivery, transportation and loading and unloading of goods are specified in Circular No 32- TTg dated February 1, 1960 and other circulars of the Prime Minister related to this issue Depending on the type of goods, it is possible to specify the time limit for delivery on a monthly or quarterly basis The buyer and the seller need to discuss the penalty for late delivery, which can be arbitrary but must comply with the provisions of the law.
Article 13: Force majeure: A force majeure event is an event that occurs objectively, which cannot be foreseen and cannot be remedied, despite the application of all necessary and possible measures permitting capacity In the event of a breach of contract due to a force majeure event, the party in breach of the contract will be exempt from liability due to the breach of contract but must also notify and be obliged to prove that force majeure event to the parties in breach of the contract Thereby, the parties must discuss to come up with regulations on extending the time for performance of contractual obligations or refusing to perform the contract.
Article 14: Contract amendment: A contract amendment is a form of agreement between the contracting parties to establish the change of the contents of the signed contract The amendment of the contract may be done many times, at many times, may modify one or more agreed contents in the contract, but must comply with the regulations on the form of agreement and the content of the new agreement effective for the parties when performing the contract An agreement to amend or supplement a contract may be expressed in a specific contract, by an addendum to the contract or by an independent civil agreement between the contracting parties.
Conflict of interest and Solution
Price is one of the most important things in an international sales contract But pricing can create a conflict of interest if one party wants to lower prices to increase profits, while the other party wants higher prices to secure its profits For example, the buyer thinks that the price of the product or service provided is too high compared to the actual value or the market price, or tends to demand a lower price when knowing that the seller is in a difficult situation or need money urgently On the contrary, the seller thinks that the price of the product or service provided is too low compared to the actual price or compared to the actual price or the seller tends to ask for a higher price when it knows that the buyer is in urgent need or does not have many choices. other.
Negotiate: The seller and the buyer can negotiate to find a reasonable price for both parties Can apply negotiation skills to find the right solution.
Market research: Sellers and buyers should study the market to have a better view of the prices of similar products This information will help both parties make the right decision on the price.
Using supporting tools: Support tools such as software to calculate costs, product prices, shipping costs, import taxes, will help the two sides calculate costs more accurately to make a decision good price.
Provide conditions and commitments: Conditions and commitments on prices should be clearly stated in the contract to avoid conflicts of interest These conditions may include minimum price, maximum price, or market price change conditions.
Find alternatives: If an agreement on price cannot be reached, the two parties can look for other alternatives, such as sourcing the product at a lower price or changing the product to get reasonable price.
Delivery time is also an important factor However, if the seller wants fast delivery to meet customer demand, while the buyer wants slower delivery to avoid overcrowding or storage limitations, there will be a conflict of interest.
Renegotiate delivery time: The seller and the buyer can renegotiate the delivery time to reach a suitable agreement During the negotiation process, the two parties can make different options to find the most suitable delivery time.
Make a clear commitment in the contract: To avoid conflict on delivery time, the seller and the buyer need to make a clear commitment in the contract about the delivery time, including the start and finish the delivery.
Find out about shipping time: The seller and the buyer should learn carefully about the shipping time and factors that affect the delivery time such as weather, terrain, customs clearance, to give the time reasonable delivery time.
Provide conditions and commitments on the penalty for late delivery: To ensure the timeliness and punctuality of the delivery, the seller and the buyer can provide conditions and commitments on the penalty for late delivery goods in the contract.Using new technologies: Using new technologies such as transport tracking, data analysis, effective communication, will help sellers and buyers better manage and monitor the delivery process , thereby minimizing delivery time conflicts.
The seller uses urgent shipping service to ensure on-time delivery avoiding the influence of external factors such as weather, strike, war or natural disaster.
Payment terms are also one of the important factors in international sales contracts However, if the seller wants to receive money before delivery to ensure financial safety, while the buyer wants to pay after receiving the goods to check the quality of the product, it will also lead to a conflict of interest.
Make a clear commitment in the contract: To avoid conflict on payment terms, the seller and the buyer need to make a clear commitment in the contract about the payment method, payment time, payment amount and other conditions related to payment.
Learn about the country's laws and regulations related to payment: Sellers and buyers need to thoroughly understand the laws and regulations of the country related to payment to come up with terms and commitments suitable combination.
Using new payment technologies: Using new payment technologies such as electronic payment systems, credit cards, e-wallets, will help sellers and buyers manage the payment process easily and efficient.
Provide conditions and commitments on the late payment penalty: To ensure the punctuality of the payment, the seller and the buyer can set the conditions and commitment on the late payment penalty in the contract .
Use the services of financial institutions: Financial institutions such as banks, payment insurance companies, will help reduce the risks associated with payment and make the payment process easy and more convenient.