KSLU Solved Question Papers
International Business
Previous Year Question Paper with Solution
B.Com. LL.B. (Five Years) · Sem 4
2021 Oct (100 marks) Examination
munotes.in
Mumbai
B.Com. LL.B. (Five Years) Sem 4 International Business 2021 Oct (100 marks) Question Paper with Solutions
First published on munotes.in on 21 October 2026.
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Contents
The questions below are the paper as Karnataka State Law University set it at the 2021 Oct (100 marks) examination, in the order it was set.
MarksPage
The Paper as Set
The questions in this volume are the questions asked at the 2021 Oct (100 marks) examination, reproduced as Karnataka State Law University set them, in the order it set them. Long reading passages are shortened to their first and last lines and our summary; the original paper prints them in full. Only the answers are ours. See the original question paper.
Duration 3 hours · Total marks 100 · 15 questions answered
How to use this volume
Solve the paper first, under exam conditions and against the clock. Then read the answers here and mark your own. Reading a solution before attempting the question feels productive and teaches very little, because recognising an answer is not the same as being able to write one.
Q1Explain International business and give details of features of International Business.[16]
Answer
For full marks, cover: the meaning of international business with a working definition; how it differs from international trade; its forms (trade in goods and services, investment, contractual entry, multinational operations); its features explained one by one (cross-border nature, several countries and governments, several currencies, large scale, dominance of multinationals and rich countries, the rising role of developing countries, intense competition, sensitivity to the environment, national and international regulation, higher risk, heavy documentation, distance and logistics, cultural diversity, interdependence, technology and research); an Indian illustration with official figures; a features table; and a conclusion.
Meaning
International business is any business activity in which the parties, the resources or the market lie in more than one country. A Bengaluru firm that sells software to a bank in London is doing international business. So is a Korean car maker that builds a factory near Chennai. So is an Indian textile firm that licenses its brand to a Gulf retailer.
A working definition is this. International business is the production, sale, purchase and investment of goods, services, capital, technology and know-how across national borders. It is carried on by private firms, public enterprises and governments, for profit or other gain.
International business and international trade
The two terms are often used loosely, but they are not the same. International trade is only the export and import of goods and services. International business is wider. It also covers investment abroad, licensing and franchising, contract manufacturing, management contracts and the running of foreign subsidiaries. Every exporter is in international business, but not every international business is trade.
Forms of international business
- Trade in goods. Merchandise exports and imports, such as rice, cars, crude oil and machinery.
- Trade in services. Software, banking, insurance, tourism, transport, education and consultancy sold across borders.
- Foreign direct investment. A firm sets up or buys a business abroad and controls it.
- Portfolio investment. Investors buy shares and bonds of foreign companies without seeking control.
- Contractual entry. Licensing, franchising, contract manufacturing, management contracts and turnkey projects let a firm enter a foreign market without owning a business there.
- Multinational operations. A parent company runs production, research and sales units in many countries under one strategy.
Features of international business
1. Crosses national borders
The defining feature is that the activity crosses at least one national frontier. Goods pass through customs, money passes through the foreign exchange market, and people and data move between countries. Domestic business never meets these frontiers.
2. Involves several countries and governments
At least two countries are always involved, and often many more. Each government has its own policy on tariffs, foreign investment, taxes and the movement of money. A firm must satisfy all of them at once. In India, for example, foreign trade must follow the Foreign Trade (Development and Regulation) Act, 1992 and the Foreign Trade Policy 2023. Payments must follow the Foreign Exchange Management Act, 1999.
3. Uses several currencies
Buyers and sellers usually work in different currencies. Prices are quoted in dollars, euros, rupees or other currencies, and money must be converted. Exchange rates change daily, so the rupee value of a sale can rise or fall between the contract and the payment. Managing this exchange rate risk is a special task of international business.
4. Large scale of operations
International business usually involves large volumes of goods, large investments and long-term contracts. Ships, aircraft, warehouses and global supply chains need heavy capital. This is one reason why large firms dominate it, though small exporters also take part through export houses, trade fairs and online platforms.
5. Dominance of multinationals and developed countries
A large share of world trade is organised by multinational firms. UNCTAD's World Investment Report 2013 estimated that value chains coordinated by transnational corporations accounted for about 80 per cent of global trade. Developed countries have long led world trade, investment and technology.
6. Rising role of developing countries
This picture is changing. UNCTAD's Handbook of Statistics 2025 shows how trade among developing countries has grown. Its share of world merchandise trade rose from 11 per cent in 2000 to 26 per cent in 2024. Developing economies also received more than half of world FDI in 2025. Firms from India, China and other developing countries are now multinationals themselves.
7. Intense competition
A firm in a world market competes with the best producers of every country. Price, quality, delivery time, design and after-sales service all matter. Only efficient firms survive, which is why international business raises productivity.
8. Sensitive to the environment
International business is affected by the political, economic, legal, social, technological and natural environment of every country involved. A change of government, a war, a pandemic, a new tariff or a natural disaster in one country can disrupt business everywhere. In 2025, for example, rising tariffs in major markets led India to approve an Export Promotion Mission to support affected exporters.
9. Regulated at two levels
National governments regulate trade through tariffs, quotas, licences and foreign exchange rules. International bodies set common rules above them. The WTO, with 166 members, administers the rules of world trade and settles disputes. The IMF, the World Bank and UNCTAD also shape the system. Regional agreements such as the EU, ASEAN and SAFTA add further rules.
10. Higher risk
International business carries risks that domestic business rarely meets. Examples are currency risk, the risk of non-payment by a distant buyer, political risk such as expropriation or sanctions, and transport risk on long journeys. Special tools exist for these risks. Examples are letters of credit, forward contracts, and export credit insurance from bodies such as ECGC in India.
11. Heavy documentation and procedure
Every export or import needs documents. Examples are the invoice, packing list, bill of lading or airway bill, shipping bill or bill of entry, and certificate of origin. Para 2.06 of India's Foreign Trade Policy 2023 lists the mandatory ones. Customs clearance, foreign exchange reporting and product certification add further steps.
12. Long distances and complex logistics
Goods often travel thousands of kilometres by sea or air. Freight, insurance, port handling and storage add to cost and time. Efficient logistics is therefore a source of competitive advantage.
13. Diversity of cultures and markets
Customers in different countries differ in language, religion, taste, income and buying habits. A product or advertisement that succeeds in one country may fail in another. Firms must adapt their products, packaging and promotion, and their managers must learn cross-cultural skills.
14. Interdependence of nations
International business makes countries depend on one another for food, energy, components, technology and markets. This interdependence raises total welfare, but it also spreads shocks quickly from one country to another.
15. Technology and research
International business depends on modern communication, transport and information technology. It also needs constant research into foreign markets, rules and competitors, which is costlier than research at home.
An Indian illustration
India shows these features clearly. Its total exports of goods and services reached a record USD 863.1 billion in 2025-26, of which services were USD 421.3 billion. The United States was its largest export market in 2025-26, taking about USD 87.3 billion of goods. India also received about USD 94.5 billion of FDI (provisional) in 2025-26. Maruti Suzuki, whose majority shareholder is Suzuki Motor Corporation of Japan, exported 447,774 vehicles in 2025-26. Its e VITARA model, made in India, reaches 44 countries. In this one example we see cross-border sales, a foreign parent, several currencies, many governments' rules and global competition at once.
Features at a glance
| Feature | What it means |
|---|---|
| Cross-border | Goods, money, people and data cross frontiers |
| Many countries | Several governments' rules apply |
| Many currencies | Exchange rate risk |
| Large scale | Heavy capital and volumes |
| Dominance of MNCs | Global value chains |
| Rise of developing countries | South-South trade 26 per cent in 2024 |
| Feature | What it means |
|---|---|
| Competition | World-class rivals |
| Environment-sensitive | Political and economic shocks travel fast |
| Two-level regulation | National laws and WTO rules |
| High risk | Currency, payment, political, transport |
| Documentation | Many documents and procedures |
| Logistics | Long distances, high freight costs |
| Cultural diversity | Products and methods must adapt |
| Interdependence | Shared gains, shared shocks |
| Technology and research | Constant study of foreign markets |
Conclusion. International business is the production, sale and investment of goods, services, capital and know-how across national borders. It is wider than international trade, because it includes investment and contractual entry as well. Its features are its cross-border nature, many governments and currencies, and large scale. Multinationals dominate it, while developing countries play a growing part. It also brings intense competition, high sensitivity to the environment and regulation at two levels. Higher risk, heavy documentation, long logistics, cultural diversity and interdependence complete the picture. A firm that understands these features can enter world markets with care and gain from them.
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