The propensity to trade, barter and exchange one thing for another . . . is common to all men, and to be found in no other race of animals.
If a good face is a letter of recommendation, a good heart is a letter of credit.
Tata Motors of India's export manager, Raju Aneja, has just signed an export order for 1,000 Nanos—its new revolutionary minicar—with Atlas Distributors, a Vespa scooter dealership based in Casablanca (Morocco). The export sale is denominated in euros (€) and calls for payment of €20 million upon delivery—scheduled for approximately three months from the time of shipment. Tata Motors has never had any commercial dealings with Atlas but was envisioning a long-term relationship with the Moroccan firm. However, it was concerned about the importer's solvency. The Moroccan dirham was pegged to the euro and partially convertible. How should Tata Motors finance its export trade? Raju knew that this would be the first of many similar deals that Tata Motors was hoping to forge with other emerging market countries where the Nano was expected to meet with much commercial success.
In this chapter you will gain an understanding of: