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Since 1951, the Government of India has started a number of institutions to assist
the export trade sector. Such institutional agencies provide organisational
support t exporters. However, they do not participate directly in export trade.
They only help exporters in finding out suitable markets, guide them through
suitable information about foreign markets and inform them about government
policies and incentives offered.
Foreign trade organisations for export promotion indirectly help Indian exporters
in their export promotion efforts.
Meaning
The meaning of Export Processing Zones (EPZs) can be broadly defined as an area
enjoying special government of India support with respect to fiscal incentives,
tax rebates and other exclusive benefits for the growth of export.
As a part of export promotion drive, the Government of India has established free
trade zones (also known as Export Processing Zones) in different parts of the
country. The basic idea behind setting up EPZs/FTZs is to provide an
internationally competitive duty free environment for export promotion at low
costs so that exporting units will operate sucessfully in the international
markets. A free trade zone is an area or industrial belt near a sea/airport where
a manufacturing unit can import goods duty free provided the products manufactured
are for exports only. Import of goods is duty free but the entry of foreign
nationals is not free. The units operating at the free trade zone are expected to
export their production to the full extent. The purpose is to offer certain
special incentives in the zones and thereby to encourage manufacturers to promote
exports. This enables the products of EPZs to be competitive, both quality-wise
and price-wise, in the international market.
Objectives
• Encourage and generate the economic development
• Encourage Foreign Direct Investments (FDI)
• To channel the sources of foreign exchange within the system in a phased
manner
• Foster the establishment and development of industrial enterprises within
the said zones
• Encourage and generate wider economic activities by encouraging foreign
investments for the development of the zones
• To channel the foreign exchange earnings for the further development of
these zones and explore new areas for the development of Indian exports
• Encourage establishment and development of Indian industries and business
enterprises and facilitate with proper infrastructure Generate employment
opportunity
• Upgrade labor and management skills
• Acquire advanced technology for increased productivity
• Ensure world class quality of products
Advantages
(1) Free trade zones (FTZs) are industrial estates which form enclaves from the
national customs territory of a country and are usually situated near seaports or
airports.
(2) The entire production in such zones is usually meant for exports.
(3) Suitable vast area with infrastructure facilities is selected for such free
zone. The normal facilities for manufacturing activities are provided by the
government in the FTZs.
(4) Special concessions and incentives are offered to units for promotion of
exports. Such incentives and concessions include: (i) Duty-free import of capital
goods and equipment, (ii) Exemption from customs and other taxes on imported raw
materials, (iii) Exemption from central excise, (iv) Liberal policy for import of
technical know-how, (v) Advance import licenses of raw materials to meet one
year’s requirements.
Prominent FTZs
Meaning
A Special Economic Zone (SEZ) is an enclave within a country that is treated
as foreign territory for the purpose of tariffs and duties. The units located in
an SEZ do not have to pay custom duties on goods they import or local levies on
goods bought from the rest country. The basis is to create a legal environment to
boost exports.
Distinctive Features
1) A designated duty free enclave to be treated as a foreign territory for
trade operations and duties and tariffs.
2) SEZ units could be for manufacturing, trading or services. SEZ units would
be able to import capital goods and raw material duty free.
3) No routine examination of export and import cargo by customs.
4) SEZ units would be required to export the whole of their production. Sale in
domestic market on full duty and import policy in force.
5) SEZ units to be positive net foreign exchange earners in three years.
6) SEZ units to maintain accounts in formats of their choice.
7) Duty free goods to be utilized within the approval period of five years
8) 100% Foreign direct inc=vestment through automatic route in the
manufacturing sector.
9) 100% Income tax exemption for five years and 50% for two years thereafter.
10) External commercial borrowing through automatic route.
11) No fixed wastage norms.
12) Performance of SEZ units to be monitored by a Committee consisting of the
Development Commissioner and the custom.
13) SEZ units shall be deemed to be foreign territory for the purpose of trade
operations and tariffs. Goods going to the SEZ are would be treated as deemed
exports.
14) SEZ units will be able to obtain products from DTA without paying terminal
excise duty.
Benefits
1) The EOUs are mainly concentrated in the engineering, chemicals, plastics,
granites and food processing.
2) Such units are permitted to import raw materials, spare parts, machinery,
etc., without the payment of import duty.
3) They need not pay excise duty when they use the domestic raw materials,
etc., for the production of goods which are to be exportes.
4) 100% EOUs need not be located in the FTZs. Such units may be located at any
place and may be of any size.
5) They aye given special concessions such as five year tax holiday, two years
gestation period before exporting.
6) They export practically the entire or atleast 75% of their total production
abroad and help the country in promorting exports.
Functions
1. To co-ordinate the export promotion activities of its constituents;
2. To collect and disseminate to members important commercial and market
information;
3. To provide common services for the benefit of exporters and their
organisations;
4. To advice or to represent to the Central and State governments on matters
relating to export trade and promotion;
5. To send delegations abroad for export promotion;
6. To give wide publicity to Indian goods abroad;
7. To arrange meetings, conferences and seminars on matters relating to export
trade;
8. To arrange buyer-seller meets;
9. To established rapport with overseas chambers of commerce, trade
associations and government agencies for promoting exports.
10. To act as registering authority for export houses/trading houses/STH/SSTH.
It also issues RCMC to such houses
1. FIEO issues recommendatory letters to members for getting visa for foreign
tours for export promotion.
2. It also issues certificate of origin to its members (export houses, trade
houses, etc.) in regard to exports.
3. It provides useful information about foreign markets to its members and
helps them in getting their problems solved through the Public Grievance
Committees.
4. In December, 1995, the FIEO prepared and published a directory of Indian
exporters and a foreign buyers’ directory for the benefit of Indian exporters.
5. FIEO takes up the pending cases of members with the Public Grievance
Committees in the office of DGFT, Collector of Customs and other organisations
such as Railways for quick and fair settlement.
MVIRDC World trade Centre (M. Visvesvaraya Indutrial Research and development
Centre)
World trade Centre (WTC) is one more export trade organisation and is useful to
Indian exporters in different ways. It brings under one roof all the agencies,
business know-how and sources of information connected with international trade.
WTC is a regular member of the World Trade Centres Association, New York, with
more than 200 members spread over 60 countries.
Functions
1. To provide registration to intending exporters against prescribed fees.
2. To develop industries relating to the products mentioned above for export.
3. To determine standards and specifications and facilitate quality control.
4. To carry out inspection of meat and meat products in any slaughter house,
processing plant and storage premises.
5. To work out improved packaging.
6. To work out result0oriented marketing strategy.
7. To promote export-oriented production and development.
8. To collect statistics from the owners of factories and to publish the same.
9. To provide the training to personnel engaged in these businesses.
The Import Export Trade Control Organisation headed by Director General of Foreign
Trade (DGFT) is responsible for the execution of the import and export policies of
the Government of India. This authority also looks after import and export
licensing of iron and steel and ferro-aloys. DGFT has subordinate offices situated
at:
Ahmedabad Amritsar Bangalore Baroda Rajkot
Bhopal Calcutta Coimbatore Chandigarh Shillong
Cuttack Ernakulam Gandhidham Guwahati Srinagar
Hyderabad Jaipur Kanpur Ludhiana
Tuticorin
Madras Moradabad New Delhi Panaji
Varanasi
Panipat Patna Pondicherry Pune Vishakhapatnam