CHAPTER-III

Present Institutional
Infrastructure For
Export Promotion
In India

40

3.1

INTRODUCTION

It is an holistic fact that exports of any developing country like India

needs guidance and assistance form various institutions at different
stages of its exports. For this purpose the government of India has set up
several institutions which are functioning to help an exporter in his work
through assistance and incentives under various schemes .Exporters in
India have been acquainted with the functions of these institutions and
the nature of help that such institutions can render to exporting
community, exporters have often been advised to contact these
institutions so that they can become clear about the help they can expect
from organized sources in their export promotion effort. Institutions
engaged in export promotions efforts in India can be classified in to six
different categories.

The Department of commerce in the ministry of commerce,

Government of India, is the apex institution which is concerned with
organization, co-ordination and formulation of Indias trade policy1. At
the second level these are deliberative and consultative organizations
which ensure that the countrys export problems are dealt with
comprehensively after mutual discussions between the government and
the industry. At the third stage, the commodity specific organizations
ideal with the problems relating to individual commodities or group of
commodities. At the fourth level there are service institutions which
facilitate and assist our exporters to expand their business and reach
more effectively to the world markets. The fifth level institutions
comprise of those organizations which are directly engaged in import

41

and export activities and handle export and import problems relating to
different commodities for the purpose of supplementing the exports of
private institutions in the field of export promotion and export
management.

At the sixth and last level various export promotion bodies set up by
the state government are functioning for export promotion purchases.

3.2

The Ministry of Commerce Government of India

International Trade policy Division.

The foreign Trade Territorial Division.

The state Trading Division/the public sector trading corporation.

The export Industries and production Division.

Economic Division.

Consultative division (committees and Boards)

7.

Commercial representatives abroad2.

8-K.U. UWB

ACC. NolP84'=^(all. No.

42

3.3

COMMODITY ORGANISATIONS

Export promotion councils.

Commodity Boards.

Marine produce of Export Development Authority.

Agricultural and processed food product export Development

authority3.

3.4

SERVICE INSTITUTIONS

Indian institute of foreign Trade.(I.I.F.T.)

Trade Development Authority (T,D.A.)

Indian institute of packaging (I.I.P.)

Trade Fair Authority of India (T.F.A.I.)

Federation of Indian exporters organization.(F.I,E.O,)

Directorate General of commercial intelligence and statistic

(D.G, C.I. and S.)

43

Export Inspection council (E.I.C.)

Indian council of arbitration (I.C.A.)

Export credit Guarantee Corporation of India (E.C.G.C.)

10

Export -import Bank of India (EXIM-BANK).

3.5

GOVERNMENT TRADING ORGANISATION

3.6

EXPORT ORGANISATIONS AT STATE LEVEL

3.7

THE DEPARTMENT OF COMMERCE GOVERNMENT OF

/

INDIA.

The department of commerce is the primary government agency

which is responsible for evolving and directing foreign trade policy and
programmes, including commercial relations with other countries, state
trading,

various

export

promotion

measures

and

development

regulations of several export oriented industries. This department has

different divisions looking after activities related with export promotion
in India4.

44

A brief description of different divisions is given as follows.

FOREIGN TRADE TERRITORIAL DIVISION

This division looks after the work relating to the development of trade
with different countries and regions of the world including trade negotiations,
trade delegations trade missions. This division handles matters pertaining to
import export trade policy and control in respect of Indias trade interests5.

ECONOMIC DIVISION.

The economic division headed by the economic advisor which is

responsible for evolution of export strategies, export planning,
periodical appraisal and review of policies as also for maintaining of co
ordination and constant contacts with other divisions as well as with
various organizations which have been set up under the commerce
ministry to assist the export drive6.

INTERNATIONAL TRADE POLICY DIVISION.

The main task of this international trade policy division is to keep

f^abraft of the development in the international organizations like
UNCTAD, GATT, the Economic commissions for Europe, Africa, Latin
America and Asia and far East. It is also responsible for Indias relations
with the European Economic community, European free Trade
Association, Latin American free Trade Area, other regional groupings

45

and comman wealth. It also looks after the generalized system of

preferences and non tariff areas1.

THE STATE TRADING DIVISION

This division looks after the state trading activities and evaluates
the performance of STC, MMTC, and its subsidiaries. With a view to
supplementing the efforts of the private enterprises in the field of
foreign trade, a number of public sector trading corporations have been
set up by tHe Government, namely, the jstate Trading Corporation of
India, and Minerals and Metals Trading Corporation.(MMTC).

Subsidiaries of S.T.C. are,

The Tea Trading Corporation of India.

The Handlooms and Handicrafts Exports Corporation of India.

The cashew corporation of India.

The projects and Equipment corporation.

Central Cottage Industries corporation8.

The M.M.T.C. has only one subsidiary namely Mica Trading

corporation. These corporations have produced the essential base for
developing

and

strengthening

the

efforts

relating

to

specific

46

commodities and for diversifying the countrys foreign trade. Briefly

their activities are.

1. To arrange for exports where bulk handling and long term contracts
are advantageous.

2. To facilitate exports of difficult to sell items through various efforts

such as linking essential Imports with additional under link and parallel
deals.

3. To organize production to meet export demands and to help

production units to over come difficulties of raw materials and other
essential requirements to meet export orders and to develop lines of
export by various methods and

4. To under take imports of such commodities where bulk procurement

in advantageous.

These corporations handle actual transactions. And maintains offices

abroad and functions like any commercial house.

THE EXPORT INDUSTRIES AND PRODUCTION DIVISION

This division has there sub-divisions namely.

a) Export product Division.

47

b) Export Industries Division.

c) Export service Division9.

The Export product division pays attention to the problems

concerned with production generation of surplus and development of
markets for various products under its jurisdiction. Their products are all
agricultural commodities and products, marine products, chemicals,
plastic minerals and

ores, coal, petroleum products, and mica salt.

Although in administrative terms, the responsibility for these products

remains with the ministries concerned to ensure that production is
sufficient to realize the fuel export potential.

The Export industries division is responsible for development

and regulation of textiles, including wool, jute, handicrafts and
plantation industries like, coffee, tea, rubber, cardamom. It also looks
after the organizations dealing with the respective products.

The Export services division pays attention for all problems of

export assistance including

import replacement, licensing, for

assistance, export credit, export house, marketing Development zones,

dry port and quality control and pre-shipment inspection, guidance to
Indian entrepreneurs

to set up joint ventures abroad, additions of

capacity to export oriented Industries including assistance to them to

import capital goods and essential raw materials to build up a sound
production base.

48

ECONOMIC DIVISION

The Economic Division headed by the Economic adviser, is

responsible for the formation of export strategies, export planning,
periodic appraisal and review of policies as also for maintaining co
ordination and constant contacts with the other divisions as well as with
various organizations which have been set up under the commerce
Department to assist the export drive. This division also monitors work
relating to technical assistance, management services for export and
overseas investments by India entrepreneurs .

CONSULTATIVE AND DELIBERATE ORGANISATIONS

Various consultative and deliberative bodies have also been set

up to ensure that the collective advice of the commercial interests is
available to the Government of India for framing and formulating export
promotion policies for successful implementation thereof, in this
respect, Advisory council on trade, zonal export and import advisory
comities and cabinet committee on export, need special mention.
Recently the Government of India have revived and re-constituted the
board of trade to make it a more effective instrument in discharging its
consultative and deliberative functions.

49
3.8

COMMODITY ORGANISATIONS

A rising from the need for closer association of the trade in the
evolution

of export

promotion

strategies,

various

commodity

organizations have also been established in the country. Most important

among these are export promotion councils and commodity boards12.

EXPORT PROMOTION COUNCILS

At present there are 19 export promotion councils representing

such items as basic chemicals, pharmaceuticals, chemicals and allied
products,

cotton

textiles,

Engineering

goods,

finished

leather

manufactures, Gem and Jewellery, handloom goods, plastics and

linoleums, processed foods, shellac, silk and rayon textiles, spices,
sports goods, Tobacco And woolen goods. The main functions of these
export promotion councils are,

1) To appraise the Government with regard to trade enquiries and

opportunities.

2) To keep its members informed with regard to trade enquiries and

opportunities.

3) To help in exploration of overseas markets and identification of

items with export potential.

50
4) To assist overseas buyers with information relating to various
aspects of the Indian Engineering Industry and also bring them in
touch with reliable sources of supply in India.

5) To sender assistance on a specific problems concerning

individual exporters.

6) To offer various facilities to engineering exporters in time with

other exporting countries.

7) To help the member exporters in claiming various types of

incentives from the Government13.

2. COMMODITY BOARDS

There are 9 commodity Boards, covering such items as

handicrafts, handloom, silks, coir rubber, coffee, tobacco and
cardamom. Theses commodity Boards deal with the entire range of
problems of production, development and marketing in respect of the
commodities concerned they act them selves as if they were the export
promotion councils. Some of these Boards have opened their branches
in foreign countries in order to promote the consumption of the
commodities under their jurisdiction14. Similarly some of the Boards
have taken promotional measures by participating in trade fairs and
exhibitions,
delegations.

conducting

market

surveys,

and

sponsoring trade

51

Supplementing the commodity organizations is in-charge of the

office of the Textile commissioner and the jute commissioner. The
textile commissioner is concerned with the development and regulation
of all textile Industries other than jute and coir. Jute commissioner is
concerned with the development of jute industry and jute mill
machinery industry.

MARINE PRODUCT EXPORT DEVELOPMENT AUTHORITIES

This Authority was established in 1970 and it started functioning

form September 1972. The functions of this Authority mainly include
the following.

1. Conservation and management of off shore and deep sea fisheries.

2. Promotion of marine products.

3. Registration of fishing vessels and storage premises relating to the

marine products Industry.

4. Development of off shore and deep sea fishing.

5. Providing marketing intelligence and free enquiry information to

fishery exports.

6. Acting as an agency rendering financial assistance.

52

7. Arranging training with special reference to fishing, processing and

marketing.

Act as an agency for extension of relief and subsidies which may be

interested by the Government15.

AGRICULTURAL AND PROCESSED FOOD PRODUCT EXPORT

DEVELOPMENT AUTHORITY

This authorities was set up in February 1986 as a statutory body

replacing the processed food Export promotion council.

It has

representatives of the respective ministries concerned state Government,

Industry and trade, and other research institutions. The object of
forming this authority is to develop and promote exports of horticultural
products, live stock products, processed foods, confectionery and other
agro based item of export potential. It also helps to mobilize export
value

added

agricultural

products

by

quality

and

packaging

improvements16.

3.9

SERVICE INSTITUTIONS

In order to meet the growing requirements of the industry and

trade, a number of institutions and organizations have been established
by the Government of India. The principle areas in which these
institutions

have

been

active

include

development

of export

management personnel, marketing research export credit and insurance,

53

export publicity, organization of trade fairs and exhibitions collection

and dissemination of marketing intelligence, preshipment inspection and
quality control, development in packing etc, the principle service
institutions in the country are given as follows17.

TRADE DEVELOPMENT AUTHORITY (TDA)

Trade Development Authority was set up in 1970, under the

societys registration Act, 1860, m scale sectors which would spearhead
the exportive in the identified products. For providing packaging
assistance to business entrepreneurs at the microlevel after identifying
the potentials of their assistance had also been functioning effectively. It
is a non profit body under the ministry of commerce and it provide
comparahensive range of service to exporters. The objectives of this
organization are:
1. To identify and nurture specific export products.

2. To identify and surface specific export worthy production mainly in

small and medium scale sectors which would separated the export drive
in the identified products.

3. To identify and cultivate specific buyers in sected markets having

increasing trade potential and to bring about durable merchandising
contract between the selected India suppliers and the over seas buyers.

4. To assist the technically competent units in product development and

adaptation.

54

5. To organize collection and dissemination of trade statistics and

commercial information on scientific and systematic basis and to
provide package and services to execute such contracts and

6. To promote and assist the creation of additional capacities in sectors

which have increasing export potential.18.

Being a non - commercial institution TDA acts mainly as a

catalyst and strives to concentrate on specific products, specific
exporters, specific markets and specific buyers. The Trade development
authority has four divisions, namely merchandising, Research and
Analysis. Trade information and statistics, and Administrative Division.
The major activities and programmers usually implemented by the
TDA includes.

1. Export

promotions through buyers seller meets, trade fairs and

exhibitions, contact promotion programmes, programme with the CFTC

assistance, product development.

2. Research and Analysis Activities through short term forecast of

Indian exports, interfirm comparison studies overseas E.T.C.
Trade information Activities through organizing seminars and
workshops training on trade information and export marketing E.T.C.,9.

55
2

INDIAN INSTITUTE OF FOREIGN TRADE (I.I.F.T.)

Indian institute of foreign Trade was established in 1964 is being

/

serving the Indian export sector with the principal activities.

1. It provides training of high standard, short term and long term for
executives and personnel employed in trade and industry export houses,
export organizations. Government departments, Government trade
corporations .and Indian Embassies and consulates abroad. Such training
programmes are run by this institute for developing specialization in
technical methods and in international trade.

2. The Institute sponsors can debates selected form industry and trade,
export houses, Government departments, trade corporations E.T.C. for
higher training abroad in export management and export techniques to
acquire first hand knowledge of the techniques and procedures adopted
by advanced countries in export marketing.

3. The Institute plans organizes, undertakes, sponsors and commissions

t

marketing research and area studies in foreign countries in accordance

with a planned programme in order to ascertain the characteristics of the
overseas markets and consumer preferences, assess the correct and
potential demand for Indian products and determine the scope and the
techniques to be adopted for an increased absorption of Indian products
in these countries. It also undertakes, commodity studies with in the
country with a view to locating new products or developing new uses of

56
existing products with export potential and drawing up long term
programs for their development, processing and export.

4. It undertakes and sponsors practical as well as fundamental research

on various problems of international trade. In spite of its own research
partners the institute undertakes research problems referred to it by the
industry trade and the Government.

5. It also provides consultancy to business firms relating to foreign trade

6. The Institute disseminates information through its quarterly journal

Foreign Trade Review and its monthly journal Foreign Trade
Bulletin20.

Along with theses services the Institute also maintained a well

furnished library which consists of large number of volumes relating to
international trade and related subjects.

TRADE FAIR AUTHORITY OF INDIA (T.F.A.I.)

The TFAI is a service institution functioning under the

Development of commerce in boosting up Indian exports. The TFAI is a
model agency for organizing trade affairs and exhibitions in India and
abroad and has made good progress during recent years in promoting
trade through the medium of fairs and exibitions .

57

It continued to try and bridge the information gap about the

Indian achievements in the field of agriculture. Small medium and
heavy industries, mineral development and other aspects of the
economy including the projection of export capabilities of the nation as
a whole.

The main objectives of the T.F.A.I

Includes:

>

To promote, organize and participate in trade fairs and

exhibitions in India and aboard.

>

To set up show rooms and shops in India and abroad.

>

To undertake training activities in commodities relating to

fairs and exhibitions.

>

To develop exports of new items for diversification and

expansion of Indian exports.

>

To provide infrastructural facilities to interested organiza

-tions for holding fairs and exhibitions at its para dimensional complex.22.

>

To project Indias image as an industrially and technologi

-cally advanced nation in diverse fields, and thus towards
trade promotion.

The TFAI play*, important role in disseminating information in

India and aboard, various achievements of the Indian economy and the

58
technological

and

business potential

of the

country.

Regular

publications are brought out and the multi-media campaigns are

organized, It brings out regularly four journals namely journal of
Industry and trade, Udyoga Vyapar Patrika, Indian exports services
bulletin and Economic and commercial news.

INDIAN INSTITUTE OF PACKAGING

The Indian institute of packaging was established as a society in

1966 jointly by the Ministry of Commerce and the packaging of Allied
Industries in the country and given the responsibility of bringing about
improvements in the standards of packaging in the country particularly
for exports. During the last 25 years a large number of activities have
been developed and implemented by the institute, to meet the
responsibility of export packaging. It has on its rolls over 800 members
including the producers of packing materials and converters of
packaging materials into packages as also a large number of users of
packaging.23.

l.I.P. is also maintaining packaging standards of Indian products

to match with standards required for sophisticated markets so that our
export items can effectively compete with the packaged products
emanating form the developed countries.

FEDERATION OF INDIAN EXPORT ORGANISATION

FIEQ^an Apex body^was set up in 1965 as a command and co

coordinating platform for various export organizations including the

59

commodity council, boards, service institutions and organizations. The

principal objectives of the FIEO are indicated as the following;-

To promote the development of export trade, and co-ordinate the

export promotion activates.

To sponsor study teams to send trade delegations abroad and to

invite trade delegations form abroad.

To sponsor and undertake commodity and market survey.

To conduct meetings and conferences, seminars and workshops

to provide an opportunity to all sectors of the exporting
community and export promotion institutions in India and to
review,

discuss

and

formulate

recommendations

to

the

Government, and other Authorities on problems, prospects and

potentials of Indias exports.

To invite leading business magnets and economic and trade

missions form abroad specially for at our of industrial and
commercial centers in India.

To project Indian goods and services through various media

including films, Exhibitions advertisement sand publications.

To establish relations with overseas chamber of commerce, trade

associations and Government departments.

60

To sponsor special projects relating to export promotion of

Indias consultancy services.

To sponsor out going multi media interests, trade and economic

missions and special terms of Government recognized export
houses, consultancy firms small scale industries and individual
study sales teams.

To execute projects and responsibilities entrusted to it from time

to time by the Government of India and serving as a forum for
two way transmission of views and informations between
Government. Departments and exporting community24.

7 DIRECTORATE GENERAL OF COMMERCIAL INTELLIGENCE

AND STATISTICS (DGCI & S).

The D.G.C.I. and S is located at Calcutta. The main functions of

the Institute is as follows.

1) Collection and compilation of commercial information required

by the government and the trade.

2) Amicable settlement of trade disputes arising between Indian

exporters and foreign buyers.

61

3) Maintenance of commercial (Exports and Imports) library in

Calcutta.

4) Publication of periodical reports received from Indias trade

representatives stationed in foreign countries with regard to
economic consideration and trade prospects25.

INDIAN COUNCIL OF ARBITRATION

The Indian Council of Arbitration was set up in 1965 as an apex

body to promote and encourage amicable settlement of trade disputes
keeping in view of growing number of trade disputes. The main
functions of the council are as fallows;
To collaborate with international bodies in matters concerning to
international commercial arbitration.

To arrange regular meetings with Export promotion councils,

public sector undertakings, chambers of commerce, Trade
associations E.T.C.

To discuss the problems of settlement of disputes by arbitration

process.

To arrange arbitration of trade disputes in international trade

through its constituent members.
To maintain panel of members as arbitrators u.

62

9.

EXPORT INSPECTION COUNCIL

In consonance with the need for constant improvement in quality

of Indian export products and for gaining the confidence of our
importers abroad in respect of the quality of Indian exports, The
Government of India established the ExportInspection Council under the
provisions of export quality control and preshipment Inspection Act of
1963. The council mainly administers the schemes of quality control
and preshipment Inspection. The council is also charged with the
responsibility of establishing laboratories and test houses throughout the
country for the provision of Inspection facilities in regard to the
commodities thus notified. Almost 90 % of export commodities
covering more than several hundred items have already been brought
within the purview of this Act and are subjected to compulsory pre
shipment Inspection.27

10

EXPORT CREDIT GUARANTEE CORPORATOION

With the view of minimizing the risk element in export business and
to facilitate the flow of finance from the banks to exporters, Export
credit Guarantee Corporation was established. In addition to the normal
risk policies the corporation assists the exporters through special
schemes, such as packing credit guarantee, post shipment credit
guarantee and Export finance guarantee. It is wholly owned by the
Government of India and works on no profit - no loss basis. To suit the
varying needs of the exporters. The corporation provides different types

63
of cover packages which may be divided in to following three broad
groups.

I. Standard policies insured to exporters to protect them against the

risks of trading with overseas buyers on credit terms.

II. Financial guarantees issued to banks against the risks involved in

28

providing credit to exporters '

The E.C.G.C bears the main brunt of the risk and pays the exporter
90 percent of his loss on account of commercial risks and political
risks.

11

EXPORT IMPORT BANK OF INDIA [EXIM-BANK]

Export Import Bank of India was established on January 1, 1982 for

the purpose of financing, facilitating and promoting foreign trade of India. It

extends finance to exporters of capital and manufactured goods, exporters of
software and consultancy services and to overseas joint ventures and turn key
construction projects abroad. The bank is the principal financial institution in
India for coordinating the work of institutions engaged in financing export and
import trade29.

3.10 PUBLIC SECTOR TRADING CORPORATIONS

With the idea of supplementing the efforts of private sector In the

fields of foreign trade. Government of India has also set up a number of
institutions such as Government trade Corporations, which include the

64

state trading corporation, the Minerals and Metal 'trading Corporation,

^picestrading corporation, and Metal scrap trading corporation. Each of
these corporations are having a subsidiaries at state levels. After the
wave of new economic package reforms in India, all most all these
subsidiaries have been made full fledged Autonomous bodies and the
functions of these organizations are being examined from time to time30.

3.11

EXPORT ORGANISATIONAL SET UP AT STATE LEVEL

The state Governments are increasingly participating in export

promotion of the country. Some state Governments have created
Independent Departments of Trade and commerce and a minister has
been put in charge of it. Some states have also been set up Export
promotion boards and export corporations for stimulating export items
originating form their respective states. Liason officers have also been
appointed by the states to develop export trade and maintain links with
the central Government Departments and organizations. Export
promotion Advisory committees have been established by some states
under the chairmanship of the chief ministers or the minister for
Industries at state level.

All these institutional efforts have gone a long way in creating

export atmosphere in the country and also stimulating the export base of
the economy. The statistical Data being available exhibits that all these
Institutions have provided stimulus to the export base and have
contributed for the countrys export promotion in a considerable
manner.

65

REFERENCES

1.

Govt, of India Compiled from various annual reports ofministiy of

commerce, New Delhi.

2.

Ibid.

3.

Ibid.

4.

Ibid.

5.

Ibid.

6.

Ibid. '

7.

Ibid.

8.

Ibid.

9.

Ibid.

10.

Ibid.

11.

Ibid.

12.

Ibid.

13.

Ibid.

14.

Ibid.

15.

Ibid.

16.

Ibid.

17.

Ibid.

18.

Ibid.

19.

Ibid.

20.

I.I.F.T Annual report 1991-92.

21.

Ibid.

22.

Ibid.

23.

Ibid.

24.

Ibid.

66
25.

Ibid.

26.

Ibid.

27.

Ibid.

28.

Ibid.

29.

Ibid.

30.

Ibid.