Export Promotion

Introduction
Sustained export growth is crucial for maintaining and accelerating the GDP Growth momentum, increasing employment and alleviating poverty. Since full Liberalization of imports and sharp reduction in transaction costs were expected to take time to implement, several export promotional schemes were introduced in the last two decades. In light of the recent changes introduced in removal of all quantitative restrictions in imports and substantial reduction in import duties and the present proposals to introduce Universal Green Channel and full implementation of EDI (incustoms clearances), it is an opportune time to take stock of all the schemes and to take a view to remove some of them which may have outlived their roles. However, in the transition period, as also suggested by the Prabhu Committee, export incentives need to be maintained so as not to lose the export momentum.

Meaning:It includes measures to encourage export production, export promotion organizations, international marketing assistance and measures to reduce business risks and increase profitability.

CONCEPT: Export development is important to the firm and to the economy as a whole. Export promotion is designed to help firms enter and maintain their position in international markets and to match or counteract similar efforts by other nations.

HOW EXPORT PROMOTIONS ?

Various approaches toward export promotion include: Knowledge transfer Direct or indirect subsidization of export activities Reducing governmental red tape for exporters. Export financing and mixed aid credits to exporters Altered tax legislation for nationals living abroad. Tax benefits to export oriented units. Exports Promotion Zones.

 Establishing special institutes for export promotions. Export Promotion for MSME: The capability of Indian MSME products to compete in international markets is reflected in its share of about 40% in national exports. In case of items like Readymade garments Leather goods Processed foods Engineering items, the performance has been commendable both in terms of value and their share.

EXPORT PROMOTION PROGRAMMES

MARKETING ASSISTANCE AND EXPORT PROMOTION SCHEME Plan Scheme Training and Manpower Development' consists of the following Components: Participation in the International Exhibitions/ Fairs. Training Programmes on Packaging for Exports Marketing Development Assistance Scheme for MSME exporters (MSME-MDA) National Award for Quality Products.

Objectives of export promotion measures in India

Compensate the exporters for the high domestic cost of production Provide necessary assistance to the new and small exporters Increase the profitability through export.

ORGANISATIONAL SET-UP
(A).Ministry of Industry and Commerce of India:
Matter related to foreign trade are dealt with by eight divisions in the Department of Commerce 1. Administrative and General Division 2. Finance Division 3. Economic Division

4. Trade Policy Division 5. Foreign Trade Territorial Division 6. Export Products Division 7. Services Division 8. Industries Division

(B)Autonomous Bodies: 1).Export Inspection Council 2).Indian institute of Foreign Trade

Training of personnel in modern techniques of international trade, Organization research in problems of foreign trade, Marketing research, Dissemination of information relating to research and market survey

3).Indian institute of Packaging

It undertake research on raw materials for the packaging industry, Organise training programmes on packaging technology, Stimulate consciousness of the need for good packaging technology etc.

4). Export Promotion Councils, Commodity Boards and Authorities.

Presently, there are fourteen Export Promotion Councils under the administrative control of the Department of Commerce. Some of these Councils are : Chemexcil Pharmexcil Cashew Export Promotion Council Council for Leather Exports Engineering Export Promotion Council, Gems & Jewellery Export Promotion Council Plastics Export Promotion Council Export Promotion Council for EOUs & SEZ Units

For some products, there are Commodity Boards which are responsible for production, development and export ( e.g.Spices Board, Coir Board, Coffee Board, Rubber Board ,Tea Board )

 For some other products, MPEDA ( Marine Products Export Development Authority ), APFPEDA ( Agricultural and Processed Food Products Export Development Authority ) are responsible for the development of the industry and export.

5). Federation of Indian Export Organisation.

It provides assistance to Govt. recognized export houses and coordinates export promotion efforts in the field of consultancy services in the country.

6). Indian Council of Arbitration. 7). India Trade Promotion Organisation.

ITPO is formed after the merger of Trade Fair Authority of India and Trade Development Authority of India. The functions of ITPO are Develop and promote export, import and upgrade technology through fairs in India and abroad. Compile and disseminate trade related information. Undertake publicity through the print and electronic media etc.

(C). Public Sector Undertakings:

A public sector undertaking operates under the administrative control of the Ministry of Commerce. State Trading Corporation of India Limited (STC) The Export Credit Guarantee Corporation The Spices Trading Corporation etc.

(D). Advisory Council:

Central Advisory Council on Trade consist of representatives from several organizations advises Govt. on matter relating to EXIM policy programme Operation of Import and Export trade control Organization and development of commercial services etc.

(E). Attached and Subordinate Offices:

1. Office of the Director General of Foreign Trade (DGFT) 2. Directorate General for Commercial Intelligence and Statistics. 3. Offices of Development Commissioners.

INCENTIVES
Export incentives includes

Rebate of duties Rebate of excise duty and custom duties on export to encourage export. Cash compensatory support Cash subsidy designed to compensate the exporter for unrebated indirect taxes and to provide resources for product/market development. Income tax concession Freight subsidy Award

Production Assistance/Facilities
1. Export Processing Zones ( EPZs )

The basic idea behind setting up EPZs is to provide an internationally competitive duty free environment for export promotion at low costs so that exporting units will operate successfully in the international markets. 2. Export Oriented Units (EOUs) Offers a wider source of raw materials, ports of exports, other facilities, availability of technological skills etc. Central Govt. has setup Software Technological Parks since 1991. 3. Agriculture Economic Zone ( AEZs )

It is setup to promote the export of agro and agro- based products. At present there are 45 APZs in India. Central Govt. assist state Govt. in the development of necessary infrastructure, flow of credit and other facilities for promoting agro export.