Export Promotion

Presented by
Rudra Sharma
Sanjib Borthakur
Export Promotion:-

It includes measures to encourage export production,

export promotion organisations, international marketing
assistance and measures to reduce business risks and increase
profitability.
 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,
 Organisation 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
Export Promotion Councils, Commodity Boards
and Authorities.

 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

Public sector undertakings 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
organisations advises Govt. on matter relating to
 EXIM policy programme
 Operation of Import and Export trade control
 Organisation 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.
 Marketing Assistances
Steps have been taken to assist the exporters in their
marketing effort. These includes-

 Conducting, sponsoring and assisting market surveys and research

 Collection, storage and dissemination of market information
 Organising and facilitating participation in international trade fairs and
exhibitions
 Credit and insurance facilities
 Release of foreign exchange for export marketing activities
 Assistance in export procedures
 Quality control and pre-shipment inspections
 Identifying markets and products with export potential
 Special Economic Zone (SEZ)
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
of the country. The reason behind for setting up of SEZ are-

 To create a legal environment to boost exports earnings.

 Encourage foreign investment in the export sector.
 Encourage transfer of tecnology
 Generate employment
 Promote economic development etc.
 Export Houses

An export house is a registered exporter who satisfies certain

criteria laid down in the Foreign Trade Policy. It is entitled to
certain facilities and incentives.

The objective of the scheme is to recognise established

exporters as export houses of different grades with a view to
build marketing infrastructure and expertise required for
promotion.
 Export Houses
 Status holder Categorization:

The Scheme of status holders continues but the

categorization of status holders from Export House,
Trading House, Star Trading House and Super Star
Trading House has been changed to one Star Export
House to Five Star Export Houses shall be eligible for
a number of privileges including fast-track clearance
procedures, exemption from furnishing of Bank
Guarantee, eligibility for consideration under Target
Plus Scheme etc.
 Export Houses
Category Performance 
over three Years
One Star Export House 15 crores.
Two Star Export House 100 crores.
Three Star Export House 500 crores.
Four Star Export House 1500 crores.
Five Star Export House 5000 crores
 EXIM Policies

 Export Promotion Capital Goods

Scheme
This scheme is available to export companies and traders who
provide the GOI with information about which type of goods
and what value of Capital Goods they will import. And they
also inform what will be the outcome of export they expect to
produce from those imports. Depending upon the export
commitment GOI provides them a license to import capital
goods duty-free or preferential rates of duty.
 Pre and Post Shipment Financing
The Reserve Bank of India provides Indian Exporters Pre-Shipment
Financing through commercial banks for purchasing raw materials and
packaging materials by presenting Letter of Credit. RBI also provides Post-
Shipment Financing through commercial banks at preferential rates by
presenting export documents.

 Export and Special Economic Zones

Govt. of India has established Export Processing Zones (EPZs) and Special
Economic Zones (SEZs). In EPZs units can import goods free of custom
duty. There is 5-year tax holiday to any industrial unit in EPZs. Govt. has
allowed 100% Foreign ownership of units under EPZs and SEZs. The
Govt. considers SEZs as foreign territory for trade and tariff purpose. Units
under SEZs may engage in Manufacturing, Trading and Services. Units are
exempt from routine checking of exports by customs, and they can sell in
the domestic market on payment of duty as applicable to imported goods.
 Duty Drawback Scheme
The basic objective of this scheme is to reduce
the indirect taxes on exports. Exporters can get
refund of the excise and import duty. Through
this scheme they can be more competitive and
have more potential market.
 Measures To Promote Exports
1.Market Access Initiative:- Government provide
financial assistance ranging from 25% to
100% depending upon the activity.
2.Marketing Development assistance (MDA):-
It is intended to provide financial assistance
for a range of export promotion activities
implemented by export promotion councils.
3.Brand Promotion And Quality:-

The Central government supports and assists trade and industry to launch a nationwide
programme on quality awareness and to promote the concept of total quality
management.

4.Agricultural Exports:-
In agri export zones, currently there are 20 zones. Government is running a new Scheme
called vishesh krishi upaj yojna.

There are 4 approved AEZs in North East,

(i) for Pineapple in Tripura, in which investment of Rs. 7.62 cr. has been made,

(ii) for floriculture (Orchids) & Cherry Pepper in Sikkim where an investment of Rs. 1.15
Cr in the form of green house, drip irrigation/Planting material has been made and
exports of Orchids have started,

(iii) for Ginger in Sikkim, in which an entrepreneur has been selected and

(iv) for fresh & processed Ginger in Assam where an investment of Rs. 3.15 Cr in the
form of pack house and 4 collection centres is being made. During 2006-07 ginger
exports worth Rs. 2.17 cr. have taken place from this area.
5. Special Economic Zones:-
SEZ’S are growth engines that can boost
manufacturing ,augment exports and generate
employment.

6. Target Plus Scheme :-

Accelerate growth in exports by rewarding
star export houses who have achieved a
quantum growth in exports
 Export Promotion in North-East
 With a view to promote exports from the North
Eastern Region, a North East Cell has been set up in
the Department of Commerce.

 Export Development Fund (EDF) was set up with the

objective of promoting exports from the Region.

 The Agricultural and Processed Food Products Export

Development Authority (APEDA) works as nodal
agency for sanctioning projects received under the
EDF (NER).
 Major Project Undertaken

 Project on Bamboo Shoot Processing in Nagaland .

 Project for Export Promotion of Infrastructure for Passion Fruit Processing

plant in Manipur with the Govt. of India contribution of Rs. 250.00 lakh
which envisages the following benefits for exporters:
Ø Remunerative prices for farmers growing passion fruit in Manipur and
neighboring states.
Ø Reduced wastage.
Ø Stimulation of agricultural production of horticulture crops.

 Project for creation of integrated trade information and stay facility centre
for traders in Manipur .

 Project for floriculture in Mizoram with the support of Rs. 210.94 lakh.
 Other Activities undertaken in the North
East Region

 To strengthen infrastructure for furthering export of

agriculture & horticulture produce from NER, APEDA has
provided assistance for establishment of the following
facilities in the North Eastern Region:-

 A pack house along with 4 collection centres for processing

Ginger for exports in Assam.

 A laboratory in Assam for conducting tests on food products

for purposes of monitoring, pre-shipment testing and issue
of test certificates.

 Canned Mushroom project for exports in Nagaland.

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 Beekeeping development project for exports in Manipur. It
provides employment opportunities to women folk.

 Setting up Integrated Pack house facility for floriculture in

Sikkim and Mizoram.

 Training programme for beekeepers in all the states on good

beekeeping practices.

 Walk in type cold rooms at Agartala, Azwal, Imphal and

Dimapur.

 Centre for Perishable Cargo (CPC) at Guwahati

 Highlights of the Foreign Trade Policy (2009-14)

 26 new markets have been added under Focus Market

Scheme. These include 16 new markets in Latin
America and 10 in Asia.

 The incentive available under Focus Product Scheme

(FPS) has been raised from 1.25% to 2%.

 FPS benefit allowed to “Green Technology Products”

and products originating from North-East.

 Duty Entitlement Passbook (DEPB) Scheme is

extended beyond 31.12.2009 till 31.12.2010.
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• Export
obligation on import of spares, moulds etc.
under EPCG Scheme has been reduced to 50%.

• The adjustment assistance scheme initiated in

December, 2008 to provide enhanced ECGC cover at
95%, to the adversely affected sectors, is continued
till March, 2010.

• To neutralize duty incidence on Jewellery exports,

Duty Drawback rates on such exports notified by
Department of Revenue.
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 Interest subvention of 2% for pre-shipment credit for
7 specified sectors has been extended till 31.03.2010.

 Income Tax exemption to 100% EOU and to STPI

units under Section 10B and 10A of Income Tax Act
has been extended for the financial year 2010-11.

 To aid technological upgradation of our export sector,

EPCG Scheme at Zero Duty and 1% duty credit scrip
for status holders have been introduced.
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 Leather sector shall be allowed re-export of unsold
imported raw hides and skins and semi-finished
leather from public bonded ware houses, subject to
payment of 50% of the applicable export duty.

 A large number of measures undertaken to reduce

transaction cost for exporters include abolition of
application fee on all incentive schemes; facilitating
e-commerce for duty neutralisation schemes etc.
THANKYOU