Sarthaks APP
0 votes
in Business Studies by (64.1k points)
Explain the major export promotion measures adopted by the government.

1 Answer

0 votes
by (106k points)
selected by
Best answer

The major export promotion measures adopted by the government can be grouped under two heads:

I. Foreign Trade Promotion: 

1. Duty Drawback Scheme: Goods meant for exports are not consumed domestically, these are not subjected to payment of various excise and customs duties, therefore, excise duties paid on such goods are refunded on production of proof of export of these goods. It is called duty drawback.

 2. Export Manufacturing under Bond Scheme: This facility entitles firms to produce goods without payment of excise and other duties. 

3. Exemption from Payment of Sales Taxes: Goods meant for export purposes are not subject to sales tax. Even for a long time, income derived from export operations had been exempted from payment of income tax. 

4. Advance License Scheme: It is a scheme under which an exporter is allowed duty free supply of domestic as well as imported inputs required for the manufacture of exports goods.

5. Export Promotion Capital Goods Scheme (EPCG): The main objective of this scheme is to encourage the import of capital goods for export production. This scheme allows export firms to import capital goods at negligible or lower rates of customs duties subject to actual user condition and fulfillment of specified export obligation. 

6. Scheme of recognizing Export Firms as Export House, Trading House and Superstar Trading House: Their objective is to promote established exporters and assist them in marketing their products in international markets. The government grants the status of Export House, Trading House, Star Trading House, etc. 

7. Export of Services: In order to boost the export of services, various categories of services houses have been recognized. 

8. Export Finance: Exporters require finance for the manufacture of goods. Therefore, two types of export finances are made available to the exporters by authorised banks. 

9. Export Processing Zones (EPZ): These are industrial estates which firms enclaves from the Domestic Tariff Area. They aim at providing an internationally competitive duty free environment for export production at low cost. Recently these have been converted into Special Economic Zones. 

10. EOU: 100% Export Oriented Units. This scheme was started in 1981. It is complementary to the scheme of EPZ. These have been set up with a view to generating additional production capacity for exports by providing an appropriate policy framework, flexibility of operations and incentives.

II. Organizational Support

1. Indian Institute of Foreign Trade (IIFT): Established in 1963 under the Societies Registration Act, the IIFT is an autonomous body responsible for the management of the country’s foreign trade. It is also a deemed university that provides training in international trade, conducts research in areas of international business and disseminates data related to international trade. 

2. Export Inspection Council (EIC): The EIC was established by the Government of India under Section 3 of the Export Quality Control and Inspection Act, 1963, with the objective of promoting exports through quality control and pre-shipment inspections. According to this act, all goods that are meant for exports (except some commodities) must pass through the EIC for quality inspection. 

3. Indian Institute of Packaging (IIP): The IIP is a training and research institute established in 1966 by the joint efforts of the Ministry of Commerce of the Government of India, Indian Packaging Industry and Allied Industries. The institute caters to the packaging needs of domestic manufacturers and exporters. 

4. Indian Trade Promotion Organisation (ITPO): The ITPO was formed on January 1, 1992, under the Companies Act, 1956. Its main objective is to maintain close interactions among traders, industry and the Government. In order to fulfill this objective, the ITPO organizes trade fairs and exhibitions within and outside the country, thereby helping export firms to interact with international trade bodies. 

5. Department of Commerce: The Department of Commerce is the apex body in the Ministry of Commerce of the Government of India and is responsible for formulating policies related to foreign trade as well as evolving import and export policies for the country. It is responsible for all matters related to the country’s external trade. 

6. Export Promotion Councils (EPCs): Registered under the Companies Act or the Societies Registration Act, EPCs are non-profit organizations that are responsible for promoting the exports of particular products. However, the product promoted by a particular EPC must fall under its jurisdiction.

Welcome to Sarthaks eConnect: A unique platform where students can interact with teachers/experts/students to get solutions to their queries. Students (upto class 10+2) preparing for All Government Exams, CBSE Board Exam, ICSE Board Exam, State Board Exam, JEE (Mains+Advance) and NEET can ask questions from any subject and get quick answers by subject teachers/ experts/mentors/students.