INTERNATIONAL TRADE AND DOCUMENTS EXPORT PROMOTION MEASURES EXPORT

INTERNATIONAL TRADE AND DOCUMENTS EXPORT PROMOTION MEASURES

EXPORT PROMOTION MEASURES This is public policy measures taken by the government of a country to potentially enhance the exporting activities. In India, the government formulates the export-import policies and programs that give direction to the exports. Exim policies aim at export assistance such as export credit cash assistance, import replenishment, licensing, free trade zones, development of ports, quality control and pre-shipment inspection, and guidance to Indian entrepreneurs to set up ventures abroad.

OBJECTIVES: Compensate exporters for high domestic cost of production. Provide assistance to exporters to set up fully independent export unit. Opportunity to achieve economies of scale and growth. Increase relative profitability in domestic market compared to foreign market. Achieve export lead growth. Reduce the effect of domestic recession. Platform for production to sell surplus

EXPORT PROMOTION MEASURES IN INDIA: EPZ- EXPORT PROCESSING ZONE: These are industrial enclaves which are formed in an international custom territory of a country. Foreign direct investments up to 100% is allowed. They can import and export capital goods without payment of any duties. Manufacturing units are given tax holiday for a limited time period.

OBJECTIVES: To attract foreign investment and earn foreign exchange To generate employment Promote technology and create skilled man power To increase the economic growth of the country

SEZ- SPECIAL ECONOMIC ZONES: SEZ is an enclave of business companies which are predominantly engaged in export oriented production. It is an area of the country selected by government for its development. Infrastructure of a SEZ consists of manufacturing units, townships, roads, schools, hospitals and other services. It is open to all fields like manufacturing, trading and services. Tax benefits are much more than EPZ.

OBJECTIVES: Generation of employment Promotion of export oriented activities Generation of foreign exchange Development of infrastructure Increase the total economic activity Providing assistance to government Providing competitive platform to entrepreneurs

FTZ- FREE TRADE ZONE: Goods imported to free trade zones may be re-exported without any processing in the same form while in export processing zone certain value addition has to be done through manufacturing and processing.

EXPORT INCENTIVES: DEFINITION: Export incentives are regulatory, legal, and monetary or tax programs designed to encourage business to export certain types of goods and services. Export incentives are a form of assistance that governments provide to industries within the national economy, in order to help them secure foreign markets. A government providing export incentives often does so in order to keep domestic products competitive in the global market.

TYPES OF EXPORT INCENTIVES AND ITS BENEFITS: Some of the different types of export incentive schemes and benefits that the government has initiated are: ADVANCED AUTHORIZATION SCHEME: As the part of this scheme, businesses are allowed to import input in the country without having to pay duty payment, if this input is for the production of an export item. Moreover, the licensing authority has fixed the value of the additional export products to not below than 15%. The scheme has the validity period of 12 months for imports and 18 months for carrying out the export obligation from the date of issue.

ADVANCED AUTHORIZATION FOR ANNUAL REQUIREMENT: Exporters who have a previous export performance for at least two financial years can avail this scheme. EXPORT DUTY DRAWBACK FOR CUSTOMS, CENTRAL EXCISE AND SERVICE TAX: Under these schemes, the duty or tax paid for inputs against the exported products is refunded to the exporters. This refund is carried out in the form of duty drawback. In case the duty drawback scheme is not mentioned in the export schedule, exporters can approach the tax authorities for getting a brand rate under the duty drawback scheme.

SERVICE TAX REBATE: In the case of specified output services for export goods, the government provides rebates on service tax to exporters. DUTY FREE IMPORT AUTHORIZATION: This is another benefit the government has introduced by combining the DEEC-DUTY EXEMPTION ENTITLEMENT CERTIFICATE (advanced license) and DFRC-DUTY FREE REPLENISHMENT CERTIFICATE to help exporters get free imports on certain products.

ZERO DUTY EPCG (EXPORT PROMOTION CAPITAL GOODS) SCHEME: In this scheme, which applies to the exporters of electronic products, import of capital goods for production, pre-production, and post-production is allowed at zero percent customs duty if the export value is at least six times the duty saved on capital goods imported. The exporter needs to verify this value within six years of issuing date. POST EXPORT EPCG DUTY CREDIT SCRIP SCHEME: Under this export scheme, exporters who aren’t sure about paying the export obligation can obtain an EPCG license and pay the duties to the customs officials. Once they fulfill the export obligation, they can claim a refund of the taxes paid.

TOWNS OF EXPORT EXCELLENCE (TEE): Towns that produce and export goods above the particular value in the identified sectors would be known as towns of export status. Towns will be given this status based on their performance and potential in exports to help them reach new markets. MARKET ACCESS INITIATIVE (MAI) SCHEME: An effort to provide financial guidance to eligible agencies for undertaking direct and indirect marketing activities like market research, capacity building, branding, and compliances in importing markets.

MARKETING DEVELOPING ASSISTANCE (MDA) SCHEME: This scheme aims to promote export activities abroad, assist export promotion councils to develop their products and other initiatives to carry out marketing activities abroad. MERCHANDISE EXPORTS FROM INDIA SCHEME (MEIS): This scheme applies to the export of certain goods to specific markets. Rewards for exporters under MEIS will be payable as a percentage of realized FOB value.

Exports have increased by a right margin, and there is also a favorable atmosphere among the business community. The government is also upcoming with many other benefits to strengthen the export sector of the country further.