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The concept of export promotion

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The concept of export promotion

  2. 2. THE CONCEPT OF EXPORT PROMOTION<br /><ul><li>All national governments have established institutional set-ups to support export activities.
  3. 3. The major objective of export promotion programmes is to create awareness about exports and make the people understand that it is one of the most crucial instruments of growth and market expansion.
  4. 4. A non-exporter needs to be motivated by making him or her aware of the international marketing opportunities.</li></li></ul><li><ul><li>A first-time exporter has to be assisted in finding export marketing opportunities and may be supported on matters related to export policy, procedures and documentations.
  5. 5. An exporters consistently attempt to explore ways to improve their international marketing operations and need to be assisted by way of trade fairs, buyer sellers meet, and market promotion programmes.
  6. 6. The export promotion programmes initiated by the government are in the form of public policy measures.</li></li></ul><li>The functions of export promotion programmes are:<br /><ul><li>To create awareness about exporting as an instrument of growth and market expansion.
  7. 7. To reduce and remove barriers of exporting,
  8. 8. To create promotional incentives.
  9. 9. To provide various forms of assistance to potential and actual exporters.</li></ul> The export promotion programmes are basically designed to assist firms in entering international markets and achieving optimum opportunities from their international business activities.<br />
  10. 10. ROLE OF EXPORT PROMOTION INSTITUTIONS IN IM<br />The export promotion organizations(EPOs) are meant to assist an international marketing manager to identify overseas market opportunities, product and packaging requirements, the pricing patterns, identifying IM channels, and marketing opportunities. <br /> Statutory requirements, such as registration-cum-membership certificates(RCMCs), quota administration , and disbursement of incentives through promotion organizations, make it necessary for the marketers to approach these organizations.<br />
  11. 11. INSTITUTIONAL SET-UP FOR EXPORT PROMOTION IN INDIA<br />In order to provide guidance and assistance to an exporter, the Government of India has setup several institutions. The institutional set-up for export promotion in India can be divided into six different tires: <br />Department of commerce<br />Advisory Bodies<br />Commodity Organizations<br />Service Organizations<br />Government Trading Organizations<br />State Export Promotion Agencies<br />
  12. 12. Department of Commerce:-<br /> It is the primary government agency responsible for evolving and directing foreign trade policy and programmes , maintaining commercial relations with other countries, supervising state trading, initiating various trade promotion measures, and developing and regulating export-oriented industries.<br />Following are the divisions of the Department of Commerce:<br /><ul><li>The economic division is engaged in export planning, formulating export strategies and periodic appraisal, and review of policies.
  13. 13. The trade policy division is responsible for maintaining India’s compatibility with regional trading agreements such as EU, NAFTA, SAFTA, Commonwealth, etc.</li></li></ul><li><ul><li>Foreign trade territorial division looks after the development of trade in different countries and regions of the world.
  14. 14. The export division looks at the problems connected with production, generation of surplus, and development of products for exports under its jurisdiction.
  15. 15. The export industries is responsible for the development and regulation of rubber, tobacco, and cardamom sectors.
  16. 16. The export division deals with the problems of export assistance , such as export credit, export house etc.</li></li></ul><li>Advisory Bodies:<br /> The advisory bodies provide an effective mechanism to maintain continuous dialogue with trade and industry and increased coordination among various departments and ministries concerned with export promotion. Bodies for promoting international trade:<br />Board of Trade<br /> The Board of Trade was setup under the chairmanship of Union Minister of Commerce and Industry in May 1989.The broad terms of reference of Board of Trade are as follows:<br /><ul><li>To advice the govt. on policy measures for the preparation and implementation of both short and long-term plans.</li></li></ul><li><ul><li>To review export performance of various sectors, identify constraints, and suggest measures to be taken.
  17. 17. To examine the existing institutional framework for exports and suggest practical measures for reorganization.
  18. 18. To review the policy instrument, package of incentives, and procedures for exports, and suggest steps to rationalize and channelize incentives to areas where they are most needed</li></ul>Export Promotion Board:<br /> In order to effect greater co-ordination among ministers involved in exports, Export Promotion Board was setup. It works under the chairmanship of the Cabinet Secretary and provides policy and infrastructural support to the exporters.<br />
  19. 19. Commodity Organizations<br />There are various commodity organizations, such as,<br /><ul><li>Export promotion councils
  20. 20. Commodity boards
  21. 21. Autonomous bodies</li></ul>These organizations look at sector-specific exports.<br />
  22. 22. Export promotion councils :<br /> Export promotion councils are non-profit organizations. They are provided by financial assistance by the central government.<br />At present there are 20 export promotion councils. Their basic objective is to promote and develop exports in the country.<br />The main role of the EPCs is to project India as a reliable supplier of high quality goods and services in the international market.<br />Each council is responsible for the promotion of a particular group of products, projects and services.<br />
  23. 23. The present set-up of EPCs covers the following sectors:<br />Engineering<br />Project<br />Electronics and computer software<br />Plastics and linoleums<br />Chemical and allied projects<br />Gems and jewellery<br />Leather<br />Indian milk<br />Carpet<br />Cotton textiles<br />Handicraft<br />
  24. 24. Functions :<br /><ul><li>To provide commercially useful information and assistance.
  25. 25. To offer professional advice to the members.
  26. 26. To organize visits to abroad to the members.
  27. 27. To organize participation in trade fairs, exhibitions.
  28. 28. To promote interaction between the exporting community and government.</li></li></ul><li>Commodity boards:<br /> In order to look after the issues related to production, marketing and development of commodities. The commodities which follows,<br /><ul><li>Tea board
  29. 29. Coffee board
  30. 30. Coir board
  31. 31. Central silk board
  32. 32. All India handlooms and handicraft board
  33. 33. Rubber board
  34. 34. Cardamom board
  35. 35. Tobacco board
  36. 36. Spices board</li></li></ul><li>Functions :<br /><ul><li>Provide an integrated approach for production development and marketing of the commodity
  37. 37. They act as a link between Indian exporters and importers aboard
  38. 38. They formulate and implement quality improvement systems, research and development programmes.
  39. 39. They act as an interface between the international agencies such as the ITC, FAO,UNIDO etc.</li></li></ul><li><ul><li>They collect information on production, processing and marketing of the product under its purview and dissemination.
  40. 40. They organize export promotion activities such as participation in international trade fairs, buyer-seller meeting.</li></li></ul><li>Autonomous bodies:<br />APEDA – agriculture and Processed Food Products Export Development Authority.<br />APEDA looks after the promotion of exports of agriculture and processed food products.<br />It works as a link between the Indian exporters and the global markets<br />The products are,<br />Fruits , vegetables, and their products<br />Meat and meat products<br />Poultry and poultry products<br />Dairy products<br />Biscuits , and bakery products <br />
  41. 41. Honey , jaggery and sugar products<br />Cashew nuts, groundnuts and papads<br />Herbal and medical products<br />The basic functions of APEDA are as follows:<br /><ul><li>It develops database on products, markets, and services.
  42. 42. It develops and implements various publicity exercises.
  43. 43. It invites official and business delegations from abroad.</li></li></ul><li>MDEDA- Marine Export Development Authority<br /> MDEPA is an autonomous body under the ministry of commerce. It covers all kinds of marine products.<br /> The prime objective are to increase export-oriented production, specify standards for processing and export marketing.<br />
  44. 44. Functions :<br /><ul><li>It provides timely and efficient services to overseas buyers
  45. 45. It establishes trade links between Indian suppliers and overseas buyers
  46. 46. It participates overseas trade fairs and exhibitions
  47. 47. It arrange products displays for visiting overseas buyers</li></li></ul><li> SERVICE INSTITUTES<br /><ul><li>Indian institute of foreign trade
  48. 48. Indian council of arbitration
  49. 49. India trade promotion organization
  50. 50. National centre for trade information
  51. 51. Export-credit guarantee corporation
  52. 52. Export import bank of India
  53. 53. Indian institute of packing
  54. 54. Federation of Indian export org.</li></li></ul><li>Indian government’s trade representatives abroad<br /> The institutional set-ups developed and strengthened within the country are supplemented by the Indian trade representatives abroad. The trade representations in the embassies and consultants are continually being strengthened to enable them to effectively support the effort, which is being made within the country.<br />
  55. 55. Government participation in Foreign Trade<br /> For supplementing the efforts of the private sector in the field of foreign trade, the govt. of India has set up a no. of corporations, namely STC, MMTC, spices trading corporation ltd., MSTC.<br />These corporations results at diversifying the country’s<br /> foreign trade.They perform following activities:-<br />To arrange for exports where bulk handling and long term contracts are beneficial.<br />
  56. 56. To organize production to meet export demand and to help production units overcome difficulties in raw material procurement.<br />To undertake import of commodities where bulk purchase is advantageous.<br />To facilitate exports of ‘difficult to sell’ items through various devices such as linking essential imports with additional exports under barter, link and parallel deals.<br />
  57. 57. States involvement in promoting export<br /> States being the prime centers for export production need to be involved actively in export promotion. The central and state government has taken a number of measures to promote export, which have been discussed as follows:<br />States’ cell in the ministry of commerce:<br />To act as a nodal agency for interacting with state government on matters related to export and import from the state and for handling references received from them.<br />
  58. 58. To process all references of general nature emanating from state governments and state export corporation.<br />To monitor proposals submitted by the state government to the ministry of commerce and coordinate with other divisions of the ministry.<br />To act as a bridge between state level corporations and associations.<br />To provide guidance to state level export organizations.<br />
  59. 59. Export promotion initiatives by state govt.<br />Provide information on export opportunities.<br />Allot land for starting export oriented unit.<br />Plan for the development of export promotion industrial parks.<br />They exempt entry tax on supplies to EPZ units.<br />
  60. 60. Impediments in export promotion<br />State govt. are reluctant to promote export activities due to the following reasons:-<br />Export never become number one priority of state agenda b’coz revenue never go to the state coffers.<br />State govt. do not distinguish between exporting unit and domestic unit b’coz of same reason. <br />The govt, generally lack the required expertise for export promotion.<br /> Additional facilities for export-oriented development mean more cost for the state governments.<br />Information about international markets, export policy etc.. Is lacking among state administration. <br />