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Chapter 20

Export promotion

International Marketing Chapter-20 Export Promotion

ObjectivesWhat are the organizational setup which promotes export.What are incentivesWhat are production assistance facilitiesWhat are marketing assistanceWhat are import facilities for exportersWhat are EPZs, EOUs, TPs, SEZsWhat are export houses and trading houses


Introduction

Export development is important to the firm and to the economy as a whole.Government measures aim, normally at the general improvement of the export of the nation for the general benefit of the economy.The benefits of exports to the economy are many.


Principle Objectives Of Export Promotion Measures In India

1. Compensate the exporters for the high domestic cost of production.

2. Provide necessary assistance to the new and infant exporters to develop the export business.

3. Increase the relative profitability of the export business vis-e-vis the domestic business.


Organizational Set Up

Government has established or sponsored a number of organizations to provide different types of assistance to the exporters.Apart from the organizations established exclusively for export promotion, there are also a number of other institutions which assist the export sector. International Marketing

Chapter-20 Export Promotion

Ministry Of Commerce

The ministry of Commerce, Government of India, is the most important organ concerned with the promotion and regulation of the foreign trade of the country.Matters related to foreign trade are dealt with by eight divisions in the Department of Commerce, namely,

1. Administrative an General DivisionInternational Marketing

Chapter-20 Export Promotion

2. Finance Division3. Economic Division4. Trade Policy Division5. Foreign Trade Territorial Division6. Exports Products Division7. Services Division8. Industries Division


Autonomous Bodies1. Commodity boards2. Export inspection council3. Indian institute of foreign trade4. Indian institute of packaging5. Export promotion councils6. Federation of Indian export organizations7. Indian council of arbitration8. Marine products export development

authority9. Indian trade promotion organization


Indian Trade Promotion OrganizationThe ITPO was bought into being in 1992 by merging together the erstwhile Trade Fair Authority Of India (TFAI) and the erstwhile Trade Development Authority of India (TDA). The functions of the ITPO are to

1. Develop and promote exports, imports and upgrade technology through fair in India and abroad

2. Compile and disseminate trade related information3. Undertake publicity through the print and

electronic media


Attached And Subordinate Offices

1. Office of the Director General of Foreign Trade (DGFT)

2. Directorate General or Commercial Intelligence and Statistics

3. Offices of Development Commissioners, FIZ/EPZs


IncentivesExport incentives are a widely employed strategy of export promotion.The main aim of these incentives is to increase the profitability of export business.Important export incentives in India include rebate of duties, cash compensatory support, income tax concession, interest subsidies, freight subsidy etc.


Marketing Assistance

Market development assistanceForeign exchangeTrade fairs and exhibitionsExport risk insuranceFinanceQuality control and preshipment inspectionInstitutional assistanceIndia brand equity fund


Important Facilities For Exporters

Export promotion capital goodsDuty exemption schemeDuty free licenseDuty entitlement pass book


Export Processing Zones/EOUs

EPZs are industrial estates which form enclaves from the national customs territory of a country and are usually situated near seaports or airports.


Main Objectives of an EPZ are

1. To earn foreign exchange2. To generate employment opportunities3. To facilitate transfer of technology by

foreign investment and other means4. To contribute to the overall

development of the economy.


SEZsWhile announcing the Exim Policy for 2000-01, the Commerce Minister stated that India would develop Special Economic Zones to boost the country’s exports.The first to SEZs are to be set up in Positrain Gujarat.The move to develop SEZs was inspired by the success of the SEZs in China which contribute about 40 per cent of her exports.


Export Houses And Trading Houses

An export house is defined as a registered exporter holding a valid Export House Certificate issued by the Director General of Foreign Trade.The objective of the scheme is to recognize established exporters as Export House, Trading House, Star Trading House and Superstar Trading House with a view to build marketing infrastructure and expertise required for promotion.


Summary

The success of export promotion measures should be judged by the growth of exports and the dynamism of the export sector.An effective export promotion should compensate for the disadvantages of the national exporters and should make the export business profitable enough to lure entrepreneurs to this sector and achieve the ultimate objective of boosting the exports.


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