DIFFERENCES BETWEEN INTERNATIONALAND DOMESTIC MARKETINGAs we have seen in the previous sections, there are many factors within theinternational environment which substantially increase the challenge of internationalmarketing. These can be summarised as follows:1 Culture: often diverse and multicultural markets2 Markets: widespread and sometimes fragmented3 Data: difficult to obtain and often expensive4 Politics: regimes vary in stability – political risk becomes an importantvariable5 Governments: can be a strong influence in regulating importers and foreignbusiness ventures6 Economies: varying levels of development and varying and sometimesunstable currencies7 Finance: many differing finance systems and regulatory bodies8 Stakeholders: commercial, home country and host country9 Business: diverse rules, culturally influenced10 Control: difficult to control and coordinate across markets.

International Monetary System

International monetary systems are sets of internationally agreed rules, conventions and supporting institutions, that facilitate international trade, cross border investment and generally the reallocation of capital between nation states.

They provide means of payment acceptable between buyers and sellers of different nationality, including deferred payment.

To operate successfully, they need to inspire confidence, to provide sufficient liquidity for fluctuating levels of trade and to provide means by which global imbalances can be corrected.

The systems can grow organically as the collective result of numerous individual agreements between international economic factors spread over several decades.

Alternatively, they can arise from a single architectural vision as happened at Bretton Woods in 1944.

Role of International Monetary System

The international monetary system (IMS) is analogous to the domestic monetary system. It caries out similar functions. In the domestic monetary system the functions that must be carried out include:1) providing for the transfer of the purchasing power, that is, money payments to cover transactions,2) providing a stable unit of value, and3) providing a standard for deferred payments.

The IMS operates in a manner analogous to the domestic system. The same basic functions must be served by the IMS, namely, making payments to cover transactions, providing a stable unit of account, and providing a standard of deferred payments. The major difference in the IMS is that cross-border payments generally involve a foreign currency transaction for at least one of the parties involved in the transaction.

Key Performance Characteristics

For the IMS to operate effectively, key performance characteristics are required. These characteristics are as follows:

1. Provision of adequate liquidity

This provision takes the form of adequate units of official reserves held by governments of countries involved in foreign trade. It also requires incentives for commercial banks operating as foreign exchange dealers to hold sufficient foreign exchange reserves to satisfy the requirements of the private sector.

2. Operation of a smooth adjustment mechanismThis objective requires that individual nations carry out economic and financial policies conducive to maintaining reasonable well balanced international payment systems, or that financial mechanisms operate to provide payments adjustment, or that governments act to preserve equilibrium in the foreign exchange markets.

(Adjustment mechanisms: Processes in the economy that work to assure a nation's external economic equilibrium)

3. Confidence in the systemIf private sector business firms and investors believe that governments will follow policies conducive to a well-balances international payments system, they will have confidence in the system. International organizations such as the International Monetary Fund (IMF) seek to promote such policies on the part of governments. In addition, governments undertake cooperative arrangements with one another to build confidence in the existing system.

Principal Components of the IMS

Composition of International Monetary System

1. International Monetary FundThe International Monetary Fund (IMF) is an international organization that was created on July 22, 1944 at the Bretton Woods Conference and came into existence on December 27, 1945 when 29 countries signed the Articles of Agreement. It originally had 45 members. The IMF's stated goal was to stabilize exchange rates and assist the reconstruction of the world’s international payment system post-

World War II. Countries contribute money to a pool through a quota system from which countries with payment imbalances can borrow funds temporarily. Through this activity and others such as surveillance of its members' economies and policies, the IMF works to improve the economies of its member countries. The IMF describes itself as “an organization of 188 countries, working to foster global monetary cooperation, secure financial stability, facilitate international trade, promote high employment and sustainable economic growth, and reduce

2. Foreign Exchange Market

The foreign exchange market is the framework for trading foreign currencies. Financial centers around the world function as anchors of trading between a wide range of different types of buyers and sellers around the clock, with the exception of weekends. EBS and Reuters' dealing 3000 are two main interbank FX trading platforms. The foreign exchange market determines the relative values of different currencies.

The foreign exchange market is unique because of the following characteristics:1. its huge trading volume representing the largest asset class in the world leading to high liquidity;2. its geographical dispersion;3. its continuous operation: 24 hours a day except weekends;4. the variety of factors that affect exchange rates;5. the low margins of relative profit compared with other markets of fixed income; and6. the use of leverage to enhance profit and loss margins and with respect to account size.

3. Official Reserves

Governments hold official reserves, international money in various forms. Official reserves only refer to foreign currency held by a country. These function like international money by their general acceptability. Official reserves consist of four separate and distinct components.

1.The first component is the IMF Reserve Positions. This represents quotes of IMF member countries freely available to them to supplement their liquid resources.

2. The smallest component is the special drawing rights (SDR), also referred to as paper gold. SDRs were created to supplement international liquidity at a time when it was thought official reserve growth would be inadequate to meet global needs. SDRs reflect bookkeeping entries within the IMF, which members in deficit can use to settle international payment at the official level (central bank of one country transferring SDRs to central bank of another country)

3. The largest component consists of foreign exchange held by governments and their central banks.

4. Finally, a part of official reserves is held in the form of monetary gold. A gold reserve is the gold held by a central bank or nation intended as a store of value and as a guarantee to redeem promises to pay depositors, note holders (e.g., paper money), or trading peers, or to secure a currency.

Governments hold official reserves for numerous reasons. Some governments are more concerned with the need to cover external debt payments, while others are more interested in being able to cover the cost of necessary imports such as food and fuel. Factors influencing governments to hold official reserves include:

1. to be able to carry out international transactions including imports without any delay in payments;2. to improve the international credit standing of the nation;3. to provide resources for foreign exchange market intervention, when needed; and4. to assure and facilitate external debt service payments.

4. Private Demand for Foreign Exchange

The private demand for foreign exchange refers to the foreign currency balances held by foreign exchange banks. The term private demand is used in contrast with official demand, where official reserves are held by the governments. Private demands result from the risk versus profit judgments of the private trading banks. When a large number of dealing banks become uncertain of the near future prospects for a currency in the market, they may shorten their deposit holdings

5. Intervention and Swap Network

A swap involves a standby credit arrangement between two (or more) countries. The swap is used to borrow or lend foreign currency in exchange for domestic currency with a commitment to reverse the exchange in three months. A foreign exchange swap is a sport purchase of a currency coupled with a forward sale. Central banks use swaps to provide foreign currency resources to one another, which are used to intervene in the foreign exchange market.ExampleTo see how the swap network operates, suppose that United States wants to sell 200 million deutsche marks to support the US dollar. What actually happens is the US Federal Reserve sells the Bundesbank (German Central Bank) US $100 million (assume the rate is DM 2.00 = $1.00) in exchange for DM 200 million with an agreed reversal in three months at a fixed rate. The Bundesbank's official reserves rise by US$100 million and those of the Federal Reserve rise by DM 200 million. The Federal Reserve can now sell the deutsche mark in the foreign exchange market, with the purpose of driving up the value of the US dollar.

History of modern global monetary orders

Bimetallism: Before 1875

A “double standard” in the sense that both gold and silver were used as money.Some countries were on the gold standard, some on the silver standard, some on both.Both gold and silver were used as international means of payment and the exchange rates among currencies were determined by either their gold or silver contents. Gresham’s Law implied that it would be the least valuable metal that would tend to circulate.

Classical Gold Standard: 1875-1914

During this period in most major countries:1. Gold alone was assured of unrestricted coinage2. There was two-way convertibility between gold and national currencies at a stable ratio.3. Gold could be freely exported or imported.

The exchange rate between two country’s currencies would be determined by their relative gold contents.

For example, if the dollar is pegged to gold at U.S.$30 = 1 ounce of gold, and the British pound is pegged to gold at £6 = 1 ounce of gold, it must be the case that the exchange rate is determined by the relative gold contents:$30 = £6$5 = £1

Highly stable exchange rates under the classical gold standard provided an environment that was conducive to international trade and investment.Misalignment of exchange rates and international imbalances of payment were automatically corrected by the price-specie-flow mechanism.

There are shortcomings:1. The supply of newly minted gold is so restricted that the growth of world trade and investment can be hampered for the lack of sufficient monetary reserves.2. Even if the world returned to a gold standard, any national government could abandon the standard.

Interwar Period: 1915-1944

Exchange rates fluctuated as countries widely used “predatory” depreciations of their currencies as a means of gaining advantage in the world export market.Attempts were made to restore the gold standard, but participants lacked the political will to “follow the rules of the game”.The result for international trade and investment was profoundly detrimental.

Bretton Woods System: 1945-1971

Named for a 1944 meeting of 44 nations at Bretton Woods, New Hampshire.The purpose was to design a postwar international monetary system.The goal was exchange rate stability without the gold standard.The result was the creation of the IMF and the World Bank.Under the Bretton Woods system, the U.S. dollar was pegged to gold at $35 per ounce and other currencies were pegged to the U.S. dollar.Each country was responsible for maintaining its exchange rate within ±1% of the adopted par value by buying or selling foreign reserves as necessary.The Bretton Woods system was a dollar-based gold exchange standard.

The post Bretton Woods system: 1971 – present

An alternative name for the post Bretton Woods system is the Washington Consensus. While the name was coined in 1989, the associated economic system came into effect years earlier: according to economic historian Lord Skidelsky the Washington Consensus is generally seen as spanning 1980–2009 (the latter half of the 1970s being a transitional period). The transition away from Bretton Woods was marked by a switch from a state led to a market led system. The Bretton Wood system is considered by economic historians to have broken down in the 1970s: crucial events being Nixon suspending the dollar's convertibility into gold in 1971, the United states abandonment of Capital Controls in 1974, and Great Britain's ending of capital controls in 1979 which was swiftly copied by most other major economies.

In some parts of the developing world, liberalisation brought significant benefits for large sections of the population – most prominently with Deng Xiaoping's reforms in China since 1978 and the liberalisation

of India after her 1991 crisis. Generally the industrial nations experienced much slower growth and higher unemployment than in the previous era, and according to Professor Gordon Fletcher in retrospect the 1950s and 60s when the Bretton Woods system was operating came to be seen as a golden age. Financial crises have been more intense and have increased in frequency by about 300% – with the damaging effects prior to 2008 being chiefly felt in the emerging economies. On the positive side, at least until 2008 investors have frequently achieved very high rates of return, with salaries and bonuses in the financial sector reaching record levels.

International monetary systems over two centuries

A summary of the international monetary systems over two centuries can be seen in this

The EuroThe euro (sign: €; code: EUR) is the currency used by the Institutions of the European Union and is the official currency of the eurozone, which consists of 17 of the 27 member states of the European Union: Austria, Belgium, Cyprus, Estonia, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, Malta, the Netherlands, Portugal, Slovakia, Slovenia, and Spain. The currency is also used in a further five European countries and consequently used daily by some 332 million Europeans. Additionally, more than 175 million people worldwide—including 150 million people in Africa—use currencies pegged to the euro.

The euro is the second largest reserve currency as well as the second most traded currency in the world after the United States dollar. As of September 2012, with more than €915 billion in circulation, the euro has the highest combined value of banknotes and coins in circulation in the world, having surpassed the US dollar. Based on International Monetary Fund estimates of 2008 GDP and purchasing power parity among the various currencies, the eurozone is the second largest economy in the world.

The name euro was officially adopted on 16 December 1995. The euro was introduced to world financial markets as an accounting currency on 1 January 1999, replacing the former European Currency Unit (ECU) at a ratio of 1:1 (US$1.1743). Euro coins and banknotes entered circulation on 1 January 2002. While the euro dropped subsequently to US$0.8252 within two years (26 October 2000), it has traded above the US dollar since the end of 2002, peaking at US$1.5990 on 15 July 2008. Since late 2009, the euro has been immersed in the European sovereign-debt crisis which has led to the creation of the European Financial Stability Facility as well as other reforms aimed at stabilizing the currency. In July 2012, the euro fell below US$1.21 for the first time in two years, following concerns raised over Greek debt and Spain's troubled banking sector.

Introduction of the Euro (History)The euro was established by the provisions in the 1992 Maastricht Treaty. To participate in the currency,

member states are meant to meet strict criteria, such as a budget deficit of less than three per cent of their GDP, a debt ratio of less than sixty per cent of GDP (both of which were ultimately widely flouted after introduction), low inflation, and interest rates close to the EU average. In the Maastricht Treaty, the United Kingdom and Denmark were granted exemptions per their request from moving to the stage of monetary union which would result in the introduction of the euro.Economists who helped create or contributed to the euro include Fred Arditti, Neil Dowling, Wim Duisenberg, Robert Mundell, Tommaso Padoa-Schioppa and Robert Tollison.The name "euro" was officially adopted in Madrid on 16 December 1995. Belgian Esperantist Germain Pirlot, a former teacher of French and history is credited with naming the new currency by sending a letter to then President of the European Commission, Jacques Santer, suggesting the name "euro" on 4 August 1995.Due to differences in national conventions for rounding and significant digits, all conversion between the national currencies had to be carried out using the process of triangulation via the euro. The definitive values of one euro in terms of the exchange rates at which the currency entered the euro are shown on the right.The rates were determined by the Council of the European Union, based on a recommendation from the European Commission based on the market rates on 31 December 1998. They were set so that one European Currency Unit (ECU) would equal one euro. The European Currency Unit was an accounting unit used by the EU, based on the currencies of the member states; it was not a currency in its own right. They could not be set earlier, because the ECU depended on the closing exchange rate of the non-euro currencies (principally the pound sterling) that day.The procedure used to fix the irrevocable conversion rate between the Greek drachma and the euro was different, since the euro by then was already two years old. While the conversion rates for the initial eleven currencies were determined only hours before the euro was introduced, the conversion rate for the Greek drachma was fixed several months beforehand.The currency was introduced in non-physical form (traveller's cheques, electronic transfers, banking, etc.) at midnight on 1 January 1999, when the national currencies of participating countries (the eurozone) ceased to exist independently. Their exchange rates were locked at fixed rates against each other. The euro thus became the successor to the European Currency Unit (ECU). The notes and coins for the old currencies, however, continued to be used as legal tender until new euro notes and coins were introduced on 1 January 2002.The changeover period during which the former currencies' notes and coins were exchanged for those of the euro lasted about two months, until 28 February 2002. The official date on which the national currencies ceased to be legal tender varied from member state to member state. The earliest date was in Germany, where the mark officially ceased to be legal tender on 31 December 2001, though the exchange period lasted for two months more. Even after the old currencies ceased to be legal tender, they continued to be accepted by national central banks for periods ranging from several years to forever (the latter in Austria, Germany, Ireland and Spain). The earliest coins to become non-convertible were the Portuguese escudos, which ceased to have monetary value after 31 December 2002, although banknotes remain exchangeable until 2022.

About the IMFThe International Monetary Fund (IMF) is an organization of 188 countries, working to foster global monetary cooperation, secure financial stability, facilitate international trade, promote high employment and sustainable economic growth, and reduce poverty around the world.

Key IMF activitiesThe IMF supports its membership by providing policy advice to governments and central banks based on analysis of economic trends and cross-

country experiences;

research, statistics, forecasts, and analysis based on tracking of global, regional, and individual economies and markets;

loans to help countries overcome economic difficulties; concessional loans to help fight poverty in developing countries; and technical assistance and training to help countries improve the management of their economies.

The IMF's fundamental mission is to help ensure stability in the international system. It does so in three ways: keeping track of the global economy and the economies of member countries; lending to countries with balance of payments difficulties; and giving practical help to members.

Economic and Financial Surveillance Technical Assistance and Training IMF Lending Research and Data

The IMF’s main goal is to ensure the stability of the international monetary and financial system. It helps resolve crises, and works with its member countries to promote growth and alleviate poverty. It has three main tools at its disposal to carry out its mandate: surveillance, technical assistance and training, and lending. These functions are underpinned by the IMF’s research and statistics.SurveillanceThe IMF promotes economic stability and global growth by encouraging countries to adopt sound economic and financial policies. To do this, it regularly monitors global, regional, and national economic developments. It also seeks to assess the impact of the policies of individual countries on other economies.This process of monitoring and discussing countries’ economic and financial policies is known as bilateral surveillance. On a regular basis—usually once each year—the IMF conducts in depth appraisals of each member country’s economic situation. It discusses with the country’s authorities the policies that are most conducive to a stable and prosperous economy, drawing on experience across its membership. Member countries may agree to publish the IMF’s assessment of their economies, with the vast majority of countries opting to do so.The IMF also carries out extensive analysis of global and regional economic trends, known as multilateral surveillance. Its key outputs are three semiannual publications, the World Economic Outlook, the Global Financial Stability Report, and the Fiscal Monitor. The IMF also publishes a series of regional economic outlooks.The IMF recently agreed on a series of actions to enhance multilateral, financial, and bilateral surveillance, including to better integrate the three; improve our understanding of spillovers and the assessment of emerging and potential risks; and strengthen IMF policy advice.For more information on how the IMF monitors economies, go to Surveillance in the Our Worksection.Technical assistance and trainingIMF offers technical assistance and training to help member countries strengthen their capacity to design and implement effective policies. Technical assistance is offered in several areas, including fiscal policy, monetary and exchange rate policies, banking and financial system supervision and regulation, and statistics.The IMF provides technical assistance and training mainly in four areas: monetary and financial policies (monetary policy instruments, banking system supervision and

restructuring, foreign management and operations, clearing settlement systems for payments, and structural development of central banks);

fiscal policy and management (tax and customs policies and administration, budget formulation, expenditure management, design of social safety nets, and management of domestic and foreign debt);

compilation, management, dissemination, and improvement of statistical data; and economic and financial legislation.

For more on technical assistance, go to Technical Assistance in the Our Work section.LendingIMF financing provides member countries the breathing room they need to correct balance of payments problems. A policy program supported by financing is designed by the national authorities in close cooperation with the IMF. Continued financial support isconditional on the effective implementation of this program.In the most recent reforms, IMF lending instruments were improved further to provideflexible crisis prevention tools to a broad range of members with sound fundamentals, policies, and institutional policy frameworks.

In low-income countries, the IMF has doubled loan access limits and is boosting its lending to the world’s poorer countries, with loans at a concessional interest rate.For more on different types of IMF lending, go to Lending in the Our Work section.Research and dataSupporting all three of these activities is the IMF’s economic and financial research andstatistics. In recent years, the IMF has applied both its surveillance and technical assistance work to the development of standards and codes of good practice in its areas of responsibility, and to the strengthening of financial sectors. These are part of the IMF’s continuing efforts to strengthen national and global financial systems and improve its ability to prevent and resolve crises.

Where the IMF Gets Its Money

Most resources for IMF loans are provided by member countries, primarily through their payment of

quotas. Borrowing provides a temporary supplement to quota resources and has played a critical

role in enabling the Fund to meet members’ needs for financial support during the global economic

crisis. Concessional lending and debt relief for low-income countries are financed through separate

contribution-based trust funds.

The quota system

Each member of the IMF is assigned a quota, based broadly on its relative size in the world economy,

which determines its maximum contribution to the IMF’s financial resources. Upon joining the IMF, a

country normally pays up to one-quarter of its quota in the form of widely accepted foreign currencies

(such as the U.S. dollar, euro, yen, or pound sterling) or Special Drawing Rights (SDRs). The remaining

three-quarters are paid in the country’s own currency.

Quotas are reviewed at least every five years. Ad hoc quota increases of 1.8 percent were agreed in

2006 as the first step in a two-year program of quota and voice reforms. Further ad hoc quota

increases were approved by the Board of Governors in April 2008, resulting in an overall increase of

11.5 percent. The 2008 reform came into effect in March 2011 following ratification of the

amendment to the IMF’s Articles by 117 member countries, representing 85 percent of the IMF’s

voting power.

The Fourteenth General Review of Quotas was completed two years ahead of the original schedule in

December 2010, with a decision to double the IMF’s quota resources to SDR 476.8 billion.

Gold holdings

The IMF’s gold holdings amount to about 90.5 million troy ounces (2,814.1 metric tons), making the

IMF the third largest official holder of gold in the world. However, the IMF’s Articles of Agreement

strictly limit its use. If approved by an 85 percent majority of voting power of member countries, the

IMF may sell goldor may accept gold as payment by member countries but it is prohibited from

buying gold or engaging in other gold transactions.

In December 2010, the IMF concluded the limited sales program covering 403.3 metric tons of gold,

accounting for about one-eighth of its holdings, as approved by the Executive Board in

September 2009. Sales totaling 222 tons were made to official holders, including the Reserve Bank of

India (200 tons), the Bank of Mauritius (2 tons), the Central Bank of Sri Lanka (10 tons), and the

Bangladesh Bank (10 tons). The gold sale program was conducted under strong safeguards to avoid

market disruption and all gold sales were at market prices, including direct sales to official holders.

Profits of SDR 4.4 billion on the sale will fund an endowment as part of the IMF’s new income model,

agreed to put the institution’s finances on a sustainable footing. The Executive Board also agreed that

SDR 0.5–0.6 billion (end-2008 net present value terms) in resources linked to gold sales would be

used to subsidize financing for low-income countries and boost the IMF’s concessional lending for

2009-14.

In February 2012, the Executive Board approved the partial distribution of the Fund’s general reserve

to the membership of SDR 700 million from the windfall profits of the recent gold sales. The

distribution became effective in October, 2012 when members representing over 90 percent of the

distribution had provided satisfactory assurances that the resources would be made available for

the Poverty Reduction and Growth Trust (PRGT).

In September 2012 the Executive Board approved a second distribution of the Fund’s general

reserves attributed to the remaining gold sales profits as part of a strategy to make the PRGT

sustainable in the longer term.

On October 10, 2013 the Fund obtained the required pledges to allow profits from windfall gold sales

to be used to make concessional lending self-sustaining.

The IMF’s lending capacity

The IMF can use its quota-funded holdings of currencies of financially strong economies to

finance lending. The Executive Board selects these currencies every three months. Most are issued by

industrial countries, but the list also has included currencies of lower income countries such as

Botswana, China, and India. The IMF’s holdings of these currencies, together with its own SDR

holdings, make up its own usable resources. If needed, the IMF can temporarily supplement these

resources by borrowing (see below).

The amount the IMF has readily available for new (non-concessional) lending is indicated by

its forward commitment capacity (FCC). This is determined by its usable resources (including unused

amounts under loan and note purchase agreements and amounts available under the IMF’s two

standing multilateral borrowing arrangements (see below)), plus projected loan repayments over the

subsequent twelve months, less the resources that have already been committed under existing

lending arrangements, less a prudential balance.

Borrowing arrangements

The IMF maintains two standing multilateral borrowing arrangements—the expanded New

Arrangements to Borrow (NAB) and the General Arrangements to Borrow (GAB)—currently with a total

borrowing capacity of SDR 370.0 billion (about $559 billion). If the IMF believes that its quota

resources might fall short of the needs of its member countries—for example, in the event of a major

financial crisis—it can activate these arrangements.

Since the onset of the global crisis, the IMF has signed a number of bilateral loan and note purchase

agreements to supplement its quota resources. The first round of bilateral borrowing took place in

2009-2010 and these resources were used to finance commitments under IMF-supported

arrangements that were approved prior to the first NAB activation (pre-NAB commitments). The use of

2009-2010 bilateral borrowing has been discontinued since April 1, 2013 and the remaining undrawn

balances under pre-NAB commitments are financed with quota resources.  

Against the background of worsening economic and financial conditions in the Euro Area, in 2011-12,

38 countries committed to increase IMF resources further by US$461 billion through bilateral

borrowing agreements. As of August 1st, agreements with 21 members are now effective for a total

amount of $378 billion. These resources will serve as a second line of defense to the Fund’s quota and

NAB resources.

IMF concessional lending and debt relief

The IMF provides two primary types of financial assistance to low-income countries: low-interest loans

under the Poverty Reduction and Growth Trust (PRGT), and debt relief under the Heavily Indebted

Poor Countries (HIPC) Initiative, the Multilateral Debt Relief Initiative (MDRI), and Post-Catastrophe

Debt Relief (PCDR). These resources come from member contributions and the IMF itself, rather than

from the quota subscriptions. They are administered under the PRGT, the PRG-HIPC, MDRI-I and MDRI-

II Trusts, and the PCDR Trust, for which the IMF acts as Trustee.

The predecessor of the PRGT was established to provide lending to eligible low-income countries in

support of the related arrangements and to subsidize the market rate of interest down to 0.5 percent

per year. Loan resources of about $42 billion (SDR 25.8 billion) have been committed by

23 contributors to the PRGT and its predecessors, while a larger number of member countries have

made subsidy contributions.

The PCDR Trust was established in June 2010 to provide post-catastrophe debt relief. The Trust was

initially financed by SDR 280 million (equivalent to around $422 million) of the IMF’s own resources,

and is expected to be replenished through future donor contributions, as necessary.

In addition to the above, there is a separate administered account financed by a group of member

countries for interest subsidies on IMF emergency assistanceto PRGT-eligible countries in post-conflict

or natural disaster situations.

Duty Entitlement Pass Book

DEPB (Duty Entitlement Pass Book ) is an export incentive scheme of Indian Government provided to Exporters in India.[1]

Duty Entitlement Pass Book Scheme in short DEPB is an export incentive scheme. Notified on 1/4/1997, the DEPB Scheme consisted of (a) Post-export DEPB and (b) Pre-export DEPB. The pre-export DEPB scheme was abolished w.e.f. 1/4/2000. Under the post-export DEPB, which is issued after exports, the exporter is given a duty entitlement Pass Book Scheme at a pre-determined credit on the FOB value. The DEPB rates allows import of any items except the items which are otherwise restricted for imports. Items such as Gold Nibs, Gold Pen, Gold watches etc. though covered under the generic description of writing instruments, components of writing instruments and watches are thus not eligible for benefit under the DEPB scheme.

The DEPB Rates are applied on the basis of FOB value or value cap whichever is lower. For example, if the FOB value is Rs.700/- per piece, and the value cap is Rs.500/- per piece, the DEPB rate shall be applied on Rs.500/-. The DEPB rate and the value cap shall be applicable as existing on the date of exports as defined in paragraph 15.15 of Handbook (Vol.1).

DEPB Scheme is issued only on post-export basis and pre/export DEPB Scheme has been discontinued. The provisions of DEPB Scheme are mentioned in Para 4.3 and 4.3.1 to 4.3.5 of the Foreign Trade Policy or Exim Policy. One significant change in the new DEPB Scheme is that in terms of Para 4.3.5 of the Exim Policy even excise duty paid in cash on inputs used in the manufacture of export product shall be eligible for brand rate of duty drawback as per rules framed by Department of Revenue which was not mentioned in the earlier DEPB Scheme.

Benefits of DEPB Rates[edit]The benefit of DEPB schemes is available on the export products having extraneous material up to 5% by material up to 5% shall be ignored and the DEPB rate as notified for that export product is be allowed.

Review of DEPB Rates[edit]The Government of India review[2] the DEPB rates after getting the appropriate an export import data on FOB (shipping) value of exportsand Cost, Insurance and Freight (CIF) value of inputs used in the export product, as per SION. Such data and information is usually obtained from the concerned Export Promotion Councils.

Implementation of the DEPB Rates[edit]

Some additional facilities as listed below have been provided for better implementation of the DEPB Rates

DEPB rates rationalized to account for the changes in Customs duties. Caps fixed on certain items but there would be no verification of Present Market Value (PMV) on such items. A number of ports have been added for availing facilities under the Duty Exemption Scheme, including DEPB. The threshold limit of Rs. 200 million for fixing new DEPB rates removed.

Provisional DEPB Rate[edit]

The main objective behind the provisional DEPB rates is to encourage diversification and to promote export of new products. However, provisional DEPB rates would be valid for a limited period of time during which exporter would furnish data on export and import for regular fixation of rates.

Maintenance of Record[edit]

It is necessary for Custom House at ports to maintain a separate record of details of exports made under DEPB Schemes.

Port of Registration[edit]

The exports/imports made from the specified ports given shall be entitled for DEPB.

Sea Ports: Mumbai, Kolkata, Cochin, Dahej, Kakinada, Kandla, Mangalore, Mormugao, Mundra, Chennai, Nhava Sheva, Paradeep,Pipavav, Sikka, Tuticorin Vishakhapatnam, Surat (Magdalla), Nagapattinam, Okha, Dharamtar and Jamnagar.

Airports: Ahmedabad, Bangalore, Bhubaneshwar Mumbai, Kolkata Coimbatore Air Cargo Complex, Cochin, Delhi, Hyderabad,Jaipur, Srinagar, Trivandrum, Varanasi, Nagpur and Chennai.

ICDs : Agra, Ahmedabad, Bangalore, Bhiwadi, Coimbatore, Daulatabad, (Wanjarwadi and Maliwada), Delhi, Dighi (Pune), Faridabad,Guntur, Hyderabad, Jaipur, Jallandhar, Jodhpur, Kanpur, Kota, Ludhiana, Madurai and the land Customs station at Ranaghat Mallanpur, Moradabad, Meerut Nagpur, Nasik, Gauhati (Amingaon), Pimpri (Pune), Pitampur (Indore), Rudrapur (Nainital), Salem Singanalur, Surat, Tirupur, Udaipur, Vadodara, Varanasi, Waluj, Bhilwara, Pondicherry, Garhi-Harsaru, Bhatinda, Dappar, Chheharata (Amritsar), Karur, Miraj and Rewari.

LCS: Ranaghat, Singhabad, Raxaul, Jogbani, Nautanva ( Sonauli), Petrapole and Mahadipur.

The exports made to the following Special Economic Zones (SEZ) are also entitled to DEPB.

SEZ : Santacruz, Kandla, Kochi, Vishakhapatnam, Chennai, FALTA, Surat, NOIDA

Credit under DEPB and Present Market Value[edit]

In respect of products where rate of credit entitlement under DEPB Scheme comes to 10% or more, amount of credit against each such export product shall not exceed 50% of Present Market Value (PMV) of export product. During export, exporter shall declare on shipping bill that benefit under DEPB Scheme would not exceed 50% of PMV of export product.

However PMV declaration shall not be applicable for products for which value cap exists irrespective of DEPB rate of product.

Utilization of DEPB credit[edit]

Credit given under DEPB Schemes is utilized for payment of Indian customs duty

Re-export of goods imported under DEPB Scheme[edit]

In case of return of any exported goods, which has been found defective or unfit for use may be again exported according to the exim guidelines as mentioned by the Department of Revenue.

In such cases 98% of the credit amount debited against DEPB for the export of such goods is generated by the concerned Commissioner of Customs in the form of a Certificate, containing the amount generated and the details of the original DEPB. On the basis of certificate, a fresh DEPB is issued by the concerned DGFT Regional Authority. It is important to note that the issued DEPB have the same port of registration and shall be valid for a period equivalent to the balance period available on the date of import of such defective/unfit goods.[3]

Duty Free Import Authorisation (DFIA) SchemeDFIA is issued to allow duty free import of inputs, fuel, oil, energy sources, catalyst which are required for

production of export product. DGFT, by means of Public Notice, may exclude any product(s) from purview

of DFIA. 

Entitlement

(a) Provisions of paragraph 4.1.3 shall be applicable in case of DFIA. However, these Authorisations shall

be issued only for products for which Standard Input and Output Norms (SION) have been notified. 

(b) DFIA shall be issued in accordance with Policy and procedure in force on date of issue of Authorisation.  

(c) In case of post export DFIA, a merchant exporter shall be required to mention only name (s) and

address(s) of manufacturer(s) of the export product(s). Applicant is required to file application to

concerned RA before effecting exports under DFIA.

(d) Pre-export Authorisation shall be issued with actual user condition and shall be exempted from

payment of basic customs duty, additional customs duty / excise duty, education cess, anti-dumping duty

and safeguard duty, if any. 

(e) In case of actual user DFIA and where CENVAT credit facility on inputs have been availed for the

exported goods, even after completion of export obligation, the goods imported against such DFIA shall be

utilized in the manufacture of dutiable goods whether within the same factory or outside (by a supporting

manufacturer). 

Value Addition.

A minimum 20% value addition shall be required for issuance of DFIA. However, for items in gems and

jewellery sector value addition as prescribed under paragraph 4A.2.1 of HBP v1. shall apply. Similarly, for

items where a higher value addition has been prescribed under Advance Authorisation Scheme, the same

value addition for DFIA shall be applied. 

APPENDIX-2

LIST OF EXPORT PROMOTION COUNCILS/COMMODITY BOARDS/EXPORT DEVELOPMENT

AUTHORITIES

S.No

.

Name of

Export

Promotion

Councils/

Commodity

Boards

Details of products falling with

their jurisdiction

1. Apparel

Export

Promotion

Council

Readymade garments.

2. Basic

Chemicals,

Pharmaceutic

als &

Cosmetics

EPC

- Dyes, Dye-Intermediates, Coal

Tar Chemicals and Alcohol

- Basic Inorganic and Organic

Chemicals including Ago

Chemicals, Oil Field Chemicals

- Cosmetics and Toiletries,

Essential Oils & Perfumery

Compounds,

- Agarbattis.

- Castor Oil & it's derivatives

 

3. Carpet Export

Promotion

Council

Handmade/ Handknotted

Woollen Carpets, Rugs,

Druggets, Durries, Handmade

tufted Carpets, Handmade Silk

Carpets, Handmade

Staple/Synthetic Carpets,

Kelem, Schumacks, Namdhas

and other Floor Covernings.

4. Cashew

Export

Promotion

Council of

India

- Cashew Kernels

- Cashewnut Shell Liquid

- Kardanol

5. CAPEXIL 1. Animal By-products

2. Automobile Tyres & Tube

3. Books, Publishing & Printing

4. Bulk Minerals & Ores

5. Cement, Clinkes & Asbestos

Cement products

6. Ceramics & Refractories

7. Glass & Glasswares

8. Granites, Natural Stones &

Explosives.

9. Graphite Electrodes &

Explosives

10. Misc. Products such as :

- Gambier Extracts/Myrobalam

Extracts/ Cutch Extracts/ Other

dyeing & tanning extracts

- Fire works

- Safety Matches

- Activated Carbon

- Cocoanut shell Charcoal

- Superphosphates Urea

- Other Chemical Fertilizers

- Hard Aggregates for Floor

11. Ossein, Glue & Gelatine

12. Paints & Allied Products

13. Paper, Board & Paper

Products

14. Plywood & Allied Products

15. Processed Minerals

16. Rubber Manufactured

Products

 

6. The Cotton

Textiles

Export

Promotion

Council

- Cotton Yarn & Sewing Thread

- Cotton Fabrics (Grey/Bleached

& Processed Fabrics) including

Yarn Dyed Fabrics:

Duck/Canvas, Sheetings,

Poplin, Shirting/Suitings,

Denims/Drills, Twills/Sateens,

Sarees/Dhotis/Terry Fabrics,

Furnishings, Voils/Mulls/Muslin,

Knit Fabrics

- Cotton Made-ups – Bed

Linens/Home Furnishings, Terry

Towels/Toweling, Bags/Sacks,

Curtains/Drapes, Blankets,

Table/Toilet/Kitchen,

Linens/Napkins,

Handkerchiefs/Dusters,

Carpets/Mats/Tarpaulins/Tents,

Tapes/Narrow Fabrics, Labels,

Shawls/Scarves, Rope &*

Twine, Drop Cloth, Mosquito

Netts/Netting, Embroidered

Fabrics/Sarees, Dress Materials,

Chaddar/Odhanis, Khangas,

Threads/Packing Threads,

Others

- Raw Cotton

 

7. Council for

Leather

Exports

Leather & Leather products

 

8. Engineering

Export

Promotion

Council

1. Machineries and equipments

2. Motor Vehicles 

3. Automobile Components 

4. Bicycles, Bicycle

Components and Accessories

5. Two Wheelers and Three

Wheelers

6. Internal Combustion Engines,

Compressors and parts thereof

7. Pumps – all types

8. Electric and Home

Appliances

9. Hand and Machine Tools

10. Medical, Surgical and Other

Instruments

11. Prime Iron & Steel and

Products Thereof

12. Non-ferrous Metals and

Products Thereof 

13. Railway Rolling Stock and

Components

14. Builders Hardware 

15. Project Exports.

16. Mica & other Mineral based

products.

17. Miscellaneous

Manufacturers Engineering

Products not specified

elsewhere.

 

9. Electronics &

Computer

Software EPC

- Electronics Hardware:

• Consumer electronics

• Telecom equipments and

services

• Electronics instruments

(which includes – industrial

instruments, office equipments,

medical equipments, laboratory

equipments, strategic

electronic equipments)

• Electronics components

• Computer hardware

• Computer software/services 

 

10. Export

Promotion

Council for

Handicrafts

Handicraft Items made of:

- Metal Ware

- Wood Ware

- Handprinted textiles and

scarves embroidered and

crocheted goods shawls and Art

wares

- Artistic handmade jewellery/

Imitation jewellery

- Lace & Embroidery crafted

stones

- Jute and Papier machine

 

11. Export

Promotion

Council for

EOUs & SEZ

Units

100% Export Oriented Units

and Special Economic Zone

Units

12. Federation of

Indian Export

Organisations

(FIEO)

-Status Holders

- Services other than Computer

Software/ Services, and those

specific services as listed in Sl.

No.22 of Appendix 2 of

Handbook of Procedures

Volume-I.

- In respect of exporters having

their Head Office/ Registered

Office in the State of Orissa,

RCMC may be obtained from

FIEO office in Bhubaneswar.

However, exporters of Minor

Forest produce may also obtain

RCMC from SHEFEXIL

 

13. The Gem &

Jewellery

Export

Promotion

Council

- Polished & Processed Pearls

(real or culture)

- Cut & Polished Diamonds

- Cut & Polished Coloured

Gemstones

- Jewellery containing gold,

silver, platinum, or palladium

and studded with diamonds,

coloured gemstones, real or

cultured pearls or synthetic/

imitation stones

- Cut and Polished Synthetic

Stones

- Costume/Fashion Jewellery

- Silver Filligree Jewellery &

Silver Filligree

- Rough Diamonds

 

14. Handloom

Export

Promotion

Council

All Handloom Products like:

Fabrics, Home Furnishings,

Carpets, Floor coverings etc.

15. Indian

Oilseeds &

Produce

Export

Association

EPC (IOPEA)

Oil seeds and oils, other than

de-oiled cake, rice bran oil,

soya oil, soya de-oiled cake and

the products other than those

dealt by Shellac & Forest

Product Export Promotion

Council.

16. The Indian

Silk Export

Promotion

Council

Natural silks and silk Blends

and their products including

readymade Garments and

Carpets.

 

17. Jute

Manufacturer

s

Development

Council

Traditional Jute Products :

Hessian, Sacking, Carpet

Backing Cloth, Yarn

Speciality and newly emerging

products : Food grade jute

cloth/bags, jute geo-textiles

Life Style Jute Products : Floor

coverings (incl. carpets, mats

and Mattings. Shopping & carry

bags incl. fancy bags. Jute and

jute blended decorative fabrics.

Promotional gift items including

handicrafts stationery items.

Wall hangings

18. Pharmaceutic

als Export

Promotion

Council

- Bulk Drugs and its

intermediates,

- Formulations

- Herbal

- Ayurvedic,

- Unani

- Homeopathic medicines

- Biotech & biological products

- Diagnostics

- Surgical

- Nutraceuticals & pharma

industry related services

- Collaborative research

- Contract manufacturing

- Clinical trials and consultants

etc

- Pharma related services.

 

19. The Plastics

Export

Promotion

Council

All plastics products covering

plastic raw materials:

intermediate products like

plastic 

Films, sheets etc .plastic

packaging materials including

Plastic woven

sacks/fabrics/bags & Flexible

Intermediate Bulk containers

(FIBC’s) Plastic Tarpaulins,

plastic consumer items, PVC

Leather Cloth/Foam leather,

floor coverings (incl.

Linoleums), Moulded/soft

luggage,FRP/GRP products PVC

Rigid/Flexible,

Pipe fittings, Toys Dolls and

Game, Plastic Electrical

Accessories, Laminates,

Fishnets. Fishing Lines,

Cordage/Ropes/Twines/Yarn/Bri

stles, PVC fabricated goods,

PVC Sheeting/Film, Intraocular

Lenses, Spactacle Frames, Hard

Resilene Lenses, goggles, Poly-

Lines Jute goods, Disposable

Syringes, blood/urine bags I.V.

sets, Dental products and other

medical disposables, Cine X-

Ray Films, Plastic

bangles/Imitation Jewellery and

all products made

predominantly of plastic

materials by processing raw

materials through injecton/blow

moulding. Extrusion,

calendaring, fabrications and

other processes: writing

instruments and human hair

and products thereof

20. Powerloom

Development

& Export

Promotion

Council

Powerloom products 

 

21. Project

Exports

Promotion

Council of

India

Project Exports:

- Civil Construction (Structures/

Infrastructure)

- Turnkey including

Engineering, Procurement &

Construction (from concept to

commissioning) and Essentially

includes civil work/construction

and all supplies specific to

these Turnkey Projects

- Process and Engineering

Consultancy Services

- Project Construction Items

(excluding Steel and Cement)

- Construction Engineering

Products (fitting and fixtures;

materials; construction

chemicals & allied products)

- Construction Equipments &

Accessories

- Other Project Goods

 

22. Services

Export

Promotion

Council

1. Health Care Services

including services by nurses,

physiotherapist and

paramedical personnel

2. Educational Services

3. Entertainment Services

including audio-visual services

4. Consultancy Services

5. Architectural Services and

related services

6. Distribution Services

7. Accounting/ Auditing and

Book Keeping Services

8. Environment Services

9. Maritime Transport Services

10. Advertising Services

11. Marketing Research and

Public Opinion Polling Services/

Management Services

12. Printing and Publishing

13. Legal Services

14. Hotel and tourism related

services.

 

23. The Sports

Goods Export

Promotion

Council

Sports Goods and Toys

24. Shellac &

Forest

Products

Export

Promotion

Council

- Minor Forest Produce and

their value added products.

- - In respect of exporters

having their Head

Office/Registered Office in the

North East States, RCMC for all

products may be btained from

Shellac & Forest Products

Export Promotion Council.

In respect of exporters having

their head office/Registered

office in the state of Orissa,

exporters of MFP from the state

can obtain RCMC from

Shefexil. 

 

25. Synthetic &

Rayon

Textiles

Export

Promotion

Council

Synthetic & Rayon (Man-Made

Fibre) Textiles and blends such

as Fibre, Yarn, Fabrics and

Made-ups covered under ITC

(HS) Classification – Chapters

54 to 63 (Excluding Garments)

26. Wool &

Woollens

Export

Promotion

Council

All types of Wool & Wool

Blended Products like Woollen

& Acrylic Knitwear, wool & wool

blended Shawls, Stoles,

Scarves, Mufflers, Rumals,

Shoddy Blankets, Fabr4ics,

Wool Tops, Woollen Yarn, Wool

Hair Belting, Felt, Machine

Made Carpets, other Made-ups

etc.

27. Wool Industry

Export

Promotion

Council

Shoddy & Woollen yarn and

Fabrics, Blankets, Wool Tops,

Wool Hair Belting, Felt and

Machine made carpets, Woven

Shawls, Scarves and Stoles.

28. Coffee Board Coffee

 

29. Coir Board Coir and Coir Products

 

30. The Rubber

Board

Rubber and Rubber Products.

31. Spices Board Cardamom, Pepper, Chilly,

Ginger, Turmeric, Coriander,

Cumin, Fennel, Fenugreek,

Celery, Aniseed, Bishopsweed,

Caraway, Dill, Cinnamon,

Cassia, Garlic, Curry Leaf,

Kokkam, Mint, Mustard,

Parsley, Pomegranate seed,

Saffron, Vanilla, Tejpat, Pepper

long, Star Anise, Sweet flag,

Greater Galanga, Horse-

raddish, Caper, Clove,

Asafoetida, Cambodge, Hyssop,

Juniper berry, Bay leaf, Lovage,

Marjoram, Nutmeg, Mace, Basil,

Poppy Seed, All-Spice,

Rosemary, Sage, Savory,

Thyme, Oregano, Tarragon,

Tamarind.

In any form including curry

powders, spice oil, oleoresins

and other mixtures where spice

content is predominant.

32. Tea Board Tea and its products

 

33. Tobacco

Board

Unmanufactured Tobacco

- Flue cured Virginia

- Light Soil Burley

- Sun cured country

- Chewing Tobacco

- Bidi Tobacco

- Cigar Tobacco

- HDBRG

Manufactured Tobacco

products

- Cigarettes

- Cigars

- Cigarillos

- Beedis

- Cut tobacco

- Chewing tobacco

- Hookah tobacco paste

- Snuff

 

Commodity Boards:

There are five statutory Commodity Boards  under the Department of Commerce. These Boards are

responsible for production, development and export of tea, coffee, rubber, spices and tobacco.

(i) Coffee Board

The Coffee Board was set up under Section (4) of the Coffee Act, 1942. The Board is headed by a

Chairman and functions from Bangalore.  The Board administers four Regional Coffee Research Stations, a

Coffee Research Institute, a number of Regional Field Stations and Coffee Demonstrations Farms.  The

primary functions of the Board include formulating and implementing programmes and projects for growth

and development of the coffee industry; promoting coffee consumption in India and exports in the

international market; supporting research; extension and developmental activities for raising productivity;

evolving pest and disease resistant varieties; and prescribing and enforcing quality standards at all

stages.

(ii) Rubber Board

The Rubber Board was set up under Section (4) of the Rubber Act, 1947.  The Board is headed by a

Chairman with head quarters at Kottayam.  It has five Zonal Offices, thirty nine Regional Offices, a number

of Field Stations, Rubber Development Centers and Regional Nurseries. The Board is responsible for the

development of the rubber industry by way of assisting and encouraging scientific, technical and economic

research; supplying technical advice to rubber growers; training growers in improved methods of planting,

cultivation and manuring and collecting statistics from the owners of estates, dealers, manufacturers.

(iii) Tea Board

The Tea Board was constituted as a Statutory Body on 1st April, 1954 under Section (4) of the Tea Act,

1953.  The Board is headed by a Chairman with head office at Kolkata.  As an apex body for the tea

industry in India, the Board has two Zonal Offices at Guwahati and Coonoor and 13 Regional Offices

spread over different parts of India, one Research Centre at Kurseong (Darjeeling) and three foreign

offices in London, Moscow and Dubai. The primary functions of the Board include rendering financial and

technical assistance for cultivation, manufacture, marketing of tea; promoting tea exports; aiding research

and developmental activities for augmentation of tea production and improvement of tea quality;

encouraging and assisting the unorganized small growers sector financially and technically and collecting

& maintaining statistical data and its publication for the benefit of growers, processors and exporters.

(iv) Tobacco Board

The Tobacco Board was constituted as a Statutory Body on 1st January, 1976 under Section (4) of the

Tobacco Act, 1975.  The Board is headed by a Chairman with headquarters at Guntur, Andhra Pradesh,

and is responsible for the development of the tobacco industry.  The Board also has a Directorate of

Auctions at Bangalore and 18 Auction platforms across the states of Andhra Pradesh and Karnataka.  The

primary functions of the Board include regulating the production and curing of Virginia Tobacco; keeping a

constant watch on the Virginia Tobacco market in India and abroad; ensuring fair and remunerative prices

to growers; maintaining and improving existing markets and developing new markets abroad by devising

appropriate marketing strategies.  The Board is entrusted with the task of recommending to the Central

Government the minimum prices that may be fixed; regulating tobacco marketing in India with due regard

to the interest of growers, manufacturers and dealers; propagating information useful to growers, traders

and manufacturers and purchasing Virginia Tobacco from the growers when the same is considered

necessary for protecting the interests of growers.  During the year 2009-10, a “Tobacco Board’s Growers’

Welfare Fund”, has been created to implement the “Tobacco Board’s Growers’ Welfare Schemes”, with

one time contribution of Rs.17.536 crores by the Tobacco Board.  This will be subject to the contribution

from growers and the Tobacco Board in the ratio of 1:2.  A rehabilitation package to Flue Cured Virginia

(FCV) tobacco farmers who wish to shift out of tobacco cultivation is also being contemplated.

(v) Spices Board

The Spices Board was constituted as a Statutory Body on 26th February, 1987 under Section (3) of the

Spices Board Act, 1986. The Board is headed by a Chairman with its head office at Kochi and is responsible

for the development of cardamom industry and promoting the export of all the 52 Spices listed in the

Spices Board Act, 1986. The primary functions of the Board include increasing the production and

productivity of small and large cardamom; development, promotion and regulation of export of spices;

granting certificate for export of spices; undertaking programmes and projects for promotion of export of

spices (like setting up of spices parks, support of infrastructure improvement in spices processing etc.);

assisting and encouraging studies and research for improvement of processing, grading and packaging of

spices; striving towards stabilization of prices of spices for export and controlling and upgrading quality for

export (including setting up of regional quality evaluation labs and training centers). In regard to

cardamom, the Board also provides financial and other assistance for cultivation and processing of

cardamom; monitoring prices; increasing domestic consumption; improving marketing; registering and

licensing brokers (including auctioneers), e-auction system; undertaking, assisting or encouraging

scientific, technological and economic research and improving quality. The Board also implements

programmes for development of spices in NE region and organic spices in the country; it also supports

programmes aimed at better post harvest practices.

CHAPTER 13

EXPORT PROMOTION COUNCILS

Basic Objectives

Role and

Functions

 

13.1

The basic objective of Export Promotion Councils is to promote and develop

the exports of the country. Each Council is responsible for the promotion of a

particular group of products, projects and services. The list of Export

Promotion Councils (EPCs) and specified Agencies/ Boards which shall be

regarded as EPCs are given in Appendix - 31 of the Handbook (Vol.1)

   

13.2

The main role of the EPCs is to project India's image abroad as a reliable

supplier of high quality goods and services. In particular, the EPCs shall

encourage and monitor the observance of international standards and

specifications by exporters. The EPCs shall keep abreast of the trends and

opportunities in international markets for goods and services and assist their

members in taking advantage of such opportunities in order to expand and

diversify exports.

   

13.3

The major functions of the EPCs are:

    (a)  To provide commercially useful information and assistance to their

members in developing and increasing their exports;

     (b) To offer professional advice to their members in areas such as

technology upgradation, quality and design improvement, standards

and specifications, product development, innovation, etc.;

     (c ) To organise visits of delegations of its members abroad to explore

overseas market opportunities;

     (d) To organise participation in trade fairs, exhibitions and buyer-seller

meets in India and abroad;

     (e) To promote interaction between the exporting community and the

Government both at the Central and State levels; and

     (f) To build a statistical base and provide data on the exports and

imports of the country, exports and imports of their members, as well

as other relevant international trade data.

Non-profit,

Autonomous

and Professional

Bodies

 

13.4

The EPCs are non-profit organisations registered under the Companies Act or

the Societies Registration Act, as the case may be.

   

13.5

The EPCs shall be autonomous and regulate their own affairs. However, if the

Central Government frames uniform bylaws for the constitution and/or for

the transaction of business for EPCs, they shall adopt the same with such

modifications as Central Government may approve having regard to the

special nature or functioning of such EPC. The EPCs shall be required to

obtain the approval of the Central Government for participation in trade fairs,

exhibitions etc and for sending sales teams/ delegations abroad. The Ministry

of Commerce and Industry/ Ministry of Textiles of the Government of India,

as the case may be, would interact with the Managing Committee of the

Council concerned, twice a year, once for approving their annual plans and

budget and again for a mid-year appraisal and review of their performance.

   

13.6

In order to give a boost and impetus to exports, it is imperative that the EPCs

function as professional bodies. For this purpose, executives with a

professional background in commerce, management and international

marketing and having experience in government and industry should be

brought into the EPCs.

Government

support

 

13.7

The EPCs may be provided financial assistance by the Central Government.

Registration

cum-

Membership

 

13.8

An exporter may, on application, register and become a member of an

Export Promotion Council. On being admitted to membership, the applicant

shall be granted forthwith Registration-cum- Membership Certificate (RCMC)

of the EPC concerned, subject to such terms and conditions as may be

specified in this behalf.