Foreign Trade Promotion Measures and Schemes
Various trade promotion measures and schemes are announced by EXIM policy. The main trade promotion measures are listed below:
- Duty Drawback Scheme: The exported goods are not subject to customs and excise duty on producing the export documents these duties paid if any are refunded to the exporter this is called duty drawback scheme.
- Export Manufacturing under Bond Scheme: The firms manufacturing for export purpose obtain a bond which will entitle them to produce goods without payment of excise and other duties.
- Exemption from Payment of Sales Tax: The export goods are free from sales tax. Now this exemption of income tax is available only to 100 percent export oriented units and to the units in the export processing zones and special economic zones.
- Advance License Scheme: In this scheme the exporter is allowed duty free supply of domestic and imported inputs required for the manufacture of export goods. Advance license is available for those who export on regular basis as well as adhoc basis. Such license is obtained against exporter's production programme or on export orders received by exporters.
- Export promotion Capital Goods Scheme: This scheme encourages the import of capital goods for export manufacturing. This scheme allows the export firms to import capital goods with a small amount of custom duty.
- Scheme of Recognizing Export Firms as Export House, Trading House and Superstar Trading House: On achieving a prescribed average export of performance in past select years by a firm the government grants the status of export house, Trading house and star trading house to select export firms. Apart from this the export house also need to fulfill the conditions laid by export import policy.
- Export of Services: The exporter's performance of service providers is taken into consideration and is recognized. Based on their performance they are categorized as Service Export house, International service export house and international star service export house.
- Export Finance: The exporters need finance for their production and also during pre-shipment and post shipment period. These export finance are of two types namely Pre-shipment finance or packaging credit and post shipment finance. The pre-shipment finance is given for purchase, packing, manufacturing and processing whereas the post shipment finance is done for the date of extending the credit after the shipment of goods to the export country.
- Export Processing Zones: these are industrial estates generally situated near airports and seaports. These EPZ provide concessional duty free environment for export production. Such zones have been setup in various parts of India like Kandla in Gujarat, Santa cruz in Mumbai, Falta in West Bengal, Noida in Uttar Pradesh, cochin in Kerela, Vizahagapatnam in Andra Pradesh and Chennai in tamilnadu. Government has allowed development of these zones by private, state or joint sector.
- 100 Percent Export Oriented Units (EOUs): This scheme was introduced in 1981 this is a complimentary unit to EPZ. The production regime is same as EPZ but these EOUs have more facilities and options for location, raw material, ports, skills and technology.