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Export Trade Promotions: Everything You Should Know!

Last updated date: 20th Apr 2024
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What do We Understand about Export Trade Promotions?

Many countries and regions utilise export promotion to promote their companies products and services in foreign markets. This will benefit the trade balance and the overall economy of the country. Export incentive programmes may also be utilised to encourage more enterprises to export. Governments support marketing, product development, payment guarantee programmes, pre- and post-shipment finance, trade missions, training, trade displays, and international representation.

International trade has played a vital role in boosting global living standards, and it has risen dramatically over time. Most countries have their own currency. Currency valuation and exchange rates are critical considerations in financial markets.

Regulation and Promotion of Foreign Trade

An act to facilitate imports into India, increase exports from India, and address issues related to or incidental to such imports and exports in order to develop and regulate international trade. The Director of Exhibitions manages showrooms in other countries and establishes Trade Centres outside of India, in addition to organising Indian shows abroad.

In line with Section 19 of the Foreign Trade (Development and Regulation) Act of 1992, the Central Government hereby promulgates the following rules (22 of 1992).

1. A Short Title and Introduction

  1. These regulations may be referred to by the Foreign Trade (Regulation) Rules, 1993.

  2. They become effective on the day they are published in the Official Gazette.

2. Defined Terms

  1. Unless otherwise specified, "Act" in these rules refers to the 1992 Foreign Trade (Development and Regulation) Act (22 of 1992);

  2. A "charitable purpose" includes assisting the impoverished, advancing education, providing medical assistance, and advancing any other broad public benefit objective.

  3. An "importer" or "exporter" is someone who imports or exports commodities and has a current Importer-Exporter Code Number issued under Section 7.

  4. "licencing authority" refers to a body that has been granted authorisation by the Director General under paragraph (2) of section 9 to grant or renew a licence in accordance with these regulations.

  5. "Policy" refers to the central government's export and import policy, which is developed and made public in accordance with Section 5;

  6. "Schedule" refers to the Schedule annexe to these rules;

  7. "section" refers to an Act section; and

  8. "Special licence" refers to a licence issued in accordance with Section 8's Subsection (2).

  9. Section 2 provides a definition of "value."

Export Trade Promotions Initiatives

Some of the export promotion measures/initiatives are listed below.

  • Duty-Free Replenishment Certificate (DFRC): A DFRC allows a merchant exporter or manufacturer exporter to import duty-free inputs such as raw materials, components, intermediates, consumables, spare parts, and packing materials for use in export manufacturing. A licence of this type is only granted if the export responsibilities are met on time.

  • The Duty Entitlement Passbook Scheme (DEPB): DEPB allows exporters to request credit based on a percentage of the FOB value of freely convertible currency exports. The credit must be used for export products and at the rates specified by the Director-General of Foreign Trade (DGFT) in the public notice.

  • The Export Promotion Capital Goods Scheme (EPCG): EPCG was established under the EXIM policy of 1992-1997 to allow manufacturer exporters to import machinery and other capital goods for export production at reduced or no customs taxes. This facility is subject to an export obligation, which requires the exporter to guarantee minimum exports equal to the total value of imported capital goods.

  • Duty Drawback (DBK): The Duty Drawback Scheme is overseen by the Ministry of Finance's Directorate of Drawback. A claim under this programme may be submitted by an exporter.

  1. Customs duty paid on components, consumables, and raw materials imported.

  2. Having to pay central excise duty on domestic raw materials and components.

  3. Consumables used in the manufacture of export-oriented goods.

  • Excise Duty Refund: Excise duty is a tax imposed by the Indian government's central government on goods manufactured in India. This duty is collected at the point of origin or before the goods are removed from the production grounds. Export items are completely exempt from central excise duty.

Other than these, IIFT is looking after the country's foreign trade. IIFT is an autonomous body registered under the Ministry of Commerce & Industry.

Organisation to Promote International Trade

The government has established the following organisations to promote international trade:

  • Indian Trade Promotion Organisation (ITPO)

On January 1, 1992, the Indian Trade Promotion Organisation (ITPO) was established under the Companies Act of 1956. Its primary goal is to keep close ties between business, industry, and government. In order to achieve this goal, the ITPO organises trade shows and exhibitions both within and outside of the country, facilitating interactions between export companies and international trade organisations.

  • Department of Commerce

The Department of Commerce is the highest-ranking division within the Ministry of Commerce of the Government of India, in charge of developing import and export regulations as well as foreign trade policy for the country. It is in charge of all aspects of the country's foreign trade.

  • Foreign Trade Institute of India (IIFT): An Overview

IIFT is an autonomous body registered under the Ministry of Commerce & Industry, a self-governing organisation established under the Societies Registration Act in 1963, is in charge of overseeing the country's foreign trade. Furthermore, it is a recognised university that teaches students about international trade, conducts research on global business topics, and disseminates information about global trade and investments.

Its establishment was largely designed to help professionalise the nation's Foreign Commerce Management skills and to provide civil servants with training in international commerce.

Over the years, the institute has worked with a variety of organisations, including the World Trade Organisation (WTO), the World Bank, UNCTAD, and the Government of India's Ministry of Commerce and Industry. As a result, the institute has grown into a full-fledged business school, offering Management Programs in a wide range of international business disciplines. It offers part-time management programmes in addition to full-time management programmes for working professionals.

So far, the institute has graduated over 40,000 business specialists from 30 different countries. The institute has also signed memorandums of understanding (MoU) with a number of institutions for a research and exchange programme.

Trade Promotion Council of India

The council of trade development and promotion was established on July 3, 2015, to ensure a continuous dialogue with State Governments and UTs on measures to provide an international trade enabling environment in the States, as well as to develop a framework for making the States active partners in increasing India's exports. The Council for Trade Development and Promotion's mandate would be as follows:

  • To provide a forum for state governments and UTs to express their views on trade policy;

  • To provide a platform for the Indian government to inform state and local governments about global developments affecting India's trade potential and possibilities, as well as to equip them to deal with changing circumstances;

  • To provide a forum for discussion on the need for infrastructure relevant to trade promotion, as well as to identify barriers and infrastructure gaps that impede India's exports;

  • To assist state governments in developing and implementing export strategies that are consistent with the national Foreign Trade Policy;

  • To provide a forum for discussion on the operationalisation of trade infrastructure.

Case Study

Foreign Trade, Foreign Investment, and Related Issues: An Analysis of China and India

Following the repayment of more than US$2 billion in debt by the Reserve Bank of India (RBI), India's foreign exchange reserves reached an all-time high of US$120 billion on August 1, 2004, which is viewed as a sign of economic success. In the early 1990s, India had a balance of payment (BOP) crisis, with its foreign exchange reserves averaging around US$ 5.5 billion. According to the RBI's balance of payments figures, roughly US$1.3 billion of these reserves were brought in as a result of FDI inflows in 2002-2003.

India's relatively low share of FDI inflows cannot be masked by a healthy increase in FDI inflows during a global downturn. India receives only 5.5% of Asia's FDI inflows, whereas China receives 80%. This difference is expected to widen as a result of China's November 2001 admission to the World Trade Organisation (WTO).


International trade results in global specialisation and the division of labour. There is an abundance of labour in India. Because of this, the Indian government encourages policies and programmes to increase foreign trade. The Indian government devises various schemes and incentives to assist businesses in increasing the competitiveness of their exports. The government has also established a number of entities to assist firms engaged in international trade with infrastructure and marketing needs.

FAQs on Export Trade Promotions: Everything You Should Know!

1. What are the measures undertaken recently towards export promotion?

The Indian government has set up a number of organisations to help with exports. Import and export operations are managed by the Ministry of Commerce. Many countries and regions use export promotion to promote their companies products and services on a global scale. This will benefit the trade balance and the overall economy of the country. Export incentive programmes may also be used to encourage more businesses to export. The government develops the policies and programmes that govern exports and imports. The Director of Exhibitions manages showrooms in other countries and establishes Trade Centres outside of India in addition to organising Indian shows abroad.

2. What are the drawbacks of duty?

Merchandise that is intended for export is exempt from paying various excise, levy, and customs duties. Upon providing the relevant government with proof of the export of these products, any such fees paid are reimbursed to the exporter. Duty disadvantages are the term for these returns. Most goods that were subject to customs duty upon importation and export are eligible for duty drawback. The Duty Drawback Scheme reimburses exporters for customs duties paid on unneeded imported items or commodities that are handled, processed, or merged into other goods for export.

Please be aware that you have 12 months from the date the goods were exported to file a tax drawback claim for tobacco products.

3. Why should exports be promoted?

Export promotion is not a new concept; countries all over the world have been doing it for centuries. When export promotion was given an organised method after World War II, it gained attention. As a result, India's top export promotion organisation, FIEO, was established in 1965. According to the MoSPI, India was the 18th-largest exporting country in the world in 2019. That year, however, only 1.72% of Indian exports were included in the global market. Export promotion councils play an important role in this regard because they were established with the sole purpose of promoting India as a reliable source of goods and services in high demand on the global market.