Government of India, like almost all other nations, has been endeavouring to develop exports. 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 performance of the nation for the general benefit of the economy. Such measures help exporting firms in several ways. The benefits of exports to the economy are many.
When the domestic market is small, foreign market provides opportunities to achieve economies of scale and growth. Secondly, the supply of many commodities, as in the case of a number of agricultural products in India, is more than the domestic demand. Thirdly, exports enable certain countries to achieve export-led growth. Fourthly, export markets may help mitigate the effects of domestic recession. Fifthly, a country may need to boost its exports to earn enough foreign exchange to finance its imports and service its foreign debt. It may be noted that many countries are suffering from trade deficit and foreign debt. Lastly, even in the case of countries with trade surplus, export promotion may be required to main its position against the international competition and the level of domestic economic activity.
The principal objectives of export promotion measures in India are to:
(i) Compensate the exporters for the high domestic cost of production.
(ii) Provide necessary assistance to the new and infant exporters to develop the export business.
(iii) Increase the relative profitability of the export business vis-a-vis the domestic business.
Government has established or sponsored a number of organisations to provide different types of assistance to the exporters. Apart from the organisations established exclusively for export promotion, there are also a number of other institutions which assist the export sector. An outline of the important organisations which help to promote exports is given below.
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. The ministry has elaborate organisational arrangement to look after various aspects of trade regulation and promotion. The Department of Commerce in the Ministry of Commerce is assigned a very important role in different matters concerned with foreign trade of the country including commercial relation with other countries, promotion and regulation of foreign trade, state trading etc. Matters related to foreign trade are dealt with by eight divisions in the Department of Commerce, namely, (i) Administrative and General Division, (ii) Finance Division, (iii) Economic Division, (iv) Trade Policy Division, (v) Foreign Trade Territorial Division, (vi) Exports Products Division, (vii) Services Division, and (viii) Industries Division.
1. Commodity Boards: There are five statutory Commodity Boards responsible for production, development and export of tea, coffee, rubber, spices and tobacco.
2. Export Inspection Council: The Export Inspection Council, a statutory body, is responsible for the enforcement of quality control and compulsory pre-shipment inspection of various exportable commodities.
3. Indian Institute of Foreign Trade: The Indian Institute of Foreign Trade, registered under the Societies Registration Act, is engaged in the following activities.
(i) Training of personnel in modern techniques of international trade;
(ii) Organisation of research in problems of foreign trade;
(iii) Organisation of marketing research, area surveys, commodity surveys and market surveys; and
(iv) Dissemination of information arising from its activities relating to research and market studies.
4. Indian Institute of Packaging: The Indian Institute of Packaging is registered under the Societies Registration Act. The main aims of the Institute are to undertake research on raw materials for the packaging industry, to organise training programmes on packaging technology, to stimulate consciousness of the need for goods packaging technology, to stimulate consciousness of the need for good packaging, etc.
5. Export Promotion Councils: There are a number of Export Promotion Councils under the administrative control of Ministry of Commerce. These Councils are registered as non-profit organisations under the Companies Act. The Councils perform both advisory and executive functions. These Councils are also the registering authorities under the Import Policy for Registered Exporters.
6. Federation of Indian Export Organisations: The Federation of Indian Export Organisations is an apex body of various export promotion organisations and institutions. It also functions as a primary servicing agency to provide integrated assistance to Government recognised Export Houses and as a central coordinating agency in respect of export promotion efforts in the field of consultancy services in the country.
7. Indian Council of Arbitration: The Indian Council of Arbitration, set up under the Societies Registration Act, promotes arbitration as a means of settling commercial disputes and popularises arbitration among the traders, particularly those engaged in international trade.
8. Marine Products Export Development Authority: The Marine Products Export Development Authority (MPEDA) is responsible for development of the marine products industry with special reference to exports.
9. Agricultural and Processed Food Products Export Development Authority (APEDA): The Agricultural and Processed Food Products Export Development Authority, set up in 1986, serves as the focal point for agricultural exports, particularly the marketing of processed foods in value added forms.
10. India Trade Promotion Organisation: The 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 fairs in India and
2. Compile and disseminate trade related information
3. Undertake publicity through the print and electronic media
4. Organise visit of foreign buyers and trade
5. Delegations to industry and trade establishments in India with a view to promoting trade
6. Assist Indian companies in trade development; organise export development programmes,
buyer-seller meets; and conduct promotion programmes and integrated marketing promotion
programmes for the trade and industry in India.
Public Sector Undertakings
The following trading/service corporations are functioning under the administrative control of the Ministry of Commerce.
- The State Trading Corporation of India and its subsidiaries
- The Minerals and Metals Trading Corporation of India and its subsidiary, viz., Mica Trading Corporation
- The Spices Trading Corporation
- The Export Credit Guarantee Corporation.
Central Advisory Council on Trade: The Central Advisory Council on Trade, consisting of representatives from different organisations and individuals with business standing and expertise in the field of trade and commerce, advise Government on matters relating to:
(i) Export and import policy programme
(ii) Operation of import and export trade controls
(iii) Organisation and development of commercial services
(iv) Export Credit Guarantee Corporation.
The Commerce Minister is the Chairman of this council.
Attached and Subordinate Offices
1. Office of the Directorate General of Foreign Trade (DGFT): The DGFT is responsible for the execution of the export and import policies of the Government. Import and Export Licensing of iron and steel and ferro-alloys is also looked after by this Organisation. The DGFT with the head office at New Delhi has subordinate offices located at different parts of the country. Earlier the office of the DGFT was known as the Chief Controller of Imports and Exports (CCIE).
2. Directorate General or Commercial Intelligence and Statistics: This Directorate is the primary Government agency for the collection, compilation and publication of the foreign, inland and ancillary trade statistics and dissemination of various types of commercial information. The Directorate brings out a number of publications, particularly on trade statistics which are utilised in framing economic policies, formulating trade agreements with foreign countries and monitoring these agreements. These publications are also used by the trading public and research scholars. The Directorate conducts studies on various topics relating to promotion of trade. It also helps in the settlement of commercial disputes and provides Indian businessmen going abroad with letters of introduction to Indian Commercial
representatives concerned. It maintains Commercial Library which is widely used by the exporters, importers, research scholars and others.
3. Offices of Development Commissioners, FIZ/EPZs: For each of the free trade zone/export processing zone in the country, there is an office of the Development Commissioner responsible for the administration of the zone.