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Export Promotion Measures

Export promotion refers to strategies and actions aimed at boosting the presence and sales of products and services in foreign markets. This initiative not only encourages organizations to export but also has broader economic implications such as increasing employment, earning foreign exchange, and achieving self-reliance. Here are some of the key reasons why export promotion is crucial:

  • Increases Employment: By motivating organizations to export, there is a direct positive effect on job creation within the country.
  • Earns Foreign Exchange: Exports are a significant source of foreign exchange earnings.
  • Manages Surplus Production: Particularly in the case of agricultural commodities, export helps in selling surplus production.
  • Economies of Scale: Local firms are offered the opportunity to attain economies of scale.
  • Promotes Innovation and Technology Transfer: Boosting exports contributes to promoting innovation and the transfer of technology.
  • Finances Imports: The revenue from exports can be used to finance imports necessary for other sectors of the economy.
  • Acquires Management Knowledge: Engaging in export activities allows acquiring management knowledge from export destinations.

Export Promotion Measures (EPMs)

Export promotion measures are policies and practices, often government-funded or subsidized, aimed at increasing the total value of export sales of business firms. This is common both in developed and developing countries and includes a wide range of policy interventions.

Export Promotion Schemes/Incentives in India

As per Ghosh (2021), several schemes and incentives have been introduced to support exporters in India:

Market Development Assistance (MDA) Scheme

  • Purpose: Supports exporters in their marketing activities abroad.
  • Activities Covered: Includes participation in export promotion activities abroad, publicity campaigns, and brand promotion.
  • Beneficiaries: Aimed at exporters, particularly small and medium enterprises.

Cash Compensatory Scheme

  • Purpose: Provides cash assistance to exporters to offset high domestic costs and promote exports.
  • Benefit: Helps maintain competitive pricing in international markets.

Duty Drawback Scheme (DBK Scheme)

  • Purpose: To refund the duties imposed on imported and indigenous materials used in the manufacture of exported goods.
  • Benefit: Reduces the cost of production for exporters by allowing them to reclaim duties paid on inputs.
  • Scope: Covers various duties including customs and central excise.

Replenishment Licensing Scheme

  • Purpose: Facilitates the replenishment of raw materials used in the manufacture of goods exported.
  • Benefit: Ensures that exporters can continue their production without the added financial burden of import duties on raw materials.

Duty-Free Import Authorization (DFIA) Scheme

  • Purpose: Similar to the Advance License scheme, allowing duty-free import of inputs used in export products.
  • Characteristics: It is a post-export scheme, meaning that duty-free imports are permitted only after the completion of exports.
  • Benefit: Supports the export production supply chain by reducing initial capital expenditure on raw materials.

These schemes collectively aim to alleviate the challenges faced by exporters and enhance their competitiveness in the global market.

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