List and explain various incentives and schemes that the government has evolved for promoting the country’s export.

The various incentives and schemes provided by India are as follows :

1. Export Processing Zones : Export Processing Zones (EPZs) have been set up to provide an internationally competitive duty free environment for export production. Infrastructural facilities are created in the zones to manufacture the products at lower cost. Customs clearance and facilities needed for financial transactions are also provided inside the zones. Import licence is not needed for import of capital goods, raw materials etc. The units located in the zones are expempted from payment of excise duty on capital goods and raw materials bought from the domestic market. 50% produce has been permitted for domestic sale at concessional rate of duty. There are 8 EPZs in India.

2. 100% Export Oriented Units : Export Oriented Units have been set up for the export of entire product expect those which are specially permitted to be sold in the domestic market. These units can be established any where in the country. They can avail of all benefits provided to the units in the EPZ.
3. Special Economic Zones : Special Economic Zones (SEZ) has been created to encourage free trade. It is a specially delineated duty free enclave. It is deemed to be foreign territory for the purpose of trade operations and duties and tariffs. Goods going into the SEZ area from Domestic Tariff Area (DTA) are treated as deemed exports. Goods coming from the SEZ area into DTA are treated as imported goods.

4. Export Houses, Trading Houses, Star Trading Houses and Super Star Trading Houses : Various categories of export houses have been recognized with a view to building marketing infrastructure and expertise required for export promotion. These houses are given national recognition so that they could make greater efforts for export promotion. They are required to operate as highly professional and dynamic institutions and act as an important instrument of export growth. The recognition is granted on the basis of the export performance of the firm.

5. Export of Services : In order to boost the export of services, various categories of service houses have been recognised. These houses are recognised on the basis of the export performance of the service providers. They are named as Service Export House, International Service Export House, International Star Service Export House, International Super Star Service Export House based on their export performance.

6. Export Promotion Capital Goods (EPCG) Scheme : The main objective of this scheme is to encourage the import of capital goods for export promotion. New capital goods including computer software systems may be imported under this scheme. Under this provision, the capital goods may be imported at 5% customs duty. The import is subject to an export obligation equivalent to 5 times CIF value of capital goods on FOB basis or 4 times the CIF value of capital goods on net foreign exchange basis. This obligation may be fulfilled over a period of 8 years from the date of issuance of license.

7. Deemed Exports : Deemed exports refer to house transactions in which the goods supplied do not leave the country. If goods are supplied to the specified categories of organizaition like EPZ, EOU, projects funded by United Nation agencies, etc. in India, they are treated as deemed exports. Deemed exports are eligible for the following benefits :

(a) Advance license for intermediate supply/deemed export.

(b) Deemed exports drawback.

(ci) Refund of terminal excise duty.

8. Duty Exemption/Remission Schemes : Duty exemption/remission schemes are aimed at facilitating import for export production. The duty exemption scheme enables import of inputs required for export production. The duty remission scheme enables post replenishment/remission of duty on inputs used in the export product.

9. Duty Drawback : Exporters use imported indigenous raw materials and components for export products. They pay customs duty/excise duty on these materials. Under the scheme of duty drawback, customs and excise duties paid on raw materials and components used for export products are refunded back to the exporters.

10. Export Finance : Exporters require finance for the manufacture of the goods. Finance is also needed after the shipment of the goods because it may take some time to receive payment from the importers. Therefore, two types of export finance are made available to the exporters by the authorised bank at concessional rate. They are termed as preshipment finance or packing credit and post-shipment finance. Under preshipment finance, finance is provided to an exporter for financing the purchase, processing, manufacturing or packing of goods for export purposes. Under the post-shipment finance, finance is provided to the exporter form the date of extending the credit after the shipment of goods to the date of realization of export proceeds.

11. Market Development Assistance : Export marketing requires huge resources. It becomes very difficult for the exporter to market their products in the overseas market. They need assistance for this purpose. The main objective of the marketing development assistance is to stimulate exports form the country. Under this scheme, assistance is provided for marketing Indian products in the overseas markets. The marketing development assistance is provided for the following purposes;

(a) Individual sales-cum study tours/trade delegations abroad.

(b) Individual participation in trade fairs/exhibitions and buyer-cum seller meets abroad.

(c) Publicity and advertisement.

(d) Other specified activities.

12. Tax Relief : Income tax exemption has been granted to promote exports. Under this scheme, export profits and foreign exchange earnings from other specified sources are exempted from income tax. The income tax exemption scheme is to be phased out over a five year period by 2004-2005. However, this scheme would remain operational for the units located in Export Processing Zones and 100% Export Oriented Units. As far as sales tax is concerned, export sales are not subject to sales tax. Excise duty on export goods is also exempted or refunded to the exporters.

13 Brand Promotion and Quality Awareness : Quality is the most important element of export marketing. High Quality branded products may be easily accepted in the overseas market. The government of India aims to encourage exporters attain internationally accepted standards of quality for their products. Government extends support to trade and industry to launch a nation wide programme on quality awareness and to promote the concept of total quality management. The central government also assists in the modernization and upgradation of test houses and laboratories to bring them up to the international standards.