Unit 14
Unit 14
14.0 Objectives
14.1 Introduction
14.2 Importance of Institutional Infrastructure
14.3 Government Policy Making and Consultations
14.4 Export Promotion Councils and Commodity Boards
14.5 Technical and Specialised Services Assistance
14.5.1 Indian Institute of Packaging
14.5.2 Export Inspection Council and Agencies
14.5.3 Export Credit and Guarantee Corporation
14.5.4 EXIM Bank for Long-term Credit
14.5.5 Indian Council of Arbitration
14.5.6 Federation of Indian Export Organisations(FIE0)
14.5.7 India Trade Rornotion Organisation (ITPO)
14.5.8 Indian Institute of Foreign Trade
14.5.9 National Institute of Fashion Technology (NIFT)
14.6 Commercial Wing of Indian Embassies Abroad
14.7 Government Participation in Foreign Trade
14.8 Organisational Set-up in the States
14.9 Let Us Sum Up
14.10 Key Words
14.11 Answers to Check Your Progress
14.12 Terminal Questions
14.0 OBJECTIVES
After studying this unit, you should be able to :
, explain the importance of the institutional infrastructure for export promotion in W a
L
I describe the role of government policy making and. consultative body in the export
promotion
* explain the functions of export promotion councils and commodity boards
, describe the role of various service institutions engaged in export promotion
L
explain the importance of government trading organisations engaged in the export of
I specified commodities.
I
Export business requires special knowledge and business acumen. Exporters need guidance
and assistance at different stages of the export effort. For this purpose, the Government of
India have set up several institutions whose main functions are to help the exporter in his
work. Ln this unit, you will learn the role of these institutions in export promotion.
With this objct in view, Government of India have established a number of specialised
institutions in the country for providing the necessary services and assistance to individual
corporate unit for a successful export effort. In view of the widely diversifying nature of the
export markets in different parts of the world and an equally diverse and varied nature of
products and services traded in international market, Government of India have established
specialised institutions at production/industry level for assisting exporters from different
sectors.
institutions engaged in export efforts fall in six distinct tiers. At the top is the Department of
Commerce of the Ministry of Commerce. This is the main organisation to formulate and
guide India's trade policy. At the second tier, there are deliberate and consultative
organisations to ensure that export problems are comprehensively dealt with after mutual
discussions between the Government and the Industry. At the third tier are the commodity
specific organisations which deal with problems relating to individual commodities andlor
groups of commodities. The fourth tier consists of service institutions which facilitate and
assist the exporters to expand their operations and reach out more effectively to the world
markets. The fifth tier consists of Government trading organisations specifically set up to
handle exportfimport of specified commodities and to supplement the efforts of the private
enterprise in the field of export promotion and import management. Agencies for export
promotion at the State level constitute the sixth tier. Let us now discuss each of them in
detail.
Board of Trade : For ensuring a regular consultation, monitoring and review of India's
foreign trade policies and operations, Government of India have set up a Board of Trade with
representatives from Commerce and other important Ministries, Trade and Industry
Associations, and Export Service Organisations. It is an important national platform for a
regular dialogue between the Government and the trade and industry. The deliberations in
the Board of Trade provide guidelines to the Government for appropriate policy measures for
corrective action.
Cabinet Committee on Exports : "With a view to ensure regular and effective monitoring
of India's foreign trade performance and related policies, Cabinet Committee on Export has
also been set up.
Grievances Cell : Grievances Cell has been set up to entertain and monitor disposal of
grievances and suggestions received. It is a cell meant for speedy redressal of genuine
grievances. Grievances Committees headed by Director General of Foreign Trade and head
of concerned Regional Licensing Authority have been constituted in the respective licensing
offices. The Committee also include representatives of FIEO, concerned Export Promotion
CounciUCommodity ~ o a r d a n dother departments and organisations. The grievances may be 1nstitutionaI set-up lor
addressed to the Grievance Cell of the concerned Licensing Authority in the prescribed Export promotion In lndir
proforma.
Director General of Foreign Trade (DGFT) : DGFT is an important office of the Ministry
of Commerce, to help the formulation of India's Export-Import Policy and
thereof. It has set up regional offices in almost all States and Union Temtories of India.
These offices are known as Regional Licensing Authorities. There is an Export
Commissioner in the DGFT office who functions as a nodal point for all export promotion
schemes. The Regional Licensing offices also act as Export facilitation centres.
Director General, Commercial Intelligence & Statistics (IJGCI&S) : DGCI&S has been
enbusted with the task of compilation and publication of data on India's Foreign Trade. It
brings out various publications relating to Foreign Trade of India. The major publications are
as under:
There are Development Commissioners, Handicrafts and Handlooms, who advises on matters
relating to the development and exports of these sectors. There are Textile Commissioner and
Jute Commissioner who advises on the matters relating to the growth of exports of these
sectors. Textile Committee has also been set up for ensuring of textile machinery
manGctured indigenously, especially for exports. It also issues certificates of origin and.
'other special certificates.
States Cell : The cell has been created under Ministry of Commerce. Its functions are to act
as a nodal agency for interacting with State Governments or Union Territories on matters
concerning export or import from the States or Union Temtories. It provides guideline to
State level export organisations. It assists them iq the formation of export plans for each
cases.
3) Mouthpiece of Industry : Further, they also act as the mouthpiece of the industry,
advising as well as seeking appropriate changes in government policies, influencing
export-effort of their specific areas of interest.
Commodity Boards
Commodity Boards are statutory bodies responsible for the development of cultivation,
increased productivity, processing, research and development and marketing. They also
ensure adequate remuneration to growers by encouraging cooperative ventures, upgradation
of quality and marketing the produce through auctions, etc. There are seven Commodity
Boards. They are tea; coffee. tobacco, rubber, coir, spices and silk board. All the commodity
boards, except central silk board, are the registering authority and issue Registration-cum-
Membership Certificate.
'
Special Authorities for Some Products : There are also special authorities established for
promoting exports of marine products, processed foods, cinematographic films, and khadi
and khadi products: These include ( I ) Marine Products Export Development Authority, (2)
Agricultural and Processed Food Products Export Development Authority, (3) National Film
Development Corporation and (4) Khadi and Village Industries Commission. Similarly, for
extractions of solvents, groundnut, soyabean and cotton-seed the industry-associations
S promoting exports of these products are as under:
1) The Solvent Extractors Association of India Institutional Set-up for
Export Promotion In India
2) The Groundnut Extractors Export Development Association
3) Soyabean Processors Association of India
4) All India Cottonseed Crushers Association
Further; the office of the Jute Commissioner and Jute Manufactures Development Council
look after exports of natural fibre products (other than coir) and Director of Vanaspati looks
Packaging plays a crucial role in export marketing. The task has been rendered extremely
complex and challenging because of the conflicting nature of expectations from the foreign
buyers. Invariably, they insist on a very strong and sturdy package on the one hand to ensure
the physical safety of the goods, and also at the same time insist on a package to be extremely
easy to unpack. Good packing reduces the unpacking labour cost as well as saves time.
Hence, Government of India have established the Indian Institute of Packaging, for
rendering assistance, advice and guidance to help Indian exporters to effectively tackle the
challenges on the packaging front.
The export inspection agencies established by the Council, certify the quality and export-
worthy aspect of the manufactured and processed products exported fiom India. In this way,
Government of India, indirectly, assure the foreign buyers, about the quality and export-
worthiness of the products, exported from India. This has been made a statutory requirement.
Regular exporting units are also being declared as export-worthy units, subject to periodical
inspection by the export-inspection agencies. In addition, these agencies also provide
guidance and advice to individual export firms regarding technical standards and
specifications required for servicing export markets world over.
Export Inspection Agencies have also been authorised to issue the GSP certificate of origin
which enables exporters from India to be eligible for preferential duty concessions in the
markets of developed countries from West Europe, North America, Japan, Australia and New
Zealand, etc. The Export Inspection Council has set up a pilot test house at Mumbai for
prompt, efficient, accurate and comprehensive testing of engineering products, particularly
from small scale sector. It also offers technical support facilities to the industry. The EIC has
also set up the Quality Development Centre at Madras for providing training to the inspection
officers. It has also evolved procedures for assessment, evaluation and settlement of
complaints from foreign buyers.
Government of India have established Export Credit and Guarantee Corporation. The ECGC
insures the risk of non-payment by foreign buyers as well as the political risk of blockage of
Export Incentives transfer of funds. The corporation assists the exporters through special schemes such as
and Assistance packing credit guarantee, post-shipment credit guarantee and export finance guarantee. The
task of an exporter in Ind~ahas therefore been rendered free from such risks.
Moreover, as an additional service, the ECGC also provides guarantees to the commerc~al
banks providing working capital for financing export-business. Consequently, individual
export-firm in India, finds it relatively easy to arrange for necessary financial support from
the banks, for undertaking export-business. As regards the risk of physical damage to the
export-cargo, the General Insurance Corporation of India provides necessary marine
insurance which covers to Indian exporters.
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2. State whether the following statements are True or False :
I) Department of Commerce in the Mlnistry of Conunerce is respons~bleonly for
the internal t ~ a d em India.
li) Export inspection agencies certlfy the quality and export-worthy aspect of the
goods exported from India.
ili) ECGC does not ensure the political rlsk of blockage of transfer of funds.
IV) EXIM bank does not provide the assistance m turnkey projects
India Trade Promotion Organisation has been formed by merging Trade Fair Authority of
India and Trade Development Authority. This is the premier trade promotion agency of the
Government of India with the headquarter in New Delhi. It has also set up offices abroad in
New York, Frankfurt, Tokyo and Dubai, ITPO is a service organisation which maintains
close interaction with the trade, industry and the Government. The organisation servzs the
industry by providing marketing information and support for participation in fairs. It also
helps in developing exports of new items and uses its network of offices in India and abroad
for improved trade-related services. It has set up a Trade Information Centre at New Delhi.
In specific term, the objectives of ITPO are:
As an apex institution at the national level, Indian Institute of Fcreign Trade (IIFT),
established by the Government o r India, functions as the main institution for export marketing
inlelligence. IIFT performs following functions :
2. Provides international business management training : In addition, the ILFT has been
the pioneer and premier institution offering international business management education
programme, including basic programmes as well as in service education. Being a
Government institution, it also offers training programmes, for Government of India
service personnel from Indian Foreign Service, Indian Administrative Service, Central
Trade Service, and Indian Economic and Statistical Service.
3. Advises government on trade policies : Ail important function of the Institute has been
to advise Government of India on all aspects of foreign trade policies, strategies and
operations. Being a premier institution, it is frequeiltly approached for necessary advice
and guidance by other export-service organisations including export promotion councils
as well as individual export corporate units.
National Institute of Fashion Technology, New Delhi has been established for human
resource development fa:. rlie garment industry. It conducts professional programmes in the
disciplines of Apparel IZ::i ..ilafidising and marketing, fashion design and gannent
manufacturing technology. It offers training through workshops and consultancy services. It
has entered into technical agreement with the Fashion Institute of Technology, New York
and the Notingham Polytechnica, UK.
Export Incentives
and Assistance 14.6 COMMERCIAL WING OF INDIAN EMBASSIES
ABROAD
Assistance in export marketing effort is also provided by the commercial wing of Indian
Embassies abroad. Individual export-units as well as export promotion and service
institutions can equally utilise the services of commercial wing of Indian Embassies abroad
for various purposes such as specific market information, importers andlor import-agents'
names and addresses, arranging meetings with prospective importers during the visits of
foreign markets by Indian exporters. Further, specific information about various tenders, as
well as supply of tender documents, and other project information, including market
assessment, marketing practices, technical standards and specifications etc., can also be
attained through this channel. Advise the guldance regarding visits of trade delegations, trade
fairs and exhibitions, development plans, market-studies, etc., is also given by these offices,
on specific requests.
Export Corporations for stimulating export business. Liaison officers have also been
appointed by the States to develop export trade and maintain links with the Central
Government Departments and organisations. Export Promotion Advisory Committees have
been established by some States under the chairmanship of the Chief Minister or the Industry
Minister.
1. Name two government corporations which are engaged in the export of canalised
. items.
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2. State whether the following statements are True or False :
i) Indian Council of Arbitration does not consider international accepted norms and
?ractices of disputes settlement.
ii) IIFT functions as the main institution for export marketing intelligence.
iii) State Governments have no! set up Export Promotion Boards.
iv) Commerc~alWlng of Indian Embassies Abroad are only engaged in political
activities.
3. Fill in the blanks : I~~slitutional
Set-up for
i) There are .................. export promotion corlncils and ................. co~nmodityboards in Export Promotion In India
ii) ................and ...................are the largest trading houses in the India's export sector.
iii) MMTC and STC are also engaged in ............... trading for India's export.
iv) .....................is the coordinating body for various Export Promotion Councils and
other service institutioris.
At the top is the Department of Commerce of the Ministry of Commerce which formulate and
guide India's trade policy. Institutions established for strengthening marketing effort include
Export Promotion Councils, Commodity Boards, Special Authorities and Industry
Associations. These are the key institutions servicing export-effort at individual corporate
level, product-wise. The primary function of these institutions is to provide the exporter with
export-marketing guidance and advice. They provide complete informatior: and details
covering almost all the critical elements involved in export marketing effort at the individual
corporate unit-level on a continuous basis.
In addition, separate institutions have also been established for providing technical and
specialised services to the export-sector in India. These institutions provide necessary
guidance, help and assistance to individual corporate units, especially in the field of
packaging, quality-control, risk coverage, long-term credit, trade fairs and exhibitions,
settlement of disputes, package-service, and market-information.
In order to oversee the national effort in export promotion, Government have also established
Indian Institute of Foreign Trade (IIFT) at the apex level. The IIFT, besides providing
export-marketing intelligence at the national level, also provides foreign-trade management
education to business-executives, policy-makers, and service institutions.
For supplementing the export-effort by the private sector, Government of India have also
established a number of Corporations in the Government sector for directly undertaking
export-import activity. Various State Governments have also established Export
Corporations for promoting exports from different states respectively.
Note : These questions and exercises will help you to understand the unit better. Try to
write answers for them. But do not send your answers to the University. These are
for your practice only.