THE ROLE OF EXPORT PROMOTION COUNCILS(EPC s) AND ADVANTAGES OF INCENTIVES

By- Meet.P.Vithani PGDM-IB

Role Of Export Promotion Organizations

The Government of India have established a number of institutions and organizations and Corporations for promoting exports from India. Export Promotion Organizations and Institutions can broadly be classified into the following categories. Government Departments (ex: FIEO, MDA) Export Promotion Councils / Commodity Boards Service Institutions (ex: ITPO,IIFT)

Export Incentives
Why we need them

How are they structured

What is their impact

Why we need export Incentives?

Remove domestic taxes on inputs Encourage domestic value-addition Drawback of import duties on goods (parts, raw materials, and capital goods) used in export activities Subsidize exports to improve competitiveness Subsidies to offset cost disadvantages: hidden costs of domestic user charges Other costs? Subsidies in excess of identified cost disadvantages

Why we need export incentives?

Definition of neutral benchmarks essential to delineate subsidy elements Destination-basis of tax (zero-rating of exports) does not extend to user charges or duty drawbacks Duty drawbacks could be viewed as an incentive or simply a means of limiting tariffs to imports for domestic production and consumption

What ison so many variables: the impact? Exports depend

Exchange rate Domestic infrastructure and investment climate Global economic conditions A simple comparison of export growth before and after DEPB is too simplistic to draw any inferences about its impact Comparisons limited to merchandize exports Complete neglect of Service exports Important distinction between policy instruments for: exports vs competitiveness Exports vs FDI

Competitiveness
Labor laws and skill shortages Infrastructure Power Transportation Financial Regulation and corruption Customs facilitation FDI approvals

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