Export Promotion Policies

The Indian government has released export-focused unit programs and export processing centres, agriculture, vegetable farming, poultry, fishing and dairy production are included in export-focused units. Export promotion capital goods schemes (EPCGS) programs that include Cash Compensatory Support (CCS) system , Duty Drawback System and issue of Replenishment Licences have been implemented to allow exporters to import large goods through contracted import taxes. Under the EPCGS system, such exporters must export goods at 4 times the value of the next five years.

Foreign Trade Policy 2015-20 and other programs provide promotional measures to improve India’s exports with the aim of eliminating infrastructure inefficiencies and associated costs associated with the provision of gaming exporters.

Export Promotion Policies: An Overall View

Important measures to promote export by the Government of India during the pre-reform period were as follows:

Cash Compensatory Support (CCS)

Cash Compensatory Support (CCS) was launched in 1966. It was planned to introduce a non-deductible indemnity tax paid by foreign traders for high commodity prices, market development costs and contributions.

Cash Compensatory Support (CCS) was designed to provide indirect tax deduction for foreign exporters on inputs, high shipping costs and market development costs. Prices vary from product to product and usually from one exporter to another.

Duty Drawback System

The  Duty Drawback System has been notified of a large number of exports by the Government following a review of the Customs, Medium Tax, Service Tax and Transaction Expenses imposed by exports. 

The  Duty Drawback System aims to provide for the return / refund of custom tax and goods for inputs or immature items and service tax payable on input services used in the manufacture of export  duties as well as import duties on imported goods into imported goods. This is a universal practice and the concept is straightforward – forward.

Replenishment Licences 

Introducing the export sector for access to export products, at international prices, the import policy i.e Replenishment Licences has promoted specialised import services for registered traders.

Export Finance Agreements 

Type 1 permit is included in the duty drawback scheme and the financial compensation support system required to compensate for the indirect fare that was not originally returned. 

Type 2 permits are included in the income tax regulations where income from exports may be partially exempt from income tax, or tax on a lower value.

Clothing Exchange Permit Program

The Blanket Exchange Permit Scheme was launched by the government in June 1987. The aim of the program was to give greater impetus to the campaign to promote India’s exports.

Advance Authorization Scheme

Under this scheme, tax-free inputs are allowed, which are actually incorporated into the export product (after allowing normal damage) and a value added 15%. Advance Authorization (AA) is issued as an input related to the resulting products in accordance with SION (General Installation Procedures determined in Handbook of Procedures Vol. II) or on an advertising basis, in accordance with FTP procedures. 

AA usually has a validation period of 12 months for the purpose of importing the goods and a period of 18 months for the fulfilment of the Export Account (EO) from the date of issue. AA is issued to an export or exporting manufacturer bound to a supporting manufacturer.

EPCG program for Zero duty

The Zero duty EPCG program allows for the importation of large quantities for pre-production, production and shipping (including Lower or Slower Downshore and computer software programs) without tax, subject to an export obligation equal to 6 times the period of storage . large imported goods under the EPCG program, which will be completed within 6 years calculated from the date of issue of authorization (section 5.1 a FTP).

The program can be considered for both export and pre-export. An export bond will require the fulfilment of a specific export obligation in addition to the existing export performance within three years.

The import time can be up to 9 months. Foreign exporters who receive benefits under the Technology Upgradation Fund Scheme (“TUFS”) may benefit from the Zero duty EPCG Scheme. 

The importation of vehicles, SUVs, all motor vehicle vehicles by hotels, tour operators, or tourists or transport operators and companies operating / operating golf resorts are not permitted. The Export Commitment to acquire inland commodities under EPCG programs has been reduced by 10% to encourage exchanges.

Conclusion

Considering that the Indian economy is one of the fastest growing economies in the world, the Government of India has created various economic policies which can enhance India’s economic progress. 

Improving Indian exports is one such plan of the government. Thus, the government has taken quite a few steps towards enhancing the exports of India by introducing the export benefit schemes like Cash Compensatory Support (CCS) system , Duty Drawback System and issue of Replenishment Licences as mentioned above. The main objective of these export benefit schemes is to simplify the entire export process.