Jul 1, 2013

Foreign Trade Policy of India - Chapter 3 - Part 1

I had given the introduction to Foreign Trade Policy (FTP) of India, here. This post will concentrate on third chapter of FTP. The third chapter concentrates on the promotional measures in order to increase India's international trade. It focuses mainly on export promotion. 

Promotional measures are divided into two parts. First part pertains to those measures that are directly implemented by the Department of Commerce. The second part pertains to the incentive schemes implemented by Directorate General of Foreign Trade (DGFT). 

Promotional measures under Department of Commerce

One of the important promotional measures include assistance to states for infrastructure development related to exports, known by the name ASIDE. The objective of this measure reads thus:
The objective of ASIDE scheme is to establish a mechanism for involving the State Governments to participate in funding of infrastructure critical for growth of exports by providing export performance linked financial assistance to them. The Scheme is administered by Department of Commerce (DoC).
I had written an evaluation of this scheme sometime ago at this link

The second scheme focus on increases market access through various trade promotion activities on focus country and focus product basis. Financial assistance is provided to Export Promotion Coucils(EPCs), Industry and Trade Associations, Agencies of State Govt and Indian Commercial missions abroad. This scheme is called Market Access Initiative (MAI). Under MAI, following activities can be conducted:
(i) Market studies/surveys,
(ii) Setting up of showroom / warehouse,
(iii) Participation in international trade fairs,
(iv) Displays in International departmental stores,
(v) Publicity campaigns,
(vi) Brand promotion,
(vii) Reimbursement of registration charges for pharmaceuticals and expenses for carrying out clinical trials etc., in fulfillment of statutory requirements in the buyer country,
(viii) Testing charges for engineering products abroad,
(ix) Assistance for contesting Anti Dumping litigations etc.
The second similar promotional measure goes by the name Market Development Assistance (MDA). 

Under MDA Scheme, financial assistance is provided for a range of export promotion activities implemented by EPCs and Trade Promotion Organizations on the basis of approved annual action plans. The scheme is administered by DoC. Assistance includes, amongst others, participation in trade fairs, exhibitions, travel expenses for participating in such fairs, stall charges and so on. 

Department of commerce also identifies and encourages, through various promotional measures, certain towns which have shown exemplary export performance. Such towns are called Towns of Exports Excellence (TEE). There are around 27 such towns currently.

In order to build the 'Made in India' brand, Department of Commerce also runs Indian Brand Equity Foundation, which started initially as a fund and is now working towards developing brand awareness for Indian exports in markets abroad.

Apart from all above, Department of Commerce also allocates funds to national level institutions and Export promotion councils for trade promotion. One can get more details of all these schemes at the website of commerce department