Export Promotion Policies: An Overall View

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

1. Cash Compensatory Support (CCS)

The Cash Compensatory Support (CCS) was introduced in the year 1966. It was planned to present compensation for un-rebated indirect taxes paid by exporters on higher freight rates, market development costs and inputs.

2. Duty Drawback System

The main objective of duty drawback system is to repay exporters for tariff paid on the imported materials & intermediates & central excise duties paid on locally produced inputs which penetrate into export production. This is a universal practice & the rationale is straight - forward.

3. Replenishment Licenses

To present the export sector with admittance to importable inputs that enter into export production, at international prices, the import policy facilitated special import facilities for registered exporters.

4. Advance Licenses & Duty Exemption Scheme

Advance licenses assisted imports of specified raw materials without payment of customs duty. Such licenses were accessible only against confirmed export orders or letters of credit. 

5. EPZs and 100 per cent EOUs

With a view to giving thrust to export drive, the government set up Export Processing Zones which offer almost free trade environment for export fabrication so as to make Indian export products spirited in the world market.

6. Subsidies on Domestic Raw Materials

7. Fiscal Concessions for Exports

The 1st type of concession was integrated in the duty drawback system & the regime of cash compensatory support which was required to compensate indirect fares that were not refunded through the former. The 2nd type of concession was incorporated in income tax stipulations where earnings from exports were either partly exempted from income tax, or taxed at lower rate.

8. Blanket Exchange Permit Scheme

A Blanket Exchange Permit Scheme was commenced by the government in June 1987. The aim of the scheme was to give a major thrust to the export promotion drive of India.

FERA and FEMA

Foreign Capital