In this essay we will discuss about Institutional Framework for International Trade in India. After reading this essay we will learn about: 1. Introduction to Institutional Framework for International Trade 2. Department of Commerce 3. Advisory Bodies 4. Commodity Organizations 5. Autonomous Bodies 6. Service Institutions 7. Government Participation in Foreign Trade 8. States’ Involvement in Promoting Exports.
Contents:
- Introduction to Institutional Framework for International Trade
- Department of Commerce
- Advisory Bodies
- Commodity Organizations
- Autonomous Bodies
- Service Institutions
- Government Participation in Foreign Trade
- States’ Involvement in Promoting Exports
Essay # 1. Introduction to Institutional Framework for International Trade:
India has a comprehensive institutional set up to promote international trade. Exporting firms need to understand and appreciate the institutions involved and the functions carried out by them. The Department of Commerce is the prime agency of the country to promote international trade.
It is supported by a massive institutional set up (Exhibit 4.5) at the union and state government levels, carrying out a range of trade facilitation activities.
Essay # 2. Institutional Framework – Department of Commerce:
The Department of Commerce is the primary governmental agency responsible for developing and directing foreign trade policy and programmes, including commercial relations with other countries, state trading, various trade promotional measures and development, and regulation of certain export-oriented industries.
The principal functional divisions of the Department of Commerce engaged in export promotion activities are discussed as follows.
The Economic Division is engaged in export planning, formulating export strategies, periodic appraisal, and review of policies. The Economic Division also maintains coordination with and control over other divisions and various organizations set up by the Ministry of Commerce to facilitate export growth.
Besides, the Economic Division monitors work relating to technical assistance, management services for exports, and overseas investment by Indian entrepreneurs.
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The Trade Policy Division keeps track of development in international organizations, such as WTO, UNCTAD, Economic Commission of Europe, Africa, Latin America, and Asia and Far East (ESCAP). The Trade Policy Division is also responsible for India’s relationship with regional trading agreements, such as EU, NAFTA, SAFTA, Commonwealth, etc. It also looks after GSP and non-tariff barriers.
The Foreign Trade Territorial Division looks after the development of tirade with different countries and regions of the world. It also deals with state trading and barter trade, organization of trade fairs and exhibitions, commercial publicity abroad, etc. Further, it maintains contact with trade missions abroad and carries out related administrative work.
The Export Product Division looks after problems connected with production, generation of surplus, and development of products for exports. However, for products wherein the administrative responsibility remains with concerned ministries, the Export Product Division keeps in close touch with them to ensure that the production is sufficient to realize the full export potential besides ensuring the home consumption.
The division is also responsible for the working of export organizations and corporations, which deal with commodities and products under their jurisdiction.
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The Exports Industries Division is responsible for development and regulation of rubber, tobacco, and cardamom. It is also responsible for handling export promotion activities relating to textiles, woolens, handlooms, readymade garments, silk, and cellulosic fibres, jute and jute products, handicrafts, and coir and coir products.
The Export Services Division deals with the problems of export assistance, such as export credit, export house, market development assistance (MDA), transport subsidies, free trade zones, dry ports, quality control and pre-shipment inspection, assistance to import capital goods, etc.
The divisions mentioned here carry out their functions through export promotion councils, commodity boards, or other organizations.
Subordinate offices:
In addition to these divisions, attached and subordinate offices are also involved in the promotion of foreign trade.
These are as follows:
Directorate General of Foreign Trade:
The directorate is responsible for execution of export-import policy announced by the Government of India. It is headed by Director General of Foreign Trade (DGFT). The directorate also looks after the work relating to issuing of licenses and monitoring of export obligations.
Its headquarters are at New Delhi and subordinate offices are located at Ahmedabad, Amritsar, Bangalore, Baroda, Bhopal, Kolkata, Chandigarh, Chennai, Coimbatore, Cuttack, Emakulam, Guwahati, Hyderabad, Jaipur, Kanpur, Ludhiana, Madurai, Moradabad, Mumbai, New Delhi, Panipat, Panaji, Patna, Pondicherry, Pune, Rajkot, Shillong, Srinagar (functioning at Jammu), Surat, Varanasi, and Visakhapatnam.
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Directorate General of Commercial Intelligence and Statistics:
The Directorate General of Commercial Intelligence and Statistics (DGCI&S) was set up in 1962 and is headquartered at Kolkata. It is responsible for collection, compilation, and dissemination of trade statistics and commercial information. The DGCI&S also brings out a number of publications, mainly on inland and coastal trade statistics, revenue statistics, shipping and air cargo statistics, etc.
Its main publications, such as India Trade Journal (weekly) and Foreign Trade Statistics of India (monthly) provide detailed information on export trade statistics. The DGCI&S uses mainly the Daily Trade Returns (DTRs), an authentic source, for compiling and generating export-import statistics.
Directorate General of Anti-Dumping and Allied Duties:
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Constituted in April 1998, the Directorate General of Anti-Dumping (DGAD) is responsible for carrying out anti-dumping investigations and to recommend wherever required, the amount of anti-dumping/countervailing duty under the Customs Tariff Act, on identified articles which would be adequate to remove injury to the domestic industry.
Essay # 3. Institutional Framework – Advisory Bodies:
Advisory bodies provide an effective mechanism for continued interaction with trade and industry and increased coordination among various departments and ministries concerned with export promotion. The Government of India has set up the following advisory bodies for promoting international trade.
Board of Trade:
In order to deploy an effective mechanism for maintaining continuous dialogue with trade and industry on issues related to international trade, the Board of Trade was set up under the chairmanship of the Union Minister of Commerce and Industry in May 1989. It was reconstituted on 1 April 2005 with an eminent representative from trade and industry as its Chairperson.
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Secretaries of Commerce and Industry, Finance (Revenue), External Affairs (ER), Textile, Chairman of ITPO, Chairman/MD of ECGC, MD of Exim Bank, and Deputy Governor of Reserve Bank of India are official members of the Board.
Representatives from FICCI, CII, FIEO and various trade and industries sector, media, and other important eminent personalities in the field of import and export trade are also board members.
The broad terms of reference (ToR) of the Board of Trade are given below:
i. To advise the government on policy measures for preparation and implementation of both short- and long-term plans for increasing exports
ii. To review the export performance of various sectors, identify constraints, and suggest industry specific measures to optimize exports earnings
iii. To examine the existing institutional framework for exports and suggest practical measures for further streamlining to achieve the desired objectives
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iv. To review the policy instrument, package of incentives, and procedures for exports and suggest steps to rationalize and channelize such schemes for optimal use
v. To commence studies for promoting trade
Thus, the Board of Trade ensures a continuous dialogue with trade and industry in order to advise the government on policy measures, to review export performance of various sectors, identify constraints, and suggest industry specific measures to optimize export specific earnings.
It meets at least once every quarter and has the power to set up sub-committees, co-opt experts, and make recommendations on specific sectors.
Export Promotion Board:
In order to provide greater coordination among concerned ministries involved in exports, the Export Promotion Board works under the chairmanship of the Cabinet Secretary to provide policy and infrastructural support.
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The secretaries of all the ministries directly related to international trade are represented in this board, including secretaries of Departments of Commerce, Ministry of Finance, Department of Revenue, Department of Industrial Policy and Promotion, Ministry of Textiles, Department of Agriculture and Cooperation, Ministry of Civil Aviation, Ministry of Surface Transport, and others, according to the requirements of inter-ministerial coordination.
The coordinated approach of the Export Promotion Board provides the required impetus to the export sector and resolves inter-ministerial issues in promoting exports.
Essay # 4. Institutional Framework – Commodity Organizations:
In order to focus on the commodity-product-specific exports, there are various commodity organizations such as export promotion councils, commodity boards and autonomous bodies. These organizations look after sectors specific exports right from product development to export marketing.
Export Promotion Councils:
Export promotion councils (EPCs) are non-profit organizations. They are supported by financial assistance from the central government. At present there are 21 EPCs, as given in Exhibit 4.6. The basic objective of the EPCs is to develop and promote the country’s exports of specific products from India.
EPCs aim to project India’s image abroad as a reliable supplier of high-quality goods and services. In particular, the EPCs encourage and monitor the observance of international standards and specifications by exporters.
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The EPCs also keep abreast of the trends and opportunities in international markets for goods and services and assist their members in taking advantage of such opportunities in order to expand and diversify exports. Each council is responsible for the promotion of a particular group of products, projects, and services.
The major functions of the export promotion councils are:
i. To provide commercially useful information and assistance to their members in developing and increasing their exports
ii. To offer professional advice to their members in areas, such as technology up gradation, quality and design improvement, standards and specifications, product development, innovation, etc.
iii. To organize visits of delegations of its members abroad to explore overseas market opportunities
iv. To organize participation in trade fairs, exhibitions, and buyer-seller meets in India and abroad
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v. To promote interaction between the exporting community and the government, both at the central and state levels
vi. To build a statistical database and disseminate information
The EPCs also issue registration-cum-membership certificates (RCMCs) to their members which are mandatory for getting export incentives.
Commodity Boards:
In order to look after the issues related to production, marketing and development of commodities, there are nine statutory commodity boards as under:
i. The Tea Board
ii. The Coffee Board
iii. The Coir Board
iv. The Central Silk Board
v. The All-India Handlooms and Handicraft Board
vi. The Rubber Board
vii. The Cardamom Board
viii. The Tobacco Board
ix. The Spice Board
The functions carried out by commodity boards are similar to those of export promotion councils.
These boards broadly carry out the following functions:
i. Provide an integrated approach for production development and marketing of the commodity under their purview.
ii. Act as a linkage between Indian exporters and importers abroad.
iii. Formulate and implement quality improvement systems, research and development programmes, education and training of farmers, producers, packers, and exporters on post-harvest management practices.
iv. Act as an interface between international agencies, such as the ITC, Geneva, Food and Agriculture Organization (FAO), and United Nations Industrial Development Organization (UNIDO), etc.
v. Collect and disseminate information on production, processing, and marketing of the products under their purview.
vi. Export promotion activities, such as participation in international trade fairs, organizing buyer-seller meets, inviting foreign delegations, and taking Indian delegations abroad.
Essay # 5. Institutional Framework – Autonomous Bodies:
Agriculture and Processed Food Products Export Development Authority:
Set up under an act of Parliament of 1986, the Agricultural and Processed Food Products Export Development Authority (APEDA) looks after the promotion of exports of agriculture and processed food products. It works as a linkage between Indian exporters and global markets.
The products which fall under the purview of the APEDA, known as scheduled products, include fruits, vegetables and their products, meat and meat products, poultry and poultry products, dairy products, confectionary, biscuits and bakery products, honey, jaggery and sugar products, cocoa and its products, chocolates of all kinds, alcoholic and non-alcoholic beverages, cereal products, cashew nuts, groundnuts and papads, guar gum, floricultural products, and herbal and medical plants.
The basic functions of the APEDA are:
i. Development of database on products, markets, and services
ii. Publicity and information dissemination
iii. Inviting official and business delegations from abroad
iv. Organizing promotional campaigns abroad and visits of official and trade delegations abroad
v. Participation in international trade fairs in India and abroad
vi. Organization of buyer-seller meets and other business interactions
vii. Distribution of annual APEDA awards
viii. Provides recommendatory, advisory, and other support services to trade and industry
ix. Resolving issues and problems of its members related to government agencies and organizations, RBI, customs, import-export procedures, problems with importers through Indian missions abroad
Like export promotion councils, the APEDA also registers its exporters and gives them RCMCs as a part of statutory requirement. The concept of agri-export zone (AEZ) to provide a focused approach to agro-exports has been widely appreciated amongst producers and exporters that also call for active involvement of the state government.
Recently, the APEDA has developed a system for grant of certification mark, i.e., ‘Quality Produce of India’ on the basis of compliance with hygiene standards, implementation of quality assurance system, such as ISO 9000, food safety systems, such as the Hazard Analysis Critical Control Programme (HACCP), backward linkage, residue testing of pesticides and contaminants, laboratory facilities, etc.
Under the National Programme for Organic Agriculture, the APEDA is also an accredited inspection and certification agency for organically produced foods. It also provides financial support for export development under a number of schemes for development of infrastructure, market and quality, and R&D, and scheme for transport assistance.
Marine Products Export Development Authority:
The Marine Products Export Development Authority (MPEDA), established in 1972, is an autonomous body under the Ministry of Commerce aimed at increasing export- oriented production, specifying standards, processing, and export marketing of all kinds of fisheries and its products.
It offers a comprehensive range of services to exporters so as to develop exports of marine products from India including market promotion (Fig. 4.5).
The basic functions of MPEDA are:
i. Conservation and management of fishery resources and development of offshore fishing
ii. Registration of exporters and processing plants
iii. Regulation of marine products export
iv. Laying down standards and specifications
v. Helping the industry in relation to market intelligence, export promotion, and import of essential items
vi. Imparting training in different aspects of the marine products industry, such as quality control, processing, and marketing
vii. Promotion of commercial shrimp farming
viii. Promotion of joint ventures in aquaculture, production, processing, and marketing of value added seafood
Some of the major activities undertaken by the MPEDA include promotion of export-oriented aquaculture, production of scampi, crabs, lobsters, molluscs, and finned fishes and Integrated Development Programme for Sea Food Quality and Extension Services, training programme on implementation of HACCP, and various schemes to promote value addition and diversification of marine products to facilitate higher unit value realization.
Essay # 6. Institutional Framework – Service Institutions:
A number of institutions and organizations have been established to meet the requirements of industry and trade.
The fields in which these institutions are engaged include development of export management personnel, market research, export credit insurance, export publicity, organization of trade fairs and exhibitions, collection and dissemination of export-related information, inspection and quality control, development in packaging, etc.
A brief review of the activities and functions of some of these institutions is given below.
Indian Institute of Foreign Trade:
The Indian Institute of Foreign Trade (IIFT) was set up in 1963 by the Government of India as an autonomous organization to induce professionalism in the country’s foreign trade management. The institute has significantly contributed to India’s foreign trade policies, rationalizing the framework of procedures and documentation, and developing the country’s international trade strategy.
The major objectives of the institute are:
i. To impart professional education in modem management techniques in the area of international business
ii. To enable participants to appreciate the interrelationship between the diverse and complex tasks of international business
iii. To develop capacities among business executives and government officials for improved understanding of various trade and economic issues
iv. To conduct high-quality research that addresses domestic as well as world trade and business issues
The institute conducts capacity building programmes and research apart from basic foundation programmes in international business (Fig. 4.6). The institute has achieved high standards of excellence and occupies the unique position today of being India’s only premier institution that focuses on international business.
Export Inspection Council:
The Export Inspection Council (EIC) is responsible for the enforcement of quality control and compulsory pre-shipment inspection of various commodities meant for exports, notified under the Export (Quality Control and Inspection) Act, 1963.
Headquartered in New Delhi it functions through Export Inspection Agencies (EIAs) located at Chennai, Delhi, Kochi, Kolkata, and Mumbai besides a network of 38 sub- offices and laboratories.
Indian Council of Arbitration:
The Indian Council of Arbitration (ICA) set up under the Societies Registration Act, promotes arbitration as a means of setting commercial disputes and popularizes the concept of arbitration among traders, particularly those engaged in international trade.
The Council, a non-profit service organization, is a grantee institution of the Department of Commerce. The main objectives of the Council are to promote the knowledge and use of arbitration and provide arbitration facilities for amicable and quick settlement of commercial disputes with a view to maintain the smooth flow of trade, particularly, export trade on a sustained and enduring basis.
India Trade Promotion Organization:
The India Trade Promotion Organization (ITPO) is a premier trade promotion agency, which provides a broad spectrum of services to trade and industry so as to promote India’s exports.
The major activities carried out by ITPO are:
i. Participating in overseas trade fairs and exhibitions
ii. Managing the extensive trade fair complex, Pragati Maidan in Delhi
iii. Establishing linkages between Indian suppliers and overseas buyers
iv. Organizing buyer-seller meets and other exclusive India shows in India and abroad
v. Organizing India promotions with department stores and mail order houses abroad
vi. Arranging product displays for visiting overseas buyers
vii. Organizing seminars, conferences, and workshops on trade-related subjects
viii. Encouraging small and medium scale units in their export promotion efforts
ix. Conducting in-house and need-based research on trade and export promotion
x. Trade information services through electronic accessibility at Business Information Centre
ITPO maintains India’s largest trade fair complex—Pragati Maidan—spread over 149 acre of prime land in the heart of Delhi, having 62,000 sq. m. of covered exhibition space besides 10,000 sq. m. of open display area.
ITPO has its regional offices at Bangalore, Chennai, Kolkata, and Mumbai. Besides, ITPO also has overseas offices at New York, Frankfurt, Tokyo, Moscow, and Sao Paulo to promote India’s international trade and investment.
National Centre for Trade Information:
The National Centre for Trade Information (NCTI) has been set up as a registered company in March 1995 with a view to create an institutional mechanism for collection and dissemination of trade data and improving information services to the business community, especially small and medium enterprises. NCTI is a non-profit joint venture of ITPO and National Informatics Centre (NIC).
The major functions carried out by NCTI are:
i. To create databases and disseminate information on trade and commerce at national and international level
ii. To keep in constant communication with trade and commercial bodies throughout the world with a view to take appropriate measures for promoting exports and facilitating imports
iii. To advise or represent government, local authorities, and trade and commercial bodies on matters related to standardization, access, and dissemination of information on trade and commerce
iv. To create and maintain databases/trade statistics for the nodal ministry and to prepare region, country, and product-specific analytical and value added reports with a view of providing support for policy formulations and other strategic actions having bearing on the country’s exports
v. To keep abreast of emerging information technologies and standardizing formats for collection and dissemination of trade information in user-friendly formats
Under UNCTAD’s trade efficiency programme, NCTI is certified as an operational trade point in India. It uploads the trade leads on the World Trade Point Federations (WTPF) as per UN/EDIFACT standard and provides value-added product, industry or country-specific information on international trade as per the request of the customer on payment of a fee.
Export Credit Guarantee Corporation:
Operating in the international market is far more risky than operating in domestic markets.
Due to little predictability on political and economic changes, such as an outbreak of war and civil war, a coup or an insurrection, economic difficulties or balance of payment problems, commercial risks of insolvency, and protracted default of buyers may result into delayed payments, restrictions on transfer of payments and non-payment.
The Export Credit Guarantee Corporation (ECGC) provides credit insurance in order to protect exporters from consequences of payment risks, both political and commercial and to enable them to expand their overseas business without fear of loss.
The type of insurance protection provided by ECGC may be grouped as follows:
i. A range of credit risk insurance covers to exporters against loss in export of goods and services
ii. Guarantees to banks and financial institutions to enable exporters obtain better facilities from them
iii. Overseas investment insurance to Indian companies investing in joint ventures abroad in the form of equity or loan
In addition to insurance protection to exporters against payment risks, the ECGC facilitates the exporters by:
i. Providing guidance in export-related activities
ii. Making available information on different countries with its own credit ratings
iii. Providing information on the credit-worthiness of overseas buyers
iv. Making it easy to obtain export finance from banks/financial institutions
v. Assisting exporters in recovering bad debts
Export-Import Bank of India:
The Export-Import (Exim) Bank of India was setup by an act of parliament in September 1981. It aims to provide financial assistance to exporters and importers, and to function as the principal financial institution for coordinating the working of institutions engaged in financing export and import of goods and services with a view to promote India’s international trade.
It acts on business principles with due regard to public interest. The major programmes of Exim Bank are summarized in Fig. 4.7.
The major services extended by Exim Bank for promoting exports are:
i. It provides information and support services to Indian companies to help improve their prospects for securing business in multilateral agencies funded projects.
These services include:
a. Disseminating business opportunities in funded projects
b. Providing detailed information on projects of interest
c. Informing on procurement guidelines, policies, practices of multilateral agencies
d. Assisting with registration with multilateral agencies
e. Advising Indian companies on preparation of expression of Interest, capability profile, etc.
f. Intervening in bids
ii. In order to promote Indian consultancy, the Exim Bank has tie-ups with a number of international organizations, such as IFC, Eastern and Southern African Trade and Development Bank, etc.
iii. The bank also serves as a consultant to various developing countries for promoting exports and exports finance.
iv. The bank helps in knowledge-building by way of conducting seminars, workshops, and carrying out research studies on projects, sectors, countries, and macroeconomic issues relevant to international trade and investment.
The bank has conducted sector-specific studies for identifying market potential for computer software, electric components, chemicals, floriculture, machine tools, pharmaceuticals, medicinal plants, sports goods, and financial services.
v. The bank gathers and disseminates information on exporters/importers, industry/ market reports, trade regulations and laws, country reports, international quality standards, etc., so as to facilitate exporters.
Indian Institute of Packaging:
Considering the existing deficiencies in the standards of packaging for eye-appeal and safe transit, the Government of India, in collaboration with the industry set up the Indian Institute of Packaging (IIP) in 1966.
The main objectives of the institute are:
i. To undertake research on raw materials for the packaging industry
ii. To keep India in step with international developments in the field of packaging
iii. To organize training programmes on packaging technology
iv. To stimulate consciousness of the need for good packaging
v. To organize consultancy services for the industry
Its activities include effecting improvements in packaging standards and rendering testing facilities for packaging.
Federation of Indian Export Organizations:
The Federation of Indian Export Organizations (FIEO) is the apex body of various export-promotion organizations and institutions in India. Set up in 1965, the FIEO acts as a primary servicing agency to provide integrated assistance to government- recognized export and trading houses.
It also acts as the central coordinating agency for promoting exports of consultancy services from India. Representing more than hundreds of thousands exporters from India, FIEO is not a product-specific organization and the member exporters may be from any export sector.
The basic functions of the FIEO are:
i. Maintaining linkages with international agencies and export promotion organizations in other countries
ii. Organizing visits of multi-product delegations to prospective overseas markets and hosting foreign business delegations in India
iii. Organizing buyer-seller meets in India and abroad
iv. Providing advisory services to its members as well as foreign buyers in international markets
v. Maintaining a comprehensive database on India’s export sector
vi. Acting as a nodal agency for promoting exports of consultancy and other services
vii. Disbursing market development assistance to export and trading houses
viii. Keeping track of export-related policy changes and act as an interface between the government and the exporters so as to resolve the problems of its member exporters
ix. Interacting closely with the central bank, commercial banks, financial institutions and the ECGC and take up issues and problems of its member exporters
Indian government’s trade representatives abroad:
The institutional arrangements that have been developed and strengthened within the country are supplemented by the Indian trade representatives abroad. The trade representations in the Embassies and Consulates are continually being strengthened to enable them to effectively support trade efforts being made within the country.
India’s commercial representatives are expected to monitor the commercial events and developments of their accreditation, identify products with export potential and other trade opportunities, and study tariff and non-tariff barriers, government procedures, and shipping facilities.
The representatives should also take initiative in cultivating specific trade contacts, undertake all publicity activities for image-building, organize participation in trade fairs and stores promotion, etc., effectively guide trade visitors and missions, maintain a flow of timely commercial intelligence, and deal with all problems of commercial complaints and bottlenecks.
Further, they are expected to provide facilities to the Indian trade delegations and exporters visiting foreign countries, and help procure and forward samples of exportable goods imported from other countries.
Essay # 7. Institutional Framework – Government Participation in Foreign Trade:
For supplementing the efforts of the private sector in the field of foreign trade, the Government of India has set up a number of trading corporations, namely, the State Trading Corporation (STC), the Minerals and Metals Trading Corporation (MMTC), Spices Trading Corporation Limited, and Metal Scrap Trading Corporation (MSTC).
The STC itself has a number of subsidiaries, namely the Handicrafts and Handlooms Export Corporation, the Projects and Equipment Corporation, the Tea Trading Corporation of India, and the Cashew Corporation of India. The Mica Trading Corporation is a subsidiary of the MMTC.
These corporations have provided the essential base for developing and strengthening efforts relating to specific commodities and products and diversifying the country’s foreign trade.
Briefly, their activities are:
1. To arrange for exports where bulk handling and long-term contracts are advantageous
2. To facilitate exports of ‘difficult to sell’ items through various devices such as linking essential imports with additional exports under counter-trade
3. To organize production to meet export demands and to help production units overcome difficulties of raw materials and other essential requirements to meet export orders and develop lines of export by various methods
4. To undertake import of such commodities where bulk purchase is advantageous
The corporations handle actual transactions. They also maintain offices abroad and function like any commercial unit in the corporate sector.
However, the government is now reducing its direct participation in trade. Therefore, a number of items that were earlier canalized through government corporations have been removed from the canalized list. New governmental policies are expected to intensify competition for the government corporations from private sector companies. As a result, the government is moving towards privatization of these corporations.
Essay # 8. Institutional Framework – States’ Involvement in Promoting Exports:
States being the prime centres for export production need to be involved actively in export promotion. The central and state governments, therefore, have enacted a number of measures to promote exports; these measures are discussed under this section.
Inter-State Trade Council:
The Inter-State Trade Council has been set up in order to ensure a continuous dialogue between the state governments and union territories. It advises the governments on measures for providing a healthy environment for international trade with a view to boost India’s exports.
States’ Cell in Ministry of Commerce:
As an attempt to involve states in export promotion, the union government has created a State’s Cell under the Ministry of Commerce with the following functions:
1. To act as a nodal agency for interacting with state governments/union territories on matters concerning imports and exports
2. To process all references of general nature emanating from state governments and state export corporations, which do not relate to any specific problem pending in a division in the Ministry
3. To monitor proposals submitted by the state governments to the Ministry of Commerce and coordinate with other divisions in the Ministry
4. To act as a bridge between state level corporations, associations of industries and commerce, and export organizations, such as ITPO, FIEO, EPZs, etc.
5. To disseminate information regarding export and import policy and export prospects to state governments and to other state level organizations
6. To provide guidance to state-level export organizations and assist in the formation of export plans for each state, in cases where export possibilities remain untapped
Further, the Ministry of Commerce has nominated nodal officers for maintaining liaison with the state governments in export promotion matters.
Institutional Infrastructure for Export Promotion by state governments:
The State Level Export Promotion Committee (SLEPC) headed by the Chief Secretary is the apex body at state level promoting exports. It scrutinizes and approves projects and overseas implementation of union government’s scheme on Assistance to States for Development of Export Infrastructure and other allied activities (ASIDE).
Most of the problems of exporters relating to infrastructure, availability of power, water, supply of raw material from within the state and inter-state movement of raw material, and remission of taxes by the state governments are dealt by separate departments within the state.
In order to resolve the problems of exporters emanating from multiplicity of departments within the state, most state governments have nominated a senior officer as the nodal officer or niryut bundhu at the level of Commissioner or Secretary of Industries.
The Directorates of Industries in most states along with other industrial development organizations have shown interest in activities related to promoting exports of the goods produced in the state. There have been wide variations in the steps taken in this direction by various state governments.
Institutional framework at both international and national level influences international business environment.
Although the foci of international economic organizations under the aegis of United Nations differ but complement each other, international economic growth is used as a strategic tool to reduce poverty and improve quality of life of millions of people, specially in the developing and the least developing countries as a part of its millennium development goals.
Several international economic institutions have been established under the UN framework to perform a variety of functions such as technical assistance for development, information collection and dissemination, training, economic surveillance, extending loans, promoting multilateral trade and investment.
Individual countries do have independent trade promotion organization at national level. ITC headquartered at Geneva carries out a host of trade facilitation activities. Besides, most countries have got their own trade promotion organizations.
Although the trade facilitation by national governments is primarily focused on export promotion, some countries with considerable imports do facilitate imports by exclusive import promotion organizations. India has got a comprehensive set-up for trade promotion both at central and state levels.