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Indian Economy

Notes (v) For taking up in trade fairs and exhibitions, or
(vi) For any other mean which will encourage development of market for Indian goods
abroad.
8. Subsidies on Domestic Raw Material: In case the domestic price of material utilised for
exports is higher than international price, then there was the provision of offering subsidy
to the degree of difference of price. This scheme was launched in 1981 in steel and was
termed as the ‘International Price Reimbursement Schemes’ (IPRS), which later involved
other imported raw materials like aluminium and copper.

9. Blanket Exchange Permit Scheme: Under this scheme, exporters are permitted, barring a
few products, to use 5-10% of their foreign exchange earnings for carrying out export
promotion activities.

10. Free Trade Zones and Export Oriented Units: The government has established free trade
zone to give impetus to exports. The goal behind this is that in these zones, capital goods
can be imported liberally and there will be minimum red-tapism. These zones are treated
separately from Domestic Tariff Area (DTA) and have a right to import all their needs,
including capital goods and spare parts and raw material, free of import licensing controls
and import duties. The initial EPZ was set up in Kandla. Now, India has eleven operating
SEZs of which seven are set up by the centre and four are encouraged by the private/joint
stake—Kandla, Cochin, Chennai, Surat, Santa Cruz, Indore, Falta, Vishakhapatnam, Noida,
Salt Lake (Calcutta) and Jaipur. Approval has already been offered for 35 new SEZs in
private/state sector.
The SEZ bill was submitted in parliament in May, 2005, which proposed for the units in
SEZ:
(i) A 15 year tax holiday,
(ii) Single window clearance,
(iii) 100% tax exemption for five years,
(iv) 50% for subsequent five years, and
(v) 50% of the ploughed back export for subsequent five years.
The goals of setting up Export-oriented Units are to offer free access to imports of all
inputs for such export-oriented units and to develop a single point clearance with relation
to industrial licensing and foreign collaboration.
11. Infrastructure Set-Up and Aids:
(i) Export Promotion Council: A number of export promotion councils have been
established with a view to help the promotion of exports of particular commodities
or groups of products. Few of them are such as Apparel Export Promotion Council,
Engineering Export Promotion Council, Cashew Export Promotion Council, Cotton
Textile Export Promotion Council, Sports’ Good Export Promotion Council, etc.
(ii) Commodity Board: The government has established an Eight-commodity Board to
frame the policies in order to enhance the production and export of respective
commodities. These boards are – Coffee, Tea, Spices, Marine Products, Rubber,
Tobacco, Agriculture and Processed Food Export Development Authority.
12. Target Plus: This scheme has been launched to acquire growth in exports. According to
this scheme, exporters who will acquire a substantial greater growth than that of general
export target will become duty-free credit based on their performance. For a growth of
more than 20%, duty-free credit will be 5%, for 25% it will be 10% and for 100% it will be
15%, respectively of FOB worth of incremental exports.

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