External Trade: Export Promotion Measures, Export Processing Zones, Export Houses and Organising Trade Fair (For CBSE, ICSE, IAS, NET, NRA 2022)

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Export Promotion Measures

Like other countries, India imports and exports a large number of goods and services. After independence, external trade of India has considerably expanded. For economic development it is necessary to import machinery, raw materials and fuel oil. As a result, import into India has increased. However, it is also necessary to increase exports to pay for the imports. The government of India has provided a number of facilities to boost its export trade. Let us discuss some of the promotional measures taken up by Government of India in this regard.

Export Promotion Measures

Export Processing Zones/Special Economic Zones

  • Export Processing Zones (EPZs) are industrial estates normally set up near the seaports where goods are produced primarily for the purpose of exporting to other countries. The raw materials, equipment՚s and machineries for production of finished goods are allowed to be imported without payment of custom duty. Custom clearance and facilities needed for financial transactions are also provided inside the zone. With a view to overcome the shortcomings experienced on account of controls and clearances, EPZs have been converted into Special Economic Zones (SEZs) .
  • Special Economic Zones (SEZs) are also set up in different parts of the country to provide internationally competitive and hassle-free environment for export production. These units may be established in public, private or joint sector for manufacturing, trading or service activity. The SEZs are free from various rules and regulations governing exports and imports except relating to labour and banking.

Hundred Per Cent Export Oriented Units

These units are established anywhere in the country and avail all those facilities being provided to the EPZs. They export all of their products to foreign countries.

Export Houses

On the basis of the export performance the government has recognised various export units as Export House, Trading Houses, Star Trading Houses, and Super Star Trading Houses. This recognition is given with an aim to encourage the units to put greater efforts and work in a highly professional manner.

Organising Trade Fair

The government generally arranges trade fairs at international level to provide a platform both for the buyers and sellers to interact whereby the export promotion can take place. Goods are displayed and demonstrated, and their sale is also conducted in trade fairs. ‘International Trade Fair’ in New Delhi at Pragati Maidan, which is held from 14th to 27th November every year, is a well-known example of Fairs that promotes foreign trade.

EXIM Policy

To provide detailed guidelines on trade and taking various policy decisions for foreign trade Government of India announces the Export Import (EXIM) policy from time to time.


SAFTA stands for South Asian Free Trade Agreement. It is an attempt to carry on foreign trade activities within SAARC (South Asian Association for Regional Cooperation) countries without many formalities. It aims at trade among all the SAARC countries with zero customs duty by the end of 2012.

Tax Relief

Income tax exemptions are allowed to the businessmen on export profits and foreign exchange earnings. They are also entitled for relief under Value Added Tax (VAT) and Excise Duty.

Brand Promotion and Quality Awareness

In order to encourage manufacturers and exporters to attain internationally accepted standards of quality for their products, the Central Government has extended support and assistance to trade and industry to launch a nationwide programme on quality awareness and to promote the concept of Total Quality Management (TQM) .

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