02 August 2021 • 23 min read
Export Promotion Council shows India to the World
Know about Export Promotion Councils in India, its roles, functions, benefits, types, current trends and how to register with them.
Export Promotion Councils (EPCs) are organisations set up by the Government of India to help and assist Indian exporters by providing access to international markets, promoting Indian products through various activities and increasing the overall exports from India.
Every country has their own export promotion organisations to perform this job. In India, there are about 37 organisations that cater to exporters of different product categories. This categorisation provides better focus in promoting products and helps EPCs offer better assistance to exporters.
This blog attempts to equip exporters with all the relevant information on EPCs including:
- why Indian merchandise require promotion,
- roles and functions of EPCs,
- how they help the export community,
- how to register with them, and
- current trends related to these organisations.
Why export promotion?
Promoting exports is not new as countries worldwide have been doing this since time immemorial. It came to the limelight after the second world war when a structured approach was brought to the act of export promotion. In India, Federation of India Export Organisations, (FIEO) the apex body for export promotion was established in 1965 for this purpose.
According to the Ministry of Statistics & Programme Implementation (MoSPI) India was the 18th largest exporting nation in the world in 2019. But, the global share of the Indian exports was only 1.72% in that year. This meagre figure explains a lot as to why export promotion is needed for a country like India. Figures 1 and 2 clearly show that there is a lot of potential that exists for Indian exports in the international markets and India can increase its scope of exports through effective promotion. The role of export promotion councils come into picture here as they are established with the sole purpose to promote India as a quality supplier of products and services that are in demand in international markets.
Types of Export Promotion Councils (EPCs)
In India, different export promotion councils (EPCs) are created to cater to the specific requirements of different export products. As every product category viz. electronic goods, apparel, food products, etc. have their own requirements and export-related challenges, the respective export promotion councils take on the responsibility to help exporters overcome challenges for those product categories and increase exports.
EPCs can be considered as a bridge between Government and exporters that coordinates with both the parties with the primary goal of boosting exports. The councils are formed as non-profit organizations under the Companies Act / Societies Registration Act. In addition to these councils, some export industries have Commodity Boards and Export Development Authorities.
Commodity Boards and Export Development Authorities were set up through special Acts passed in the Parliament.
FIEO is the apex body of all the export promotion councils. It acts as the crucial interface between Indian exporters, Central Government, State Governments, financial institutions, ports, railways, surface transport and other concerned stakeholders. It is estimated that FIEO serves more than 200,000 exporters from all the goods and services industries either directly or indirectly.
For simplicity, the word abbreviation ‘EPCs’ is used to collectively represent these organisations in this article. Further, all the above-mentioned organisations fall under the purview of the Ministry of Commerce.
Below is the comprehensive list of EPCs, Commodity Boards and Export Development Authorities:
Role of Export Promotion Councils (EPCs)
The primary role and function of EPCs is to showcase India as the preferred destination for export of high-quality products and services. To achieve this, the EPCs represent India and its exporters in the international markets and promote the products through various means. While consolidating exports in current export destinations, EPCs are also required to help exporters in identifying new markets and expanding their export basket.
On the other hand, they also help the Government in framing effective trade policies by providing insights about the issues faced by exporters in international markets.
The EPCs are constituted as autonomous bodies with independent functioning and decision-making powers. Nevertheless, any laws and by-laws devised / modified by the Central Government from time to time, apply to all the EPCs and they are required to follow them.
Functions of EPCs
- Promoting exports: The primary objective of EPCs is to help exporters in promoting their products in international markets. They do this through various external and internal promotional activities including organising / participating in international trade fairs, buyer-seller meets, etc.
- Assistance in Incentive schemes: Help and assist exporters in availing benefits of various incentive schemes announced in the Foreign Trade Policy. EPCs are authorized to issue RCMC certificates without which exporters cannot avail those benefits.
- Expanding to new markets: Help exporters to consolidate their exports and expand into new markets / meet new buyers through EPC’s branches and offices opened in foreign countries. This is helpful more so in the case of small and medium manufacturers who may not have resources to do this on their own.
- Strengthen relations: Arrange and send delegations to key foreign countries in order to strengthen or diversify exports in those countries.
- Providing timely information: Provide exporters with information on latest trends, happenings, and export opportunities in international markets; changes or updates in trade policies, etc.
- Liaisoning: Liaison with the trade and export communities to identify their needs, issues/problems and represent their problems to the Government.
- Assist in policy making: Collect comprehensive data on exports concerning their respective product categories and provide the same to the Government to help frame effective trade policies.
- Assist exporters in: (a) technology upgradation, (b) product/service quality improvement, (c) design improvement, (d) standards and specifications, (e) product development, (f) innovation
Benefits of EPCs
- Ease of access to international markets: The biggest benefit for exporters is the ease of access to international markets as EPCs work towards increasing buyer-seller interactions. Small and medium businesses stand to benefit most out of this as many of them do not have the resources to approach international buyers on their own.
- Aid in export incentives: Registeredexporters with the EPCs benefit from the various export incentive schemes as and when announced by the government. It is mandatory for exporters to register with EPCs to avail these benefits.
- Source of trade data: All EPCs collect export and import data of all its members, thus building a repository of valuable information for both the government and the exporters. This data can provide a lot of insights into diversifying and expanding the international market base.
- Platform for growth: EPCs arrange foreign tours for trade delegations to help exporters reach out to new markets. Such tours present perfect opportunities to increase the buyer base and exports. It not only strengthens the trade relations, but also overall bilateral relations between the countries.
Registering with Export Promotion Councils (EPCs)
Registering with an EPC has many benefits for the exporter. The registration and membership rules of EPCs are governed by the Foreign Trade Policy and EPCs’ Memorandum of Understanding and Articles of Association.
RCMC – key document
The Foreign Trade policy of the Government of India requires exporters to register with EPCs to get a Registration Cum Membership Certificate (RCMC). This is a key document for exporters as they cannot claim the benefits of incentive schemes announced in the Foreign Trade Policy without RCMC. Once issued, it is valid for 5 years.
RCMC issuing authorities
EPCs are authorized to issue RCMC. For instance, a leather exporter may apply for RCMC with the Council for Leather Exports; a pharmaceutical exporter must register with the Pharmaceutical Export Promotion Council and so on. This way the government has made it easier for exporters to register with their respective product/service promotion councils.
However, in case of multi-product exporters (who export two or more products each belonging to different industries and their main line of business is not settled) or if an export product is not covered under any of the export promotion councils, Government (for such cases) has authorized FIEO to issue RCMC. So, all multi-product exporters (who are yet to decide on their main line of business) or exporters whose products are not covered under any of the EPCs can apply for RCMC with the FIEO.
For multi-product exporters whose registered office or head office is located in the North Eastern States, RCMC can be obtained from Shellac & Forest Products Export Promotion Council (except for the products covered under APEDA, Spices Board and Tea Board).
Applying with EPCs
To apply for RCMC from any of the EPCs, exporters must fill the application form that can be downloaded from respective websites of EPCs. Following documents must be submitted along with it:
- A self-certified copy of the IEC Number issued by the licensing authority concerned
- An Undertaking on non-judicial stamp paper duly notarized on 10/- stamp paper.
- A self-attested Copy of Memorandum & Articles of Association / Partnership deed / Certificate of Registrar of firm etc. as the case may be
- In case the exporter wants to be registered as Manufacturer exporter self-attested copy of SSI Certificate / Letter of Intent / Industrial License / Factory License / Employee State Insurance Certificate / Employees Provident Fund Registration Certificate.
Furnish any further evidence for being manufacturer exporter by providing any of the documents being manufacturer exporter as per the undertaking on non-judicial stamp paper.
Applying with FIEO
To apply for FIEO membership, the exporters must download and fill the application form and submit the following documents along with it:
- A self-certified copy of the IEC Number issued by the licensing authority concerned.
- A Cheque / Pay Order / Demand Draft favouring Federation of Indian Export Organisations towards Annual Membership Subscription.
- Letter of Authority on the letterhead of the firm duly completed and signatures attested by C.A.
- Self-certified copy(ies) of the SSI Registration Certificate/Industrial Licence/IEM/others, if applicable.
- A self-certified copy of One Star Export House / Two Star Export House / Three Star Export House / Four Star Export House / Five Star Export House Certificate, if applicable.
- ID proof of Director(s) / Partner(s)/ Proprietor(s) (Adhaar Card/ Driving Licence/ Voter ID Card/ Passport)
- Export Turnover country-wise /commodity-wise for the past 3 financial years. Proforma enclosed (OR) Statement of foreign exchange earnings for the past 3 financial years in case of Service Providers
Difference between EPCs and Commodity Board
The difference between EPCs and Commodity boards lie in the way they are set up and run. The table below provides more details on the same.
Current trends related to EPCs
When it comes to the performance of EPCs in achieving their objectives, fingers are pointed at them questioning their effectiveness, especially in the backdrop of stagnating exports between 2014 and 2020.
One must, however, note that EPCs being non-profit organisations, have to raise funds to sustain themselves. Promotional activities are carried out through funds provided by the Government through various schemes like Market Development Assistance (MDA) or Marketing Access Initiative (MAI). Their funding primarily comes from the annual membership fees, EPCs as such cannot spend in a huge way in export promotion programmes. But that does not mean that they do not keep their members happy. The export community feels that EPCs are doing all they could in export promotion. There are other external issues (out of control of EPCs) that play a major part in export stagnation, including uncertainty in export markets, falling global demand, increased trade protectionism, lack of free trade agreements with major export partners, delays in releasing export benefits, inherent flaws in formulating trade policy etc.
Government on the other hand feels that it is prudent to review and restructure (and if necessary, close) certain EPCs based on their performance. For instance, the Ministry of Textiles in July/August 2020, abolished five advisory boards under its purview and in March 2021, another entity related to the same ministry, the Handicraft & Handlooms Export Corporation was shut down as it was consistently incurring losses since 2015-16.
Points to remember:
- While exports can be done without an RCMC, it is mandatory if you wish to avail the benefits of export incentive schemes under the Foreign Trade Policy.
- MDA and MAI schemes are helpful in accessing new export markets and growing business in those markets.
- For multi-product exporters from Northeastern states, RCMC can be obtained from Shellac and Forest Products Export Promotion Council.
- Once issued, RCMC is valid for 5 years. Renew it on time to avoid getting delisted from availing benefits.
- Some of the EPCs may be restructured or merged with others or closed down as per Government order. Hence, stay in touch with your EPC for latest updates in this regard.
- Even if you are registered with FIEO as a multi product exporter, do not forget to reach out to the EPC(s) related to your product(s) for any further requirements like information on schemes and promotion activities.
Cogoport advises exporters / shippers to take a note on above mentioned points and keep abreast of latest information and happenings related to your EPCs. Check periodically with your respective EPCs on various parameters that directly or indirectly help in your exports.
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