Indian Export Promotion Schemes and Trade Regulations

Posted on Feb 17, 2026 in Economy

Export Marketing Fundamentals and Risks

Export marketing refers to the marketing of goods and services from one country to another. It involves selling domestic products in foreign markets. However, it carries certain risks because of differences in currency, culture, government policies, and global economic conditions.

Risks Involved in Export Marketing:

Political Risk: Changes in government policies, trade restrictions, or political instability in the importing country can affect exports.
Economic Risk: Recession, inflation, or economic slowdown in the foreign market may reduce the demand for imported goods.
Exchange Rate Risk: Fluctuations in currency exchange rates can lead to losses or reduced profits for exporters.
Credit Risk: The foreign buyer may delay or fail to make payment due to financial problems or bankruptcy.
Transport and Logistics Risk: Goods may get damaged, lost, or delayed during shipping or transit, affecting delivery schedules and customer satisfaction.
Legal and Regulatory Risk: Different countries have different import laws, product standards, and documentation requirements. Non-compliance can lead to penalties or shipment rejection.
Cultural and Language Risk: Misunderstanding foreign customers’ preferences, language, or customs can lead to poor marketing communication and product mismatch.
Competition Risk: Exporters face strong competition from local and international brands, which may affect their pricing and market share.

Conclusion: Export marketing offers great opportunities but also involves several risks. To succeed, exporters must study foreign markets carefully, follow regulations, insure their goods, and adopt proper risk-management strategies.

Indian Export Promotion Schemes

Export Promotion Capital Goods (EPCG) Scheme

The Export Promotion Capital Goods (EPCG) Scheme was introduced by the Government of India to promote exports and enhance international competitiveness. Under this scheme, exporters are allowed to import capital goods like machinery, equipment, or spare parts at zero or concessional customs duty. The main objective of the scheme is to help Indian exporters upgrade their technology and reduce production costs.

Duty Concession: Exporters can import capital goods at zero or reduced customs duty.
Export Obligation: Exporters must fulfill an export obligation equal to six times the duty saved within a specified period, generally six years.
Technology Upgradation: The scheme encourages modernization and improvement in production facilities.
Eligibility: Both manufacturer exporters and merchant exporters are eligible under this scheme.
Competitiveness: It helps Indian exporters produce quality goods at lower costs, increasing their global competitiveness.

In conclusion, the EPCG Scheme plays a significant role in strengthening India’s export sector by promoting modernization, reducing production costs, and encouraging exporters to achieve higher export performance.

Duty Drawback Scheme

The Duty Drawback Scheme is an export incentive provided by the Government of India under which exporters are refunded the customs and excise duties paid on imported inputs or raw materials used in the manufacture of export goods. The main aim is to reduce the cost of production and make Indian goods more competitive in global markets.

Refund of Duties: Exporters receive a refund of customs or excise duties paid on inputs used in the production of export goods.
Two Types of Rates: Duty drawback can be claimed under All Industry Rate (AIR) fixed by the government or Brand Rate based on actual duty paid.
Encourages Exports: It motivates exporters to increase exports by reducing production costs.
Customs Verification: The refund is given only after verification by customs authorities to ensure goods have been actually exported.
Payment Form: The refund is usually given in cash or credit directly to the exporter after export completion.

In conclusion, the Duty Drawback Scheme plays a vital role in promoting exports by refunding duties on inputs, thereby reducing cost, improving profitability, and increasing the competitiveness of Indian products in the international market.

Market Access Initiative (MAI)

MAI stands for Market Access Initiative. It was introduced by the Government of India to promote the export of Indian goods and services by exploring and developing new foreign markets. The main objective of the MAI scheme is to provide financial assistance for export promotion activities to help Indian exporters increase their global presence.

Key Features of the MAI Scheme:

Market Promotion: Financial support is provided for participation in international trade fairs, buyer-seller meets, and exhibitions abroad.
Brand Promotion: Assistance is given for creating brand awareness of Indian products in foreign markets.
Market Research: Funds are provided for conducting surveys, market studies, and research to identify potential export markets.
Export Infrastructure: Support is given for setting up showrooms, warehouses, and marketing offices overseas.
Capacity Building: Training programs and workshops are conducted to enhance exporters’ knowledge and skills.
Product Diversification: Encourages exporters to introduce new products and enter untapped markets.
Industry and Export Councils Support: Export Promotion Councils and Commodity Boards receive financial help to organize promotional activities.
Assistance for Reputed Institutions: Financial aid is given to institutions that help in export market development.

In conclusion, the MAI scheme plays a vital role in expanding India’s export base by providing necessary financial support for marketing, branding, and global promotion of Indian products.

Assistance to States for Developing Export Infrastructure and Allied Activities (ASIDE)

ASIDE stands for Assistance to States for Developing Export Infrastructure and Allied Activities. It was launched by the Government of India to involve State Governments in developing infrastructure that supports exports. The main aim of ASIDE is to create efficient export infrastructure like roads, ports, inland container depots, trade centers, and testing labs that help exporters reduce costs and improve competitiveness.

Main Features of ASIDE:

Shared Responsibility: Both Central and State Governments participate in export infrastructure development.
Financial Assistance: Funds are given to States based on their export performance and potential.
Export Infrastructure Focus: Development of facilities like industrial parks, SEZs, ports, and testing centers.
State Empowerment: States identify projects that directly or indirectly help export promotion.
Linkage to Exports: Projects should clearly link to export growth, not general infrastructure.
Central Approval: The Ministry of Commerce monitors and approves project proposals.
Private Participation: Encourages PPP (Public-Private Partnership) projects for efficiency.
Extension to Indian Exporters: Exporters benefit through better logistics, reduced costs, and improved facilities for international trade.

In conclusion, ASIDE has played a major role in strengthening India’s export infrastructure by encouraging State participation and supporting exporters through better connectivity and facilities.

Financial Incentives for Indian Exporters

Financial incentives are benefits or support provided by the Government of India to encourage exporters and promote foreign trade. These incentives help reduce export costs, increase competitiveness, and boost India’s export performance.

Main Financial Incentives Available:

Duty Drawback Scheme: Refund of customs and excise duties paid on imported materials used in manufacturing export goods.
Duty Exemption Schemes: Exporters are exempted from paying import duties on raw materials and components required for producing export goods.
Export Promotion Capital Goods (EPCG) Scheme: Allows import of capital goods at concessional or zero customs duty to promote production for export.
Market Access Initiative (MAI): Provides financial support for marketing, brand promotion, and participation in international trade fairs and exhibitions.
Merchandise Exports from India Scheme (MEIS): Offers duty credit scrips to exporters based on the value of exports to offset infrastructure and freight costs.
Services Exports from India Scheme (SEIS): Provides rewards to service exporters in the form of duty credit scrips.
Transport and Freight Assistance: Helps reduce freight costs for agricultural and other specified export goods.
Interest Equalization Scheme: Offers interest rate subsidy on pre-shipment and post-shipment export credit to make Indian exports more competitive.

In conclusion, these financial incentives play a crucial role in promoting India’s exports by reducing costs, improving profitability, and encouraging global trade participation.

Trade Regulations and Policy Framework

Directorate General of Foreign Trade (DGFT)

DGFT stands for Directorate General of Foreign Trade. It functions under the Ministry of Commerce and Industry, Government of India, and plays a vital role in promoting and regulating India’s foreign trade. The main objective of DGFT is to implement the Foreign Trade Policy and ensure the smooth flow of exports and imports in the country.

Major Roles and Functions of DGFT:

Formulation of Foreign Trade Policy: DGFT prepares and implements the Foreign Trade Policy to promote exports and regulate imports.
Issuing Export-Import Licenses: It grants licenses, authorizations, and certificates required for export and import of restricted items.
Export Promotion Measures: DGFT introduces various schemes like MEIS, SEIS, EPCG, and MAI to encourage exporters.
Monitoring and Regulation: It monitors export and import trends to ensure compliance with trade laws and policy provisions.
Trade Facilitation: DGFT provides online services for registration, application, and documentation to make trade procedures faster and transparent.
Coordination with Export Promotion Councils: DGFT works closely with various councils and commodity boards to resolve export-related issues.
Collection of Trade Data: It collects and analyses export-import data to help in policy decisions and trade planning.
Grievance Redressal: DGFT provides solutions to exporters’ problems and ensures smooth operation of trade activities.

In conclusion, DGFT plays a key role in strengthening India’s foreign trade by framing policies, providing incentives, and simplifying export-import procedures.

Foreign Trade Policy (FTP) 2015–2020

The Foreign Trade Policy (FTP) 2015–2020 was introduced by the Government of India to boost exports, create employment, and support the “Make in India” and “Digital India” initiatives. It aimed to make India a global manufacturing and trading hub by simplifying export procedures and improving ease of doing business.

Implications of Foreign Trade Policy 2015–2020:

Export Promotion: The policy focused on increasing India’s exports of goods and services through incentives and simplified procedures.
Introduction of MEIS and SEIS Schemes: Merchandise Exports from India Scheme (MEIS) and Services Exports from India Scheme (SEIS) were launched to reward exporters with duty credits.
Ease of Doing Business: Online procedures, e-filing, and digitization reduced paperwork and encouraged new exporters.
Support to Make in India: The policy promoted manufacturing and export of “Made in India” products, encouraging local industries.
Employment Generation: Increased exports created new job opportunities, especially in manufacturing and service sectors.
Diversification of Markets: Efforts were made to explore new markets in Africa, Latin America, and Asia to reduce dependence on traditional markets like the US and EU.
Boost to SEZs and EOUs: Special Economic Zones and Export Oriented Units received policy benefits to enhance their export potential.
Foreign Exchange Earnings: The rise in exports under this policy improved India’s balance of payments and strengthened the rupee.

Conclusion: The Foreign Trade Policy 2015–2020 played a major role in simplifying trade rules, promoting exports, and supporting India’s vision of becoming a global manufacturing and trading leader.

Tariff Barriers

Tariff barriers are taxes or duties imposed by a government on imported goods to control the flow of foreign products, protect domestic industries, and earn revenue. These are also called customs duties.

Types of Tariff Barriers:

Specific Duty: A fixed amount of duty charged per unit of imported goods, e.g., ₹50 per kg.
Ad-Valorem Duty: A duty charged as a fixed percentage of the value of imported goods, e.g., 10% of invoice value.
Compound Duty: A combination of both specific and ad-valorem duties, e.g., ₹20 per item plus 5% of its value.
Sliding Scale Duty: The duty rate changes according to the price or quantity of goods imported.
Countervailing Duty: Imposed to counter foreign subsidies that make imported goods cheaper.
Anti-Dumping Duty: Charged on foreign goods sold below their normal price to protect domestic producers.
Protective Duty: Levied to protect local industries from foreign competition.
Revenue Duty: Imposed mainly to collect income for the government rather than to protect industries.

Conclusion: Tariff barriers help governments regulate imports, protect domestic industries, and maintain a favourable balance of trade, but excessive tariffs may reduce international competitiveness.

Non-Tariff Barriers (NTBs)

Non-tariff barriers are trade restrictions imposed by a country that do not involve direct taxes or duties on imports or exports. Instead, they include rules, regulations, and procedures that make international trade more difficult or expensive. These barriers are often used to protect domestic industries and control the quality and quantity of goods entering a country.

Main Types of Non-Tariff Barriers:

Quota Restrictions: Limits the quantity of specific goods that can be imported or exported during a certain period.
Licensing Requirements: Importers or exporters must obtain special permission or licenses to trade certain products.
Technical Barriers: Include product standards, safety, health, and environmental regulations that foreign goods must meet.
Customs Procedures: Complex documentation and lengthy clearance processes delay trade and increase costs.
Voluntary Export Restraints (VERs): An exporting country agrees voluntarily to restrict exports at the importing country’s request.
Subsidies: Government provides financial aid to domestic producers, making foreign goods less competitive.
Import Deposits: Importers are required to deposit a certain amount of money with the government before importing goods.
Exchange Control: Restrictions on foreign currency availability make it difficult for importers to pay for goods.

In conclusion, non-tariff barriers are indirect restrictions that affect the flow of international trade and are often used by governments to protect domestic industries and maintain trade balance.

Market Selection and Service Exports

Determinants of Foreign Market Selection

Determinants of foreign market selection are the factors that influence an exporter’s decision while choosing the most suitable country to sell goods or services. These factors help identify markets with higher potential and lower risks.

Key Determinants:

Market Size and Growth: Countries with large population, high income, and fast economic growth offer better opportunities for export.
Political and Legal Environment: Political stability, friendly trade policies, and simple legal procedures encourage exports.
Economic Conditions: Stable currency, high purchasing power, and low inflation make a market more attractive.
Competition Level: Markets with less competition are easier to enter and offer higher profits.
Cultural and Social Factors: Cultural values, tastes, religion, and language affect the acceptance of a product.
Infrastructure Facilities: Good transport, communication, banking, and internet systems support smooth trade operations.
Government Policies and Tariffs: Low import duties, incentives, and favourable trade agreements help exporters.
Geographical Distance and Transportation Cost: Nearer markets reduce shipping costs and delivery time.

Conclusion: Considering all these determinants helps exporters choose the most profitable, safe, and suitable foreign market for their products and ensures long-term success in global trade.

Steps in the Market Selection Process

Market selection means choosing the most suitable foreign market for exporting goods and services. It helps exporters focus on profitable and less risky markets.

Steps Involved in Market Selection Process:

Identification of Potential Markets: The exporter first identifies various countries where there is possible demand for the product.
Preliminary Screening: Markets are compared based on basic factors like political stability, economic condition, and trade restrictions.
Market Research: Detailed study of each market is done to understand consumer preferences, competition, and import regulations.
Evaluation of Market Potential: The exporter examines market size, income level, growth rate, and purchasing power of customers.
Assessment of Competition: The level of domestic and foreign competition in the selected market is analyzed.
Evaluation of Marketing Environment: Factors like legal rules, cultural practices, language, and technology are studied.
Selection of Target Market: The most suitable and profitable market is selected based on all evaluations.
Market Entry Strategy: The exporter decides how to enter the chosen market, such as direct export, agents, joint venture, or licensing.

Conclusion: Careful market selection helps exporters reduce risk, choose the right customers, and achieve long-term success in international trade.

Basic Features of Export Marketing

Export marketing means selling goods and services produced in one country to customers in other countries. It includes identifying foreign markets, studying their needs, setting suitable prices, promoting products, and ensuring delivery to international buyers.

Basic Features:

Customer-Oriented: Export marketing focuses on satisfying the needs and preferences of foreign customers.
International Scope: It operates beyond national boundaries and deals with global markets.
Market Research: Exporters must study foreign markets, competition, and consumer behavior before entering.
Product Adaptation: Products are often modified according to the tastes, standards, and legal requirements of importing countries.
Documentation and Procedures: It involves completing various export documents and following trade regulations.
Foreign Exchange Involvement: Export transactions are conducted in foreign currencies, involving exchange rate risks.
Government Assistance: Exporters often receive help from government bodies through incentives, subsidies, or export promotion schemes.
High Competition: Exporters face tough competition from both domestic and international players in the global market.

Conclusion: Export marketing helps a country earn foreign exchange and expand its trade globally. It requires proper planning, understanding of international markets, and efficient execution to succeed.

Problems of India’s Export of Services

India’s export of services includes IT, software, tourism, education, banking, transport, etc., which earn foreign exchange for the country. However, several problems affect the growth and competitiveness of India’s service exports.

Problems Identified:

Infrastructure Issues: Poor transport, internet, and communication facilities in many areas affect service quality and delivery.
Shortage of Skilled Manpower: Lack of trained and skilled professionals in advanced services like finance, design, and research reduces competitiveness.
Global Competition: India faces tough competition from countries like China, Philippines, and Eastern Europe in outsourcing and IT services.
Data Security and Privacy Laws: Strict data protection laws in foreign countries make it difficult for Indian firms to handle sensitive information.
Language and Cultural Barriers: Communication gaps and cultural differences affect customer satisfaction in foreign markets.
Government Policies and Procedures: Complicated export documentation and slow policy implementation create delays.
Limited Market Diversification: Most exports depend on the US and European markets; any slowdown there directly affects India’s services.
Technological Challenges: Rapid global technological changes make it hard for small firms to stay updated.

Conclusion: India’s service export sector has great potential, but to sustain growth, the government and exporters must improve infrastructure, skill development, and technology adoption while diversifying global markets.

Deemed Exports Explained

Deemed exports refer to those transactions in which goods supplied do not leave the country, but payment for such goods is received in Indian rupees or foreign exchange. These goods are treated as exports because they are considered to be supplied to export-oriented units or projects that serve export purposes within India.

Explanation / Features of Deemed Exports:

Goods Do Not Leave India: The goods remain within the country, unlike normal exports.
Payment in Indian Rupees or Foreign Exchange: Payment can be received in either currency.
Supplies to Special Units: Supply of goods to Export Oriented Units (EOUs), SEZs, or projects funded by international agencies are treated as deemed exports.
Eligible for Export Benefits: Deemed exports enjoy benefits like duty drawback, refund of GST, and other incentives.
No Physical Export: There is no movement of goods outside India, only transfer within Indian territory for export-related purposes.
Government-Funded Projects: Supplies made to projects financed by the World Bank, UN agencies, or similar institutions qualify as deemed exports.
Industrial Growth Support: It encourages domestic production and supports industries involved in export-oriented activities.
Documentation Required: Proof of supply and payment is necessary to claim export benefits.

Conclusion: Deemed exports help promote domestic manufacturing, encourage export-oriented industries, and earn foreign exchange indirectly, contributing to India’s economic growth.

The Negative List of Exports

The Negative List of Exports refers to the list of goods and services which are prohibited or restricted from being exported from India. These restrictions are imposed by the Government to protect national interest, conserve natural resources, maintain security, and follow international agreements.

Items in the Negative List of Exports:

Prohibited Items: Goods that cannot be exported under any circumstances, such as wildlife products, narcotic drugs, and endangered species.
Restricted Items: Goods that can be exported only with special permission or license from the government, like certain chemicals, medicines, and cultural artifacts.
Canalised Items: Goods that can be exported only through designated government agencies such as STC, MMTC, or other authorized bodies. Examples include petroleum products or precious metals.
Arms and Ammunition: Export of weapons, explosives, and defense equipment is restricted to ensure national security.
Antiques and Art Treasures: Old coins, paintings, and antique items are not allowed to be exported to preserve cultural heritage.
Wildlife and Animal Products: Export of ivory, animal skins, and endangered species is strictly prohibited.
Certain Agricultural Products: Some food grains or pulses may be restricted during shortage to maintain domestic supply.
Hazardous Chemicals and Waste: Export of harmful or polluting materials is controlled to protect the environment.

Conclusion: The Negative List ensures that India’s exports follow ethical, environmental, and security standards while promoting responsible international trade.