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1.

1 CONTEXT
Exports have long played a role in the analysis of regional economies, primarily through the
concept of the economic base. The need to export is predicated on solely economic reasons.
According to Miloslavsky and Shatz (2006), much of the early thinking on exports in economic
development was brought together in series of articles by Richard B. Andrews in the 1980s. In
the first article (Andrews, 1953), he stated the basic role of export as: There is a fairly general
consensus, that the economic base refers to those activities of an urban community which
export goods and services to points outside the economic confines of the community or which
market their goods and services to persons who come from outside the communitys economic
boundaries. The base activities can be considered the wage earners of the community
family. Without them, or if they decline in earning power, the economic health of the
community suffers accordingly.
This assertion highlights two important concepts. Firstly, export in the context of regional
economic development is seen as goods and services sold outside the region not necessary
international. Secondly, export may refer to goods and services sold to people in countries other
than the country where the product or service is produced. Drawing from the latter, an exporter is
therefore someone who sells goods and services on a foreign market in order to make profi t.
According to NEPC (2008), there are two types of exporters: the export merchant and the
manufacturing exporter. The export merchant is one who buys goods or products for export from
manufacturers and producers within the country. The manufacturing exporter refers to a
company which apart from manufacturing certain products is also exporting the product.
Exporting is an indispensable part of all international businesses, whether the company markets
in one country or on a global market. Goods are produced in one country, distributed to another,
and moved across borders to enter the distribution system of the target market.
An important objective of recent General Agreement on Tariffs and Trade (GATT)/World Trade
Organization (WTO) rounds of trade negotiations has been to urge member countries to adopt
trade policies that are more transparent in their effects. One example in this regard has been the
move towards ratification of non-tariff barriers in an effort to make the price effects of trade
barriers more readily discernible. This goal remains largely unfulfilled, as many countries
continue to implement barriers that are often complicated and disguised in their effects. Instead
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of adopting direct export subsidies, for example, some countries subsidize the use of a
specialized input into the production of a final product. While the effect of this subsidization is
similar to a direct export subsidy, the effects are not transparent in that the subsidy applies to an
input and the effect that the subsidy has on trade depends on the importance of the input in the
cost of producing the final product. Furthermore, there is often no way of calculating the effects
of these disguised barriers in a straight forward manner.
The export pessimism of these influential economists was cast in the
mould of natural forces and phenomena that the developing countries faced. Nurkse, for instance,
wrote about increasing economy in the use of raw materials and a shift further from natural to
synthetic materials, both dampening the demand for developing countries' ex-ports over time.
Developing countries could do nothing to change these conditions at the source, just as one
cannot do anything about bad weather. But their policies had to adjust to these conditions, just as
one can buy an umbrella against the rain. The early postwar arguments in support of export
pessimism are briefly reviewed below, before the precise content of an EP strategy is stated. The
article then considers a few salient lessons that have emerged in the studies on the advantages of
the EP strategy and examines several new sources of skepticism concerning export-promoting
trade policies. The contrasts between the old (postwar) pessimism and the new pessimism
prevalent today are then exploited briefly to draw a central policy lesson for the developing
countries, especially in regard to the multilateral trade negotiations.

1.2 EXPORT PROMOTION: AN OVERVIEW


Export promotion refers to those public policy measures which potentially helps in enhancing the
export of a country. Although many forces determine the international flow of goods and
services, since export promotion is one of the principal opportunities that governments have to
influence the volume and types of goods and services exported from their areas of jurisdiction.
Government of India, like almost all the nations has been trying their best to develop exports.
Export development is important to the firm and to the economy as a whole. Governmental
measures normally aims at an overall improvement of the export performance of the nation for
the general benefit of the economy. Export promotion strategies promote the industries whose
have potential for developing itself and competing with other foreign rivals. Since the goal is to
trade abroad to earn foreign, there becomes competition , which in turn remedies the return to
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scale. The main objectives of export promotion are to prepare the potential industries for
competition with the foreign companies. Exporters facing the increasing competition have to
improve their technologies, their quality continuously in order to compete with their competitors.
As our country has the competitive advantage of human capital, Export promotion strategies will
work as a remedy to the employment problem. In other words export promotion refers to the
incentive programs designed to attract more firms in to exporting by offering help in product,
market identification and market development, pre shipment and post shipment financing,
training, subsidies, payment guarantee schemes, trade fairs, trade visits, foreign presentations etc.
Exports are instrumental in the development of an economy,
particularly developing nations. One of the major contributory factors for promotion of export
trade is the availability of Special Finance both at pre and post-shipment stages. An exporter
has not only to procure the raw materials either indigenous or imported for processing the same
in finished goods and boarding them of ship/air, but also has to often allow credit terms to an
overseas buyer. Delivery period in international trade transactions is normally longer compared
to the domestic counterpart and correspondingly. The lead time for getting payment from the
overseas buyer is more. The exporter has thus to be extra cautious to ensure that the overseas
buyer is reliable one and payment for the goods/services sold/rendered will be realised
expeditiously. The Indian economy has gained considerable momentum over the last one decade,
by achieving and sustaining an annual GDP growth rate of over 7 percent. This high growth rate
can be in part attributed to the growing contribution of the export sector to the economy. The
Second World War severely impacted the economic stability of many countries, however, Indias
economic performance remained less affected as its GDP continued to grow at 3.5 percent per
annum while the per capita income averaged at 1.3 percent per annum, a phenomenon better
known as the Hindu rate of Economic growth and this growth rate persisted till 1979-80
(Virmani 2004). Indias international trade policy following her independence in 1947 focused
on being self-sufficient, which also implied minimal reliance on international trade as a source of
income. An alarming large number of people were living in abject poverty and the central
government sought to improve the well-being of people by adopting the strategy of importsubstituting industrialization. To implement this, the government developed a complex,
extensive and often costly system of price controls and quantitative restrictions.

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1.3 REVIEW OF LITERATURE:


B.N. Gangulis (1956) book provides an extremely valuable account of the evolution of
economic development in the Asian and Pacific countries in the past century and of India's
economic relations with them. This is one of the 1 Ganguli, B.N. (1956), Indias Economic
Relations with the Far Eastern and Pacific Countries. 84 important works with regard to Indias
economic relations with the Asian countries.
S.J. Patel (1959) made a pioneering attempt to analyses the long term trends in Indias foreign
trade. He examined the stagnancy of Indias exports over years, and explained it in terms of
stagnancy and declining world demand for Indian exports. India's trade with the socialist
countries of Eastern Europe has been perhaps the most dynamic sector of India's foreign trade
during 1960s. Payment arrangements under trade for its imports from East Europen countries
were in nonconvertible rupees. The effectiveness of these arrangements has been analysed by
many scholars such as Surender Dave,3 Sunanda Sen4 Sumitra Chisti5 and Asha Datar6 .
Anne Kruger (1961) and B. Cohen (1964) felt that stagnation of India's exports has been more
due to higher domestic production costs and rising domestic demand leading to higher relative
prices of exports in the world market.
Singer (1957)9 , Myrdal (1961)10, and Prebirch (1962) have argued that international trade if
left to market forces leads to deterioration in terms of demand transfer income from the poor
nations to the rich nations, and a slower rate of growth of the former.
R. Bharadwaj (1962) sought to test empirically, with the help of Indian data, the Becksher
Ohlin hypothesis that a countrys exports use intensively the countrys abundant factors of
production.
A. Kruegar (1961) maintains that the observed stagnation in the Indian export behaviour can be
more than adequately explained by policies of the Government of India and the Planning
Commission combined with internal demand and supply factors.
Da Costa (1965) demonstrates that the world demand has severely constrained Indian export.
The stagnation was followed by moderate expansion during 1960s, and there was a temporary
decline during 1965-67, and a buoyant growth in the seventies. A study conducted by the Indian
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Institute of Foreign Trade (1966)15 shows that the export and import prices were quoted at
international rates, and that the terms of trade were usually in favour of India.
Dharam Narain (1967) states the prices paid by some of the socialist countries including the
USSR were 5 to 10 per cent higher than the internationally traded commodities of India.
Bhagwati and Desai (1970) attributed stagnation in Indias exports to domestic policies. They
failed to notice the probability that an oligopoly market may sometimes involve a reduction in
the market share of the leading producers due to the new marginal entrants. He attributed
improvement in India's exports in the early 1960s to (a) a major increase in exports to Soviet
block countries, (b) export subsidisation, (c) the inclusion of Goa's foreign trade.

1.4 RESEARCH GAP AND STATEMENT OF PROBLEMS:


A lot of research has been made on Export Promotion of Odisha so far. But no research
has been made on what is the potential trend of export of handicraft product and handloom items
and also some generic reasons of slower pace of exports in Odisha. This research paper
extensively emphasizes the gap of research on export demotion in Odisha, inspite of huge
potential environment and sources. We have a major problem of slower pace of export in our
state, under this study, an effort is made to solve this generic issues.

1.5 IMPORTANCE OF STUDY:


Export is a major part of economy of a country. The country, which has earned majority of its
revenue from export related activities, is called as self-sufficiency like China. In India, about one
third of worlds mineral ore reserved here, but it is pathetic to say that we are not able to grab
benefits out of that as other countries does. This segment of economy becomes so neglect since
independence. Today we are importing more than export, so that it leads to high negative
Balance of Payment as well as current account deficit. Export is known as the key player for
developing a countrys economy in terms of socially, culturally, and economically. If we
consider the states of Odisha, it is well known for high reserve of mineral ore and handicraft
product. But we are in poor condition and not capable of reaching this creative product at world
at large. So this study focuses on promotional measures for the sick export trend in Odisha and
find out some new direction and trends to development of this sector. It also emphasizes on trend
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and progress of export and their relative potential in Odisha in order to suggest some new
products for export. It analyses the role played by government as a regulator and feasibility of
their various policies on export promotions.

1.6 OBJECTIVES OF THE STUDY:


To study the need, pros and cons of exports in India in general and Odisha in particular.
To study the export potential in Odisha.
To analyse the sectoral growth of exports and its impact on the economy.
1.7 SCOPE AND PERIOD OF THE STUDY:
The study is limited to geographical area of Odisha, India. The scope also limited to various
means like i.e. exporters of Odisha only, few exported items, limited period data, few expert
opinions etc. This project has taken around three months to be completed and various magazines,
articles; journals are studied for this project. Suggestions from various professors and teachers
are taken and discussion among seniors and friends are made for conducting this study.

1.8 RESEARCH METHODOLOGY:


1.8.1 Sources of Data:
The present study has been conducted on the basis of secondary data only.
Secondary data was extracted from various archives like- books, e-newspapers, magazines, govt.
reports and statement on exports, various journals and internet search. Data is also collected from
Directorate of Export Promotion and Marketing (DEPM), MSME department, Government of
Odisha. Data also received from various giant export house of the state and also from NonGovernment Organisation (NGO). Efforts also made to collect expert opinion on this topic.
1.8.2 Tools and Techniques:
Various statistical and mathematical tools and techniques like ratios, percentage, and are used in
this research project. Some tabular form of data presentation also used in this research project.

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1.8.3 Editing and Presentation:


The most of data are collected from secondary sources only. This study is depended upon purely
secondary data, which is collected from various sources. So that there is lesser needs to edit the
collected data, because it has been edited properly. In this study, only tabulation, sorting, and
assembly of raw data is done. Afterward it is presented in forms of some little bit edit and delete.

1.8 RELEVANCE OF THE STUDY:


This research work will immensely help to the Government and Exim Bank of India for
formulating plans and policies regarding the export promotional activities. This will help to the
other researchers, economist, professionals in their respective fields.

1.9 LIMITATION OF THE STUDY:


The major limitation in this project is time constraint. If there has some more
time, then some more data could have been collected.
The research is limited to only one geographical boundary i.e. Odisha.
Since the target respondents chosen from random basis.
Monetary support for collecting data is limited.

10 CHAPTER PLAN:
As mentioned in the content that this project is consists of five chapters. The details about the
chapter plan is mentioned belowChapter 1 covers introduction part of the project which includes context, Importance of the
topic, Literature review, Research gap & statement of the problem, Objectives of the study,
Research methodology, and relevance of the study and limitation of the study.
Chapter 2 overviews on export promotion, its concept, objectives, export promotion and
economic development, current scenario of export promotions in India, Measures taken by govt.,
institutional players, swot analysis etc.

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Chapter 3 presents a data analysis on export promotion in Odisha in comparison to other state
and India also.
Chapter 4 covers major findings, recommendation, suggestion, scope for future study and
conclusion of the research topic.

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2.1 INTRODUCTION:
Export is of paramount importance and at any point of time we have had more than one scheme
to facilitate and encourage exports. As a result, exports have gone up but the pace has not been
satisfactory. Moreover, the critical test of a scheme is whether it has led to genuine exports or
not. This question assumes importance as there are a number of reported cases of overvaluation
of exports and in the name of exports dumping of sub-standard goods abroad, which are not even
cleared at the foreign ports. No doubt this happens because the unscrupulous exporters are
actually targeting the benefits in form of duty free imports and their chief concern is not exports.
The link between such exports and hawala transactions to fund illegal activities is also brought
out. Thus, whereas there should be all encouragement to genuine steps have to be taken to check
misuse of the export promotion schemes. This assumes great importance when we find that
precious customs and central excise revenue is sacrificed in the name of exports. The link
between revenue foregone on account of export promotion and a low tax to GDP ratio is also
evident, though it must be added that this would be a non-issue so long as genuine exports do
take place. However, when exports do not pick up commensurate with the duty foregone,
legitimate questions are rightly asked as regards the efficacy of the schemes.
It is the view that a viable export strategy must rest upon two basic premises. Firstly, to be
competitive in the international market, the export product must match, if not better, the
competition in terms of pricing and quality. Secondly, the exporter must have an incentive to
enter the highly uncertain export market. Both these objectives are achieved through wideranging facilities, infrastructure, financing, income tax relief, trade facilitation, etc. and indirect
taxes play a critical role. Taking up indirect taxes, it is evident that the strategy so far has been to
grant customs and central excise duty exemptions on the raw materials, inputs etc. used in the
export product. Neutralizing the tax element in export products is an internationally accepted
methodology. However, it is seen that we have multiple schemes which are not all necessary e.g.
Drawback, DEPB, Advance Licence/DEEC, DFRS, EPCG and EOU). Besides creating
difficulties in administration, multiple schemes tend to be misused. Further, in view of
practically no import licensing requirement now, the advantage is to be extended basically in
terms of tax free availability of inputs, raw materials etc.

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2.2 EXPORT PROMOTION IN INDIA: A CRITICAL ANALYSIS


Globalization is the continuous process by which restriction and hurdles are minimized in the
field of trade investment and flow of return. Today, there are 149 member countries of W.T.O.
where 5 billion population live and 80% trade is involved. Interdependence of countries
increased considerably after World War II. Developments in international transport and
telecommunications caused the shrinkage of the globe. Liberalization and globalization brought
substantial and sustained expansion in world trade. India has become of W.T.O. and chosen the
policy of globalization voluntarily. Globalization has made multi-dimensional effects and
impacts in Indias foreign trade. Transnational or multinational corporations which engage in
international production increased interdependence. Increased labour flows between countries
contributed to interdependence by way of enriching the capabilities. India has trade relations
with more than about 150 countries and deal in thousands of goods and services. Even though
Indias share in the global trade is about 0.4% only but we have every opportunity to increase it.
There are many problems and limitations like lack of standardization and better quality of
exported goods, procedural delays, negative attitude of bureaucracy, confusing policies, rues and
regulations made and implements, lack of professionalism etc. Foreign trade is an important
component of economic relations between countries. Interdependence of countries increased
considerably

after

World

War

II.

Developments

in

international

transport

and

telecommunications caused the shrinkage of the globe. Liberalization and globalization brought
substantial and sustained expansion in world trade. Another important factor in increasing
interdependence is the transnational or multinational corporations which engage in international
production. Increased labour flows between countries also contributed to interdependence.
Foreign trade or international trade is important because it affects the domestic economy in
several ways. The degree of the impact of foreign trade on the domestic economy depends on the
size of the former in relation to the latter. This varies from country to country for quite a few
reasons. Diversified climates, natural resources and geographic proximity are all the important
factors.
The radical reforms in Indias foreign trade launched in July 1991 and international
developments GATT 1994, WTO has its impact on foreign trade. Countries have started
realigning their priorities to face the challenges. Foreign trade is necessary for understanding the

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nature and extent of economic interdependence among countries. Countries depend on each other
for a variety of economic transactions and financial transactions namely transactions in goods,
services and capital. A country not only has to depend for its growth and development on its own
economy that is National economy but also with the World that is International economy. No
country can therefore live in economic isolation or afford to keep out of the global economy.
This is because, no country is self-sufficient with regard to its needs or requirements, and it
cannot consume or use all the resources. The country cannot remain a closed economy. In other
words, interdependence of countries is reflected in economic relations consisting of exchange of
goods, exchange of services, inter-country movement of skills and labour.
The effects of foreign trade on the domestic economy may be at
the macro-economic level, i.e. the aggregate level or on the economy as a whole. It may be at the
micro economic level, i.e. at the level of individual units, firms or particular sectors of the
economy. At the macro-level the impact of foreign trade may be on output, employment, income
and prices. A countrys exports of goods and services in a given period constitute a part of the
total demand for the countrys output. Similarly, the import of goods and services represents part
of the demand for the output of a country producing them. Exports are part of GNP or National
Income which is being released from current consumption, while imports represent a part of
current spending in the economy. Exports provide employment directly in export industries and
indirectly throughout the economy. Foreign trade affects prices. An important macro-economic
impact of foreign trade is the fluctuations in the level of output, employment and prices. An
increase in exports relative to imports will stimulate the level of economic activity, while a rise
in imports relative to exports may have the opposite effect. Besides, if foreign countries suffer a
decline in economic activity, this would affect the exporting country. Another important macroeconomic impact of foreign trade is its contribution to economic growth of a country. Though
there is no direct cause between foreign trade and economic growth, foreign trade does provide a
stimulus to growth of the economy. Expansion of exports may lead to larger output and
employment. Similarly, increase in imports may promote investment and thus facilitate larger
output and income. Foreign trade contributes to economic growth; growth also influences the
volume, nature and direction of foreign trade. Thus, the relationship between foreign trade and
economic growth is one of continuous interaction between the two leading to mutual benefit. At
the micro economic level, the role of foreign trade is equally important. Exports provide
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important market outlets for a number of industries. Likewise, imports are a source of supply to
many other industries. Some industries may depend entirely or to a large extent on imports for
their supplies, just as some other industries may be dependent to a large extent on export markets
for their sales and income. This implies that changes in export outlets and sources of imports
would affect the fortunes of individual industries in terms of production and sales income
therefore employment in these industries.

2.3 GAINS OF FOREIGN TRADE:


The gains are measured in terms of larger output, increased consumption and higher standards of
living for the community, collectively termed as welfare. Welfare is measured not on absolute
basis but on comparative basis, that is a comparison of welfare levels before and after trade.
Gains from trade accrue in many ways and most directly from exports and imports. Increase in
exports results in larger output, employment and incomes and therefore in increased
consumption and higher living standards. Imports would fill up the gap between domestic
demand and domestic supply. An important factor influencing is the exchange ratio of goods that
is exports and imports. If imports can be obtained at less cost compared to its exports, then the
ratio of exchange between its exports and imports is favourable. When the import costs are more
compared to its exports the ratio of exchange is unfavourable. This ratio of exchange is called
terms of trade. The terms of trade are measured by the ratio of index of export prices to the index
of import prices. The government plays an important role in maintaining balance in terms of
trade so that the economic welfare of the community is maintained or increased. Trade is the
important item of economic transactions between countries. Trade or total trade is made up of
transactions in goods or exchanges of goods or purchase and sale of goods between countries,
collectively called Imports and exports.
Economic transactions between countries, i.e. exchange of goods, services and capital,
involve receipts and payments in settlement of the transactions. Thus money flows take place
between countries and these are described as international financial transactions. Conversion of
domestic currency to foreign currency and vice versa takes place in export and import
transactions. This conversion takes place in foreign exchange market. In international currency
market purchase and sale of foreign currency takes place other than transactions in goods and
services. International capital market deals with issue of bonds, securities and shares are dealt in
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foreign currency to raise funds. These three kinds of markets make up the International Financial
System.
2.4 EXPORT PROMOTION AND ECONOMIC GROWTH:
Economic development is largely affected by a number of economic and noneconomic factors.
Among the economic determinants of growth, we may single out the rate of saving, the
expansion of exports, the process of import substitution and the inflow of foreign capital.
Professor Habuler lists four advantages of trade which are as follows:
It provides material means, viz. capital goods, machinery and raw, semi finished
materials, which are indispensable for economic development.
It is an important source of technological knowledge, managerial talents and
Entrepreneurship.
It is a transmitter of capital, and
It brings an atmosphere of healthy competition by checking monopolies and restrictive
trade practices.
An expanding export trade is a dynamic factor in a countrys development process. Foreign
trade has worked as an engine for growth in the past and even in more modern times the
outward oriented growth strategy adopted by the Newly Industrializing Economies of Asia, viz.
Hong Kong, Singapore, Taiwan and South Korea has enabled them to overcome the constraints
of small, resource, poor underdeveloped economies. Foreign trade contributes to economic
development in a number of ways. First, the primary function of foreign trade is to explore
means of producing imports of capital goods, without which no process of development can start.
Secondly, it is a means to price stability. The demand supply imbalances, which are likely to be
severe in the initial stage of growth, can conveniently be connected through the mechanism of
foreign trade. Thirdly, it generates pressures for dynamic change through:
Competitive pressures from imports,
Pressure of competing for export market, and
A better allocation of resources.

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Fourthly, exports allow fuller utilization of capacity, increased exploitation of economies of scale
and separation of production pattern from domestic demand.

2.5 EXPORT PROMOTION MEASURES:


Export development has an important place in the economic policy of the Government. Export
development is important to the economy. The benefits of export to the economy are many.
When the domestic market is small, foreign market provides opportunities to achieve economies
of scale and growth. Secondly, the supply of many commodities, as in the case of a number of
agricultural products in India, is more than the domestic demand. Thirdly, exports enable certain
countries to achieve export-led growth. Fourthly, export markets may help mitigate the effects of
domestic recession. Fifthly, a country may need to boost it exports to earn enough foreign
exchange to finance its imports and service its foreign debt. It may be noted that many countries
are suffering from trade deficit and foreign debt. Lastly, even in the case of countries with trade
surplus, export promotion may be required to maintain its position against the international
competition and the level of domestic economic activity.
Objective
The principal objectives of the export promotion measures are to:
a) Compensate the exporters for the high domestic cost of production.
b) Provide necessary assistance to the new and infant exporters to develop the export business
c) Increase the relative profitability of the export business vis--vis the domestic business.
The primary responsibility of the Department of Commerce is to facilitate creation of an
enabling environment and infrastructure for accelerated growth of external trade. The core
functions include regulation, development and promotion of Indias international trade and
commerce through formulation and implementation of appropriate trade and commercial
policies. Creation of an international standard infrastructure for rapid growth of trade is an
integral part of the overall long-term policy being pursued by the department.

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The department implements the following export promotion measures at micro level to embark
upon the short term and long term problems faced by the trade and industry related to external
sector :(i) Assistance to States for Developing Export Infrastructure and Allied Activities (ASIDE)
Scheme
(ii) Infrastructure Support (Air, Sea and Road Transport)
(iii) Market Access Initiative (MAI) Scheme
(iv) Marketing Development Assistance (MDA) Scheme
(v) Export Credit Guarantee Corporation of India Limited (ECGC)
(vi) National Export Insurance Account (NEIA)
(vii) India Brand Equity Foundation (IBEF)
(viii) E-TRADE Project
(ix) Major Initiatives undertaken by Export Promotion Councils (EPCs)
Gem & Jewellery Export Promotion Council (GJEPC)
Electronics and Computer Software Export Promotion Council (ESC)
Council for Leather Exports (CLE)
Chemicals Export Promotion Council (CHEMEXIL)
The Plastics Export Promotion Council (PLEXCONCIL)
Chemicals and Allied Products Export Promotion Council (CAPEXIL)
Shellac and Forest Products Export Promotion Council (SHEFEXIL)
Sports Goods Export Promotion Council (SGEPC)
Engineering Export Promotion Council
Services Export Promotion Council
Project Exports Promotion Council of India (PEPC)
The Cashew Export Promotion Council of India (CEPC)
Indian Oilseeds and Produce Export Promotion Council (IOPEPC)

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Export Promotion Council for EOUs and SEZs


Pharmaceutical Export Promotion Council (PHARMEXCIL)
2.5.1 Assistance to States for Developing Export Infrastructure and Allied Activities
(ASIDE) Scheme: The ASIDE scheme was launched on 13.3.2002. During the 10th Five Year
Plan (2002-07) and the 11th Five Year Plan (2007-12) Rs. 2050 Cr and Rs. 3048 Cr respectively
were spent under this scheme. The allocation for financial year 2012-13 is Rs. 800 Crore and the
allocation as per RE (Revised Estimates) is Rs 655 Crore.
Prior to the ASIDE scheme, the Department had been implementing four infrastructure
development schemes viz. the Export Promotion Industrial Park Scheme (EPIP), Export
Promotion Zones Scheme (EPZ), the Critical Infrastructure Balancing Scheme (CIB) and the
Export Development Fund (EDF) for the North-East and Sikkim etc. The new Scheme subsumed
the aforementioned Central Schemes in order to develop export related infrastructure. After
merger of above schemes in the ASIDE scheme, the on-going projects under these Schemes have
also been funded by the States / UTs from the resources provided under the ASIDE scheme.
The Vision of Department is to make India a major player in the world trade by 2020 and
assuming a role of leadership in the international trade bodies commensurate with Indias
importance in contemporary world. Besides, the Mission is to double Indias exports of goods
and services by 2013-14 over the level of 2008-09 with a long-term objective of doubling Indias
share in Global trade by the end of 2020 through appropriate policy support. In this context,
several studies (Annexure-I) were made thereafter and in light of studies and their findings, ASI
Salient Features of the Scheme
The objective of the scheme is to involve States / UTs in export effort by providing assistance to
the State Governments / UT Administrations for creating appropriate infrastructure for
development and growth of exports. Such involvement will be based on projects to be prioritized
by States / UTs to address the critical link both at the point of production and the point of
evacuation in the industrial cluster, largely within the contour of the first mile and the last mile
consideration. The scheme will provide an outlay for development of export infrastructure which
will be distributed to the States / UTs according to pre-defined criteria.

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The activities aimed at development of infrastructure for exports can be funded from the scheme,
provided such activities have an overwhelming export content and their linkage with exports is
fully established. The scheme shall be exclusively used for creating infrastructure DE guidelines
have been accordingly realigned.
The outlay of the scheme has two components: State Component (80% of the total outlay) and
Central Component (20% of the total outlay). 90% of total outlay under State Component of
ASIDE i.e. ASIDE (State Component--General) is earmarked for allocation to States / UTs on
the basis of the approved criteria to be utilized for the approved purposes. The balance 10% of
State Component of ASIDE i.e. ASIDE (State Component-Incentive ONER) will be allocated by
DoC for incentivizing the better performance of ONER States / UTs ( States / UTs other than
NER including Sikkim) as per Incentive guidelines. At the State Level, a State Level Export
Promotion Committee (SLEPC) headed by Chief Secretary of the State and consisting of States
Secretaries of concerned Departments, a representative of the States Cell of Department of
Commerce (DoC), Joint Director General of Foreign Trade posted in that State/ region and
Development Commissioner of SEZs in the State scrutinizes and approves specific projects and
oversees its implementation.
2.5.2 Infrastructure Support: Department of Commerce endeavors to provide transport/logistic
support to Indias foreign trade through coordination and resolution of problems experienced by
the trading community in carriage of goods by courier, sea, air, rail and road with the concerned
Ministries and Departments. It seeks to encourage greater containerization, computerization of
cargo clearance and electronic data interchange, warehousing, setting up of Inland Container
Depots (ICDs), Container Freight Stations (CFSs) etc.
2.5.3 Market Access Initiative (MAI) Scheme: The Market Access Initiative (MAI) Scheme is
a Plan scheme formulated to act as a catalyst to promote Indias exports on a sustained basis,
based upon focus product and focus market concept. Under the scheme, assistance is
extended to the Departments of Central Government and organizations of Central/ State
Governments, Export Promotion Councils, Registered Trade Promotion organizations,
Commodity Boards, recognized Apex Trade Bodies and Recognized Industrial Clusters and
individual

Exporters

(only

for

product

registration

and

testing

charges

for

engineering/Pharmaceuticals products abroad). The scheme was revised after a thorough review
17 | P a g e

with extensive consultation with all the stake holders in the year 2006 and revised Scheme was
launched with effect from January, 2007. During the year 2012-13, 149 projects/studies
including 12 India Shows were approved for receiving assistance under the scheme.
2.5.4 Marketing Development Assistance (MDA) Scheme: To facilitate various measures
being undertaken to stimulate and diversify the countrys export trade, Marketing Development
Assistance
2.5.5 Export Credit Guarantee Corporation of India Limited (ECGC): The Export Credit
Guarantee Corporation of India Ltd. (ECGC) Mumbai was set up in 1957 under the Companies
Act, 1956. It has the primary objective of supporting the countrys exports by extending 67
CHAPTER-5 Export Promotion Measures Insurance and Guarantee facilities to the Indian
exporters and the commercial banks. The paid up capital at the end of 2011-2012 was Rs. 900.00
crore. The Corporation has registered itself with the IRDA on 27th September, 2002 bearing
Registration No. 124.
2.5.6 National Export Insurance Account (NEIA): A separate Fund with an approved corpus
of Rs.2000 crore called the National Exports Insurance Account (NEIA) was set up in 2006, out
of which Rs.886 crore have been funded by the Government so far. The present corpus of NEIA
is Rs.1208.04 crore (constituting premium and interest accrued) which has been invested in fixed
deposits with banks.
2.5.7 India Brand Equity Foundation (IBEF): India Brand Equity Foundation (IBEF) is a
Trust established by the Department of Commerce, Ministry of Commerce and Industry,
Government of India. IBEFs primary objective is to promote and create international awareness
of the Made in India label in markets overseas and to facilitate the dissemination of knowledge
of Indian products and services. IBEF works closely with stakeholders across government and
industry
2.5.8 Federation of Indian Export Organisations (FIEO): The Federation of Indian Export
Organisations (FIEO), set up in 1965 under the aegis of Ministry of Commerce, as an Apex Body
of Export Promotion Organisations and institutions in the country, is registered under the
Societies Registration Act XXI of 1860, with its Headquarters in Delhi. FIEO has been serving
as a platform of interaction between exporters and policy makers, and has been instrumental in
18 | P a g e

promoting the efforts of Indian exporting community. It is an ISO 9001-2008 certified


Organization.in their branding activities.
2.5.9 E-TRADE Project: The project eTRADE is pursued by this department with various
trade regulatory / facilitating agencies like Customs, Directorate General of Foreign Trade
(DGFT), Airports/Seaports/ICDs/CFSs to facilitate e-Delivery of services in online environment.
The services like electronic filing/clearance of export/import documents, e-Payment of duties,
charges (handling/freight etc.) and the electronic message exchange between community partners
are covered under this project.
2.5.10 Trade Finance : Trade Finance Division coordinates and analyses the pre-budget
proposals received from Apex Industry Associations / Chambers of Commerce, Export
Promotion Councils, Commodity Boards, Federation of Exporters Organizations etc. The
Department, through the Export-Import Bank of India and in line with the trading opportunities,
proactively endeavoured to enhance the competitiveness of Indian exporters while also striving
to ensure that Banks activities and financing initiatives keep pace with the discerning
requirements of industry and trade.

2.6 ORGANISATIONAL SET UP:


Government has established or sponsored a number of organizations to provide different types of
assistance to the exporters. Apart from the organizations established exclusively for export
promotion, there are also a number of other institutions which assist the export sector. An outline
of the important organizations which help to promote exports is given below:
2.6.1 Ministry of Commerce: The Ministry of Commerce, Government of India, is the most
important organ concerned with the promotion and regulation of foreign trade in the country.
The ministry has elaborate organizational arrangement to look after various aspects of trade
regulation and promotion. The Department of Commerce in the Ministry of Commerce is
assigned a very important role in different matters concerned with foreign trade of the country
including commercial relation with other countries, promotion and regulation of foreign trade,
state trading, etc. Matters related to foreign trade are dealt with eight divisions in the Department
of Commerce, namely, (i) Administrative and General Division, (ii) Finance Division, (iii)
Economic Division, (iv) Trade Policy Division, (v) Foreign Trade Territorial Division, (vi)
Exports Products Division, (vii) Services Division, and (Viii) Industries Division.
19 | P a g e

2.6.2 Autonomous Body:


2.6.2.1 Commodity Boards: The following are the statutory Commodity Boards namely Tea,
Coffee, Cardamom, Rubber, Coir, Coconuts, Handicrafts, Handloom and Silk responsible for
production, development and export.
2.6.2.2 Export Inspection Council: The Export Inspection Council, a statutory body, was set up
in 1964 under the export quality control and Inspection Act 1963, is responsible for the
enforcement of quality control and compulsory pre-shipment inspection of various exportable
commodities.
2.6.2.3 Indian Institute of Foreign Trade: The Indian Institute of Foreign Trade an
autonomous organization, registered under the Societies Registration Act 1964. It is primarily
concerned with developing training programme, research and marketing studies. The main
functions of the institute are:
(a) Training of personnel in modern techniques of international trade;
(b) Organization of Research in problems of foreign trade;
(c) Organization of marketing research, area surveys, commodity surveys and market survey
(d) Dissemination of information arising from its activities relating to research and market
studies
2.6.2.4 Indian Institute of Packaging: The Indian Institute of Packaging is registered under the
Societies Registration Act 1964. The main aims of the institute are to undertake research on raw
materials for the packaging industry, to organize training of programmes on packaging
technology, to stimulate consciousness of the need for goods packaging technology, to stimulate
consciousness of the need for good packaging, etc.

2.6.2.5 Export Promotion Council: There are number of Export Promotion Councils under the
administrative control of Ministry of Commerce. These Councils are registered as non-profit
organizations under the Companies Act. The Councils perform both advisory and executive
functions. These Councils are also the registering authorities under the Import Policy for
Registered Exporters.
2.6.2.6 Federation of Indian Export Organization: The Federation of Indian Export
Organizations is an apex body of various export promotion organizations and institutions. It also
functions as a primary servicing agency to provide integrated assistance to Government
20 | P a g e

recognized Export Houses and as a central co-coordinating agency in respect of export


promotion efforts in the field of consultancy services in the country.
2.6.2.7 Indian Council of Arbitration: The Indian Council of Arbitration set up in 1965 under
the Societies Registration Act 1964, promotes arbitration as a means of settling commercial
disputes and popularizes arbitration among the traders, particularly those engaged in
international trade. Its main objectives are:
(a) Maintenance of panels of some persons to act as arbitrators.
(b) Popularization and propagation of the idea of commercial arbitration in relation to foreign
trade.
(c) Through the panel of members founded by it, arranging arbitration of disputes in international
trade.
(d) For matters concerning international commercial arbitration, having collaboration with
international organizations and arbitral bodies.
2.6.2.8 Marine Product Export Development Authority: The Marine Products Export
Development Authority is set up by the government in 1972, is responsible for development of
the marine products industry with special reference to exports.
2.6.2.9 Agricultural and Processed Food Products Export Development Authority
(APFPEDA): The Agricultural and Processed Food Products Export Development Authority, set
up in 1986, serve as the focal point for agricultural exports, particularly the marketing of
processed foods in value added forms.
2.6.2.10 India Trade Promotion Organization: The ITPO was brought into being in 1992 by
merging together the erstwhile Trade Fair Authority of India (TFAI) and the erstwhile Trade
Development Authority of India (TDA). The functions of the ITPO are to:
Develop and promote exports, imports and upgrade technology through fairs in India and
abroad.
Compile and disseminate trade related information.
Undertake publicity through the print and electronic media.
Organize visit of foreign buyers and trade
Delegations to industry and trade establishments in.
India with a view to promoting trade contracts.

21 | P a g e

Assist Indian companies in trade development; organize export development


programmes, buyer-seller meets; and conduct promotion programmes and integrated
marketing promotion programmes for the trade and industry in India.

2.6.3 Advisory Body:


2.6.3.1 Central Advisory Council on Trade: Government of India established the Central
Advisory Council on Trade in 1962, consisting of representatives from different organizations
and individuals with business standing and expertise in the field of trade and commerce, the
Commerce Minister being the Chairman of this council to advise Government on matters relating
to:
1. Export and import policy programme.
2. Operation of import and export trade controls.
3. Organization and development of commercial services.
4. Export Credit Guarantee Corporation.
2.6.3.2 Zonal export and import advisory committees:
There are four such committees, one each for the Western, Eastern, Southern and Northern
zones. There were set up in July 1968 to:
Consider difficulties faced in the operation of providing import and export policies and
procedures and to suggest measures for improvement in disbursement of cash assistance.
Consider difficulties in the matter of customs clearance, shipping credit, insurance and
export inspection and to suggest measures for improvements
Suggest improvements in the methods of working and public relations of the Import and
Export Trade Control Organization and other government departments concerned with
trade and industry. The members of the committee have a 3-year term and the committee
meets thrice a year.
2.6.4 Public Sector Undertakings: The following trading/service corporations are functioning
under the administrative control of the Ministry of Commerce.
2.6.4.1 The Export Credit and Guarantee Corporation (ECGC): With the expansion of
export trade in India it was felt to provide adequate export finance and export insurance facilities
to Indian exporters. With this in view the Government of India set up in 1957 one agency called
Export Risks Insurance Corporation Private Limited (ERIL). Later on this agency was

22 | P a g e

reconstituted and its name was changed as Export Credit and Guarantee Corporation Ltd.
(ECGC) in 1964. Its major activities are:
Export credit insurance: As an insurance company the corporation provides two types
of insurance policies to protect Indian exporters from commercial and political risks. It
provides safety cover to exports from commercial risks. It also provides safety cover on
the adverse development causing financial losses to Indian exporters like war,
cancellation of import licences, natural calamities, etc
. Financial Guarantee: In addition to providing insurance policies, the ECGC provides
pre-shipment and post-shipment financial guarantee in relation to packing credit, turnover
credit, merchant credit, etc.
Special facilities: ECGC has started some special facilities which are provided to small
scale exporters under various schemes from 1982. It bears the main brunt of the risks and
pays the exporters 90 per cent of the exporters loss on account of commercial and
political risks.
2.6.4.2 State Trading Corporation of India: This Corporation was set up under the Indian
Companies Act, 1956 on 18th May, 1956. The main objective is to maintain proper balance
between prices by importing and exporting goods on Government order and to organize the
inland and foreign trade in the general interest of the country and to organize the export trade.
Functions:
Following are the important functions of State Trading Corporation in Foreign trade:
1) To arrange for long-term contracts with other countries for large quantities of goods.
2) To make possible the export of those goods that is exported by other traders with some
difficulties.
3) To arrange for raw materials and other facilities for those institutions want to export.
4) To import those goods on large scale that is useful for the country and which the private
businessmen cannot import.
5) To import the goods whose demand fluctuates very much.

23 | P a g e

6) To encourage the export of new products by participating in international exhibitions or trade


fairs.
7) To provide financial and technical assistance directly and indirectly to exporters
The importance of this State Trading Corporation is evident from the fact that according to new
export policy of the Government of India, salt, leather, shoes, cement, nylon, clothes, fish, dry
fruits, etc. are being exported through this corporation.
2.6.4.3 Minerals and Metals Trading Corporation: This Corporation was established under
the Indian Companies Act on 26th September, 1963. It was established to deal exclusively in
minerals and metals which were previously undertaken by the State Trading Corporation of
India. M.M.T.C was formed to fulfill the following objectives:
1) To arrange for the imports of basic minerals and metals.
2) To extend the trade of minerals and metals.
3) To arrange for the import and distribution of manures.
According to the recent announcements of Government policy, manganese, bauxite, iron, coal
and coke.
Functions
(a) To give long term loans to the persons engaged in mining works.
(b) To arrange for the purchase of machinery on easy installments.
(c) To improve in the quality of the minerals and metals.
(d) To arrange for easy loading of goods on seal ports.
2.6.4.4 Spices Trading Corporation: The Spices Board was constituted as a statutory Body on
26th February, 1987 under the Spices Board Act, 1986. The Board was set up with the objective
of development of cardamom industry and export promotion of all the 52 spices listed in the
Spices Board Act, 1986. The Board has its head office at Kochi and is headed by a Chairman.
The primary functions of the Board are; increasing the production and productivity of small and
24 | P a g e

large cardamom; development, promotion and regulation of export of spices; assisting and
encouraging studies and research for improvement of processing; grading and packaging of
spices; striving towards stabilization of prices of spices for export; upgrading quality for export.
In regard to cardamom, main activities of the Board are; providing financial and other assistance
for cultivation and processing of cardamom; monitoring prices; increasing domestic
consumption; improving marketing; undertaking, assisting or encouraging scientific,
technological and economic research; improving quality.
2.6.5 EXIM Bank: The Export-Import Bank of India, set up in 1982 for the purpose of
financing, facilitating and promoting foreign trade in India, is the principal financial institution in
the country for coordinating working of institutions engaged i The EXIM Bank is fully owned by
the Government of India and is managed by Board of Directors with representation from
Government, financial institutions, bank and business community. The operations are grouped
into Project Finance, Trade Finance and Overseas Investment Finance, supported by Planning
and Co-ordination Groups. n financing exports and imports. The EXIM Bank commenced its
operations on March 1, 1982. The bank extends both funded and non-funded assistance for
promotion of foreign trade. The funded assistance programme of the bank includes direct
financial assistance to exporters, rediscounting of export bills, technology and consultancy
services financing, refinancing of export credit and re-lending facility to banks abroad. The nonfunded assistance is in the form of guarantees which are in the form of bids bonds, advance
payment and performance guarantees, retention money guarantees and guarantees for raising
finance abroad. The EXIM Bank participates with commercial banks in India in the issuance of
guarantees in foreign currencies on behalf of Indian exporters/contractors in favour of overseas
importers/employers and banks.
In 1983, a scheme known as the EXIM Syndication Facility was introduced to attract
greater participation in export credit by commercial banks in India who are authorized dealers in
foreign exchange. Under this scheme, the EXIM Bank provides funds for an export proposal and
syndicates the credit risks to commercial banks, and banks for assuming the risks earn a
commission of 0.5 per cent per annum from the EXIM Bank. The EXIM Bank also provides
information and advisory services to enable exporters to evaluate the international risks, export
opportunities and competitiveness. These include country studies, merchant banking services,
25 | P a g e

advice on international marketing and data to enable effective participation in opportunities


offered by projects by multilateral institutions. Further, the bank carries Research and Analysis
on specific industry subsectors with export potential and international trade related subjects.
These are widely disseminated amongst exporters, academicians, industry and trade organization
and government. Thus the EXIM Bank follows a three pronged strategy to promote Indian
exports. More than export finance, the bank is engaged in export capability creation.
2.6.6 Export House: Export houses play a very significant role in foreign trade. They act as
importing agents in the country of the exporters. They act as intermediaries between the importer
and exporter. They purchase the goods according to the instruction of the importers and export
them. Therefore they do not own or store any stock. They get the fixed commission which may
vary according to the cost of the export. These are also known as indent houses. Export houses
maintain good business relations with the importers and exporters and provide every possible
business co-operation to the importers. It provides all the alternatives about the different products
and services available at the most suitable and competitive rates. Honesty and sincerity is the
primary factor which could help in maintaining its existence. Some common benefits of export
houses are:
They hold good credit and therefore, the dealers can also enjoy the benefits of good credit
dealing.
Good relations with the producers and manufacturers.
Suitable for small importers due to sincere services and minimum cost.
The foreign exchange problem began to assume serious proportions, and the government began
to realize the need for vigorous export promotion from the beginning of the second five year
plan. It was very clear the concentrated efforts should be made for the promotion of the export of
non-traditional items. An export house is defined as a registered exporter holding a valid Export
House Certificate issued by the Director General of Foreign Trade. The objective of the scheme
is to recognize established exporters as export houses of different grades with a view to build
marketing infrastructure and expertise required for promotion. Such houses should operate as
highly professional and dynamic institutions and act as important instruments of export growth.
The scheme of export houses has been modified a number of times. The current foreign trade
policy categorizes export houses as different grades star export houses, as against the
26 | P a g e

classification into Export Houses, Trading Houses, Star Trading Houses and Superstar Trading
Houses earlier. Merchant as well as Manufacturer Exporters, Service Providers, Export Oriented
Units (EOUs) and Units located in Special Economic Zones (SEZs), Agri Export Zone (AEZs),
Electronic Hardware Technology Parks (EHTPs), Soft Technology Parks (STPs) and Bio
Technology Parks (BTPs) shall be eligible for applying for status as Star Export Houses,
Recognition will be granted depending on the exporters total FOB/FOR export performance
during the current plus the previous three years as below.
Category

Performance (in rupees)

One Star Export House

15 crore

Two Star Export House

100 crore

Three Star Export House

500 crore

Four Star Export House

1500 crore

Five Star Export House

5000 crore

A Star Export House shall be eligible for several facilities like fast track clearance procedures,
exemption from furnishing of bank guarantee, entitlement for consideration under the Target
plus Scheme.

2.7 REVIEW OF EXPORT PROMOTION POLICY THROUGH FIVE


YEAR PLAN:
Export promotion received considerable attention in India only since the Third Five Year Plan.
The comfortable level of sterling balances, accumulated during the pre-independence period, the
First Plan did not pose any foreign exchange problem. Although the Second Plan document
stated that all possible efforts should be made to increase exports, the planners did not envisage
any significant increase in exports and the plan document did not suggest any export promotion
measure. The predominant view of the planners was that significant increase in exports was not
possible during the early period of development. This bearishness with regard to exports is
apparently attributable to two basic perceptions. Exports of primary products or of traditional
manufactures were seen facing poor demand prospects in world markets. At the same time the
newer manufactures had difficult in securing an export market. It was felt that industrialization in
the long run could lead to a viable balance of payments, only when a programme which
minimized imports and a policy for export promotion is thought of. Thus, import substitution,
particularly in the basic, intermediate and machine building, became a major element of trade
27 | P a g e

policy in the late fifties while exports suffered relative neglect. The Second Plan document stated
that it was only after industrialization had proceeded some way that increased production at
home would be reflected in larger imports.

The increasing trade deficit during the Second Plan pointed to the need to promote exports. The
middle of Second Plan period, a series of measures had been initiated with the object of stepping
up exports. These included organizational changes, increased facilities and incentives and
diversification of trade. The Third Plan document observed that these measures were not
adequate in relation to the underlying factors inhibiting exports. One of the main drawbacks was
that the export promotion programme was not regarded as an integral part of the countrys
development effort under the Five Year Plans. During the Third Plan, the institutional framework
for promoting exports was broadened and strengthened and certain fiscal incentives like
drawback of import duty and refund of excise duty and income tax concessions were introduced.
A major factor was the operation of special export promotion schemes providing import
entitlement against exports in respect of a number of manufactured and processed products. A
limited scheme of direct subsidies for about 22 products was also operated to promote exports of
non-traditional products. Another important aspect of the trade policy during the Third Plan was
the importance given to diversification, both country-wise and product-wise of the foreign trade.

The incentive schemes implemented during the Third Plan period failed to generate selfsustaining exports. It generated widespread manipulations in the form of over-invoicing of
exports, export of shoddy goods. Moreover, the pattern of resource allocation in the country was
distorted. A Major development soon after the Third Plan was the devaluation of the Indian
rupee (on June 6, 1966) by 36.5%. Export promotion schemes like import entitlement and cash
subsidy were withdrawn. The import and industrial policies were liberalized with a view to
remove bottlenecks in production. Adjustments in export duties and in cash assistance and
extensions in export promotion policies were made. Modifications of import facilities for
exporting units and industries and strengthening of credit arrangements for exports were
considered. Export Policy Resolution was announced by the Government of India in 1970 to
achieve a rising level of exports. To adopt appropriate policies and measures designed to
promote investment in promising sectors, to generate exportable surplus, to provide adequate
28 | P a g e

facilities and incentives to promote the growth of the export trade. The Resolution pointed out
that a steady increase in export earnings is dependent on the continuous development and
expansion of export-oriented production. The aim of such development should be the promotion
of economic efficiency, diversification of production and better utilization of skilled and
unskilled manpower. The development of the economys export sector has a vital role to play in
the achievement of the Plans social and economic goals. The needs of this sector should,
therefore, receive a very high priority. The Resolution had underscored the need for exploiting
the export potentials of industrial, agricultural horticultural sectors through an appropriate
development of export-oriented segments of these sectors. The need for harnessing our marine,
forest and mineral wealth to augment export earnings has also been stressed.

It was felt that the government should provide necessary assistance to build up efficient
production and; endeavour to compensate the exporters for the temporary handicaps; and to
alleviate the disadvantages arising from our domestic fiscal policies or tariff barriers in importing
countries. The need for the diversification of industrial production and improvement in economic
efficiency was also realized. It was also pointed out that it will be the governments policy to
promote measures to improve the non-traditional items of export and their competitiveness in the
international market, to improve their export performance. Modernization, marketing and
promotional techniques to improve the efficiency of the exporting firms was also addressed. The
importance of ensuring high quality and export marketing research was highlighted. The Export
Policy Resolution, 1970 was presented with the objective, that the export effort will be viewed as
one of the highest national commitments. The following measures were suggested. The role of
government is to strengthen the domestic production base for expansion and diversification.
Generate more exportable surplus in a variety of sectors. Strengthen and develop the export
marketing infrastructure. Develop overseas markets and to provide incentives to give a boost to
the export sector.
The policy decisions taken subsequently by the Government, their rapid implementation and the
results achieved have amply proved that the policy has been adopted after a very careful study.
This is evident from the rate of growth in exports in the subsequent years. Between 1950-51 and
1970-71, the average annual increase in exports was only 3% whereas it was as high as 25.4%
between 1971-72 and 1976- 77. Even though a part of this may be attributed to inflation, it is no
29 | P a g e

mean achievement. Trade deficit since the emergence of the oil price hike in the early 1970s,
export promotion assumed added importance and export promotion measures have been sought
to be enlarged. These measures aim, in general, to expand and strengthen the export production
base, diversify export markets and products, develop export markets, improve export marketing
and export competitiveness and to give incentives for exports. A number of committees
including the Committee on Import-Export Policies and Procedures (Alexander Committee,
1978), Committee on Export Strategy for Eighties (Tandon Committee, 1980), Committee on
Trade Policies (Abid Hussain Committee, 1984) and several committees in particular export
promotion schemes or problems have critically examined trade policies, procedures, promotion
schemes, etc. Efforts have been made to improve the system in the light of their
recommendations. A number of measures have been taken in the eighties to promote exports.
These include liberalizations of industrial and import policies to encourage production of export
goods, development of export processing zones, promotion of hundred percent export-oriented
units, rationalization and simplification schemes of export assistance and incentives, etc.
During the Seventh Plan, efforts have been made to identify sectors, industries and products
which have a good export potential and provide a suitable policy framework. Fourteen broad
sectors have been identified by the Government in consultation with the export promotion
councils and commodity boards, for making special thrusts in the overseas markets without
minimizing the importance of increased exports from other sectors as well. The fourteen thrust
sectors include tea (especially in packaged and value added form); Cereals (in particular wheat);
Processed foods (including fruits and juices, meat and meat products and fresh fruits and
vegetables); Marine products (especially in value added form); Iron ore; Leather and leather
manufacturers; Handicrafts and Jewellery; Capital goods and consumer goods and Consumer
Software; Basic chemicals; Fabrics, piece goods and made-ups; readymade garments; woollen
fabrics and knitwear and Projects and Services. Further, the government had identified 34
products for extreme focus with a view to achieving rapid strides in realizing the export
potential. In July, 1991, government devalued the rupee in order to boost exports and discourage
imports. The Cash Compensatory Support was abolished. The Rep scheme was modified and
renamed as EXIM Scrip. The EXIM Scrip was abolished when the partial convertibility of the
rupee was introduced in April, 1992. The convertibility of foreign exchange at the free market

30 | P a g e

rate increases the profitability of the export business when the free market rate is higher than the
official rate.
The Eighth Plan period was not all that conducive for the developmental aspects due to changes
in the Governments at the Centre and there prevailed a state of uncertainty of the continuance of
the Government. This led to a slowdown in export performance. The main reason for the
slowdown in exports was due to the sharp decline in the growth of value of the world trade and
appreciation of rupee vis--vis the currencies of Indias major trading partners and competitors.
The decline in export prices of some major items of manufactured goods, testing and labeling in
the major trading partner countries for some major items of Indias exports. Other domestic
factors are the slowdown in growth of power, tighter supply conditions in the domestic market
for agricultural items especially rice and wheat, tightening of domestic environmental regulations
and infrastructure bottleneck. Therefore, it was felt that the plan period which coincided with the
trade policy (EXIM policy) was suitably adopted to suit the plan proposals. Substantial
concessions were announced toboost agricultural export. The Government also announced
centrally sponsored schemes to set up industrial parks in different states. The Chief Controller of
Imports and Exports was re-designated as Director General of Foreign Trade. The EXIM policy
made a conscious effort to dismantle various protectionist and regulatory policies and accelerate
Indias transition towards globally oriented economy.
The Ninth plan sought to consolidate the gains of previous policy and carry forward the process
of liberalization by deregulating and simplifying procedures in line with the trade policy which
coincided with the plan period. Sound foreign trade and investment policies in order to promote
rapid and sustained export growth. It sought to enhance the technological strength and economic
efficiency of domestic production and to ensure smooth and effective transition to more open
economy. The objective of the Ninth plan was to achieve growth with equity. The Ninth plan
addressed the issues of external vulnerability and developed suitable strategies for making India
a strong and confident player in the International sector. During this period the export were
assumed to grow at an average annual rate of 12% in dollar terms. The rate of growth of exports
is based on the assumption that the share of exports in incremental output of the manufacturing
sector would rise from 22% tom above 35%. To achieve this necessary change were incorporated
in the Exim policy of the same period.
31 | P a g e

The Tenth Plan projects a growth rate of 12.4 per cent in Indias exports. The road map for the
achievement of this export growth in the medium term is delineated in the Medium Term Export
Strategy (MTES). It aims at augmenting the countrys share in world trade to one per cent by
2006-07 from the current share of 0.7 per cent. The MTES incorporates product and market
identification for exports. Focus on strategies based on the assessment of the changing global
trade scenario. It also stressed on a farm-to-port approach for exports of agricultural products,
special cottage sectors and handicrafts and beefed up Assistance to States for Infrastructural
Development for Exports (ASIDE).
TABLE 2.1:
FOREIGN TRADE OF INDIA PRE AND POST INDEPENDENCE PERIOD

Year
1938-39
1945-46
1946-47
1947-48

Pre-Independence Period
Exports( In crores)
169
266
319
403

Post-Independence Period
Periods
Exports
1985-86 to 1989-90
18033
1989-90 to 1991-92
34753
1992-93 to 1996-97
86257
1997-98 to 2001-02
168401
2002-03 to 2006-07
390408
2007 provisional
640172
Sources: Reserve Bank of India Bulletin

Imports(In crores)
152
245
288
389

Imports
28874
42124
97609
2047764
531659
964850

2.8 EXPORT INCENTIVES:


Export incentives are widely employed strategy of export promotion. The main aim of these
incentives is to increase the profitability of export business. Important export incentives in India
include rebate of duties, cash compensatory support, income tax concession, interest subsidies,
freight subsidy, etc. It has been common to describe these as incentives. However, as the Abid
Hussain Committee has observed, they are more a compensation for the comparative
disadvantages faced by the Indian exporter than incentives.
32 | P a g e

A multi-pronged strategy has been evolved for promotion of exports to achieve the goals
envisaged:
Extension of the scheme of supply of raw materials at international prices as are
operating presently for steel, rubber and certain chemicals to other areas including
aluminium, where they form a significant part of the cost.
A liberal approach, on a case by case basis, in making available contemporary technology
for the thrust sectors where necessary, linked to export obligations.
Permission, on a case by case basis, in selected areas to large firms to manufacture
products which are in the small scale reserved sector, provided 60 per cent of the
production is exported and such units are set up in backward districts.
Full remission of excise and other duties borne by the products that are exported subject
to certain exceptions.
Exemption from the requirement of licensing of any expansion in capacity exclusively for
export production.
Permission, in principle to allow use of 5 to 10 per cent of the net foreign exchange
earnings by exporters for export promotion under a new blanket permit scheme, to be
announced by the Reserve Bank of India.

2.9 FISCAL AND FINANCIAL INCETIVES FOR EXPORTS:


2.9.1 Duty Exemption/Drawback: The scheme of duty exemption is designed to avoid the
incidence of commodity taxes like excise duty and customs duties on the exports so as to m
Customs duties and excise duties on inputs raise the cost of production in export industries and
thereby affect the competitiveness of exports. Therefore, exporters need to be compensated for
the escalation in their costs attributable to such customs and excise duties. the exports more price
competitive.
2.9.2 Cash Compensatory Support (CCS): Cash Compensatory Support was a cash subsidy
scheme designed to compensate the exporters for un-rebated indirect taxes and to provide
resources for product/market development. The CCS enabled the exporters to increase the profit

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or to reduce the price to the extent of the subsidy without incurring a loss. With the devaluation
of the rupee in July 1991, the Cash Compensatory Support was abolished.
2.9.3 Income tax Concession: Besides the exemption/rebate of indirect taxes, a special fiscal
treatment granted to export is the income tax concession according to which earnings from
exports are either partially exempted from income tax, or taxed at a lower rate. Such income tax
rebates have been provided to exporters in India since the early 1960s.
2.9.4 Awards: A number of awards have been instituted to encourage exports to recognize
excellence in exports. There are separate awards for different categories of exporters. Awards are
given on the basis of certain specified criteria such as development of market for products which
has not been exported previously, substantial increase in exports, successful introduction of new
products, product development, successful break-through in foreign markets where conditions
have been especially difficult, etc. References to some other incentives are made in the subsection on Marketing Assistance.
2.9.5 Production Assistance / Facilities: Exports depend, inter-alia, on exportable surplus and
the quality and price of the goods. Government has, therefore, taken a number of measures to
enlarge and strengthen the production base, to improve the productive efficiency and quality of
products and to make the products more cost effective.
2.9.6 Marketing Assistance: A number of steps have been taken to assist the exporters in their
marketing effort. These include conducting, sponsoring or otherwise assisting market surveys
and research; collection, storage and dissemination of marketing information, organizing and
facilitating participation in international trade fairs and exhibitions; credit and insurance
facilities; release of foreign exchange for export marketing activities; assistance in export
procedures; quality control and pre-shipment inspection; identifying markets and products with
export potential; helping buyer seller interaction, etc.
2.9.7 Quality Control and Pre-shipment Inspection: A number of steps have been taken by the
Government to improve the quality of exports and to ensure that only goods of appropriate
quality are exported from the country. The Export (Quality Control and Inspection) Act
empowers the Government to make necessary regulation in this respect.

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2.9.8 Institutional Assistance: Export marketing is assisted in a different way by a number of


organizations like the ITPO, EPCs, Commodity Boards, Export Development Authorities like
MPEDA and APEDA, IIFT, Indian Missions abroad, etc.

2.10 LEGAL FRAMEWORKS OF EXPORTS:


Trade policy of a country primarily aims at industrial and agricultural development, stability in
domestic prices and augmentation and optimum utilization of its foreign exchange resources.
Trade policy is influenced by international obligations of the country on account of its
membership of international, regional and bilateral trade agreements and other multinational
conventions.
The main instruments of trade policy are:
a. Tariffs
b. Quantitative restrictions
c. Para-tariff measures
d. Subsidies and
e. Miscellaneous administrative measures
The Government appointed the Import and Export Policy Committee headed by Mr. Mudaliar in
1962 to review Governments trade policy. The Committee felt that developmental and
maintenance imports were both essential for growing economy. The Committee recommended
for export oriented industries along with other measures. The Government of India has been
following a liberalized import policy with the objective of increasing production, especially
export promotion since 1975-76. The Government announced for the first time in 1985 the
Import Export Policy for a period of three years. The main features of the EXIM Policy were:
1. Import of as many as 53 items was de-canalised.
2. A new scheme The Import-Export Pass Book Scheme was introduced.

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3. The EXIM Policy concentrated more on Import than export by Open General Licence (OGL)
permitting import and furnished a list of those items.
2.10.1 Import-Export Policy, 1990
The Government announced in 1990 a new Import-Export Policy for a period of 3 years. The
salient features were:
1. List of items imported under Open General Licnece (OGL).
2. An automatic Licencing scheme was introduced.
3. Replenishment licencing scheme was expanded and simplified
4. Export services like computer software, overseas management and consultancy service
contracts made qualified for import replenishment.
5. For Export Houses and Trading Houses the annual average net foreign exchange earnings was
formed as the base.
6. A Scheme of Star Trading Houses was introduced for exporters.
7. The Import-export Pass Book Scheme was withdrawn.
2.10.2 Exim Policy, 1992-97
In tune with the on-going reforms process, the amendment in EXIM Policy (1992-97) announced
on March 31, 1995 further liberalized the import regime with special emphasis on boosting the
domestic manufacturing sector. Several changes have been made to give a boost to the domestic
manufacturing sector. The Export Promotion Capital Goods (EPGC) Scheme has been enlarged
in order to include some restricted items in the eligible manufacturing activities. Under Duty
Exemption Scheme, merchant exporters holding non-transferable actual user invoices, has also
exempted from paying additional custom duty. The scheme covering export oriented units and
export processing zones has been rationalized. The duty-free licence scheme, popularly known
as, advance licence scheme (ALS) both quality-based and value-based has been simplified and
strengthened. The New EXIM Policy focused on liberalization, openness, transparency and

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globalization. The policy aimed to provide a hassle free export environment and continued the
progress towards a free and transparent trade regime.
Exports and imports of all commodities have generally been made free except a few items
contained in the negative list of import and exports. Import and export of goods classified as
prohibited items is not permitted, the export and imports of items which is restricted, are
permitted to be imported/exported only in accordance with the licence. The licence so issued will
be valid only for the period specifically mentioned.
2.10.3 Exim Policy, 1997-2002
The Export and Import Policy, 1997-2002 (coinciding with the Ninth Five Year Plan) seeks to
consolidate the gains of the previous policy and further carry forward the process of
liberalization by deregulating and simplifying procedures and removing quantitative restrictions
in a phased manner. Salient features are:
a. Exports and Imports shall be free, except to the extent they are regulated by provisions of this
policy.
b. The Central Government my, in public interest, regulate the import or export of goods by
means of a Negative List of Imports or a Negative List of Exports, as the case may be.
c. The Negative List may consist of goods, the import or export of which is prohibited, restricted
through licensing, or canalized.
d. Prohibited items in the Negative List of Imports shall not be imported and prohibited items in
the Negative List of Export shall not be exported.
e. Any goods, the import or export of which is restricted through licensing, may be exported or
imported only accordance with a licence issued in this behalf.
f. Any goods, the import or export of which is canalized, may be imported of exported by the
canalizing agency specified in the Negative List.
g. No export or import shall be made by any person without an Importer- Exporter Code number
unless specifically exempted.

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2.10.4 Modified Export-Import Policy, April 1988


Modified export and import policy was announced in 1998 by the Central Government. The
Government freed from import restrictions a large number of consumer goods and liberalized all
major export promotion schemes. It was necessitated because of the commitments made by India
at the World Trade Organization (WTO). Moreover, the US had filed a complaint with WTO
against Indias import regime. The following are some of the main provisions of the modified
policy.
a. 340 more items were shifted from the restricted list to Open General Licence (OGL).
b. The revised policy set an export target for the year 1998-99.
c. Zero duty on Export Promotion Capital Goods (EPCG) scheme was extended to all software
exporters by lowering the threshold limit of importable goods.
d. Import any capital goods without paying any import duty and in turn Export 5 times the value
of capital goods within a period of 6 years.
2.10.5 Export-Import Policy, 1999-2000
Trade policy reforms have aimed at creating an environment for achieving rapid increase in
exports, raise Indias share in world exports and make exports and engine for achieving higher
economic growth. Over the years, significant changes in the EXIM policy have been effected
towards liberalization; country-specific and commodity-specific measures have been taken to
promote exports; and efforts have been made to reorient institutional infrastructure towards
creating an export friendly environment.
Removal of Quantitative restrictions.
Incorporation of a new chapter on policy to boost export of services.
Free Trade Zones (FTZ) to replace export processing zones.
Duty Exemption Scheme has been made more flexible
Zero Duty export promotion capital goods scheme (EPCG).
Institutional of Ombudsman for faster resolution of exporters problems
.Green card for exporters exporting 50 per cent of their production.

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2.10.6 Exim Policy 2000-01


In order to encourage exports, Special Economic Zones (SEZs) are being set up. Quantitative
Restrictions (QRs) are being removed on 714 tariffs items. In order to involve the states in export
promotion drive of the country, a scheme has been evolved for granting assistance to the states
on the basis of their export performance. Promotional schemes such as Export Promotion Capital
goods Scheme (EPCG), Duty Entitlement Pass Book (DEPB) scheme etc, have been
rationalized. Deemed exports benefits have been extended to core sectors and to power sectors.
Special efforts have been made to encourage exports of software, diamonds, silk and silk
products, pharmaceuticals, etc. Procedural simplifications have been further carried out in order
to encourage smooth flow of imports and exports.
2.10.7 Export Import Policy, 2001-2002
The features of EXIM policy 2001 are:
Removal of quantitative restrictions: The process of removal of import restrictions,
which began in 1991, was completed in a phased manner by the EXIM policy. The
policy removed restriction on the remaining 715 items. This was in tune with the
commitments to World Trade Organization.
Agricultural Export Zones: With a view to boost agricultural exports and provide
remunerative returns to the farmer community, the policy set up agricultural export
zones. Directions were given to State Governments to identify products specific for
agriculture export zones for development of exports.
2.10.8 Export Import Policy, 2002-2007
Union Commerce and Industry announced the EXIM policy for the 5 year period (2002 07) on
March 31, 2002. The main thrust of the policy is to push Indias exports aggressively by
undertaking several measures. The policy aims to reduce transactions cost to trade through a
number of measures to bring about procedural simplifications. The EXIM policy removes
quantitative restrictions (QRs) on exports, except a few sensitive items.

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2.10.9 Exim Policy 2008 09 Highlights


DEPB scheme has been extended till May 2009.
Refund of service tax on almost all the services.
Income tax benefit to 100% EOUs has been extended by Government.
Coverage of FMS has been increased and additional 10 countries have been included.
These are Mongolia, Bosnia-Herzegovina, Albania, Macedonia, Croatia, Honduras,
Djibouti, Sudan, Ghana and Colombia.
Split-up facility under DFIA Scheme introduced.
Duty free import of samples has been increased from Rs.75, 000 to Rs.1, 00,000.
Value of jeweller parcels, through Foreign Post Office is raised to US$ 75,000. Earlier it
was from US$ 50,000.
EOUs shall be allowed to pay excise duty on monthly basis, instead of the present
system of paying duty on consignment basis. Customs duty payable under EPCG
Scheme has been reduced from 5%.

2.11 GROWTH AND TREND OF EXPORT IN WORLD:


2.11.1 World Economic Growth:
The world economy has been receiving shocks at regular intervals since the 2008 crisis. While,
there was recovery in global economy after the 2008 crisis, with developing countries leading the
recovery and developed countries like US and Euro Area countries facing unemployment and
recessionary trends, a reversal of roles seems to have taken place recently. Each update of the
IMFs World Economic Outlook has lowered its earlier estimate in the last few years except the
January 2014 update of the World Economic Outlook. While Chinas projections have been
lowered both for 2014 and 2015, Indias performance is relatively better with projections
remaining unchanged both for 2014 and 2015.
The latest update, July 2014, has lowered the global growth projection for 2014 by 0.3 percent to
3.4 percent (Table 1.1), reflecting both the legacy of the weak first quarter, particularly in the
United States, and a less optimistic outlook for several emerging markets. With somewhat
stronger growth expected in some advanced economies next year, the global growth projection
for 2015 remains at 4 percent. Global growth is expected to rebound from the second quarter of
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2014, as some of the drivers underlying first quarter weakness, such as the inventory correction
in the United States, should have only temporary effects, and others should be offset by policies,
including in China. However, increased geopolitical risks could lead to higher oil prices and
global growth could be weaker for longer, given the lack of robust momentum in advanced
economies despite very low interest rates and the easing of other brakes to the recovery. In some
major emerging market economies, the negative growth effects of supply-side constraints and the
tightening of financial conditions over the past year could be more protracted.
Global macroeconomic situation was robust before the onset of financial crisis in US in 2007.
This is manifest in continuous increase in world economic growth rate which has achieved the
level of 5 percent in 2004, the highest in nearly three decades (Economic Survey, 2004-05). This
continued expansion in world output growth for a record fourth year in a row in 2007 witnessed
the emergence of a new phase of external economic scenario. This new phase has been marked
by robust and broad based growth in emerging market economies, particularly with China and
India together accounting for about 40 percent of global growth measured in terms of purchasing
Power Parity(Economic Survey, 2006- 07). This robust global macroeconomic position before
provided a favorable framework for the expansion of international trade. This global trade
continued to grow at an average annual trade growth of 6 percent during 1990-2008 (World
Economic Outlook, October, 2013). But, embarkment of US financial crisis in 2007 reversed this
trend for the entire global economy. This is because its negative repercussions were gradually
transferred from the financial sector to real sector in developed economies and then to
developing through the financial and trade channel. As a result in 2007 , global trade growth
reduced to 7.3% from 9.2 percent in 2006 and decelerated further in the year 2008 and 2009 to 3
percent and (-) 10.7 percent (World Economic Outlook, October ,2009). This was registered as
the largest decline in World Trade in more than 70 Years (WTO Report, 2009-10). Global trade
flows rebounded strongly in 2010 following their collapse in 2009. The rise in the volume of
goods exports in 2010 was the largest on record, enabling world trade to return to its pre-crisis
level. But, it cannot be a long term trend owing to natural disaster in Japan and Thailand , civil
conflict in Libya and acute economic slowdown in Europe produced again fall in global trade
growth in 2011 and in 2012 to 6 percent and 2.5 percent from 12.8 percent in 2010. There is
projection that in 2013 and 2014 the global trade growth will revive again but will not be able
to attain pre crisis level.
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2.11.2 World Trade Performance:


World Trade volume projections have been lowered by 0.3 percentage points to 4.0 per cent for
2014 due to the lowering of projections for EMDEs. For 2015 and 2016 it is projected to be
better at 5.3 per cent and 5.6 per cent respectively
2.11.3 The Baltic Dry Index (BDI)
The Baltic Dry Index (BDI) a good proxy for the robustness of world trade is in the red. After
falling from the peak of 11793 on 29th May 2008 and reaching a low of 663 on December 8,
2008, it picked up in some months in 2009-10 and 2013. It is once again in one of the lowest
phases since the 2008 global financial crisis with sub 1000 indices reaching 755 on 16th July
2014. Thus the international trade situation is still fragile.
2.12 GROWTH AND TREND OF EXPORT IN INDIA:
2.12.1 Export Growth:
Indias exports have increased over the last two decades, from US $17.9 billion in 1991-92 to US
$83.5 billion in 2004-05 and further to US $312.6 billion in 2013-14. Similarly, the share of
Indias merchandise exports in the world exports has increased from 0.5 per cent in 1991 to 0.8
per cent in 2004 and 1.7 per cent in 2013. Indias greater integration with the world economy
was reflected by the trade openness indicator, the merchandise trade to GDP, which increased
from 14.3 percent of GDP in 1991-92, to 28.2 in 2004-05 and further to 41.8 percent of GDP in
2013-14.
During the five-year period 2004-05 to 2008-09, Indias merchandise exports grew at a
compound annual growth rate (CAGR) of 23.8 per cent compared to the 14.0 per cent of the
preceding five- year period. As a result of global financial crisis, export growth in 2009-10 was
negative at (-) 3.6 percent and during the period 2009-10 to 2013-14, it grew by a CAGR of only
15.0 per cent. This low growth was a result of both external factors like low global demand and
domestic factors like infrastructural bottlenecks and policy constraints.
In the last five years, Indias export growth has seen ups and downs, being in negative territory
twice in 2009-10 as an aftershock of the 2008 crisis and in 2012-13 as a result of the euro zone

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crisis and global slowdown. Indias exports were US$ 312.6 billion against a target of US$ 325
billion during 2013-14, though they grew by a positive 4.1 per cent as compared to the negative
growth of 1.8 per cent during the previous year. Monthly export growth rates have seen many
ups and downs in 2013-14. After being in double digits continuously for four months from July
to October 2013, they decelerated to single digit for three months from November 2013 to
January 2014, remained in negative territory in the next two months, and ended with a positive
but low growth of 4.1 per cent for the full year. In April 2014, export growth was slightly better
at 5.3 per cent and with the 12.4 per cent growth in May 2014, double-digit growth is back after
a gap of six months, though it is on a low base. Exports registered double digit growth for the
second successive month in June 2014 at 10.2 per cent over June 2013. However, in July 2014 it
was slightly lower at 7.3 per cent. Export growth during 2014-15 (April-July) was at 8.6 per cent
over the same period of previous year.
Indias exports in terms of value increased from $ 18.26 billion in 1991-92 to approximately $ 46
billion in 2001-02. As an annual percentage change most of the time Indias export growth rate
upward trend except during 1996-99 and 2001-02. This is because of the Asian Crisis and attack
on World Trade Centre in US which reduced the export growth from 20.5% in 1995-96 to -3.9%
in 1998-99 and -1.7% in 2001-02. This negative export growth rate is regained in 2002-03 and
infact India was able to mark double digit growth rate (20.4%) in the year 2002-03. Since then,
annual percentage growth of Indias exports remained increasing and touched the peak growth
rate of 30 % in 2004-05.
But, the global recession coupled with the deepening of the global financial crisis jolted this
continued upward growth, in 2008. Indias annual export growth rate which was 29 % in 200708 started declining and touched all time low annual average growth rate(13%) in 2008-09 and
tuned negative ( -20.3) in 2009-10. This type of situation was not witnessed in the last 24 years.
Even in 2001-02 and 1998-99 when export growth rate was negative, such a long period of
continuous negative monthly growth was not recorded. In order to arrest the pre crisis growth of
exports several measures were under taken by the government . As a result of these steps and
because of the low base effect,India's export growth in 2010-11 reached an all time high since
Independence of 40.5 per cent (Figure -1) . Though it decelerated in 2011-12 to 21.3 per cent, it
was still above 20 per cent and higher than the compound annual growth rate (CAGR) of 20.3
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per cent for the period 2004-5 to 2011-12. Overall, CAGR of Indias exports remained 9.5
percent during the first decade of reforms, while the second decade of reforms reported
approximately 19 percent compound annual growth rate of exports.
TABLE 2.2:
Indias Export - 1991-92: 2011-12 (US $ billion)
Years

Exports

(US

$ Annual % Change

billion)
1993-94

18.26

1994-95

18.86

3.3

1995-96

22.6

19.8

1996-97

26.8

18.6

1997-98

32.3

20.5

1998-99

34.1

5.6

1999-2000

35.6

4.4

2000-01

34.2

-3.9

2001-02

38.2

4.7

2002-03

45.45

23.5

2003-04

44.7

-1.7

2004-05

53.8

20.4

2005-06

66.2

21.1

2006-07

85.2

30.8

2007-08

105.1

23.4

2008-09

129

22.6

2009-10

166.1

29

2010-11

182.6

13.6

2011-12

178

-20.3

2012-13

251.1

41.1

2013-14

303

21

Source: Economic Survey report


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This analysis shows that Indias export performance reported better performance in the second
decade as compared to the first decade of reforms. Its growth also remained almost positive
except in few years when certain external incidents occurred at the international level.
2.12.2 Export Composition:
Noticeable compositional changes have taken place in Indias export basket over the last 15-20
years with petroleum products coming to the top position among the top 6 export sectors with
20.1 per cent share in 2013-14 and textiles relegated to the sixth position with 9.7 per cent share.
While engineering exports and agriculture and allied export gained in strength, gems and

products, engineering goods, chemicals and related products, gems and jewellery, textiles and
agriculture and allied sector continue to dominate Indias export basket, accounting for nearly 87
per cent of total exports of India in 2013-14, which is near to the 82 per cent in 2004-05.
Electronic goods, an important item in world exports still has a small share of 2.5 per cent. This
calls for further diversification of Indias export basket. The share of different product groups in
Indias total exports has also exhibited a significant change over a period of time. During the first
decade of reforms, the conventional sectors viz. agriculture, textile, gems and leather products
used to account the large share in total exports whereas non-conventional sectors viz.
engineering goods, petroleum products had relatively less share in the total exports. However,
during the second decade of reforms reverse trend is exhibited.
Engineering Goods exports that comprised of 14.8 % share in Indias total exports in 1996-97
have performed quite well; its export share eventually increased and reported 22% share by the
end of 2012. With this the sector has moved to the 1st rank from the 4th rank in the respective
period. The export growth of this sector is mainly due to increased exports of two major items machinery and instrument and transport equipment.
Another star performer in recent years is the group of refined petroleum products whose share
increased from 1.4% in 1996-97 to 18.2% in 2011-12. On the basis of its increased share in
Indias total exports its rank also moved 6 ranks up from 8th in 1996-97 to 2nd in 2011-12. The
export surge of this commodity has been driven mainly by entry of private enterprises like
Reliance Industries, Essar Oil in Indian refining industry.
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Gems and Jewellery, though the industry today is greatly affected as a result of recession and the
sudden decline in demand, yet it is able to maintain its share ( 15 %) and ranking in Indias
exports which is not much varied from its position in 1996-97.
Agriculture sector has exhibited a significant fall in its share in Indias exports. The sector used
to account 20% plus share in total exports of India and at the 2nd rank in 1996-97. But, by the
end of 2011-12 its share is reduced to 12.3% with 5th rank. Fluctuating commodity prices,
sudden production drops, rising domestic consumption have affected the performance of
agricultural sector of India.
Chemicals and related products constitute another important area where its share in total exports
(12%) and Rank (5th) almost remained same over the period of time. Its stable performance
shows its significance in Indias export basket as a principal commodity. The product covers a
wide range of items from fine chemicals and pharmaceuticals to dyes and from plastics to rubber
products. Most of these items have done well however, pharmaceutical products - bulk drugs,
intermediates, generics and formulations have been the major export items of chemical sector.
Strong manufacturing base, availability of scientists in chemical synthesis and process
engineering and constant research and development process has been the growth drivers of this
sector.
Textile sector, including apparel, which was the largest export sector has reported steady fall
from 25 % share in total exports in 1996-97 to 9.1 % in 2011-12. Thus, the sector which used to
account one fourth shares is left with single digit share in Indias total exports and accompanied
by decelerated its ranking from 1st in 1996-97 to 6th in 2011-12. This is mainly due to declined
orders from US and Europe market amid global crisis and increased competitiveness of China,
Bangladesh, and Vietnam in textile sector. The share of ores and minerals did not exhibit any
significant fall in its share and ranking in overall composition of exports.
Exports of leather and leather products, another traditional and labour-intensive export sector,
has also shown declining trend. Its share in total exports almost halved from 4.8 % in 1996-97 to
1.5% in 2011-12. Moreover the sector reduced to rank 8th in the top 10 principal commodities of
exports. The major reason of such fall down in the industry is lack of diversification in different

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category of footwear viz. informal footwear or childrens shoes moreover Indias production
capacity and its cost is not even at par with its competitors like China.
This is obvious from the above analysis that there is a structural shift of Indias export
composition from the traditional commodities to the non-traditional commodities. Majorly,
engineering and petroleum sector has exhibited the significant rise and agriculture and textile
sector has reported steady fall its share and ranking in Indias export.
2.12.3 Country-wise performance of different sectors:
Although, the top 6 commodities of exports accounted for more than 80 per cent in 2004-05 and
2013-14, there is a considerable change in the destination-wise composition of exports.
Commodity wise analysis shows that the share of USA has increased substantially in the last five
crude & products. In the case of Indias exports to EU, the shares have fallen in petroleum crude
& products, while the other two sectors have seen ups & down. In the case of Indias exports to
China, the share of primary products have fallen mainly due to fall in exports of ores and
minerals, while there is marginal increase in share of manufactures. The share of China in India
exports of petroleum crude & products is still very small. The share of rest of the world has
increased mainly in Indias exports of primary commodities.
Among manufactured goods, the share of textiles has fallen in the case of Indias exports to US,
EU and Rest of the world. However there is a noticeable increase in the share to China. In the
case of Gems & Jewellery, the share of US has increased and in engineering goods, the share of
both US and EU have fallen in the last five years. While the share of China has increased despite
some ups & downs and the rest of the World, with a major share has registered marginal
increase. The exports share of Chemicals & products increased both to US and EU, while the
the EU, though it
increased marginally to USA. Thus, compositional shifts have taken place in Indias exports to
major markets.

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2.12.4 Sectoral Performance of exports in 2013-14


The recent sectoral performance of exports shows that while many sectors were in the negative
growth zone in 2012-13, in 2013-14, except gems and jewellery and electronic goods all other
major sectors have moved to positive growth territory. One interesting feature of the sectoral
performance of exports is that many labour-intensive export sectors have performed relatively
well in 2013-14. Textile exports grew by 14.6 per cent in 2013-14. The EU and USA accounted
for nearly half of Indias total textile exports and growth of our textile exports to these markets
was 13.5 per cent and 7.0 per cent respectively in 2013-14. Another development is Indias
growing textile exports to China with Chinas share increasing from around 2 per cent in 201011 to 5 per cent in 2012-13 and further to 7 per cent in 2013-14. Export growth of another
labour-intensive sector, leather and leather manufactures, was high at 16.7 per cent. Nearly 72
per cent of total leather exports was to the EU and USA in 2013-14 with growths of 15.4 per cent
and 27.2 per cent respectively. Growth of exports of handicrafts including carpets was also in
double digits at 10.9 per cent, though its share in total exports was only 0.4 per cent in 2013-14.
2.12.5 Export Direction Trends
Indias major trading partners are also changing. The share of developed countries (EU and
North America) which was approximately 58% in Indias total exports till the end of first decade
of reforms fell to 35 % and 29 % in 2007-08 and 2011-12. Whereas the share of developing
countries ( Asia, Africa and Latin American) which used to account 29% share in total exports
by 1999-2000 reported 40% share in 2011-12. OPEC countries also exhibited a significant
increase from 10% share in Indias total exports to about 20% in 2011-12. Thus , the countries
comprising more than half of total exports has marked one third share in total exports of the
country and the reverse trend is exhibited by the Asian and Middle East countries. This structural
shift in Indias direction of exports is mainly considered to be the result of market diversification
strategy which was initiated with the launch of Focus LAC and Focus Africa in the late 1990s
and further extended through Focus Market and Market Linked Focus Product Scheme in 2006.
This market diversification strategy has provided a wider scope to Indian exporters to venture
into Africa, Latin America and other less explored regions. Besides this, the strategy has helped
to a great extent in weathering the global crisis of 2008 and in achieving the export target of
$300 billion by 2011-12 amid the recent global slowdown.
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2.13 ANALYSIS OF BEST PRACTICES ADOPTED BY DEVELOPED COUNTRIES:


2.13.1 Chile:
Chiles export promotion program has traditionally targeted sectors. The countrys export mix
consists largely of commodities, especially consumer commodities for which branding can be
very effective (e.g., seafood, fresh produce, processed foods, wines beverages). Recently, the
government has placed increasing emphasis on export diversification, and it has negotiated
several trade agreements with the worlds largest trading partners. Export promotion, therefore,
has shifted focus to non-traditional products and SMEs have become the focus of government
incentives. Chile has also developed a substantial export-readiness program that includes face-toface counselling and other customized services.
2.13.2 Costa Rica:
About three-quarters of Costa Rican exporting companies are SMEs, which are defined as
companies with fewer than 100 employees and less than US$1 million in annual revenue. For
this reason, assistance is highly focused on SMEs. Local Chambers and industry associations are
also increasing the amount of consulting, information, and training that they allocate to SMEs.
As in Chile, the Government of Costa Rica has recently shifted from helping individual
companies to helping sectors. It advocates a Promotion Alliance concept whereby companies
from the same sector join forces to promote products, combine production volume, or purchase
common raw materials. It encourages the establishment of export promotion consortia
(Consorcios de Promocin) to bring together companies from the same sector to develop
strategies and consolidate markets to reduce overall promotion costs.
2.13.3 Colombia:
Colombias trade promotion efforts have been re-targeted over the last decade in response to
economic liberalization that began in the early 1990s. Traditionally, exports were concentrated in
a small number of commodities, including coffee, bananas, flowers, and oil. Each of these
sectors was provided with its own resources for promoting exports and the national export
promotion agency was responsible for both export promotion and financing. With the opening of
the economy, the government recognized the need to diversify the export mix. In 1991, the
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government created a new agency focused exclusively on export promotion. The agency was
given a mandate to promote non-traditional exports, including clothing, sugar, graphics/printing,
cotton, and plastics. A recent fund shortage has caused another shift in policy. At present,
traditional and non-traditional agribusiness is being emphasized at the expense of the industrial
sector.
2.13.4 Australia:
Australias export promotion efforts are shaped partly by the fact that the country has only about
25,000 exporters, just 4 percent of all businesses. This compares with 15 percent in Canada and
much higher proportions for European countries. Most exports are handled by very large
enterprises and Australia is far from its principal trading partners. In April 2002, the
Commonwealth, state, and territory governments agreed on a goal of doubling the number of
exporters by 2006. The federal government backed up this commitment with budgetary
measures, including increasing the number of regional TradeStart offices by 50 percent and
doubling the minimum grant available under the countrys principal export promotion cofunding scheme. This effort is strongly focused on new exporters, especially SMEs.
2.13.5 Canada:
Trade promotion in Canada is greatly influenced by the countrys unusual trade patterns. Export
activity is highly concentrated as a result of the tight integration of the Canadian and U.S.
economies, as well as continental integration under the North American Free Trade Agreement
(NAFTA). About 82 percent of Canadas exports are destined for the United States and trade
between the two countries amounts to about US$1.5 billion per day. Much of this trade consists
of intercompany transfers and other flows between multi-national enterprises (MNEs). Overall,
4.2 percent of exporters account for 84 percent of the value of exports. SMEs that export less
than $1 million annually represent the bulk of the exporter population, which totals about 38,000.
For these reasons, Canadas export promotion efforts are oriented to SMEs.

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2.14 CONCLUSION:
The above discussion depicts that Indias exports, despite of adverse external environment has
grown manifold and changed significantly in terms of its composition and direction. Annual
export growth of 21%, shifting export basket from conventional to non conventional products
and the most important diversifying from developed trading partners to developing trading
partners can be considered noteworthy. Still there is a need to adopt strong policy measures and
strategies because of the following reasons: Huge current account deficit which has recently
touched 5.2% of GDP , requires urgent steps to avoid its negative consequences on the economy.
The share of Indias exports at in world exports is still insignificant. It is only 1.3% share which
is far below than the share of its major competitors - China, Singapore, Vietnam. In the top 100
imports of the world at the four-digit HS level in 2011, India has only 6 items in the top 50; it has
only 5 items with a share of 5 per cent and above and 18 items with a share of 2 per cent and
above. In terms of number of markets also, 70 percent of our exports are made to majorly 14-15
countries which is a sign of highly concentrated exports from India. Unexpected economic
shocks at the domestic or international level affects the stability of Indias exports growth easy.
The current policy requires marking $500 billion dollar of exports by the end of 2014.
Thus, certain achievements pertaining to Indias export are not end in itself. It is to be progressed
in the light of the current challenges like huge CAD, global slowdown; weak position at the
international level, highly concentrated export products and markets. Last but not the least is to
achieve the laid down target of exports in the foreign trade policy.

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3.1 PROFILES OF ODISHA:


Its territory formed a part of the ancient Kalinga of Mahabharat fame. Ashok the Mauryan King
of Magadh, invaded Kalinga in 261 BC and this event has gone down in history as the Great
Kalinga war. Then the people of Kalinga offered a relentless & dauntless resistance, but they lost
at last. How desperate was the battle, how bitterly was it fought, and how terrible were the
results, are known from Ashoks own descriptions. This is what he wrote about the Kalinga war
in his thirteenth Rock Edict. The country of Kalinga was conquered when King Priyadarshan,
beloved of the Gods had been anointed eight years. One hundred and fifty thousand were there
from captured, one hundred thousand were there slain, and many times as many died. In 1936,
ultimately an independent state Odisha was constituted as a separate province by carving out
certain portions from the provinces of Bihar, Odisha and Madras. As centuries rolled by, Odisha
continued to invite heros, Scholars and prophets alike. In fact, Odisha has become a multi
dimensional, multi coloured, many splendoured, vibrant & boisterous modern state all set on its
journey in the present millenium to make its presence and voice felt in the nooks & crannies of
the world through the Universal Cult of brotherhood, its unique cultural heritage, luxuriant
forests & wild life, sprawling Chilika Lake, bountiful coastline, wide range of tribes & colourful
canvass of art & culture.
It Situated on the coast along the Bay of Bengal, Odisha stands for its ancient glory and modern
endeavor. Endowed with natures bounty, a 482 km stretch of coastline with virgin beaches,
serpentine rivers, mighty waterfalls, forest-clad blue hills of Eastern Ghats with rich wild life,
Odisha is dotted with exquisite temples, historic monuments as well as pieces of modern
engineering feat. The land, while retaining its pristine glory, also offers the visitors modern
amenities. Its lush green countryside and fertile plains, tiny hamlets fringed with palm, coconut
trees and mango groves offer the charm of rural beauty while the urban pockets, the four cities
in particular, with the splendor of modern technology provide the amenities necessary for a
comfortable stay. This wonderful land of fascinating beauty boasts of colourful festivals round
the year. Odisha is also the land of unique handicrafts and other excellent artifacts.

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The modern state of Odisha is located between 170-48 and 220-34 North latitude and 810-24 and
870-29 East longitude. The State is bounded by the bay in the east, West Bengal in the northeast, Bihar in the north, Madhya Pradesh in the west and Andhra Pradesh in the south. The
territory may be divided into four distinct geographical regions : the Eastern Plateau, the Central
River Basin, the Eastern Hill Region and the Coastal Belt. The entire territory lies in the tropical
zone as a result of which high temperature is recorded particularly during April-May. However,
the sea exercises a moderating influence over the climate of the coastal belt whereas the hill
tracts experience an extreme climate. The state is drained by six important rivers: the
Subarnarekha, the Budhabalanga, the Baitarani, the Brahmani, the Mahanadi and the Rusikulya.
The rich mineral belts lie in the western and north-western parts of the state. Covering an area of
155,707sq.km. Odisha has a population of about three crore out of which more than 22 percent
are tribal, with their concentration in Mayurbhanj, Keonjhar, Sundargarh and Koraput districts.
Oriya is the mother tongue of the people of Odisha and most of them understand Hindi as well.
People can sometimes speak Bengali, Telugu, Urdu and a bit of Gujarati in addition to the
various tribal dialects. English can be understood by the educated mass. Rice, dal, vegetables and
fish constitute the principal diet of the people. They also take chapattis, meat and sweets.
Different types of pithas (cakes made of rice flour, gur, coconut, ghee and other ingredients
depending on the variety ) and milk/cheese preparations are special Odishan delicacies.
Odisha, which is largely rural, the traditional values are still kept alive. In general the values
have no doubt weakened but they are not lost. Among die innocent Advisees dwelling in the
wooded hinterland and forested hill slopes, Indias earliest civilization is retained in its pristine
form. Not only in their secluded hamlets, bet also in the countless thousands of villages in the
country sides one can catch a glimpse of the dwindling horizon of humanity, through the
innocent and benign outlook of tile villagers. A sensitive person who happens to be a prisoner of
the modern society with its stress and strain will not, while in a typical village, fail to mark the
relationship of its common people with God, nature and their fellow men.
3.1.1 Economic Profile:
The anticipated growth rate of Odisha economy during 2014-15 has been estimated as 8.78
percent at 2004-05 prices in Market prices. The State economy is expected to recover strongly in
2014-15 after a sluggish growth rate of about 2.21 percent in 2013-14 that occurred due to the
53 | P a g e

adverse impact of the natural shocks and industrial recession during the year. The State
witnessed the falling share of agriculture sector to overall GSDP as well as fluctuating trend of
growth rates for last few years. The share of agriculture & animal husbandry sector to GSDP of
Odisha remained 15.1 percent, 13.1 percent and 12.3 percent in 2012-13, 2013-14 and 2014-15
respectively. Major factors like natural shocks of floods, droughts, severe cyclone etc and price
variations in agricultural products contributed significantly to the varying degrees of growth
rates, mostly negative growth rates in the last decade between 2004-05 and 2014-15. During the
last three years agriculture sector has witnessed a very fluctuating growth trend. The sector
recovered strongly with a higher growth rate of 12.3 percent in 2012-13. However this recovery
in the growth rate was short lived as the severe cyclone Phailin followed by heavy floods very
adversely impacted coastal Odisha during 2013-14 resulting in a negative agricultural growth
rate.
The Industry and Services sectors have emerged as main drivers of growth during the past
decade. In real terms at 2004-05 prices, Odisha economy exhibited an average annual growth
rate of 8.82 percent during the 10th Plan period against a target of 6.20 percent. The economy
grew in real terms at the rate of 7.05 percent during the 11th Plan. The standard of living in
Odisha has improved over the years with the rise in real per capita income. But the continuing
gap in real per capita income between India and Odisha is a matter of concern.
Odisha economy is diversifying at a faster rate and though the State economy still continues to
be adversely impacted by frequent natural shocks, it has acquired some resilience to such natural
shocks. This has happened because of transformation in the economy from agriculture based to
industries and service sectors driven. As can be seen from the time series data of State income
estimates, the share of Agriculture sector has steadily declined over the years and the share of
Industry and Services sectors have been increasing over the years. As per 2014-15 (advance
estimates), share of the Services sector is expected to be about 51.2 percent of the Gross State
Domestic Product (GSDP) followed by those of the Industry (33.4 percent) and the Agriculture
(15.4 percent) in real terms at 2004-05 prices. The growth patterns also exhibit similar trend at
All India level. The high growth rates recorded by the State in the 10th and 11th Five Year Plans
were mainly due to high growth registered by the Industry Sector and the Services Sector. The
performance of the Agricultural Sector continues to be highly volatile mainly due to adverse
54 | P a g e

impact of natural shocks such as cyclones, droughts and floods. The Services sector has been
growing in a comparatively stable manner.
The district-wise analysis of GSDP reveals that among the districts, Sundergarh has the highest
percentage share of States GSDP with 8.54 percent followed by Khorda 7.52 percent and
Deogarh contributed least share of 0.53 percent of GSDP in 2010-11. In 2010- 11, the real per
capita net district domestic product at 2004-05 prices was highest for Jharsuguda district and
lowest for Nabarangpur district. The workers participation ratio in Odisha at 41.8 percent was
slightly higher than 39.8 percent at the national level in 2011. The share of marginal workers in
the total workforce increased substantially from 33 percent in 2001 to 39 percent in 2011, while
the share of main workers declined from 67 percent in 2001 to 61 percent in 2011. The share of
total workers in the Agricultural sector, i.e., both cultivators and agricultural workers, declined
from 64.7 percent in 2001 to 61.8 percent in 2011. This indicates that, although the majority of
population in the State still depends on agriculture directly or indirectly, the State economy has
been diversifying and there is a shift moving away from the Agricultural sector to non-farm
sectors.
As per the NSS data, the rate of unemployment in the State has fallen lately - from the 61st round
(July 2004-June 2005) to the 68th round (July 2009-June 2010). This stands true for both rural
and urban areas and among casual workers and also those who have full time jobs. But the
States unemployment rate in rural area is marginally higher than the national rate of
unemployment, while it is lower than all India average in case of urban areas. The share of
employment in the public sector continues to be higher than that in the private sector, although
the latter has shown steady increase. It is, however, heartening to note that the share of women
employees in the organized sector has been steadily increasing and has stood at 16 percent in
2012.
3.1.1.1 Agriculture Sector:
The Agriculture sector includes agriculture, animal husbandry, fisheries and forestry subsectors.
Because of higher growth rate in the industries and services sector achieved during the past
decade or so the share of agriculture Sector in the States GSDP has been declining. The share of
this Sector in Odishas GSDP is around 15.4 percent as per the advance estimate in 2014-15. In
55 | P a g e

spite of this Agriculture sector continues to be vital for the State. This Sector provides
employment and sustenance, directly or indirectly, to more than 60 percent of the population.
However the sector suffers from frequent natural shocks like cyclones, droughts and flash floods
affecting the growth trend. Despite wide annual variations in its growth, the Agriculture sector
grew robustly in real terms at 2004-05 prices, at a rate of 12.30 percent during 2012-13.
Followed by a negative growth rate in 2013-14 mainly caused by cyclonic storm Phailin and
flash floods in the State in October 2013. However, as per the advance estimate, the agriculture
& animal husbandry sector expects to grow at 1.97 percent during 2014-15.
3.1.1.2 Industry Sector:
For the purpose of the survey, the Industry Sector consists of manufacturing, mining and
quarrying, electricity-gas-water supply and construction sub-sectors. The sector contributed
about 33.45 percent share of Odishas GSDP in real terms as per the estimates of 2014-15. In
spite of global economic slowdown, disruption and other problems in the mining and quarrying
sub-sector the advance estimate for the sub sector shows a growth rate of 2.30 percent in 201415. Most large-scale industries in Odisha are mineral-based. Presently in steel production,
Odisha has 10 percent of the total capacity of the nation, while it has 25 percent of total ironore
reserves in the country. Therefore, there is substantial scope for expansion in steel production in
the State. Accordingly, Odisha has been a favorite destination for big investments in this Sector
during the past years. A number of investment proposals of big business houses are in the
pipeline. When these investments fully materialise, the steel producing capacity of the State will
improve substantially and Odisha will grow at a much faster rate.
3.1.1.3 Service Sector:
This Sector comprises of sub-sectors such as banking and insurance, real estate etc, public
administration, trade, hotels and restaurants, transport, storage and communications and other
services. This Sector dominates the States economy with a share of more than 51 percent of
GSDP as per advance estimate for 2014-15. The Sector has been growing at higher rates
compared to other Sectors more or less in a stable manner. As per the advance estimate of the
growth rate for the Sector during 2014-15 is 9.2 percent. The advance estimates of 2014-15
suggest that the community, social and personal services sub-sector contributed 13.45 percent,
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the trade, hotels and restaurants sub-sector 13.09 percent, financial and insurance services subsector 13.64 percent the States GSDP in real terms at 2004-05 prices. The transport, storage and
communication sub-sector may contribute about 10.99 percent, Other services contributed about
10.08 percent to the GSDP.

3.2 EXPORT POLICY 2014


Government of Odisha was contemplating to bring out the Odisha Export Policy, 2014 aiming at
boosting exports from the State of Odisha both in traditional and non-traditional sectors and
compete favourably in the global market adopting the new technologies and undertaking the skill
upgradation and diversification etc. which will have a significant impact on the overall industrial
climate of our State. Apart from that, it also aims at increasing the income of entrepreneurs with
employment generation opportunities in industrial sector with an objective to achieve significant
growth above the present level of export of the State. The proposal was under active
consideration of State Government for some time past. After careful consideration of the
proposal, the State Cabinet in their 5th meeting held on the 8th September 2014 have been
pleased to approve the Odisha Export Policy, 2014.
3.2.1 Objectives:
In achieving this Mission, the focus will be on the objectives set out below:

To focus on existing exporting industries and to provide them with necessary support to
give further boost to exports from these industries.

To motivate Industries in Odisha exporting through Merchant Exporters in other State to


export directly.

To encourage Industries / Traders with products having good export potential to enter the
export field.

To provide a conducive environment for motivating new export oriented units to set-up
their base in Odisha.

To bring about technology and skill up gradation in the traditional export sectors like
Mineral based products, Marine products, Handicrafts, Handlooms, Agriculture and
Processed Food products to enhance value addition and quality competitiveness.

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3.2.2 Strategy:
In order to achieve these objectives, the following strategy will be adopted:

To create a strong networking with Export Promotion Councils, Commerce & Transport
Department, FIEO, ITPO and Product Sectoral Associations to give impetus to PublicPrivate Partnership.

To provide e-Governance support to exporters in Odisha

To establish a B2B exchange, which would facilitate even the small and tiny unit in the
State to take up online trading activity?

To create an inclusive strong and analytical database on exports and exporters in Odisha

To promote Public-Private initiative in developing competitive export infrastructure

To set-up an institutional mechanism in the State for promoting exports like State Level
Export Promotion Council, State Level Export Promotion Committee and District Level
Export Promotion Committee and specific clusters.

To strengthening and restructure the Export Wing of the Directorate of EPM, which shall
be the Nodal Agency for export promotion to plan and execute strategies to sustain
Odisha as a global hub for international trade.

To identify sector specific support measures required for acceleration of exports in


sectors in which the State has competitive advantages and to encourage them in
consultation with the concerned sectoral association.

3.2.3 Identification of Focus Product Groups:


Basing on the possibilities of export to overseas countries and potentialities of the State specific
product groups have been identified and grouped into six main categories
I. Agriculture and Forest Products
II. Handloom Product
III. Handicraft Product
IV. Marine Product

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V. Engineering and Allied Product


VI. Service Export (Computer Software, Tourism, Medical services, Education services,
Engineering Consultancy & Export Management service).
3.2.4 Product Promotion Group:
To provide for closer interaction with manufacturers and exporters and a stronger support system
for identified export sectors, Product Promotion Groups comprising of exporters, manufactures
and exports will be established. The groups will be as follows:
a.
b.
c.
d.
e.
f.
g.
h.
i.

Handicraft Product Promotion


Handloom and Textile Product Promotion
Engineering, Chemical and Allied Product Promotion
Agriculture, Forest Product, Food Processing and Value Addition activity Promotion
Marine Product Promotion
Mineral and Metallurgical Product Promotion
Pharmaceutical Product Promotion
Electronics and Software Product Promotion
Gems Jewellery Product Promotion

3.2.5 Exporters Card (Green Card) :


Exporters Card shall be issued to the exporters of Odisha having good track records for early
passage of export consignment at check gates of the Government on priority basis subject to
condition that the provisions of rules, regulations, instructions, etc. issued by the Government
then prevailing are not violated.
3.2.6 Infrastructure Development:
Sound physical infrastructure with easy availability of key utilities is a dream scenario for any
investor. The State is aware of the fact that at present, the investment in industry overshoots the
investment in infrastructure. While, this may offer faster economic growth in the short run, it
might ultimately prove to be unsustainable. Therefore, both industry and infrastructure should
keep pace with each other so that the balance of regional development is not affected. To hasten
the pace of infrastructure development, projects with smaller financial magnitude may be
identified and implemented with the help of private sector investment immediately. Development
of infrastructure is the top priority on the State agenda. At present, there is a State Level Export
Promotion Committee (SLEPC) constituted under the Chairmanship of Chief Secretary for
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export infrastructure development of the State under ASIDE Scheme of Government of India. As
of now, 13 SLPEC meetings have been organized and several projects under this scheme have
been completed and some of them are under ongoing stage. New projects under this scheme will
be considered by the SLEPC in the 14th forth coming SLEPC meeting. In this way, through gap
funding system under ASIDE Scheme / through PPP mode, new projects coming up in future for
export infrastructure in the State will help in boosting the export trade from the State. The
agencies like FIEO, FICCI, CII, etc. shall be requested to identify appropriate infrastructure
projects meant for export development.
Setting up of Export Park and Trade Centre:
Export parks will be set up for the various export products so that all the necessary infrastructure
facilities are available at one place and regular monitoring is possible. Such parks are proposed
to be set up in the first instance at Balasore, Cuttack, Berhampur and Sambalpur. Also State of
the Art Trade Centers equipped with all traderelated facilities for display of goods, conduct of
buyer-seller meets, etc. will be made available to desirous exporters. A Trade Centre is proposed
to be set up at the first instance in the DEPM and then will be extended to other important places
of the State.
Show Casing of MSME Product of the State:
MSME Products manufactured in the State should be displayed in the prominent places of the
country permanently to attract National/International buyers through State Govt. participation as
a result of which marketing our products in International market will reach a new high. At the
initial stage four prominent places of the country like Delhi, Mumbai, Kolkata & Chennai are
selected where already State Govt. infrastructure exists.
Establishment of WTO Cell:
The aim and objective of WTO cell is to disseminate WTO related matter to all stack holders of
International trade in order to keep them updated on the happenings across the globe. Besides,
necessary capacity building and expert support services could be provided by this cell. Hence, a
WTO cell shall be established in the DEP&M to provide necessary support services to the
exporter of Odisha.
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Establishment of Trade Information Centres:


Trade Information Centres/KIOSKS would be establish initially at six Industrial growth centre of
the State viz. Rourkela, Cuttack, Balasore, Berhampur, Angul, Balangir to provide first-hand
information to the exporters of this State.
Warehousing and Container Facilities:
ICD / Dry port facilities will be provided at different locations of the State so that there are no
difficulties in cargo storage, customs clearance and container availability for the exporters.
Paradip Port is one of the major ports of India and is the main outlet and inlet of the sea borne
trade not only of the State of Odisha but the entire eastern region as well. Paradip Port has
specialized in handling bulk-cargo and also handles containerized cargo. Paradip Port shall be
provided with Container facility and refer container facilities so that there will be no difficulty in
cargo storage, custom clearance and container availability.
Establishment of a NABL accredited/ISO certified Food Testing Laboratory:
Considering the tremendous export potential in Food Processing Sector, Ministry of Food
Processing Industries, Government of India has lunched scheme of setting up / up gradation of
Food Testing Laboratories in the country. In the 11th five-year Plan there is proposal to establish
74 Food Testing Laboratories in the country. A strong and effective Food Processing Sector
plays a significant role in diversification and commercialization of agriculture, improves value
addition of agricultural produce, generates employment, enhances income to farmers and creates
surplus for export of agro foods. Food Testing Laboratories are the only way to enhance safety
and quality of food produced by Regulatory Authorities, exporters, importers, processors,
farmers and consumers. The growth rate of Food Processing Industries has risen from 7% to
13.14% per annum in the last five years and it is expected to go up to 20% in the next five-years
enhancing the share in global market from 1.6% to 3%. So to provide quality support to the Food
Processing Industries to be set up in Food Park and Mega Food Park in the State and to certify
the food products as per relevant standards, a Food Testing Laboratory shall be set up in the State
at Testing Laboratory, Cuttack functioning under the Directorate of Export Promotion &
Marketing, Odisha. The Laboratory

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shall be accredited by National Accreditation Board for Testing & Calibration Laboratory
(NABL), Ministry of Science & Technology, Government of India who is the Apex Body in
India for Laboratory Accreditation and has understanding with more than 45 countries for mutual
acceptance of test report and ISO certified for acceptance of test report at national and
international level.
3.2.7 Export Promotion:
High Level Clearance Authority (HLCA) under the Chairmanship of Chief Minister to look into
various issues pertaining to export promotion for foreign direct investment. Odisha Investment
and Export Promotion Office (OIEPO) in the office of the Resident Commissioner, Government
of Odisha, New Delhi shall network with Embassies, Industries Associations, Chamber of
Commerce and Industries to promote Odisha as an attractive investment destination and to
facilitate investment related approval and clearances in respect of coming up Industrial projects
in the State liasioning with Government of India Ministries and other agencies concern.
3.2.8 Function of the DEPM:
The Directorate of Export Promotion & Marketing will co-ordinate with all Government
Departments and Export Promotion Councils to provide a favourable environment for the
exporter. The DEPM shall interact with the exporters in one hand and the EPCs, Exporters
Association, State and Central Government bodies on the other hand, so that the implementation
of State Export Policy can be ensured and the problems of the exporters sorted out in time and
redressed. The DEPM will organize buyers-sellers meet at regular intervals and arrange
participation of exporters in trade fairs and exhibitions both in the country and abroad. It will
also conduct project studies keeping in view the international market condition.

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4.1 ANALYSIS OF EXPORT PROMOTION IN ODISHA: A CASE STUDY


Table 4.1
EXPORT OF GOODS FROM ODISHA FROM 2010-11 TO 2014-15: A FIVE YEAR
STUDY

SL
NO
1

PRODUCTS CATAGORY

Engineering
allied

Metallurgical
or

Mineral

Agricultural & forest

Marine

Handloom

Handicraft

Textile

Pharmaceutical

10

Softwares

11

Gems & Jewelries

Chemical

(Rs in crores)
2010-2011 2011-2012 2012-2013 2013-2014 2014-2015
4807.96
100%
612.62

4806.68
-0.03%
196.21

100%
9836.84
100%
8.77
100%
541.47
100%
0.12
100%
0.71
100%
28.84
100%
01.45
100%
1254.24

-67.97%
9259.48
-5.87%
0.02
-99.77%
521.34
-3.72%
0.01
-91.67%
0.17
-76.06%
0.01
-99.97%
0.05
-96.55%
1414.78

13.15%
3150.76
-67.97%
0.05
-99.43%
821.06
51.64%
0.58
383.33%
0.20
-71.83%
20.01
-30.62%
0.02
-98.62%
2169.94

476.41%
3546.78
-63.94%
02.92
-66.70%
1699.41
213.85%
0.64
433.33%
0.85
19.72%
10.00
-65.33%
0.93
-35.86%
2300.46

452.30%
634.00
-93.55%
04.39
-49.95%
2069.00
282.11%
0.84
700%
0.67
-12.99%
40.29
39.70%
02.52
73.79%
2567.17

100%

12.80%

73.01%

83.41%

104.68%

-----------

----------

-----------

------------

100%

100%

100%

100%
12

Service providers

5.84
100%
17098.88

TOTAL

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5382.60
11.95%
693.21

7682.25
59.78%
3531.21

10836.98
125.40%
3383.49

0.54
0.54%

8.59

7.56

10.00

12.01

47.09%

29.45%

71.23%

105.65%

16207.34

12245.99

18785.45

19551.90

100%

-5.21%

-28.38%

9.86%

14.35%

Source: Directorate of Export Promotion and Marketing, Odisha


Interpretation
1. From the above data it is found out that the export performance of Odisha has been
declined to 5% in 2011-12, in 2012-13 further export declined to 28.38% which was a
considerable fall in export because of crises in foreign market and that time Indian GDP
has also declined as we are living in a global village. In 2013-14, the export performance
had risen suddenly from negative to positive as 9.86%, it is showing that the export of
Odisha has also increased. In 2014-2015 financial year, the export of India has risen to
14.35% and it contributes for the development of the country.
2. Metallurgical products like: Aluminum Metal, H.C. Ferro Chrome, H.C. Manganese
,Pig Iron, Ferro-Chrome, Sponge iron. The export in these products has been failed to
0.03% in 2011-12 and in 2012-13 the export has positive growth to 11.95%. In 2013-14
the export in these sector has been risen to 59.78% means export growth of Odisha in this
sector is very positive. Further in 2014-15, these export has been risen to 125.40% which
is more than double export than the year 2010-11. Kindly speaking these materials deal
with raw materials.
3. Engineering and chemical products has a considerable impact in the total export of
Odisha. These products are: C.I. Casting, Paper (writing and printing, Refractory
Materials, Mechineries, Transformers, ACSR/AAAC Conductors, PVC Casing Pipes and
Fittings, Calcined Alumina, LPG cylinder etc. The export in this sector has a negative
growth in the year 2011-12 as it was 67.97% as in this year in all the sectors exports are
relatively fall. In 2012-13 the export of these products has been increased to 13.15%. The
export has also risen to 476.41% in the year 2013-14, it shows our engineering products
have a huge market in foreign market. In 2014-15 the export in this sector has further
grows to 452.30% which was relatively less than the current year but a huge figure as it
was nearly 5 times of export in 2010-11.
4. In mineral sector the export of Odisha is showing a decreasing trend as govt. has
restricted for the export in this sector. In 2011-12, the exports failed by 5.67%, In 201264 | P a g e

13 it further failed by 67.97% , in 2013-14 also it had a negative trend of 63.94% ad last
but not the least in 2014-15, the export is also failed by 93.55%.

5. Agricultural and Food products are the indigenous products of Odisha. It has a huge
market in foreign market. Export in these sectors shows that we are self-sufficient in food
products. In 2010-11 highest export was there in these sectors and from the year onwards
the export is decreasing in this sector. In 2011-12 it was suddenly decreased to negative
as 99.77%. In 2012-13 export was nearly less as 99.43% and in 2013-14 exports are
increasing as it is less 66.70% and in 2014-15 the export in this sector has increased to
49.95% but less or negative in comparison to the base year 2010-2011.
6. IN marine products Odisha has a huge market in the world. In 2011-12 the export of
marine sector has been reduced 3.72%, In 2012-13 the export was increased to 51.64% ,
then in 2013-14 the export has risen 213.85% which was more than double. At last in
2014-15 the export in these products has risen to 282.11% of the previous year 2010-11.
7. In handloom sector the export in absolute figures are less. But it has a growing trend as
the rates of exports are increasing from 2012. In the year 2011-12, exports had been
decreased to 91.67% due to crises in the foreign market. But after that the percentage of
exports are growing as in 2012-13 it was 383.33%, in 2013-14 it was 433.33% and finally
in 2014-15 the export in this sector was 700% export of the base year 2014-15. It shows
that Odisha market for handloom is growing the foreign market.
8.

In handicrafts product Odisha has a flactuative trend. In 2011-12, the export was failed
by 76.06 as negative means export failed. In 2012-13, the export was just increased than
previous year but in comparison to base year it was far less as 71.83%. But in 2013-14, it
was raised to a positive number as the export has increased by 19.72% whereas in201415 further the export has been reduced to 12.99% of the base year. So it has a flactuative
trend.

9. In textile sector the export was also reducing. In the year of crises in foreign market the
export of Odisha failed by 99.97%. in 2012-13 the export was just increased than
previous year but was negative in comparison to base year 2010-11. In 2013-14 the

65 | P a g e

export was also failed by 65.33% of the base year. But in the year of 2014-15, It is found
that the export of this product line has been increased to 39.70% of the base year.
10. In pharmaceutical sector our potential products are Homeopathic medicines and surgical
dressings was highest in the base year as in absolute figure but after that export was not
eye catching. In 2011-12, the export of these products decreased by 96.55%, in 2012-13
further decreased to 98.62%. But after 2013 it has an increasing trend as it was decreased
but in comparison to previous year 35.86%. in 2014-15, the export was also increased to
73.99%.
11. In software products Odisha have an increasing trend as the export is increasing year by
year. In 2011-12, it was increased by 12.80%, In 2012-13 it was increased by 73.80%,
In 2013-14 it was increased by 83.41% and also in 2014-15 it was risen by 104.68%.
12. In Gems and jewelries , Odisha is importing from other state as well as from other
countries . So till 2014, Odisha has no export in these products but in the last year
0.54lacs has been earned by exporting these products.

13. Lastly in Service sector the export of Odisha is ever increasing and it shows an increasing
trend. In 2011-12 the export had been increased by 47.09%, in next financial year 201213 the export had decreased than the previous year but had increased than the base year
by 29.45%, In 2013-14 the export has been increased to 71.23% and also in 2014-15 to
105.65%.
Table: 4.2
COMPARATIVE EXPORT DATA OF INDIA VIA-A-VIS ODISHA FOR THE LAST 5 YEARS

YEAR

INDIA

ODISHA

2010-2011

1148169.56

17098.88

2011-2012

1465959.39

16207.34

1.11

2012-2013

1634672.95

12245.99

0.75

66 | P a g e

% OF ODISHA TO
INDIA
1.49

2013-2014

1894181.95

18785.45

0.99

2014-2015

1756233.47

19551.90

1.11

Source: Directorate of Export Promotion and Marketing, Odisha


Interpretation:
As the above table shows data relating % of export of Odisha to the total export of India.
1. In 2010-11, the total export percentage of Odisha to was 1.49%
2. In 2011-12, the total export p percentage of Odisha to was reduced to 1.11% in the year
when there was a crises in the foreign market and also the export of India had been
decreased.
3. In 2012-2013, the total export percentage of Odisha was 0.75% where the Indian export
had risen but export of Odisha has reduced.
4. In 2013-14, the total export percentage of Odisha to India was 0.99.
5. In 2014-15, the total export percentage of Odisha to India is 1.11 where the Indian export
has decreased but the export of Odisha has increased.
Table: 4.3
LIST OF EXPORT HOUSE STATUS HOLDERS EXPORTERS OF ODISHA

SL NO NAME OF EXPTORS
1
Orissa Stevedores Ltd.

CATEGORY
Star Export House

Shiva Exports

Export House

VISA Steel Ltd.

Star Export House

Magnum Seafoods (p) Ltd.

Star Export House

Gupta Power Industries Ltd.

Star Export House

IMFA Ltd.

Trading House

Emerald Minerals (P) Ltd.

Export House

67 | P a g e

VALID UP TO
01.04.2014
31.03.2019
01.042008
31.03.2013
01.04.2009
31.03.2014
01.04.2009
31.03.2014
01.04.2009
31.03.2014
01.04.2009
31.03.2014

to
to
to
to
to
to

8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29

Sabrifoods Products

01.04.2009
31.03.2014
Alfa Transformer Ltd.
Export House
01.04.2009
31.03.2014
Bonai Indl. Co.Ltd.
Star Export House
01.04.2009
31.03.2014
Liberty Marine Syndicate (P) ltd.
Export House
01.04.2009
31.03.2014
NALCO Ltd.
Premier
Trading 01.04.2009
House
31.03.2014
Falcon Marine Exporters Ltd.
Trading House
01.04.2009
31.03.2014
Ore Cast (INDIA)
Star Export House
01.04.2009
31.03.2014
OCL India Ltd.
Star Export House
01.04.2009
31.03.2014
The Liberty Marine Syndicate (P) Ltd.
Star Export House
01.04.2010
31.03.2015
Sushant Minerals (P) Ltd.
Export House
01.04.2010
31.03.2015
Steer Overseas (P) Ltd.
Star Export House
01.04.2010
31.03.2014
Ram Assorted cold storage Ltd., BBSR Star Export House
01.04.2011
31.03.2016
Teekay Marines(P)Ltd., bbsr
Star Export House
01.04.2011
31.03.2016
May Fair hotel and ResortLtd., bbsr
Export House
01.04.2012
31.03.2017
Ferro Alloys Corp. Ltd., Bhadrak
Trading House
01.04.2012
31.03.2017
Jaikishandass Mall Jute (P) Ltd.
Star Export House
01.04.2012
31.03.2017
Magnum Estate Ltd., BBSR
Export House
01.04.2012
31.03.2017
Maa Samaleswari Iron & Steel co. bbsr Star Export House
01.04.2012
31.03.2017
Ramesh Kumar Behura Keonjhar
Star Export House
01.04.2012
31.03.2017
TRL
Krosoki
Refactories
Ltd., Star Export House
01.04.2012
Jharsuguda
31.03.2017
B.L. Goyal Balangir
Export House
01.04.2012
31.03.2017
Paradeep
Phosphates
Ltd., Star Export House
01.04.2014

68 | P a g e

Export House

to
to
to
to
to
to
to
to
to
to
to
to
to
to
to
to
to
to
to
to
to
to

Bhubaneswar
Source: Directorate of Export Promotion and Marketing, Odisha

31.03.2018

Interpretation:
The above table shows the data related about exporters and their status of export house. Out of
the 29 major exporters, few of them are self-sufficient and performing well. They are operating
business in the different products and services. Most of them are dealing with minerals item and
handicraft and handloom products of the state. Few of them are dealing with industrial product
and also few are in service sectors. Inspite of huge agricultural production of the state, a few
exporters are operating in this line, which is pathetic one.
TABLE: 4.4
ITEM WISE EXPORTS O F GOODS FROM ODISHA DURING THE YEAR 2014 TO 2015
1. Agricultural & food Products
SL
Items Exported
NO
1
Spices
2
Rice
3
Amla Powder
4
Tamarind
Concentrato

Countries to which Exported

Value in (lakhs)

Nepal, Singapore, USA


Benin, Niger
USA
USA, UK, UAE, Singapore

20.83
303.98
02.00
103.01

total

438.82

2. Engineering, Chemical and Allied Products


SL NO Items Exported
Countries to which Exported
Value in (lakhs)
1
C.I. Casting
UK, Australia, USA, Cyprus, Middle
East, Newzeland, Behrain, WestIndies, Dubai, Germany, Belgium,
etc
2
Paper (writing and Culombia, Doha, EGYPt, Ghana,
printing)
Greece, Iraq, Iran, Jordan, Keniya,
Maldives,
Mauritius,
Nigeria,
Oman, Quatar, Saudi Arabia, Nepal,
etc
3
Refractory
Australia,
Bangladesh,Belgium,
Materials
Chille, Brazil, Bulgeria, China, Iran,
Czech,
Republic,
Germany,
69 | P a g e

Phillipines, Roania, Russia, Saudi


Arabia, South Africa, Singapore,
Spain, Sweden, Thailand, turkey,
UAE,UK, Jambia, Yamen, Nigeria,
Uganda, Japan, Baharaim, Sudan,
Netherland, Peru, Ghana, New
Colombia,
Egypt,
Malaysia,
Indonesia, Taiwan, France.
Mechineries
UK, Keniya, UAE, Togo, Tanjania.
Transformers
Nepal
ACSR/AAAC
USA, Zambia, Rwanda, Afganistan,
Conductors
Tanzania, Kajkistan.
PVC Casing Pipes Sudan AND Democratic Republic of
and Fittings
CONGO
Calcined Alumina
Bahrain, China, Egypt, Itan, UAE.

LPG cylinder

4
5
6
7

3. Electrical Products
SL NO
1
Softwares

4. Handloom Products
SL NO Items Exported
1
Handlooms

5. Handicraft Products
SL NO Items Exported
1
Brass
stone
handicrafts

70 | P a g e

BHUTAN
total

338348.9

Countries to which Exported


Value in (lakhs)
UK, USA, Germany, e
256716.53
Europe, Australia, Canada, Spain.
China, Middle East, South Africa,
Singapore, Denmark, Philippines,
etc.
total
256716.53

Countries to which Exported


Value in (lakhs)
USA, UK, Germany, Italy, Brazil, 84.09
Czech,
Republic,
Australia,
Thailand, Japan Canada, France,
Indonesia
total
84.09

Countries to which Exported


Value in (lakhs)
, UK, USA, Hong Kong, Canada, New 67.44
Zealand, Korea, UAE
total

6. Marine Products
SL NO Items Exported
1
Frozen shrimps

Marine Products

7. Metallurgical Products
SL NO Items Exported
1
Aluminum Metal

H.C. Ferro Chrome

H.C. manganese

Pig Iron

Ferro-Chrome

Sponge Iron

8. Mineral Products
SL NO Items Exported
1
Chrome
71 | P a g e

Countries to which Exported


Value in (lakhs)
Canada, Belgium, Vietnam, japan, 119679.00
USA, UAE, Mexico, Dominican,
Republic Netherland, UK, France,
China, Mauritius, Re-Union.
USA, japan, Mexico, UAE, Canada, 87221.00
Vietnam, Spain, Belgium, France,
Netherland, Hong Kong, Thailand.
total
206900.00

Countries to which Exported


Value in (lakhs)
Mexico, Taiwan, Korea, China, 520169.96
Switzerland, Vietnam, Colombia,
Egypt, Georgia, Iran, Quarter
Bangladesh, Malaysia, Singapore,
Thailand,
Bahrain,
Indonesia,
Turkey, Japan, Brazil, Bulgaria,
Dominican Republic, Equader,
Israel, Monteregoa, South Africa,
Taiwan,
Alberia,
Netherland,
Romania, UAE
South Korea, China, Japan, Mexico, 463708.99
Poland, Thailand, Vietnam
Korea, UK, Turkey, Thailand, Japan,
6105.92
Taiwan
Malaysia, Taiwan, Thailand, South
64124.46
Korea
China, Japan, Korea, Thailand,
11344.42
South Korea
Kuwait, Nepal
18244.25
total
1083698.00

Countries to which Exported


Value in (lakhs)
China, Japan, Spain, South Korea, 37706.60

2
3
4

Concentrate
Iron Ore Fines
Iron ore
Limonite

Garnet

Zircon

Rutile

Thailand
China
China
Austria, China,
Singapore
Austria, China,
Singapore
Austria, China,
Singapore
Austria, China,
Singapore
total

UAE,

Malaysia,

549.39
12792.18
10863.13

UAE,

Malaysia,

509.84

UAE,

Malaysia,

930.98

UAE,

Malaysia,

47.88
63400.00

9. Pharmaceutical Products
SL NO
1
2

Items Exported
Homeopathic
Medicines
Surgical Dressings

Countries to which Exported


Nepal

Value in (lakhs)
4.23

Nepal, Malaysia, Bangladesh, UK, 248.01


Bhutan
total
252.24

10. Textile Products


SL NO Items Exported
Countries to which Exported
Value in (lakhs)
1
Jute Twine, Yam, Nepal, Malaysia, Bangladesh, UK, 4029.00
Sac Bag
Bhutan
total
4029.00
11. Jems and Jewelleries
SL NO Items Exported
Countries to which Exported
1
Gems,
Stones, Srilanka, China, Australia, Libya,
Jewelleries,
Italy, UAE
Handicrafts
total
12. Service Providers
SL NO Items Exported
Countries to which Exported
1
Hotel,
Lodgings, All foreign Countries
Foodings
total
Source: Directorate of Export Promotion and Marketing, Odisha

72 | P a g e

Value in (lakhs)
54.32

54.32
Value in (lakhs)
1201.05
1201.05

Interpretation:
The above are the different products which are exported to different countries of Odisha under
the supervision of certain authorities. The specified items which are exported to different
counties follow certain rules as known as Export formalities. The above data reveals that the item
wise export of Odisha to other foreign countries. Out of which minerals, chemicals and
metallurgical products stands first in quantity of exports. But, in case of agricultural product,
handloom, and textiles are not in so much quantity as one desire.
Table 4.5
Total Fish Export of Odisha to Other States And Countries

Source: Directorate of Fisheries, Govt. of Odisha

73 | P a g e

Interpretation:
Odisha is the land of river and sea. So we have abundant marine resources in our hand. The state
is one of the major exporters of marine product in the country. As the above data shows that
there is fall and rise of exports of marine product in between 1999-2000 to 2013-14. In the year
2008-09, marine product export has touched a milestone and afterward, it tends to fall because of
negligence of government to this sector.
Table:4.6
Marine Products Exports Of Odisha

Source: Source: Directorate of Fisheries, Govt. of Odisha


Interpretation:
The above table shows the data regarding quantity of exports of marine products of state. The
trend and progress of exports becomes upward in relation to 2004-05. Both the quantity and
money flows in marine exports rises every year as it is one of the largest sources of export of
Odisha.

74 | P a g e

COMPARATIVE ANALYSIS OF GROWTH RATE OF EXPORTS WITH


GROWTH RATE OF GSDP OF ODISHA:
Table 4.7:
Comparison of GSDP and Exports Growth rate of Odisha
Year
Growth rate of Exports
Growth rate of SGDP
2012-13
-24.44%
3.52%
2013-14
15.90%
4.72%
2014-15
20.60%
6.20%
Source: Economic Survey Report 2014-15 Base Year: 2011-12

Interpretation:
As the above table shows the data related growth rate of exports and SGDP of Odisha. It clearly
indicates that export is not sole factors to responsible for growth of SGDP. Although growth rate
of SGDP influences the growth rate of exports. In the year 20112-13, the growth rate of exports
goes down, in spite of positive growth of SGDP, afterwards there is a positive relation between
two with increased rate growth. So we can say GSDP may little bit affect through export growth
of states, which is clearly visible from the above data.

75 | P a g e

5.1 MAJOR FINDINGS:


Some of the findings that I found from this study are:

1. Odisha is a state full of natural resources and self-reliant in in several areas. But the
contribution towards export is very less. As the contribution of export of Odisha to India
is of an average 1%. It is relatively very less in comparison to other states.
2. There is a huge needs for reform in export sector in India as well as Odisha. From this
study, it found that, our export industry is still in back foot in 21st century. So that urgent
need of reformation in policy formulation as well as policy implementation.
3. As the study shows, there is hidden potential growth of export of some traditional and
handicrafts product in the state. This sector gives boost to export in many ways and also
improve socio-economic condition of the people.
4. Economic development and export growth have direct relationship. As the study reveals
that, the state economy has developed as the growth of export. Because some part of
revenue comes from this sector. So that economic development is possible, only when
one country or sate is self-sufficient in export and earn foreign exchange .
5. The exports are increasing is specifically in metallurgical, engineering and chemical,
handlooms, marine and seafood, softwares, service providers products. Most of the
products are indigenous products.
6. Particularly in seafood opr marine products like fish, prawn, dry fish etc. has a huge
demand as the export contribution is increasing day by day as I found from the above
analysis, the exports are in increasing trend.
7. In Odisha there is the nee4d for developments in agriculture, infrastructure, and industry
in other areas also. As the agricultural and forest products, the exports are decreasing day
by day.
8. Export has influence on the GSDP, but in Odisha point of view it is very less as I found
from the above analysis.
9. Odisha is a underdeveloped state, but it provides nearly 1% of total export of India. So it
is a good thing for all ODIANS. With this our people will be motivated towards exports.
10. Most of the people are not getting information relating to export and it compliances. So
the govt. is responsible for this. We have number of export promotion incentives, but
these are not reaching with the people.
11. Before 2010, the export in marine products are double than the import of marine
products. But after this our export is more than 5 times of import of marine exports.
12. As derived from above table marine products give a better performance towards the
whole export of goods and services.
13. Odisha is a full of natural mineral resources but the export of natural raw materials,
finished goods are very less.
76 | P a g e

14. Now a days the service sector provides highest contribution towards GDP. But the in this
sector export is less so eye should be remain here.
15. In India we have nearly 400 to 500 Special Economic Zones(SEZ), Export Oriented Units
(EOU) and in Odisha we have 40-50 but the performance is very less.
16. There was a time when Odisha was pioneer in textile products for hand made designs,
even now in different places we have and the export was very high in this sector in
relation to india. But now the export in this sector is becoming very less as I find from the
above diagram.
17. Right from now the export is expected to grow in next years because the government is
taking a number of schemes and steps in this regard.
18. The research found that from the export policy 2014 that monitoring band governing
system of export is not working properly.
19. There is a more scope for for IT and software products in Odisha as IN Odisha we have
two smart city in Bhubaneswar and Rourkela and the number is going to increase in near
future.
20. The industrial sector has a wide scope in Odisha because in Odisha there is very less
number of industries. I think this this is an opportunity for Industrialists.
The above are the major findings of my study what I observed from my research. These
are to be taken consideration while taking decision regarding exports of Odisha.

5.2 RECOMMENDATIONS AND SUGGESTIONS:


The Study has found some recommendation from Director of EPM and Officers from FIEO are
as follows:

Odisha has a huge demand in foreign market but we people are not able to fulfill the
demands of foreign marketers or aspirants. Some of the reasons are:

Odisha have no cluster network for meeting the needs of foreign people. For example in
Korea and South Africa, there have huge demand for small murtis of Ganesh, hanuman,
and other gods. Whereas we are not able to provide that product to them. If that can be
provided, will help in increasing foreign currency.

In Odisha we dont have an export hub where someone can easily get all the information
regarding exports. The people who want to make export, they are facing problems in
getting detailed information. As export hub is a place where all the information regarding
export will be available, such informations are :

77 | P a g e

a. Information relating to exporters as export houses will be there.


b. Information relating to different export agencies
c. Information relating to export insurance
d. Information relating to successful and dynamic exporters as a means for motivation for
new entrants.
e. All the benefits provided by govt. for promoting export activities as governmental offices
will be there.
f. Easy access to information for research to know the determinants which problems in
increasing exports.
g. Banking facilities will be there as bank branches will be there.
h. Information relating to way of transfer means by air, by water, and by sea: all the
information will be available.
i. Besides the above other services which are provided by govt. will be available in export
hub.

In Odisha export potential players are not available. We have a huge demand in foreign
market but these demands are not meet by our potential players. We have the full of
natural resources, natural products but we cannot provide those facilities to outsiders

In Odisha, specifically indigenous products, and materials have a huge market but not the
technological products or machinery products.

Odisha have no Research hub for export of different products. As the reason for which
export is not increasing can be found out from that research hub. Not only the reason but
also the different goods how will be exported, we will able to found out. Provided, if
export hub is there some of the functions of Research hub for exports will be maintained
by them.

Our products are not directly transferred from Odisha to Other Countries. But through
other air ports, ports of other parts of India which costs more in way of loading and
downloading wastes, normal losses, creates high cost etc.

In Odisha , we have the political stability but a number of good projects are not
undertaken by government due to political disturbances. As industrial development is
taken care of so that latest machinery, technology are not available in Odisha which were
being imported from other countries.

78 | P a g e

Last, but not the least, it is the mind-set of the people. Our people always think or try to
be a Job seeker rather than a Job provider. If they want to be a job provider, they will got
the ways to be an entrepreneur and works for the development of indigenous exporters.

So, in the above what reasons are given, that is provided by Director of EPM and Officers of
FIEO. I also agree with the above reasons for which the export of Odisha is in behind. But in
recent years, these reasons have been submitted with government. As an Optimistic point, I think
the developments will be taken and Odisha will give a big supporting hand for the development
of the Country.
I have made a research on the Export performance of Odisha. I found that the export
performance is increasing whereas the contribution towards Indias export is very less. So as a
student of commerce, I think these things should be undertaken by the govt., people, to boost the
export so that the export of the country will increase, and will have a better impact on our
country. At last but not the least India will be a developed country.

5.3 SCOPE FOR FUTURE STUDY:


It is evident from the preceding discussion that India has followed a development model unlike
that of the East Asian Economies. While the services sector has registered remarkable growth
and contributed significantly to Indias GDP, the manufacturing sector has grown at a
comparatively slower pace. The overall performance of the Indian manufacturing sector has
widespread implications for various aspects of the economy; employment, being one of the chief
areas of impact. Since this sector generates large scale employment for low and medium skilled
workers, it is imperative to develop features which will create a conducive environment for
industries to grow further. The paper identifies the various inadequacies which prevail within the
sector. In particular, the presence of the unorganized component within industries reduces the
benefits that can be derived from economies of scale. Such constraints cumulatively prevent the
manufacturing sector from achieving its potential.

79 | P a g e

5.4 CONCLUSION:
You

never

change

things

by

fighting

the

existing

reality.

To change something, build a new model that makes the existing model
obsolete.
R. Buckminster Fuller
Odisha is a state of natural and mineral resources; it has good climate conditions better
educational facilities and best opportunity for investment. Odisha has the rich tradition of
handcrafts and handlooms. One state can develop, if it can develop its export and earn foreign
exchange for the economy. The needs of export in backward state like Odisha have great
importance, because of deficit financing, shortage revenue, and abundant opportunities for
investments. There is both pros and cons of growth of export in Odisha. As compared to cons,
we have a many cons for export for our states. If we consider the potential growth of export,
there is huge potential, because of still our export sector is still under developed and untapped.
Another major facility for Odisha is its longest costal line, which enhances for good system of
trading through setting of number of ports. As the research says the export is very less, so not
only the government should take steps but also we people should join hand with government for
the development of export along with Odisha. In various sectors Odisha lacks behind in the
country as compared to other states so its the right time for take action and reach at the top.
O -----------------OPPORTUNITY
D----------------DEVELOPMENT
I----------------------INITIATIVE
S-------------------SUSTAINABLE
H---------------------HARMONISE
A-----------------ACHIEVEMENT
From the above it is understood that Odisha stands for ABUDANT OPPORTUNITY FOR
DEVELOPMENT

OF

INITIATIVE

ACHIEVEMENTS OF AT A LARGE.

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IN

SUSTAINABLE

AND

HARMONISE

ANNEXURE-1
BIBLIOGRAPHY
Beltzr, C., & Zetterqvist, M., 2008. An Evaluation of Swedish Export Promotion. Master's
Thesis. Stockholm School of Economics - Institute of International Economics. Available online
at arc.hhs.se/download.aspx?MediumId=544 [Accessed June 25, 2012].
Borooah, V.K., 2003. Market Failure An Economic Analysis of its Causes and Consequences.
Ulster:
Ulster
University
Press.Available
online
at
http://www.borooah.com/Teaching/Microeconomics/Market_%20Failure.pdf [Accessed June 25,
2012]
Chertow, M.R., 2000. Accelerating Commercialization of Environmental Technology in the
United States: Theory and Case Studies. Yale University.
uek, L., Kleme, J.J., Kravanja, Z., 2012. A Review of Footprint analysis tools for monitoring
impacts on sustainability. Journal of Cleaner Production 34, 9-20.
Del Ro Gonzlez, P., 2009. The empirical analysis of the determinants of technological change:
A research agenda. Journal of ecological economics 68, 861-878.
European Commission. 2007. Supporting the internationalisation of SMEs - Final report of the
expert
group.
Available
online
at
ec.europa.eu/enterprise/newsroom/cf/_getdocument.cfm?doc_id=3433 [Accessed June 18, 2012.
REPORTS, JOURNALS AND MAGAZINES
Odisha Economic Survey Report 2015-15
Exporter Directory of Odisha 2016
Economics and Political Weekly
Indian export policy
The frontline
The yojana
The kurukhestra
NEWS PAPERS
The Hindu, The new Indian Express, The Economics Times, The Samaja

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