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  • The Bank offers a wide range of lending and service programmes to assist Indian companies at all stages of the business cycle. Through import of technology, capital, goods and raw materials, the Bank facilitates the upgradation of technology and capabilities of Indian companies to enable them to enhance their competitiveness. The broad array of support programmes offered by the Bank for product development, production marketing, as also preshipment and postshipment ,enables Indian companies to add value resulting in exports of products, capital goods, services. The Bank has also been instrumental in promoting ventures overseas in the fields of manufacturing, assembly, marketing and trading.

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  • Implications of Foreign Trade Policy and Facilitation of Foreign Trade A Presentation S.R.Rao Chief General Manager Export-Import Bank of India
  • Where Does India Stand Globally?
    • India’s share in global merchandise exports: 0.8% (2003)
  • India’s Export Performance Source: DGCIS, MOC&I
  • India’s Import Performance Source: DGCIS, MOC&I
  • Trade Policies in India
    • Exim Policies
      • Streamlined trade procedures
      • Liberalised import regime
      • Thrust on export orientation
    • Medium Term Export Strategy, 2002
      • 1% share in global exports by 2007
    • Foreign Trade Policy 2004-2009
      • To double India’s share in global merchandise trade by 2009
  • Role of Institutions
    • Institutions dedicated for promoting foreign trade have played an important role towards enhancing the process of internationalisation of Indian companies, viz.
      • Export-Import Bank of India,
      • Export Credit Guarantee Corporation,
      • Indian Institute of Foreign Trade
  • Exim Bank
    • Set up by an act of parliament in September, 1981
    • Wholly owned by Government of India
    • Commenced operations in march, 1982
    • Established “for providing financial assistance to exporters and importers, and for functioning as the principal financial institution for coordinating the working of institutions engaged in financing export and import of goods and services with a view to promoting the country’s international trade…”
  • Foreign Trade Policy 2004-09
      • Quantum Jump in Merchandise Exports Required:
      • Enhance exports of major export
      • commodities
      • Identify potential export commodities
      • Diversify export destinations
  • Foreign Trade Policy 2004-09
      • Exim Bank Study “Strategy for Quantum Jump in Exports: Focus on Africa, Latin America and China”
      • India could aim to achieve:
        • US$ 18 billion in Africa’s Imports by 2007 from US$ 3.8 bn in 2003-04
        • US$ 4 bn in China’s imports by 2007 (in 64 identified groups) from US$ 0.86 bn in 2000
        • US$ 1.8 bn in LAC’s imports by 2007 (in 100 identified groups) from US$ 0.6 bn in 2000
      • Share in India’s Exports in 2003-04: Africa (6%); Latin America (1.8%); China (4.7)
  • Lines of Credit
    • Overseas Governments
    • Parastatal Organisations/ Govt. Agencies
    • Commercial Banks
    • Regional Financial Institutions
    • Particularly relevant for SMEs
    • Eligible items – all items permissible under Exim Policy
      • Engineering Goods
      • Consumer Durables
      • Commodities
  • AFRICA ASIA EUROPE ALGERIA PTA BANK covering BANGLADESH GHANA BURUNDI INDONESIA KAZAKHSTAN KENYA COMOROS IRAN , IRAQ BULGARIA MALAWI DJIBOUTI SRI LANKA RUSSIA MAURITIUS ERITREA, EGYPT KOREA ROMANIA NAMIBIA ETHIOPIA MALAYSIA HUNGARY SEYCHELLES KENYA THAILAND POLAND SOUTH AFRICA MALAWI VIETNAM SUDAN MAURITIUS PHILIPPINES TANZANIA RWANDA TUNISIA SOMALIA UGANDA SUDAN LATIN AMERICA & CARIB. ZAMBIA TANZANIA UGANDA BRAZIL MEXICO COLOMBIA BOAD covering ZAMBIA JAMAICA VENEZUELA BENIN ZIMBABWE BURKINA FASO CAF covering BCIE covering COTE D’IVOIRE BOLIVIA COSTA RICA MALI EADB covering COLOMBIA EL SALVADOR NIGER KENYA ECUADOR GUATEMALA SENEGAL TANZANIA PERU HONDURAS TOGO UGANDA VENEZUELA NICARAGUA LOCs Extended by Exim Bank
  • Foreign Trade Policy 2004-09
      • Simplifying procedures and bringing down transaction costs
      • Transaction costs are incurred at the pre and post-production stages, and arise out from several procedural complexities associated with administrative processes, availability of finance and transportation problems.
      • For enhancing the growth of exports it is important to reduce the transaction costs involved.
      • Exim Bank Study on Transaction Costs of Indian Exports
  • Foreign Trade Policy 2004-09 Findings of Exim Bank’s Study Sector No. of Firms Transaction costs as % of export revenue (2003 Survey) Transaction costs as % of export revenue (1998 Survey)   Textile/Garments 23 3-10 15 Engineering goods 18 < 5 10 Pharmaceuticals 9  8 10 Chemicals 7 < 5 14 Computer software 9 1-5 10 Agro-Industries 2 1-2 7-8.5 Electronic & Electrical machinery 3 5 - Plastic components 2 5-10 - Paper Industry 2 5-7 - Others 7 1-2  
  • Foreign Trade Policy 2004-09
      • Transaction Costs: International Experience
      • Simplified and less stringent bureaucratic procedures like single window clearance and business friendly approach
      • Better technology due to higher levels of foreign investment, faster loading/unloading methods
      • Flexible labour laws
      • Cheap availability of power and raw materials,
      • Freight incentives by the Government,
      • Lower ocean freight rates due to greater availability of vessels
  • Foreign Trade Policy 2004-09
      • Special package for agriculture
      • Duty free imports of capital goods
        • Will lower production cost and hence improve profitability
      • Exports of medicinal plants & herbal products facilitated
        • Global imports of medicinal plants: US$ 1 bn (2001)
        • India second largest exporter after China
        • P otential to increase export to Rs. 1750 crore by 2006-07 and more than Rs. 2500 crore by 2009-10.
        • Global market for Herbal products: US$ 80 bn
        • India’s exports of Herbal products: US$ 280 mn (2002-03)
  • Foreign Trade Policy 2004-09
      • Textile sector incentives
      • Duty free entitlement for garments & handicrafts increased from 3% to 5%
        • Will help exporters to move up the value chain
        • However, further incentives required to consolidate India’s position in the post-MFA era
      • Handicraft Special Economic Zone to be established
        • Will contribute to strong growth in handicraft exports
        • Will generate employment opportunities
  • Foreign Trade Policy 2004-09
      • Export Promotion Schemes
      • Target Plus scheme introduced
        • Will further boost exports from the successful exporters
      • Vishesh Krishi Upaj Yojana to boost horticulture exports
        • Global trade in horticulture: US$ 79 bn (1999)
        • India’s exports: US$ Rs. 1830 cr (1999-2000)
        • S uccess of AEZs for horticulture depend on “ the ability of the states to overcome existing shortcomings in infrastructure, institutional mechanism and policy and programme support to achieve desired export orientation ”
  • Foreign Trade Policy 2004-09
      • Export Promotion Schemes
      • “ Services Export Promotion Council” to be set up
      • “ Served from India” scheme: Service providers who earn forex of at least Rs. 5 lakhs will be eligible for duty credit entitlement
        • Will help small scale service providers
        • Will enhance India’s share in global exports of services (1.4% in 2003)
        • Feasibility study for establishment of an export credit and guarantee facility for Gulf Cooperation Council countries
        • Regional cooperation in export finance and export credit
        • guarantees for ESCAP
        • Study on promotion of international competitiveness and exports of manufactured goods for ESCAP
        • Setting up the Afrexim Bank
        • Designing of Export Financing Programmes - Turkey
    Exim Bank as a Consultant Sharing Institutional Building Capabilities World wide
        • Setting up an Exim Bank in Malaysia
        • Design of Export Marketing Seminars for SMEs in Vietnam
        • Export Development Project : Ukraine
        • Enterprise Support Fund : Armenia
        • Establishing an Export Credit Guarantee Company in Zimbabwe
        • Advisory services to Industrial Development Corporation of South Africa for international finance products
        • Mauritius – Study on Projecting Mauritius as an Investment Hub for Indian Firms
    Sharing Institutional Building Capabilities World wide Exim Bank as a Consultant
  • Promoting Indian Consultancy
    • Tie-up with
    • International Finance Corporation, Washington D.C.
      • Africa Project Development Facility
      • Africa Enterprise Fund
      • Mekong Project Development Facility
      • South-East Europe Enterprise Development Facility
      • Private Enterprise Partnership (CIS Countries)
      • China Project Development Facility
      • South Asia Enterprise Development Facility
    • Eastern & Southern African Trade & Development Bank (PTA Bank)
    • African Management Services Company (AMSCO)
    • Exim sponsors consultants under GoI-AfDB cooperation Agreement
  • Advisory Services Multilateral Agencies Funded Projects Overseas (MFPO )
    • Information and support services to Indian companies to help
    • improve their prospects for securing business in multilateral
    • agencies funded projects.
    • Dissemination of business opportunities in funded projects
    • Providing detailed information on projects of interest
    • Information on Procurement Guidelines, Policies, Practices of
    • Multilateral Agencies
    • Assistance for Registration with Multilateral Agencies
    • Advising Indian companies on preparation of Expression
    • of Interest, Capability Profile
    • Bid Intervention
  • Foreign Trade Policy 2004-09
      • Export Oriented Units
      • Exemption from service tax
      • EOUs permitted to retain 100% of export earnings in EEFC accounts
      • Income tax benefits to DTA units which convert to EOUs
        • All these should considerably increase export growth from the EOUs
  • Exim Bank: Financing of Export-Oriented Companies Software Training Institutes Minor Ports Technology Parks EOU Projects & TUFS Term Loans Project Finance Equipment Finance Working Capital Overseas Investment Finance Long Term upto 5 years Term Loans for 1-2 years Loans to Indian companies for Equity Investment in their ventures overseas Loans to Indian companies to olden to their overseas ventures Other Programmes Export Marketing Finance Export Product Development Finance for R&D Short Term < 1 year Direct Equity stake
  • Institutional Linkages
    • Multilateral Agencies
    • World Bank
    • Asian Development Bank
    • African Development Bank
    • European Bank for Reconstruction & Development
    • Multilateral Investment Guarantee Agency (MIGA)
    • International Finance Corporation (IFC)
    • UNIDO - Industrial Promotion Offices
    • Afrexim Bank
    • Eastern & Southern African Trade &
    • Development Bank (PTA Bank)
    • Board of Investment of Sri Lanka
    • Hatton National Bank, Sri Lanka
    • China National Technical Import & Export Corporation
    • Polish Agency for Foreign Investment (PAIZ).
    • Hungarian Investment and Trade Development Agency
    • UNIDO Industrial Cooperation & Investment Promotion Service, Poland
    • Economic Development Board, Bahrain
    • Investment & Trade Promotion Centre, Vietnam
    • Centero Estero Vineto, Italy
    • Centro Estero Camere Commercio Piemontesi, Italy.
    • Netherlands Council for Trade Promotion.
    • Board of Investment of Mauritius
    Institutional Linkages Trade & Investment Promotion Agencies
    • Export Credit Agencies
    • The Export-Import Bank of China.
    • Croatian Bank for Reconstruction and Development.
    • Czech Export Bank.
    • Hungarian Export-Import Bank Ltd.
    • Uzbekinvest – National Export-Import Insurance Company.
    • Exim Bank of Romania.
    • Export-Import Bank of the Russian Federation.
    • Forum of Asian ECAs
    Institutional Linkages
    • Board of Investment of Sri Lanka
    • Hatton National Bank, Sri Lanka
    • China National Technical Import & Export Corporation
    • Polish Agency for Foreign Investment (PAIZ).
    • Hungarian Investment and Trade Development Agency
    • UNIDO Industrial Cooperation & Investment Promotion Service, Poland
    • Economic Development Board, Bahrain
    • Investment & Trade Promotion Centre, Vietnam
    • Centero Estero Vineto, Italy
    • Centro Estero Camere Commercio Piemontesi, Italy.
    • Netherlands Council for Trade Promotion.
    • Board of Investment of Mauritius
    Institutional Linkages Trade & Investment Promotion Agencies
  • Exim Bank : Partner in Globalisation
    • Technology
    • Capital (Foreign Investment)
    • Raw Materials
    • Capital Goods
    • Final Products
    • Capital Goods
    • Capital (Overseas Ventures )
    • Product Development
    • Production
    • Marketing
    • Pre shipment
    • Post shipment
    VALUE ADDITION EXPORT M P O R I T
  • Foreign Trade Policy 2004-09
      • Final Observations
      • Import of second hand capital goods allowed without age restrictions
        • No outdated technology should be imported
      • “ Special Focus Initiatives”
        • Could be extended to other sectors of high export orientation like chemicals & pharmaceuticals
      • Export orientation of FDI should be increased
  • FDI and Exports Source: SIA, MOC&I Low share of FDI in major export sectors 8.37 Services (incl. Hotels & Tourism) 0.20 Leather & leather goods 1.20 Textiles 5.70 Chemicals & pharmaceuticals 6.46 Computer software industry 7.50 Transportation industry Share in FDI (%) Sector
  • THANK YOU www.eximbankindia.com