EXPORT HOUSE & TRADING

HOUSE
HISTORICAL BACKGROUND

1947 Indian achieves independence; highly
protected economy because of colonial rule
1956 Founding of State Trading Corporation
of India Ltd. under the Indian Companies Act
1960 Setting up of Export Houses
1981 Setting up of Trade Houses
1992 Establishment of Super Trading Houses
1994 Start of Super Star Trading Houses

They are large international trading companies that
specialize in the long-term development of exporting,
importing, countertrading and third-country trading in
goods and services which are generally supplied by, or
sourced from, other parties.

Export trading houses export large volumes of products
from many sources of lower unit costs through established
networks of overseas offices.

OVERVIEW OF EXPORT AND TRADING
HOUSES
OBJECTIVES OF TRADING HOUSE

1. To make available supplies of essential commodities to consumers at
reasonable prices on a regular basis.

2. To ensure a fair price of the produce to the farmers so that there may be
an adequate incentive to increase production.

3. To minimize violent price fluctuations occurring as a result of seasonal
variations in supply and demand.

4. To arrange for supply of fertilizers and insecticides.

5. To undertake the procurement and maintenance of buffer stock and
their distribution whenever and wherever necessary.

6. To arrange for storage, transportation, packaging and processing.
WHAT IS STATE TRADING?

There are several ways to define state trading.

Early definitions focused on state conduct (or operation) of
foreign trade, on governments monopolizing foreign trade and on
government ownership of an enterprise.

A functional definition gradually replaced these approaches with
Kostecki (1982) arguing that state trading occurs when a
government or a government-backed agency determines the
essential conditions (including prices or quantities) on which exports
and imports have to take place.


One of the responsibilities of government is to ensure the supply of essential
commodities to the people. This may require direct intervention on its part in
trading of agricultural commodities.
TYPES OF TRADING

Partial State Trading

Here private traders and government coexist.

Traders are free to buy and sell in the market .

The government may place some restrictions on them such as declaration of
stocks, limits on stocks, which can be held at a point of time and submission of
regular accounts.

The government enters the market for purchase of commodities directly
from producers at notified procurement price. It undertakes the distribution of
commodities to consumers through a network of shops.

Complete shops

The purchase and sale of commodities is undertaken entirely by the
government or its agencies. Private traders are not allowed to enter the
market for purchase or sale.

In India complete wholesale trade in wheat was taken over by the
government in 1973; but it had to be given very soon.


In Jan 1965, the FCI was set up to undertake the purchase, storage
movement, transport, distribution and sale of food grains.
INDIAN STATE TRADING ORGANISATIONS

1. MMTC Limited

2. India Trade Promotion Organisation Limited

3. Export credit and Guarantee Corporation Limited

4. The MICA Trading Corporation of India Limited (MITCO)

5. The Projects and Equipments corporation of India Limited

6. Spices Trading corporation of India Limited

7. Tea Trading Corporation Limited

Merchant as well as Manufacturer exporters, Export
Oriented Units (EOUs)/units located in Export
Processing Zones (EPZs)/ Electronic Hardware
Technology Parks (EHTPs)/ Software Technology Parks
(STPs) shall be eligible for such recognition.



ELIGIBILITY
Export Performance Level
For being a status holder exporter, an
applicant is required to achieve the following
prescribed export
Performance (including deemed exports)
exceeding the level given below, level during
the current licensing year plus the preceding
three years (taken together).


CRITERION OF RECOGNISITION
Status Category Export Performance FOB / FOR Value
(Rupees in Crores)
Export House(EH) 20
Star Export House(SEH) 100
Trading House(TH) 500
Star Trading House(STH) 2500
Premier Trading House(PTH) 7500
Following exports are eligible for double weightage for the Export
House/Trading House status, i.e. exports by specified category units or
exporters are entitled for double weightage.
(i) SSI/tiny/cottage sector units

(ii) Units registered with the KVIC (Khadi & Village Industries Commission)
or KVIBs (Khadi
& Village Industries Board)

(iii) Units located in:
(a) North-Eastern States
(b) Sikkim
(c) Jammu & Kashmir

(iv) Units exporting handloom, handicrafts, hand knotted carpets, or silk
carpets

(v) Exporters exporting to countries in:
(a) Latin America
(b) CIS (Commonwealth of Independent States)
(c) Sub-Saharan Africa

Weight age given to exports
(vi)Units having ISO 9000 (Series), ISO 14000
(Series)/WHOGMP/HACCP/SEI CMM level-II and above status
granted by agencies listed in Appendix-6 of the HB '09-14 edn.

(vii) Exports of agro products

The Double Weightage shall be admissible to Merchants as
well as Manufacturer Exporters. However, a shipment can get
double weightage only once in anyone of the above
categories.



o Export House/ Trading House/ Star Trading House/ Super Star
Trading House Certificate shall be valid for a period of 3 years
starting from 1st April of the licensing year ,unless otherwise
specified. On the expiry of such certificate, application for renewal
of status certificate shall be required to be made within a period of
six months.
During the said period, the status holders shall be eligible to claim
the usual facilities and benefits..

Validity period
Exemption from furnishing of bank gurantee in
schemes
100% retention of foreign exchange in EEFC
account
Authorization/Licence/certification and custom
clearances for both exports and imports on self
declaration basis.
BENEFITS TO EXPORTERS
Exporters who have attained Export House,
Trading House, Star Trading Houses and
Super Star Trading Houses status for three
terms or more and continue to export shall
be eligible for golden status certificate which
would enable them to enjoy the benefits of
status certificate.

Golden Status Certificate

EXPORT HOUSES IN CHANDIGARH
A. Kumar Cloth House Export House
B. Punjab Small Inds
& Export Corporation
C. Golden Laminates Limited
D. Shiv Export House
E. Akarshan Cloth House And
Readymade