STATE TRADING AND EXPORT HOUSES

PRESENTED BYHARSHIT MALHOTRA DEEPSHIKHA AGARWAL

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

OVERVIEW OF EXPORT AND 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.

To arrange for storage. To arrange for supply of fertilizers and insecticides. 2. To make available supplies of essential commodities to consumers at reasonable prices on a regular basis. To undertake the procurement and maintenance of buffer stock and their distribution whenever and wherever necessary.OBJECTIVES OF TRADING HOUSE 1. packaging and processing. 4. transportation. To minimize violent price fluctuations occurring as a result of seasonal variations in supply and demand. 5. 6. . To ensure a fair price of the produce to the farmers so that there may be an adequate incentive to increase production. 3.

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

. It undertakes the distribution of commodities to consumers through a network of shops.TYPES OF TRADING Partial State Trading Here private traders and government coexist. which can be held at a point of time and submission of regular accounts. 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. The government enters the market for purchase of commodities directly from producers at notified procurement price.

In India complete wholesale trade in wheat was taken over by the government in 1973. In Jan 1965. . distribution and sale of food grains. storage movement. transport.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. but it had to be given very soon. the FCI was set up to undertake the purchase.

INDIAN STATE TRADING ORGANISATIONS 1. Spices Trading corporation of India Limited 7. Export credit and Guarantee Corporation Limited 4. The MICA Trading Corporation of India Limited (MITCO) 5. Tea Trading Corporation Limited . MMTC Limited 2. The Projects and Equipments corporation of India Limited 6. India Trade Promotion Organisation Limited 3.

companies: Adani Enterprises Ltd. Gujarat. edible oil manufacturing. trading of auto components & coke. wheat. headquartered in Ahmedabad. manufacturing of refractory items and wind energy generation. engaged in the business of bulk transportation. exports rice. located in Ahmedabad . Adani Wilmar. plywood etc Frontline Corporation Ltd Flagship company of the Agarwal Group.Gujarat Adani Group Diversified group with interests in commodities trading. sugar & imports edible oil. Gujarat Adani Port. port operations (Mundra) & natural gas distribution. has the status of a star trading house. Mundra SEZ etc Vishal Exports Overseas Limited Trading company based in Ahmedabad. pulses.

Haryana. based in Gurgaon. Haryana .Haryana Jaguar International Limited Institutional Sector 44.P. products include pipe fittings. auto spares. granite & marbles. Gurgaon 122002. scaffolding. Jindal Group engaged in the export and import of steel products. India Map ISO certified star export house set up by D. steel products and cotton.

Maharashtra Sakuma Exports Ltd Company in Mumbai. Africa. based in Coimbatore. and USA. sheet metal fabrication. chilly. McKinnon India. items: lentils. machine building & trading. Prokop Eltex etc . sugar. brass. wheat flour. engaged in the trading and export of agro-based commodities to South East Asia. ferrous castings. cotton yarn. peanuts. Europe. rape seed meal. jaggery etc Tamil Nadu Eltex Group of Companies Group with diverse business interests in wheat flour milling. Middle East. onions. companies: Eltex Super Castings. soya bean meal.

etc. ball bearings. baby clinical dipper. machinery supplies. forgings & castings. chemicals. aerated water. Punjab. also imports & exports BOPP film. based in Ludhiana with a division in China . yarn etc Heena International Exporter of automotive components. 2 & 3 wheeler components. pulses & spices. wrought iron components. tractor & JVC components. fasteners. moped parts. shoes. bicycles & parts.Punjab Amit International Manufacturers of acrylic mink blankets. sandals. blended yarn & knitted fabrics based in Ludhiana.

Star Trading House and Super Star Trading House with a view to build marketing infrastructure and expertise required for export promotion.` The objective is to recognise established exporters as Export House. ` Such Houses should operate as highly professional and dynamic institutions and act as important instruments of export growth. . Trading House.

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

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

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 .

i. exports by specified category units or exporters are entitled for double weightage. hand knotted carpets. (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. or silk carpets (v) Exporters exporting to countries in: (a) Latin America (b) CIS (Commonwealth of Independent States) (c) Sub-Saharan Africa .e. handicrafts.` ` ` ` ` ` ` ` ` ` ` ` ` ` Following exports are eligible for double weightage for the Export House/Trading House status.

` ` . However. 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.(vi)Units having ISO 9000 (Series). ` (vii) Shvices(specified) exporters (viii) Exports of agro products The Double Weightage shall be admissible to Merchants as well as Manufacturer Exporters. a shipment can get double weightage only once in anyone of the above categories.

. ` During the said period. application for renewal of status certificate shall be required to be made within a period of six months.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 . the status holders shall be eligible to claim the usual facilities and benefits. On the expiry of such certificate.unless otherwise specified. .

.` ` ` Exemption from furnishing of bank gurantee in schemes 100% retention of foreign exchange in EEFC account 2 star export houses and above shall be permitted to establish export warehouses ` Authorization/Licence/certification and custom clearances for both exports and imports on self declaration basis.

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. .Exporters who have attained Export House.

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

prices and delivery Lower cost thanks to a network of procurement facilities One stop shopping facility After sale services assured Lower transportation and handling costs Long term business perspective .MANUFACTURERS Goods are collected and payments made at door step Better price realizations because of overseas marketing organization All risks and hassles of exporting avoided Global network for techno-commercial information Market entry at lower cost Long term business perspective FOREIGN CUSTOMERS Proven record of reliability for quality.

. nuclear reactors & parts. handicrafts. 2011.1. plastics and basic chemicals (excluding pharma products). 2. Additional Duty Credit Scrips shall be given to Status Holders @ 1% of the FOB value of past exports accelerate exports and encourage technological up gradation. and ships. 3. This facility shall be available for sectors of leather (excluding finished leather). This facility shall be available up to 31 March. textiles and jute. automobiles & two wheelers. boats and floating structures). engineering (excluding Iron & steel & non-ferrous metals in primary and intermediate form. 4. Transferability for the Duty Credit scrips being issued to status holders under VKGUY Scheme permitted only for the procurement of cold chain equipments.

ships and other similar items shall not be allowed for this exemption. . Additional flexibility under Target Plus Scheme (TPS) / Duty Free Certificate of Entitlement (DFCE) Scheme for the marine sector. boats.` ` Fisheries exempted from maintenance of average EO under EPCG Scheme (along with 7 sectors) however Fishing Trawlers.

under EPCG Scheme has been reduced by 50%. . Export obligation on import of spares. Plan to establish "Diamond Bourse (s) with an aim to make India and International Trading Hub announced. To aid technological up gradation of export sector. 2. 3. EPCG Scheme: 1. moulds etc. EPCG Scheme at Zero Duty has been introduced.` ` ` Duty Drawback is allowed on Gold Jewellery exports to neutralize duty incidence. Introduction of a new facility to allow import on consignment basis of cut & polished diamonds for the purpose of grading/ certification. Obligation under EPCG scheme relaxed.

` ` Introduction of a single window system to facilitate export of perishable agricultural produce with an aim to reduce transaction and handling cost. . Leather sector shall be allowed re-export of unsold imported raw hides and skins and semi finished leather from public bonded ware houses. These agencies will be accredited by APEDA. This system will involve creation of multi-functional nodal agencies. Scheme for leather On the payment of 50 % applicable export duty.

It has been reduced from the existing 100% to 50%. Export of tea has been included under VKGUY Scheme benefits. .` ` ` The existing Minimum value addition under advance authorisation scheme for export of tea is 100 %. DTA (Domestic Tarriff Area) sale limit of instant tea by EOU units increased from 30% to 50%.

.` ` Export Obligation Period for advance authorizations issued increased from existing 6 months to 36 months. Pharma sector included under MLFPS for countries in Africa and Latin America & some countries in Oceania and Far East. Scheme for handloom exports The claims under Focus Product Scheme. the requirement of " Handloom mark" was required earlier. This has been removed.

` ` ` ` EOUs have been allowed to sell products manufactured by them in DTA (Domestic Tariff Area) upto a limit of 90% instead of existing 75%. Extension of block period by one year for calculation of Net Foreign Exchange earning of EOUs kept under consideration. within the overall entitlement of 50% for DTA sale. EOU allowed CENVAT Credit Facility. . (This means that instead of 75% these units can sell up to 90 % of their products in the domestic markets) EOU allowed to procure finished goods for consolidation along with their manufactured goods. subject to certain safeguards. without changing the criteria of similar goods .

. The incentive available under Focus Product Scheme (FPS) has been raised from 1.25% to 2%.` ` ` ` 26 new markets have been added under Focus Market Scheme. The incentive available under Focus Market Scheme (FMS) has been raised from 2.5% to 3%. Extra products have been included in the scope of benefits under FMS.

Dewas and Ambur Horticultural Products: Malihabad . Towns of Export Excellence (TEE) The following cities have been recognized as towns of export excellence (TEE) Handicrafts : Jaipur.Announcements for MDA & MAI: Higher allocation for Market Development Assistance (MDA) and Market Access Initiative (MAI) has been announced. Srinagar and Anantnag Leather Products : Kanpur.