Export Development Fund
Export Development Fund
An Export Development Fund (EDF) facility is a unique fund initiated by the Government of India under the Exim Bank Act and governed by the Exim Bank. The Exim bank approves the loan for the enhancement of international trade and towards accomplishing the purposes of improving and encouraging the export in surplus. The Exim Bank, under the Government of India’s ‘Act East Initiative,’ has embarked on a mission to extend trade to CLMV countries (Cambodia, Laos, Myanmar, and Vietnam) in a Project Development framework. The Federation of India Exporters Association (FIEO) has requested an Export Development Fund with an amount of 0.5% export value for Micro, Small, and Medium Enterprises (MSMEs) in the 2019 budget.
Objectives and Project Components
The Export Development Fund was launched with two main objectives:
- To reform the already existing export policies and their administration.
- To support the Government of India in boosting the country’s competitiveness and exports of manufactured goods.
The program’s other target goals include the following:
- To assist eligible and potential exporters in finding, competing, and sustaining the export markets through aid and assistance.
- To support the exporters in export marketing.
- To complement the existing aids with long- and short-term lending funds for export-linked investments. The export development fund project will integrate with the following financial institutions to achieve its target:
- ICICI
- Eximbank
- Bank of Baroda and
- Canara Bank
Components under the Program
Every integrated program in each financial institution incorporates the following components:
- Export Development Fund (EDF) to support exporters in enhancing their marketing, product development, and technological knowledge for well-structured export development plans and programs by offering them grants.
- Technical Assistance Fund (TAF) to strengthen and assess export development programs and investments and help the exporters in these areas by boosting the capabilities of the financial institutions.
- They are promoting export-based subprojects to boost exportable output by delivering investment funds through term lending components.
Features of the Program
The Export Development Fund (EDF) is implemented to benefit new and existing enterprises in improving their export development plans in the following ways:
- The program would help entrepreneurs establish market targets, conduct field research, interact with their potential buyers, and discover the source of buying decisions and the nature of hurdles that the enterprise would face during the export development process.
- The field research would help the entrepreneurs draft a market analysis report and thwart their enterprise in exploiting the targeted customers and overcoming the hurdles.
- The market analysis report would help the entrepreneurs deal with the hurdles and help them achieve the export sales export growth by establishing a sales network, designing brochures, etc.
Benefits under the Program
The Government has initiated the below steps to support entrepreneurs in improving export activities and, therein, boost the foreign exchange for the country:
- A new Foreign Trade Policy(2015-2020) was implemented on 01st April 2015 to revise the existing export promotion schemes. Further, two more new schemes, namely Merchandise Exports from India Scheme (MEIS) and Services Exports from India Scheme (SEIS), were implemented to develop export trade and services in the country.
- Entrepreneurs can completely transfer their duty credit scrips issued under the scheme.
- Incentive rates for the MSME sector are hiked by 2% with a financial allotment of 8,450 Crores per year.
- A new Logistic Division is set up in the Department of Commerce to synchronize the cohesive development of the logistics industry. The World Bank’s Logistics Performance Index of India has seen significant growth since then and increased from 54 in 2014 to 44 in 2018.
- The government supports entrepreneurs in improving the comfort of doing business.
- The interest Equalisation Scheme was introduced to offer interest equalization at a 3% rate for labor-intensive/MSME enterprises on pre and post-shipment rupee export credit on 1st April 2015.
- The rate was hiked to 5% for MSME enterprises from 2nd November 2018, and merchant exporters were included in the scheme.
- Trade Infrastructure for Export Scheme (TIES) was implemented on 1st April 2017 to tackle the export infrastructure gaps in the country.
- To increase the income of the farmers and encourage agricultural exports in the country, the Agriculture Export Policy was implemented on 06th December 2018.
- The transport and marketing Assistance (TMA) schemes were implemented to reduce the elevated cost of transportation for the export of listed agricultural products.
- Entrepreneurs can claim a refund of duties/taxes at higher rates for the expenses spent on the export of garments under the Rebate of State and Central Taxes and Levies (RoSCTL) scheme launched on 07th March 2019.
Funds Allocated under the Program
The entrepreneurs can obtain the fund under the Export Development Fund:
- In the form of loans, gifts, grants, or donations from the Government of India.
- Funds would be credited as a mode of repayment of loans, advances, or other facilities.
Import Export Code
The Import Export Code is a primary document necessary for commencing Import-export activities. The IE code is to be obtained for exporting or importing goods or services.IEC has numerous benefits for the growth of the business. Indeed, you cannot ignore the necessity of IE code registration, as it is mandatory. You can apply for an Import Export code through IndiaFilings and obtain it within 6 to 7 days.
