The government on Wednesday launched the Rs 4531 crore Market Access Support (MAS) component of the Export Promotion Mission (EPM) that will support participation of exporters in marketing opportunities like trade fairs and product demonstrations.
The MAS will run for next six years as part of the Rs 25060 crore EPM that has 11 components to increase the competitiveness of Indian exports. This is the first component of the mission that has been operationalised and rest will be rolled out by January-end, Director General of Foreign Trade Ajay Badhoo said.
For this year Rs 500 crore has been allocated for MAS as just three months remain. Of the total Rs 330 crore is for clearing the dues of the Market Access Initiative (MAI) that was functional as a standalone scheme till last financial year.
Under the MAS the support will be for organising and participating in buyer-seller meetings (BSM), reverse buyer-seller meetings (RBSM) where the buyers visit India to meet exporters and trade delegations. For BSM Rs 5 crore assistance per event will be provided while for RBSM support has been capped at Rs 10 crore. For trade delegations the cap is Rs 5 crore. For each event the government will bear 60% of the costs and 40% will be shouldered by the private sector.
Funding structure and priority sector focus
For priority areas the government support can go up to 80%, Badhoo said. For participating in BSM and trade delegations. 35% has been reserved for Micro Small and Medium Enterprises (MSMEs). Within goods the priority sectors are agriculture and allied industries, handicraft, handlooms, leather, sports goods, telecom, defence and other emerging technology sectors.
Within services the priority sectors under MAI are tourism, medical, logistics, legal, audio visual, communications, construction and environment-related services.
A new component for Proofs-of-Concept and Product Demonstrations to potential overseas buyers, particularly in technology-intensive, emerging and sunrise sectors, will be notified shortly to complement existing market access interventions, the DGFT said. This has been brought in on the request of ministries of telecom, IT and electronics.
“Mandatory online feedback mechanisms will be instituted for exporters participating in each supported event, covering parameters such as buyer quality, business leads generated and market relevance. Based on feedback and implementation learnings, the MAS guidelines will be progressively refined and institutionalised,” Badhoo said.
Tackling costs and standards
The EPM approved by the cabinet in November has two components – Niryat Protsahan and Niryat Disha. The outlay for Niryat Protsahan is Rs 10,401 crore while for Niryat Disha Rs 14.659 crore has been kept aside.
Niryat Protsahan is for reducing the cost of credit and includes schemes like interest subvention for Micro Small and Medium Exporters. The interest subvention component of the mission alone will cost around Rs 5,000 crore. Niryat Protsahan will also offer collateral guarantee, support for export factoring, credit enhancement to improve borrower’s credit profile and credit cards. For warehousing and logistics Rs 2500 crore and for compliance support Rs 4131 crore has been earmarked under EPM.
The Niryat Disha component of the mission will support exporters for market access. The government will bear the cost of testing, certification and audits required to meet the multiple standards that are imposed by importing countries. It will also help reduce logistics costs, provide export warehousing and enhance India’s export identity through unified branding, packaging and specific campaigns.