Facilities for Exporters

Here are some notes on facilities for exporters:

  • Bank Facilities
    • Pre-shipment finance: This is a type of loan that is provided to exporters to help them finance the costs of production, such as the purchase of raw materials and the hiring of labor.
    • Post-shipment finance: This is a type of loan that is provided to exporters to help them finance the costs of shipping and insurance.
    • Export working capital finance: This is a type of loan that is provided to exporters to help them meet their day-to-day operating expenses.
  • Government Facilities
    • Export promotion capital goods scheme: This scheme provides exporters with a concessional rate of customs duty on capital goods that are imported for use in the export business.
    • Duty exemption / remission scheme: This scheme allows exporters to import raw materials and components without paying customs duty.
    • Duty entitlement pass book scheme: This scheme allows exporters to earn credits for the import of raw materials and components. These credits can be used to offset the customs duty that is payable on exported goods.
  • Other Facilities
    • Export credit insurance: This is a type of insurance that protects exporters against the risk of non-payment by their overseas buyers.
    • Export marketing assistance: This is a type of assistance that is provided to exporters to help them market their products overseas.
    • Export training programs: This is a type of program that is provided to exporters to help them develop the skills and knowledge they need to succeed in international trade.

MCQs on Facilities for Exporters

  • Question 1: Which type of bank facility is most commonly used by exporters?
  • Answer: Pre-shipment finance is the most commonly used type of bank facility by exporters. This is because it helps exporters to finance the costs of production, which is the most significant expense that exporters face.
  • Question 2: What is the purpose of the export promotion capital goods scheme?
  • Answer: The export promotion capital goods scheme is designed to promote the export of goods by providing exporters with a concessional rate of customs duty on capital goods that are imported for use in the export business. This helps to reduce the cost of production for exporters and makes their products more competitive in overseas markets.
  • Question 3: What is the purpose of the duty exemption / remission scheme?
  • Answer: The duty exemption / remission scheme is designed to promote the export of goods by allowing exporters to import raw materials and components without paying customs duty. This helps to reduce the cost of production for exporters and makes their products more competitive in overseas markets.

Conclusion

Facilities for exporters can be a valuable resource for businesses that are looking to expand their international sales. By understanding the different types of facilities that are available, exporters can choose the ones that are most appropriate for their needs.