Understanding Merchant Exporters in India: An Overview
Merchant exporters play a significant role in India's economy
by promoting international trade and earning foreign exchange. They act as
intermediaries between manufacturers and buyers in foreign markets, helping to
bridge the gap between demand and supply. In this blog, we will take a closer
look at merchant exporters in India, their types, and the process involved in
merchant exports.
Merchant exporters are businesses that procure goods from
local manufacturers and sell them in foreign markets. They do not manufacture
the products themselves but act as intermediaries between the manufacturers and
buyers. In India, the legal framework for merchant exporters is governed by the
Foreign Trade Policy (FTP) and the Handbook of Procedures (HOP) issued by the
Directorate General of Foreign Trade (DGFT).
Types of
Merchant Exporters in India
There are different types of merchant exporters in India,
including manufacturer-exporters, merchant-cum-manufacturer exporters, and pure
merchant exporters. Manufacturer-exporters are businesses that manufacture and
export their products, while merchant-cum-manufacturer exporters are businesses
that both manufacture and export their products. Pure merchant exporters are
businesses that do not manufacture any products but procure goods from other
manufacturers and export them to foreign markets.
Process of
Merchant Export in India
The process of merchant export in India involves various
steps, including obtaining an Export-Import (EXIM) code, sourcing products from
local manufacturers, negotiating with buyers in foreign markets, and shipping
the products. Merchant exporters need to comply with the documentation
requirements specified by the DGFT, such as filling out shipping bills,
obtaining a Certificate of Origin, and providing other relevant documents as
per the terms of the contract with the buyer.
Government
Policies and Incentives for Merchant Exporters in India
The Government of India has implemented various policies and
incentives to promote the growth of merchant exports in the country. Some of
the notable policies include the Merchandise Exports from India Scheme (MEIS),
the Export Promotion Capital Goods (EPCG) Scheme, and the Advance Authorization
Scheme. These policies provide benefits such as duty exemptions, tax refunds,
and reduced transaction costs to merchant exporters.
Challenges
Faced by Merchant Exporters in India
Merchant exporters in India face several challenges, such as
inadequate infrastructure, high transaction costs, complex regulations, and
lack of access to credit. These challenges can hinder their growth and
competitiveness in international markets. However, with the support of the
government and other stakeholders, merchant exporters can overcome these
challenges and seize the opportunities available in the global marketplace.
Conclusion
Merchant exports play a crucial role in promoting
international trade and earning foreign exchange for India. They provide a
platform for local manufacturers to access global markets and compete with
international players. By understanding the process, types, and challenges of
merchant exports in India, businesses can tap into the opportunities available
in the global marketplace and contribute to the growth of the Indian economy.
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