Export Assistance and Incentives

3006 Words Nov 27th, 2010 13 Pages
Export incentives Devices used by countries to encourage exports. These can include tax incentives for exporters, allowing them exemptions from the normal provisions of anti-monopoly legislation, preferential access to capital markets, priority
Developing countries have started manufacturing industries only recently. As a result, their cost of production generally tends to be high because of the following reasons:
 Total market availability within the country is small with the result that the economies of large-scale production cannot be reaped.
 Productivity of labor is low because the level of mechanization as compared to that in the developed countries is low.
 Manufacturing units in developing countries, being small and
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This benefit is also available to supporting manufacturers exporting through Export/ Trading Houses provided that the amount of deduction claimed is retained as a reserve for the purpose of the business of the assesse. However, the budget for the year 2000-2001 has reduced this exemption by 20 per cent every year to be phased out in five years.
(b) Exemption from taxation of the profits from overseas projects to the extent of 50 per cent.
(c) Exemption from taxation of 50 per cent of royalty, commission, fees or any similar payment obtained from the exports of technical know-how and technical services.
(d) A 10-year tax holiday for 100 per cent export-oriented units and for units located in Free Trade/Export Processing Zones.
(e) Discounted rates of customs duty on imports of selected items of machinery for export production.

Export assistance and a variety of facilities and export incentives available to the
Exporters are given in mindset and more aggressive approach is needed to develop technology.
Export capabilities and to enhance such exports. These may include better
Management of trade policies at international level, simplified procedures, better
Incentives for high value-technology incentives exports etc.
Export incentives can play an integral role in developing export capability and can encourage exports by providing financial

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