The Hindu Business Line : New MDA norms to stress on 4 focus countries

THE revised Market Development Assistance (MDA) guidelines drawn up by the Commerce Ministry, scheduled to come into effect from April 1, will entail a renewed thrust on four focus countries, and accordingly prune travel grants for direct participation in trade fairs/exhibitions/BSMs abroad in general areas.

While sales-cum-study tours for individual exporters have already been discontinued, direct participation in fairs/exhibitions by individual exporters will also cease from April 1. Reimbursement to individual exporters for participation in such fairs abroad will now be allowed only for Export Promotion Council- (EPC) led activities.

The focus areas are: Focus-LAC (total travel grant plus stall charges of Rs 1.40 lakh), Focus-Africa including WANA (Rs 1.10 lakh), Focus-CIS (Rs 90,000) and Focus-Asean Plus 2 — Australia and New Zealand — (Rs 1.10 lakh). The maximum financial ceiling per event is at 90 per cent for exporters having valid SSI registration certification and 75 per cent for others including merchant exporters.

Talking to Business Line here, after inaugurating the new office of the Plastics Export Promotion Council at the newly constructed International Trade Facilitation Centre building, Mr S. Ramasundaram, Joint Secretary, Department of Commerce, clarified that while the pay-out under MDA for various trade-related activities has not been curtailed, greater thrust was now being given to the focus countries, especially under the MAI (Market Access Initiative) programme.

He said all activities per se will now have to be EPC-oriented and accordingly the non-focus areas where traditional strengths have already been built up are gradually being taken out of MDA purview.

On the MAI front, which was the way forward according to him, the corpus for 2004-05 was being increased to Rs 140 crore from the current year's Rs 40 crore, and then to Rs 150 crore and Rs 160 crore for the successive financial years.

Asked on the kind of response from EPCs in terms of project proposals, Mr Ramasundaram said now that a higher corpus is available, special and innovative projects for market penetration are expected from the councils.

Under the revised MDA code, assistance to the extent of 60 per cent for market studies/survey activities will end, as the same are now also assisted under MAI scheme.

A major concern expressed by smaller councils, such as the Shellac Export Promotion Council is in the area of basic research and development, where under the revised MDA Code, some 60 per cent of the grant will be deleted, as it is also available under the MAI scheme. These councils want this cut restored, as lot of basic research now goes on in universities and other institutions on many commodities such as shellac, which have export potential.

The territorial divisions dealing with focus area programmes would be free to recommend activities to be undertaken by EPCs and other trade promotion organisations such as FICCI, CII etc.

As per the existing code, assistance to approved trade bodies for one or two non-specific non-recurring activities should not exceed Rs 10 lakh in a financial year to a particular approved body.

It is now proposed to enhance this ceiling to Rs 10 lakh for each focus area programme plus Rs 10 lakh for general areas.

But the total MDA grant to such approved trade bodies would not be more than Rs 50 lakh per annum.

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