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Scope of market access initiative scheme widened

N. Mohan Padmanabhan

KOLKATA, July 31

EXPORT Promotion Councils (EPCs) and other trade promotion organisations (TPOs), under the expanded `Market Access Initiative' Scheme recently proposed by the Commerce Ministry, will now be required to project their requirements for undertaking market pr omotion efforts overseas on a `country-product focus approach' basis in a single project.

This is as per the guidelines of the expanded scheme labelled `Export enhancement and export studies -- Market Access Initiative' formulated by the Department of Commerce, Ministry of Commerce.

Such a project, it is pointed out, should be for identified products, whose export has potential for promotion in a chosen country. And for each product, exporters participating in the project should be identified by the EPC, and the selected exporters w ill have to identify the need for intervention, its components and cost sharing by them within the overall parameters of the scheme.

The project will include activities like marketing studies, showrooms, warehousing facilities, participation in international departmental stores (through tie-ups with distributors and major stores), publicity campaigns, brand promotions, participation i n trade fairs and buyer-seller meets, and research and product development.

Brand promotion, along with marketing, would be focussed as a component of the approved project to replace the poor perception of India as a supplier of low quality items to supplier of high-tech value-added world class quality products.

The Ministry has clarified that the project should aim at intervention on a sustained basis over the next two or three years, and support from the scheme will decline over the period each year. The project would be examined by an empowered committee of t he department, headed by the Commerce Secretary, and after sanction, grants in aid would be provided to the concerned implementing agencies. Besides monitoring the progress made in the projects, the committee, expected to meet at least once in every quar ter, would also evaluate the impact of the support given from time to time.

The broad objectives of the scheme, according to trade promotion agencies, are to identify priorities of research relevant to the Department of Commerce, sponsor such studies, consider proposals made by individual scholars and institutions for undertakin g research in matters of interest to the Commerce Department and arrange for wide dissemination of the results of such studies for proper debate.

The approved cost of the research and product development would be borne by the scheme up to 25 per cent of the total approved cost, and the balance 75 per cent has to be put in by the concerned exporters/ EPC/ TPOs.

The key purpose is to obtain greater market intelligence, promote and facilitate direct access to major retail markets in focus countries for focus products, promotion of branded products in international markets and supplement efforts by State governmen ts in carrying out an export potential survey of the State for identified product groups.

The surveys at the state level, aimed at evolving market-related strategies for promoting exports from the states, are to be funded by the scheme and the state government on a matching basis, and the concerned EPC would be the coordinating agency.

In the case of showrooms, which would be set up for selected consumer items at identified centres on the basis of marketing studies in leased or rental accommodation, 75 per cent, 50 per cent and 25 per cent of the lease/rental charges will be borne by t he scheme in the first, second and third year, respectively. Warehousing facilities are proposed to be set up on the same pattern as that of showrooms to ensure quicker deliveries.

Intensive publicity campaigns for launching identified products in chosen markets would be encouraged, and the locations would be determined on the basis of specific marketing studies undertaken by professionals. Local marketing consultants would be hire d on a turnkey basis, and 80 per cent of the expenditure would be borne by the scheme. The sharing ratio, between the export organisation concerned and the scheme, will be reviewed after two years of operation to make it on a matching basis.

The brand promotion cost of selected individual products would be recommended to the IBEF (India Brand Equity Fund) Trust for considering reimbursement to the exporters concerned, as per IBEF guidelines, by way of soft medium-term loans to be repayable i n 5-7 years period with a nominal royalty on the incremental sales of the particular brand in the thrust area. It is learnt that funding of brand promotion expenditure would be first tried through the IBEF Trust, failing which, it would be funded by the Scheme as per existing IBEF norms.

Related links:
Govt spells out market access guidelines
Govt plans to set up product display centres abroad
MAI, what hype!

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