Exim Matters: Performance and not compulsion should bring members to EPCs

Raising the RCMC exemption threshold eases compliance for small exporters, but compulsory EPC membership for accessing trade-policy benefits deserves a wider review

The Foreign Trade Policy (FTP) requires an exporter to obtain a Registration-cum-Membership Certificate (RCMC) from an Export Promotion Council (EPC),  or a Certificate of Registration from another designated authority, for applying for an authorisation or any other benefit or concession under the FTP. On September 15, the commerce ministry relaxed that requirement by enhancing the de minimis exemption for small-value export consignments from ₹10,000 to ₹3 lakh. 

The measure seeks to reduce the compliance burden for new and small exporters and facilitate exports through postal, courier, ecommerce and other emerging channels. According to data released by the ministry, consignments valued below $3,000 accounted for 43 per cent of shipping bills during 2021-22 to 2025-26, but only 0.86 per cent of merchandise export value. So, the relaxation is welcome, but it raises a larger question: Why should an exporter be compelled to register with an EPC merely to obtain an FTP entitlement? 

By making RCMC a gateway to such entitlements, the government assures EPCs a stream of members and membership revenue. The certificate may help identify an exporter’s principal product group and the body responsible for representing that sector. However, Customs and DGFT data can now provide much of the information needed for identification and scheme administration. Whatever the original justification for compulsory registration, its continued necessity deserves a relook. 

EPCs were established when information about overseas markets, prospective buyers, trade fairs, foreign regulations and international commercial practices was difficult and expensive to obtain. They helped exporters participate in exhibitions, organised buyer-seller meetings, circulated market information and represented sectoral problems before the government. Some councils continue to render useful services, but the environment in which they operate has changed fundamentally. For almost three decades, the Internet has been the principal source of market information. Exporters locate buyers, compare tariffs, study regulations and identify exhibitions through online platforms. Government portals, foreign chambers of commerce, logistics providers, professional bodies and advisers offer further assistance. AI has made preliminary market research, regulatory searches and preparation of market-entry strategies faster and cheaper. 

EPCs are also no longer the only channel for representing exporters. Apex industry associations such as the Confederation of Indian Industry and numerous product-specific and regional associations, regularly raise issues concerning Customs, DGFT, GST, logistics, standards, trade remedies and market access. Most depend upon voluntary membership and must demonstrate value to attract and retain businesses. EPCs, by contrast, enjoy a captive constituency because access to FTP entitlements is linked to RCMC. Such assured membership can weaken accountability. 

This is not an argument for abolishing EPCs. They possess accumulated knowledge and can undertake work that individual exporters and online tools cannot easily perform, including identifying non-tariff barriers, coordinating responses to foreign standards, conducting serious sectoral research and presenting evidence-based policy proposals. They can also coordinate participation in exhibitions where collective presence has demonstrable value. Councils that perform these functions effectively would attract members without compulsion. 

The government can gradually make EPC membership voluntary and finance worthwhile export-promotion programmes via transparent grants or charges for specific services. The recent exemption is a useful beginning, but the value of a consignment cannot settle the principle involved. In the age of the Internet, AI and active industry associations, EPCs should earn their members through performance, not acquire them through policy compulsion.