Tech, Reforms Have Made Epcs Redundant

The ministry of commerce started setting up export promotion councils (EPCs) in the Sixties. There are now 28 product specfic councils and commodity boards plus the apex body Federation of Indian Export Organisations (FIEO). Together they have 126 of fices: It is doubtful if they all do any useful work.

EPCs were established in when very few ventured to export. In a closed economy, the protected domestic markets assured adequate profit for the manufacturers. Information regarding overseas markets was not easily available. Viable schemes to rebate the taxes and obtain inputs for export production did not exist. Getting foreign exchange for overseas visits, importing prototypes for product development, participating in trade fairs abroad sending exhibits, samples etc were all difficult exercises:

 

EPCs took on three specific tasks:

* Disseminating information about buyers abroad. This was done by sending circulars about interested buyers, arranging buyer-seller meets, printing directories of exporters, spreading new about export capabilities of India and so on.

* Acting as a forum of exporters to give policy inputs to the government and administer schemes like textile quotas, International Price Reimbursement Seheme, Market Development Assistance:

* Playing a facilitating role by issuing certificates of origin and certificates for getting foreign exchange, importing prototypes, sending out samples etc.

Technology and liberalisation have made EPCs redundant Today, the exporter can display his goods and capabilities on the lnternet and locate his buyers through the Internet. He does not need the EPC to recommend issue of license or release of foreign exchange. He can interface with the Directorate General of Foreign Trade more easily than in earlier years. They need very little from EPCs today other than registration cum membership certificates (RCMC).

EPCs have become irrelevant because the key issue today is not export promotion but building export capabilities. Orgartisations like CII have taken a more holistic view of what industry needs to do to become globally competitive. In contrast, EPCs have viewed export promotion in isolation, asking only for concessions. They have also failed to live up to their mandate - providing members useful commercial information or professional advice on technology upgradation; quality and design improvement; product development, innovation etc. It is bureaucrats who man EPCs and not professionals in commerce, management and international marketing.

Under the Exim policy, any person applying for a licence to import/export (except restricted items) or for any benefits or concession under this policy is required to furnish RCMC from an EPC. So, the EPCs get membership fees whether or not they do any useful work. In addition, the commerce ministry parts with tax money to keep the EPCs alive.

It is high time EPCs are asked to justify what 126 offices do with taxpayer's money and membership fees forced out of the exporters. If EPCs are sure that they are giving worthwhile service to their members, they should be confident of surviving on voluntary membership. They should come forward to forego the grants and fees that come our of exporters' compulsion to obtain RCMC. At present, the EPCs seem to live only to please themselves. Let them earn a living by giving service to members like CII or Ficci.