Exporters with an FOB value of up to Rs 300 million in the preceding year will now be eligible for MDA benefits
By EB Bureau
Saturday, June 29, 2013: With the objective of pushing up India’s exports, the Department of Commerce has recently revised the guidelines of the Marketing Development Assistance (MDA) scheme. As per the revised guidelines, which aim to promote exports particularly among micro, small and medium enterprises (MSMEs), exporting companies (whether manufacturers or traders) with a free on board (FOB) value of exports of up to Rs 300 million in the previous year are eligible for incentives under the MDA scheme. Earlier, this limit was Rs 150 million. With this revision, bigger companies can now apply for the scheme.
“Marketing and branding is a costly affair and only big companies can afford to do so. Therefore, for the MSMEs, this is a very useful scheme as it allows them to meet their buyers personally and do brand-building as well,” says DK Sareen, executive director, Electronics and Computer Software Export Promotion Council (EPC).
With those in the MSME sector now realising the need to export, the MDA scheme has become popular over the years. In 2013-14, 100 ESC members participated in overseas activities and 150 companies participated in India.
Highlights of the revised MDA
Companies looking for MDA incentives can participate in buyer-seller meets or in fairs/exhibitions abroad and explore new markets for their products. However, this is subject to the condition that the exporter should have been a member of the concerned Export Promotion Council (EPC) for a period of at least 12 months and have filed tax returns regularly.
The government has identified five global regions that are lucrative for exports—Latin American countries, African countries, CIS countries, ASEAN, Australia and New Zealand. The financial ceiling for participation in trade fairs and exhibitions has also been enhanced—from Rs 180,000 to Rs 250,000 for Latin American countries (LAC); from Rs 150,000 to Rs 200,000 for African countries, CIS countries, and ASEAN; and from Rs 80,000 to Rs 150,000 for Australia and New Zealand.
“Due to the recession and the economic downturn, exports in the past two years have not been increasing. Hence, we have been exploring niche and lucrative areas like the LAC for MSMEs to identify markets for their products,” informs Sareen. For the same reason, there is no ceiling on the turnover of companies participating in events organised in LAC. This means that any company, irrespective of its turnover, is eligible to participate in buyer-seller meets or in fairs/exhibitions organised by the EPC.
The financial ceiling has been increased as the value of the rupee has gone down compared to the dollar, over the years. It has also been decided that for international exhibitions where the number of participants exceeds 75, the EPCs will be eligible for a higher financial support to the tune of Rs 4 million, explains Sareen.
Eligibility criteria
For companies to avail the benefits of the MDA scheme, it is mandatory that they be a member of the EPC, which circulates the calendar of overseas events among its members. Every year, the Ministry of Commerce allocates a budget for each EPC across India, and companies can avail MDA benefits on a first-come-first-served basis. Also, a company can avail MDA benefits five times in a financial year, and participate in one event per region. Each EPC can select a maximum of three companies for participation in a particular trade fair/exhibition, in a year.
