IMPORTANT NEWS

To

Subject : Marketing Development Assistance(MDA) Code for Export Promotion Efforts(June 2001 edition) - amendments thereto.

Dear Sir,

In continuation to the amendment issued to the MDA Code vide amendment letter of even number dated 19th June 2002, the undersigned is directed to intimate that it has since been decided to discontinue the Sale-Cum-Study Tours by individual exporters from the approved activities under the MDA Code (June 2001 edition) by deleting para 3(i) of the MDA Code & deleting paras 4 and 7 A of the MDA Code.These modifications would be applicable with immediate effect.

2. All other terms & conditions of the MDA Code (as  amended till date) remain unaltered & applicable.

3. Please acknowledge receipt.

Your's faithfully,

(Veena Brahma)

Joint Secretary to the Govt. of India

Government of India
Ministry of Commerce & Industry
Department of Commerce (E&MDA Division)
Udyog Bhavan, New Delhi - 110 011 June, 2001

The MDA guidelines are reproduced hereinbelow once again for the benefit of the members.

Export promotion continues to be a major thrust area for the Government. In view of the prevailing macro economic situation with emphasis on exports and to facilitate various measures being undertaken to stimulate and diversify the country's export trade. Marketing Development Assistance (MDA) scheme is under operation through the Department of Commerce to support the undermentioned activities :

2. Administration of the Scheme

(i) The utilization of scheme is administered by the E&MDA Division in the Department of Commerce, Government of India, Udyog Bhavan, New Delhi - 110 011. Recognized EPC's on product grouping basis, Commodity Boards and Export Development Authorities are eligible for MDA assistance for development and promotional activities to promote exports of their products and commodities from India. (para 10).

(ii) MDA budget allocation to recognized EPCs for export promotion activities including specific special development and promotional projects are finalized in annual meetings with the respective EPCs, which are chaired, by the Additional Secretary and Financial Advisor (AS&FA), Department of Commerce. Proposals for adhoc grants for exclusive innovative export promotional activities, which are considered helpful to promote exports of Indian products and commodities are examined by the E&MDA Division and decided with the approval of the AS&FA (Paras 10 to 12).

(iii) Proposals for reimbursement of MDA assistance to individual exporters for eligible export promotion activities abroad on receipt of specific recommendations from FIEO, EPCs, Commodity Boards and Export Development Authorities in the prescribed verification note are considered at the final stage and approved by the MDA Committee under the Chairmanship of Director (MDA), Department of Commerce with Director/Dy. Secretary (Finance), Director / Dy. Secretary from one Commodity Division on annual rotation basis as Members and Under Secretary (MDA) as Member Secretary (Paras 3 to 9).

(iv) proposals for grant of MDA assistance referred to by the concerned Commodity / administrative divisions in the Department of Commerce / Ministry of Textiles, from within the overall allocation decided in the annual budget meeting with the EPCs and against adhoc grants approved for specific innovative export promotion activities are examined and approved by the E&MDA Division in consultation with the Finance Dvision of the Department of Commerce.

(v) Proposals received from concerned EPCs for assistance to contest countervailing duty and anti dumping duty proceedings initiated abroad are considered by a specific committee constituted in this regard under the chairmanship of AS&FA (Para 11).

3. Assistance to individual exporters for export promotion activities abroad.

(i) All exporters for bonafide overseas marketing promotion activities to explore new markets for export of their specific product(s) and commodities from India in the initial phase are eligible for assistance under MDA scheme in undertaking following & activities abroad:

1) Sale cum study tour subject to elibiility under para 4 below.

2) Participation in trade fair / exhibition

3) Publicity through printed material

(ii) Maximum number of permissible sale cum study tours and / or participation in fairs / exhibitions are two in a financial year. One additional activity, either sale cum study tour or participation in trade fair / exhibition in the Latin American Countries would also be permissible in a financial year.

(iii) Recognized export / trading houses by the DGFT would be provided assistance through Federation of India Export Organizations (FIEO) and other exporters would be provided assistance through concerned EPCs, Commodity Boards, APEDA & MPEDA.

4. Sale Cum Study Tour :

Assistance would be permissible on travel expenses by air, eurorail etc., in economy excursion class fair @90% for exporters having valid SSI registration certificate and @75% for others including merchant exporters. This would, however, be subject to an upper ceiling of Rs. 60,000/- per tour (Rs. 90,000 for LAC region). This would also be subject to meeting the conditions of para 3 and as under :

(1) A maximum of two sale cum study tours to a particular country would be eligible for MDA assistance and exporting companies after availing MDA assistance two times including past cases to a particular country, have to visit that country, if any, on self financing basis.

(2) The tour to single country or a group of countries shall be with a minimum of four-nights stay abroad excluding journey period.

(3) Assistance shall be permissible to one regular employee / Director / partner / proprietor of the company.

(4) intimation application must be received in the concerned EPC, FIEO, Commodity Board, APEDA & MPEDA with a minimum of 14 days clear advance notice excluding the date of receipt of application in the office of the concerned organization and the date of departure from the country.

(5) The company shall not be under investigation / charged / prosecuted / debarred / black listed under EXIM Policy of India or any other law relating to export and import business.

(6) Maximum MDA assistance shall be inclusive of MDA assistance received from all Govt. bodies / FIEO / EPCs / Commodity Boards / Export Development Authorities / ITPO etc.,

5. Participation in Trade Fairs / Exhibitions :

Assistance would be permissible on travel expenses by air, eurorail etc., in economy excursion class fair and / or charges of the built up furnished stall, electricity and water charges @90% for exporters having valid SSI registration certification and @75% for others including merchant exporters.

This would, however, be subject to an upper ceiling of Rs. 1,10,000/- per participation (Rs. 1,40,000/- for LAC region). This would also be subject to meeting the following conditions :

(1) A maximum of three participations in a particular trade fair / exhibition would be eligible for MDA assistance and exporting companies after availing assistance three times including past cases for a particular fair / exhibition, have to participate in that fair, if any, on self-financing basis.

(2) Assistance for participation in trade fair / exhibition, wherein national participation is arranged by ITPO / EPC Commodity Board / Export Development Authority, would be provided if participated in the Indian Pavilion through the concerned organization or after getting waiver certificate from the concerned organization.

(3) Assistance for travel expenses would be permissible to one regular employee / Director / partner / proprietor of the company

(4) Intimation application must be received in the concerned EPC, FIEO, Commodity Board, APEDA & MPEDA with a minimum of 14 days clear advance notice excluding the date of receipt of application in the office of the concerned organization and the date of departure from the country.

(5) The company shall not be under investigation / charged / prosecuted / debarred / black listed under EXIM Policy of India or any other law relating to export and import business.

(6) Maximum MDA assistance shall be inclusive of MDA assistance received from all Govt. bodies / FIEO / EPCs / Commodity Boards / Export Development Authorities ITPO etc.

6. Publicity through printed material :

Cost of production of publicity material like product catalogue, brochure, information handout etc., for use abroad during sale cum study tour, participation in trade fair / exhibition, EPC sponsored buyer cum seller meet / trade delegation etc., would be permissible for assistance from MDA scheme @25% of the total approved cost subject to an upper ceiling of Rs. 15,000. This would be subject to meeting the following conditions:

(1) Assistance would be provided once in a financial year.

(2) A copy of the publicity material is to be submitted along with the claim.

(3) Quotation from a minimum of three printers is to be obtained and submitted alongwith the claim. Assistance will, however, be allowed on the lowest quotation subject to the upper ceiling as mentioned above.

(4) Intimation application must be received in the concerned EPC, FIEO, Commodity Board, APEDA & MPEDA with a minimum of 14 days clear advance notice excluding the date of receipt of application in the office of the concerned organization and the date of the publication of the material.

(5) The company shall not be under investigation / charged / prosecuted / debarred / black listed under EXIM policy of India or any other low relating to export and import business.

(6) Maximum MDA assistance shall be inclusive of MDA assistance received from all Govt. bodies / FIEO / EPCs / Commodity Boards / Export Development Authorities / ITPO etc.

7. DOCUMENTATION FOR REIMBURSMENT OF ASSISTANCE TO EXPORTERS :

7-A. For sale cum study tour

(i) Intimation application duly completed and signed in the prescribed format (Annexure-I) shall be submitted by the exporter to the concerned FIEO / EPC / Commodity Board / APEDA / MPEDA giving clear 14 days advance notice.

(ii) Concerned Organization (FIEO, EPC etc.) on receipt of application shall examine and issue approval letter to the exporter preferably within 5 working days of the receipt of the application form in the prescribed format (Annexure IV).

(iii) Claim alongwith the declaration duly completed shall be submitted by the exporter to the concerned Organization (FIEO, EPC etc.) in the prescribed format (Annexure V) alongwith under mentioned papers immediately on return to India after completion of the activity but positively within 3 months of their return to India.

* Details of sale cum study tour undertaken earlier with MDA assistance to the same country / countries.

* Self-certified copy of the export house / trading house certificate, if applicable.

* Self-certified copy of SSI registration certificate issued by the concerned Directorate of Industries, if applicable.

* Legible photocopy of passport highlighting the entries about departure from and arrival into India and also the countries visited. In case, passport does not have arrival / departure dates regarding visits to various countries, some documentary evidence such as Hotel Bills, Boarding pass, lodging pass etc. be submitted.

* Original air ticket / jacket used during the journey. If Original air ticket / jacket is lost, a legible photocopy of the same along with a certificate from the concerned airline indicating following may be sent :

(a) Name of the traveller

(b) Ticket number

(c) Flight No.

(d) Date of departure from India

(e) Sectors / countries visited

(f) Class in which travelled

(g) Economy excursion class fare for sectors / countries visited.

* Self certified f.o.b. value export figures during the last three financial years, year wise.

* Brief report about the tour and achievements.

* An undertaking that we have not availed MDA grant from any other organisation of Govt. of India / Council / FIEO / Board / Authorities.

(iv) Claim form received after 3 month of return to India or wherein the deficiencies in the claim as intimated by the concerned EPC. FIEO etc., are not fully completed within 30 days of the date of directions given in this regard by the concerned EPC, FIEO etc., would not be entertained and rejected.

7.B - For participation in trade fair and exhibition

(i) Intimation Appliction duly completed and signed in the prescribed format (Annexure-II) shall be submitted by the exporter to the concerned FIEO/EPC/Commodity Board/APEDA/MPEDA giving clear 14 days advance notice.

(ii) Concerned Organization (FIEO, EPC etc.) on receipt of application shall examine and issue approval letter to the exporter preferably within 3 working days of the receipt of the application form in the prescribed format (Annexure IV).

(iii) Claim alongwith the declaration duly completed shall be submitted by the exporter to the concerned organization (FIEO, EPC etc.) in the prescribed format (Annexure VI) alongwith under mentioned papers immediately on return to India after completion of activity but positively within 3 months of return to India after completion of activity :

* Details of participation in the past with MDA assistance in the same trade fair / exhibition

* Self-certified copy of the export house / trading house certificate, if applicable.

* Self-certified copy of SSI registration certificate issued by the concerned Directorate of Industries, if applicable.

* Legible photocopy of passport highlighting the entries about departure from and arrival into India and also the countries visited. In case, passport does not have arrival / departure dates regarding visits to various countries, some documentary evidence such as Hotel Bills, Boarding pass, lodging pass etc. be submitted.

* Original air ticket / jacket used during the journey. IF Original air ticket / jacket is lost, a legible photocopy of the same alongwith a certificate from the concerned airline indicating following may be sent :

(a) Name of the traveller

(b) Ticket number

(c) Flight no.

(d) Date of departure from India

(e) Sectors / countries visited

(f) Class in which travelled

(g) Economy excursion class fare for sectors / countries visited.

* Self certified copy of receipts / bank advice etc., evidencing payment(s) made.

* Self certified f.o.b. value export figures during the last three financial years, year wise.

* Brief report about the participation and achievements.

* An undertaking that we have not availed MDA grant from any other organisation of Govt. of India / Council / FIEO / Board / Authorities.

(iv) Claim form received after 3 months of return to India or wherein the deficiencies in the claim as intimated by the concerned EPC, FIEO etc., are not fully completed within 30 days of the date of directions given in this regard by the concerned EPC, FIEO etc., would be entertained and rejected.

7.C - For Publicity through printed material

(i) Intimation application duly completed and signed in the prescribed format (Annexure-III) shall be submitted by the exporter to the concerned FIEO / EPC / Commodity Board / APEDA / MPEDA giving clear 14 days advance notice.

(ii) Organization (FIEO, EPC etc.) on receipt of application shall examine and issue approval letter to the exporting company, preferably within 5 working days of the receipt of the application form in the prescribed format (Annexure-IV).

(iii) Claim alongwith the declaration duly completed shall be submitted to the concerned organisation (FIEO, EPC etc.) in the presceibed format (Annexure VII) alongwith undermentioned papers immediately on return to India / production of publicity material:

* Copy of the publicity material, self-certified.

* Self certified copy of the invoice.

* Self certified copy of receipt / bank advice etc., evidencing payments made.

* Copies of quotations from printers, self certified.

* Self certified f.o.b. value export figures during the last 3 financial years, year wise.

(iv) Claim form received after 3 months of the production of publicity material or wherein the deficiencies in the claim as intimated by the concerned EPC, FIEO etc., are not fully completed within 30 days of the date of directions given in this regard by the concerned EPC, FIEO etc., would not be entertained and rejected.

8. Examination of claims and reimbursement of assistance :

(i) Concerned organization (EPC / FIEO etc.) shall examine the claim received in the presceribed verification note format (Annexure VIII) on priority and shall send the varification note along with a copy of the claim form only in batches on fornightly / monthly basis to the Under Secretary (MDA), Department of Commerce, Udyog Bhavan, New Delhi - 110 011, for perusal and taking approval of the MDA Committee. In cases approved by the MDA Committee, due MDA assistance shall be released in full to the exporting company on reimbursement basis by the concerned organization (FIEO / EPC etc.) preferably within ten days of the receipt of approval letter.

(ii) FIEO, EOCs, Commodity Boards, APEDA and MPEDA may request for placement of funds with them in advance on quarterly basis from the E&MDA Division, Department of Commerce, based on the approvals given and claims likely to be reimbursed during the quarter, intimating therewith the details of carried over funds to the last quarter, funds received during the last quarter, details of funds disbursed in the last quarter, balance unutilized funds available and likely disbursements to be made during the next quarter.

9. Consortium Marketing Approach Abroad :

Three to five SSI manufacturer exporters and / or merchant exporters with f.o.b. value of average exports less than Rs. 2 crore per annum per members during the preceding three financial years, can participate in trade fairs and exhibitions abroad through a consortium marketing approach subject to the activity within the maximum activity permissible limits given in para 3 above. This shall however be subject to meeting the following conditions:

(i) The consortium should have a Memorandum of Understanding (MoU) and should have an action plan for export promotion, skill upgradation and technology upgradation etc. and register it with the concerned E.P.C.

(ii) It shall consist of 3-5 SSI manufacturer exporters and / or merchant exporters having f.o.b. value of average export turnover of less than Rs. 2 crore per annum per member during the last three financial years.

(iii) All members should be exporting similar type of products or their products should reach the users through the same outlets so that the consortium could offer large capacities or range of products to foreign importers / users.

(iv) Organizations, who are members of the consortium, should not be of the same ownership.

(v) Such a consortium should submit their proposals to the respective Export Promotion Councils.

(vi) The proposal shall come to the Commodity Division and E&MDA Division in the Department of Commerce through the concerned EPC alongwith their view / recommendations and specific prior approval should be obtained in each case.

(vii) It would not be necessary for all members of the consortium to participate in the trade fair / exhibition etc. The participation by two members from such consortium in trade fair / exhibition shall enable the consortium to avail the MDA assistance for all members of the consortium.

(viii) MDA support would be provided as per MDA guidelines as applicable to the members of the consortium, i.e., 90% of the economy excursion airfare and stall charges subject to a maximum of Rs. 1,10,000/- per member of the consortium multiplied by number of members (between 3 to 5) of the consortium. Assistance available for production of publicity material for use abroad can also be pooled together and utilized by the consortium.

(ix) The consortium shall send the detailed report about the participation and its achievements to EPC / Department of Commerce within one month of return to India after the completion of the participation.

MDA assistance due to the consortium be claimed by the consortium and released by the concerned EPC on the same lines as applicable for disbursemenr of assistance to individual exporters.

10. Focus LAC Programme

(i) Marketing promotion activities in the Latin American Countries (LAC) through EPCs, ITPO etc. by way of organizing specialized `Made In India' Exhibitions, translation facilities in Spanish / Portuguese and vice versa, market survey, setting up of werehousing facilities, opening of foreign catalogue in CD-ROM form, inviting prominent foreign delegates and buyers to India etc. would be supported from MDA on the recommendations of FT(LAC) Division to the extent of 60% of the total approved cost except in the case of warehousing, foreign offices, market survey and reverse trade delegations from LAC region. Market survey in the LAC region would be financed on 80% basis from MDA.

(ii) Approved export / trading houses, approved organizations and recognized consortium of SSI units shall be given assistance for opening and maintaining a warehouse on a declining scale of 75%, 50% and 25% in three successive years for meeting the rental expenses subject to the condition that the quality of warehouse and the fairness of the rent is certified by the concerned Indian Mission. This provision shall be available only for a period of three years starting from 1st April, 2000 and shall be met entirely from the special MDA provision for focus LAC. Complete proposals for opening of warehouse in LAC region supported by FT (LAC) Division must reach E&MDA Section of the Department of Commerce in format given at Annexure-IX, a minimum of 30 days in advance excluding date of receipt in E&MDA Section and date of opening of warehouse.

(iii) Under reverse trade visits, visit of prominent delegates and buyers (one person from each organization) from LAC region under focus LAC programme for participation in buyer cum seller meets, exhibitions etc., would be assisted in meeting their return air travel expenses in economy excursion class upto the entry point in India. The other expenses relating to their stay, per diem allowance, local travel etc., would be met either by the concerned EPC or by sharing between the organizers and the foreign delegates / buyers. This would, however, be subject to financing only the well planned participations wherein the potential of the incoming delegate(s) buyer(s) have been screened by the concerned EPC and FT(LAC) Division.

(iv) Foreign offices in LAC :

Recognised Indian export houses and trading houses, recognised consortia of SSI units shall be given assistance for opening and maintaining foreign office in Latin American countries on the following terms and conditions:

(i) Complete proposals for opening of foreign office in LAC region suported by FT(LAC) Division must reach E&MDA Section of the Department of Commerce in format given at Annexure-IX, a minimum of 30 days in advance excluding date of receipt in E&MDA Section and date of opening of foreign office.

(ii) Individual recognised export houses and trading houses, recognised consortia of SSI units can open not more than one office in a financial year in the LAC region during the period ending March 2003 subject to a maximum of two foreign offices in the LAC region.

(iii) The second office would be permitted after evaluating the progress of the first office opened in the LAC region.

(iv) MDA assistance would be made available on reimbursement basis to meet 50% of the expenditure on rent charges for office accommodation and expenditure on salary with maximum assistance of Rs. 2.00 lakhs and Rs. 4.00 lakhs respectively in the first year of operation.

(v) The concerned exporter and consortia shall give an undertaking to continue the maintenance of the foreign the maintenance of the foreign office for atleast two more years after the first year of operation with MDA assistance, on the scale at which MDA assistance has been provided in the first year of its operation.

(vi) Fairness of the rent of the office accommodation shall be certified by the concerned Indian mission.

(vii) The maximum assistance shall be subject to maintaining office for full year otherwise the assistance would be reduced proportionately.

(viii) The exporter / consortia shall submit half yearly progress report to claim reimbursement on half yearly basis. After that, progress report be submitted to the concerned mission.

11. Approved organisation(s)/trade bodies.

(a) Approved organization / trade body means an organization, institution or association engaged in development and promotion of exports and approved by the E&MDA Division in the Department of Commerce for this purpose. These Organisation can organise programme / activity for specific purpose of development and promotion of exports of Indian products and commodities with the prior approval of the Government (E&MDA Division in the Departmenr of Commerce) for its members. These are of following two types:

(i) Approved organisations who can sponsor MDA proposals of its member exporters:-

List of the approved organisations is given in Annexure XI. These organisations can sponsor requests for MDA assistance for marketing export promotion efforts abroad, received by them from their members.

(ii) Other approved trade bodies

List of organisations approved under this heading is at Annexure-XII. These organisatons cannot sponsor proposals of their members exporters for MDA assistance but with the prior approval of the E&MDA Division of the Department of Commerce, can consider organising non-recurring specific promotional activity for export growth of Indian Products and Commodities abroad with MDA assistance.

(b) Any other organisation, institution or association, desirous of getting itself registered as an approved organization, may apply to the Department of Commerce (E&MDA Division) with full particulars in the prescribed proforma (Annexure XIII).

12. Pattern of Assistance to Grantee / Approved Organisations other than EPCs

(i) IIFT, IIP, IDI and ICA

MDA assistance to IIFT, IIP, IDI and ICA for various activities on and annual basis would not be provided. However specific development activities directed towards export growth of Indian products and Commodities would be considered by the Govt. (E&MDA Division in the Department of Commerce) for part financing.

(ii) To ITPO

Allocation for ITPO from MDA would be kept to the minimum and confined to the special fairs to meet deficit as approved by the Exhibition Advisory Committee in the Department of Commerce. ITPO should cross subsidize other events from surpluses in other fairs.

(iii) To Other approved trade bodies

On receipt of specific development and export promotion project(s) from the approved trade bodies (other than IIFT, IIP, IDI, ICA and ITPO), E&MDA Division may consider financing one or two special specific non-recurring activities with 60% financial assistance of the net expenditure on approved items from MDA subject to MDA assistance not exceeding Rs. 10 lakh in a financial year to a particular approved trade body.

13. Adhoc Grant-In-Aid

Residual essential activities or proposals connected with the export effort which qualify for the grant-in-aid but not covered by this Code will also be considered on merits for assisting from the Marketing Development Assistance scheme.

APPLICATION FORM FOR SALE-CUM-STUDY-TOUR ABROAD

APPLICATION FORM FOR PARTICIPATION IN TRADE FAIR / EXHIBITION ABROAD

APPLICATION FORM FOR PRODUCTON OF PUBLICITY MATERIAL

SAMPLE APPROVAL LETTER

CLAIM FORM FOR SALES-CUM-STUDY TOUR ABROAD

CLAIM FORM FOR PARTICIPATION IN TRADE FAIR / EXHIBITION ABROAD

CLAIM FORM FOR PRODUCTION OF PUBLICITY MATERIAL

VERIFICATION NOTE FOR PERSUAL OF MDA COMMITTEE

PROFORMA FOR OPENING OF WAREHOUSE/FOREIGN OFFICE IN LATIN AMERICAN COUNTRIES

LIST OF GRANTEE ORGANISATIONS(EXPORT PROMOTION COUNCILS)

LIST OF APPROVED ORGANISATIONSWHO CAN SPONSOR PROPOSALS

LIST OF OTHER APPROVED TRADE BODIES

PROFORMA FOR APPLICATION FOR RECOGNITION

CIRCULAR NO.2/1/2002-E&MDA DATED 31/3/2002