Eligibility criteria for an export house

Eligibility criteria for an export house:

The Eligibility criteria for export house recognition are made liberal in the Exim policy statements issued since 1990.

The Eligibility criterion for export house is: annual average FOB value of exports during the preceding three licensing years should be Rs. 15 crore.

As per the modified Exim policy 1997-2002, all exporters who maintain export house status for three successive terms or more will be eligible for a golden status certificate which will entitle them to all benefits accruing from such status in perpetuity, irrespective of their performance in future.

Recognized export houses are given the following import facilities and foreign exchange facilities:

(A)        Import facilities:

1. REP are admissible to them. In addition, REP licenses can be transferred to them by others.
2. They can import items placed on open general license (OGL) as per export-import policy.
3. They can get additional license as provided in Exim policy.
4. They can avail of import license to the extent of 100% of their value of REP licenses earned against their own exports made during the previous year.
5. Te export houses may be allowed to import capital goods against REP/ additional licenses so as to enable them to set up servicing centers for the benefit of their supporting manufacturers and other exporting units.
6. They may be allowed to import non-OGL capital goods, other than the banned list items, upto Rs. 40 lakhs CIF during the licensing year as per Exim policy.
7. They can import one electronic telephone exchange (PBX/PABX) for use in their offices.
8. They are free to import technical designs and other documentation for a value not exceeding Rs. 10 lakhs against REP/Additional licenses issued in their favour.
9. The export houses are also eligible to claim raw materials and components through IRMAC. The purpose is to enable them to supply raw materials and components to the actual users.

(B) Foreign Exchange Facilities:

RBI may allow registered/recognized export house to utilize foreign exchange upto Rs. 2.5 per cent of F.O.B. value of its total exports during the previous year subject to a maximum of Rs. 10 lakhs for the following purposes:

1. Foreign exchange expenditure on promotional activities permitted under the code of grants-in-aid for exports efforts;
2. Import of testing instruments and equipments for packing and tagging and their spare parts for setting up common service centres; and
3. Setting up warehouses and offices abroad without obtaining prior approval of the RBI.

The permission given by the RBI in this regard must be used within one year of its issue as the permission itself is valid for one year from the date of issue. The EH can cross the limit of 2.5 per cent of F.O.B. value of its exports foe certain purposes like exploring foreign markets, undertaking research and development for upgrading product technology, opening of showrooms to display Indian goods abroad, participating in exhibitions and advertising of Indian goods abroad.

Export houses operate mainly at the port towns. They are useful to Indian manufacturers in securing foreign markets for their products. They also give various services to their suppliers i.e. manufacturers. Such services may be financial and/or technical.