Trading Houses, Star Trading

Houses and Status Holders

Presented by-
Lalit Sondhi
MBA-IB
What are Trading Houses?
 A business that specializes in facilitating
transactions between a home country and
foreign countries. A trading house is an
exporter, importer and also a trader that
purchases and sells products for other
businesses. Trading houses provide a service for
businesses that want international trade experts
to receive or deliver goods or services.
What are Status Holders?
 Status Holders are business leaders who have
excelled in international trade and have
successfully contributed to country’s foreign
trade. Status Holders are expected to not only
contribute towards India’s exports but also
provide guidance and handholding to new
entrepreneurs.
Objective of this Scheme
 The objective of the scheme is to recognize
established exporters as One Star, Two Star,
Three Star, Four Star, Five Star Trading Houses
with a view to building marketing infrastructure
and expertise required for export promotion.
Such Houses should operate as highly
professional and dynamic institutions and act as
important instruments of export growth.
Eligibility and Criterion For
Recognition
 Merchant as well as Manufacturer exporters, Service
providers, Export Oriented Units (EOUs)/ units located
in Export Processing Zones (EPZs)/ Special Economic
Zone(SEZ’s) /Electronic Hardware Technology Parks
(EHTPs)/ Software Technology Parks (STPs) shall be
eligible for such recognition.
 All exporters of goods, services and technology having
an import-export code (IEC) number shall be eligible
for recognition as a status holder. Status recognition
depends upon export performance. An applicant shall be
categorized as status holder upon achieving export
performance during current and previous two financial
years, as indicated in the FTP. The export performance
will be counted on the basis of FOB value of export
earnings in free foreign exchange.
Eligibility and Criterion For
Recognition
 For deemed export, FOR value of exports in
Indian Rupees shall be converted in US$ at the
exchange rate notified by Central board of
Excise and Customs (CBEC), as applicable on
1st April of each Financial Year.
Export Performance to be achieved

CATEGORY EXPORT PERFORMANCE (in

US $ million)*
One star export house 3
Two star export house 25
Three star export house 100
Four star export house 500
Five star export house 2000

*Value changed to US$ million in regard to INR in the

previous policy 2009-14
Recognition for State Corporations
 With a view to encouraging participation of
State Governments and Union Territories in
export promotion, one state corporation
nominated by the respective State
Government/Union Territory may be
recognized as an Export House, even though
the criterion for such recognition is not
fulfilled by it. This benefit shall be available
only for such period and in accordance with
such terms and conditions as may be
specified from time to time.
Weightage provided to exports
Double weightage
Double weightage is given to status-holder position only
to One Star Export House. It is granted to following
categories:-
 Micro, Small and Medium Enterprises (MSME) as defined
in Micro, Small and Medium Enterprises Development
Act, 2006.
 Manufacturing units having ISO/BIS.
 Units located in North Eastern States (including J & K
and Sikkim).
 Units located in Agri Export Zone.
Weightage provided to exports
 A shipment can get double weightage only
once in any one of the above 4
categories.
 Export performance of one IEC holder cannot
be transferred to another IEC holder. Hence,
calculation of export performance based on
disclaimer letter shall not be granted.
 Export on re-export basis not counted.
Privileges for Status Holders
 Authorization and Customs Clearances for
both imports and exports may be granted on
self declaration basis.
 Input-Output norms may be fixed on priority
within 60 days by the Norms Committee.
 Exemption from furnishing of Bank Guarantee
for Schemes under FTP.
 Exemption from compulsory negotiation of
documents through banks. Remittance /
receipts, however, would be received through
banking channels.
Privileges for Status Holders
 Two star and above Export houses shall be
permitted to establish Export Warehouses as
per Department of Revenue guidelines.
 Three Star and above Export House shall be
entitled to get benefit of Accredited Clients
Programme (ACP) as per the guidelines of
CBEC.
 The status holders would be entitled to
preferential treatment and priority in handling
of their consignments by the concerned
agencies.
Privileges for Status Holders
 Manufacturers who are also status holders (Three
Star/Four Star/Five Star) will be enabled to self-certify
their manufactured goods as originating from India with
a view to qualify for preferential treatment under
different preferential trading agreements (PTA), Free
Trade Agreements (FTAs), Comprehensive Economic
Cooperation Agreements (CECA).
 Status holders shall be entitled to export freely
exportable items on free of cost basis for export
promotion subject to an annual limit of Rs 10 lakh or
2% of average annual export realization during
preceding two licensing years whichever is higher.
Conclusion
Exporters not inclined to renew status-holder
recognition under new FTP 2015-20
 Status-Holder recognition scheme has ceased to be
attractive to exporters because of new changes
introduced in the new Foreign Trade Policy.
 Many of them may not ask for renewal of status-
holder recognition obtained under the erstwhile FTP
(2009-14). Special treatment and privileges given to
status-holders are meant to facilitate their trade
transactions in order to reduce their transaction cost
and time. Status-holders, however, are of the opinion
that "the privileges" granted to them do not bring any
exclusive benefit to them as compared to others.
References
 (“Exporters get self-declaration power - The
Economic Times,” n.d.)Exporters get self-
declaration power - The Economic Times. (n.d.).
 Foreign trade policy. (1969). Lo Spettatore
Internazionale, 4, 516–522.
https://doi.org/10.1080/03932726908457788
 Highlights of the Foreign Trade Policy 2015-2020
Highlights of the Foreign Trade Policy 2015-2020.
(2015).
 What’s an export house, trading house and a star
trading house - Quora. (n.d.).
Thank you for your Attention.

Questions?