ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -A government providing export incentives often does so in order to keep domestic products competitive in the global market. Types of export incentives include export subsidies, direct payments, low-cost loans, tax exemption on profits made from exports and government-financed international advertising.

Detailed explanation-2: -Export subsidy is a government policy to encourage export of goods and discourage sale of goods on the domestic market through direct payments, low-cost loans, tax relief for exporters, or government-financed international advertising.

Detailed explanation-3: -Registration Cum Membership Certificate (RCMC):-Exporters, holding RCMC, get various benefits in the form of subsidies and exemption in excise duty, tax, etc. After getting the IEC number, the exporter applies for RCMC.

Detailed explanation-4: -There is no effect on the importing country’s government revenue as a result of the exporter’s subsidy. Export subsidy effects on the importing country. The aggregate welfare effect for the country is found by summing the gains and losses to consumers, producers, and the government.