The Government of India has consistently acknowledged exports’ significant role in driving the nation’s economic growth. To further promote this vital sector, the government has introduced several incentives, one of which is the Export House Certificate. This recognition is granted to exporters who have exhibited exceptional performance in international trade. It not only honours their contribution to India’s foreign trade but also provides them with certain advantages to enhance their competitiveness in global markets.
What is an Export House Certificate?
An Export House Certificate serves as a mark of excellence for exporters who meet specific criteria established by the government. The certificate is awarded to those demonstrating strong export performance over a designated period.
Under the Foreign Trade Policy, the Indian government introduced the Export House Certificate, which is also known as the Status Holder Certificate. Businesses that have demonstrated exceptional performance in international commerce and made significant contributions to the nation’s foreign exchange revenues are granted this accreditation. It acts as a testament to the business’s achievements and dedication to advancing exports.
Businesses that export technology, commodities, or services must be eligible for the Status Holder Certificate. They also need to have a valid Importer-Exporter Code (IEC). These licensed exporters not only increase India’s export numbers but are also urged to serve as mentors. They are supposed to guide and encourage new or aspiring entrepreneurs, helping them manage the hurdles of international trading.
Export House Status Holder Categories
An applicant can qualify as a Status Holder by meeting the required export performance criteria specified in the Foreign Trade Policy (FTP) 2023. The classification of status holders, based on the FOB/FOR (as converted) value of exports, is as follows:
- One Star Export House: $3 million
- Two-Star Export House: $25 million
- Three Star Export House: $100 million
- Four Star Export House: $500 million
- Five Star Export House: $2000 million
Eligibility Criteria for Export House Certificate
The process of obtaining an Export House Certificate involves meeting certain eligibility requirements, followed by a formal application. Exporters must fulfil the criteria set by the Directorate General of Foreign Trade (DGFT), including achieving a specified export performance level. Once eligible, exporters can apply through the relevant channels to obtain this prestigious recognition. Here are some eligibility criteria that you need to fulfil to get an Export House Certificate.
- Businesses engaged in exporting goods, services, or technology must possess a valid Importer-Exporter Code (IEC) to be eligible for this certification.
- Eligibility is determined by the company’s export performance. Applicants must achieve the export performance threshold as specified in the Foreign Trade Policy (FTP) for the current financial year as well as the three preceding years. For businesses in the Gems & Jewellery sector, export performance from the current and two previous years will be considered.
- Export performance is calculated based on the FOB (Free on Board) export earnings, which can be in freely convertible foreign currencies or Indian rupees (INR), depending on FTP guidelines.
- For deemed exports, the FOR (Freight on Road) value in INR is converted to USD using the exchange rate set by the Central Board of Indirect Taxes and Customs (CBIC), applicable on April 1 of each financial year.
- To be eligible, a consistent export performance over all three preceding financial years is required (for Gems & Jewellery, performance across the two preceding years and the current year is sufficient).
Documents Required for Export House Certificate
Exporters seeking an Export House Certificate may be required to submit the following documents, as applicable:
- Certificate of Exports if double weightage has been claimed (this applies specifically to applications for a One Star Export House).
- You will need a certificate verifying foreign exchange earnings through the supply of services.
- You will also require a certificate indicating the FOR value of deemed exports.
- Information on exports from SEZs, EOUs, EHTPs, STPs, and BTPs units, included in the IEC, which are being considered for status calculation.
- Annexure will be required as per ANF 3C.6.
Conclusion
The Indian government recognises exceptional exporters who make significant contributions to the foreign exchange profits of the country by awarding them with the Export House Certificate. It is a distinction granted in accordance with the Foreign Trade Policy, which is predicated on a business’s export performance during a predetermined time frame.
Importer-Exporter Codes (IECs) and export thresholds must be met for three consecutive fiscal years in order for enterprises to be eligible. Based on their export worth, status holders are divided into five tiers, from One Star to Five Star. Required documentation includes certificates certifying exports, foreign exchange earnings, and deemed export values.
