“Export merchant” and “Export House” are both entities involved in facilitating and promoting exports of goods and services from a country to international markets.
Get the full solved assignment PDF of IBO-02 of 2024 session now.
However, they differ in terms of their roles, functions, and legal definitions:
- Export Merchant:
- An export merchant is a type of intermediary or trader who purchases goods from domestic manufacturers or producers and sells them to foreign buyers or customers in international markets. The export merchant assumes ownership of the goods and is responsible for arranging transportation, documentation, and logistics for exporting the products.
- Key functions of an export merchant include sourcing products from domestic suppliers, negotiating prices and terms, consolidating shipments, handling export documentation (such as invoices, packing lists, and export licenses), arranging shipping and freight services, and managing export financing and payments.
- Export merchants typically operate as independent businesses or trading companies that specialize in specific product categories or industries. They play a vital role in connecting domestic producers with international buyers, facilitating trade transactions, and expanding market access for exporters.
- Export House:
- An Export House is a registered entity recognized by the Directorate General of Foreign Trade (DGFT) in India, which is engaged in exporting goods and services from India to international markets. Export Houses are eligible to receive various benefits, incentives, and privileges under government export promotion schemes and policies.
- To qualify as an Export House, a company must meet certain eligibility criteria and fulfill specific conditions prescribed by the DGFT, including minimum export performance requirements, compliance with export regulations, and adherence to quality standards.
- Export Houses play a significant role in promoting and boosting exports from India by facilitating trade, providing export-related services, and supporting exporters in accessing global markets. They may offer services such as export documentation, logistics support, market research, product sourcing, export finance, and compliance assistance to exporters.
- Export Houses may operate as standalone entities or as part of larger conglomerates, trading groups, or export promotion organizations. They contribute to enhancing the competitiveness of Indian exports, fostering international trade relations, and driving economic growth and development.
In summary, while both export merchants and export houses are involved in promoting and facilitating exports, export merchants typically operate as trading intermediaries that buy and sell goods internationally, while export houses are registered entities recognized by government authorities that engage in exporting goods and services from a specific country, such as India, to international markets.