Role of Commerce and Industry Associations in Promotion of Internal Trade

Associations of business and industrial houses are formed to promote and protect their common interests and goals. India has several such bodies, including the Associated Chambers of Commerce and Industry (ASSOCHAM), the Confederation of Indian Industry (CII) and the Federation of Indian Chambers of Commerce and Industry (FICCI).

Their role: These chambers act as the national guardians of trade, commerce and industry and play a catalytic role in strengthening internal trade as part of overall economic activity. They interact with the government at different levels to reshape or introduce policies that reduce hindrances, increase the interstate movement of goods, bring transparency, and remove multiple layers of inspection and bureaucratic hurdles. They also work to build sound infrastructure and to simplify and harmonise tax structures.

Main areas of intervention:

• Interstate movement of goods: Help with registration of vehicles, surface transport policies, and construction of highways and roads. For example, the Golden Quadrilateral corridor (announced at a FICCI Annual General Meeting) facilitates internal trade.
• Octroi and other local levies: Octroi and local taxes — collected on goods and people entering a state or municipal limits — are important revenue for local governments. Chambers try to ensure their imposition does not hurt smooth transportation and local trade.
• Harmonisation of the sales-tax structure and Value Added Tax (VAT): Chambers interact with the government to harmonise sales tax across states. A rational structure with uniform rates promotes balanced trade. Under the new policy, VAT is being levied in place of sales tax to remove the cascading effect of sales tax.
• Marketing of agro products and related issues: Associations of agriculturists and federations help market agricultural produce — streamlining local subsidies and the marketing policies of agencies selling agro products, working with bodies like farming cooperatives.
• Weights and Measures and prevention of duplication of brands: Laws on weights and measures and on brand protection safeguard both consumers and traders and must be strictly enforced. Chambers interact with the government to frame such laws and act against violators. …