Canada
(Source : High Commission of India, Ottawa)
Products with Export Potential for India
Comparative advantage vis-à-vis peers in terms of manufacturing costs, market knowledge, technology and creativity has been a driving force for engineering exports from India. Engineering exports from India stood at US$ 65.23 billion in FY 2016-17. The export of engineering goods grew by 11.33 per cent year-on-year. Top ten importers of Indian engineering products during FY 2016-17 were US (US$ 7.06 billion), UAE (US$ 4.03 billion), Singapore (US$ 2.80 billion), UK (US$ 2.48 billion), Mexico (US$ 2.45 billion), Malaysia (US$ 2.39 billion), Germany (US$ 2.21 billion), Nepal (US$ 2.16 billion), Italy (US$ 2.08 billion) and Bangladesh (US$ 1.99 billion). The EU, ASEAN+2 and North America recorded the highest shipment of engineering products from India, with a share of 21 per cent, 16 per cent and 15 per cent respectively in total engineering exports in FY 2016-17. Capacity creation in sectors like infrastructure, power, mining, oil & gas, refinery steel, automotives, and consumer durables has been driving demand in the engineering sector. Separately, the approval of significant number of special economic zones (SEZs) across the country and the development of the Delhi Mumbai Industrial Corridor (DMIC) across seven States is expected to further bolster the engineering sector.
(Source: IBEF, EEPC India)
Significant Trends in Trade and Investment
Details of significant trends
Canadian exports to India continue to grow each month of this year, however they have dipped to 32% more than the same period last year (they were 57% more in July). The gap between export and import growth is maintained, with a 28% difference between them (it was nearly 50% in July). India has therefore performed better over the past 2 months of this year, narrowing the export and import gaps. Exports of mineral fuels and oils witnessed the highest growth compared to last year, at nearly threefold, and they are the second largest export to India. As with prior months, agricultural products (Edible Vegetables and Certain Roots and Tubers, Fertilizers) to India continue to maintain constant growth and continue to be the largest share of exports (26%). Due to Alberta’s oil sands, Mineral fuels are Canada’s largest export to the world, along with the highest growth rate. Aircrafts and Spacecrafts showed the 2nd highest growth rate, although this group is only the 9th biggest export to India. On the other hand, Inorganic Chemicals and Compounds of Precious Metals and Radioactive Elements experienced the biggest drop in exports as compared to the corresponding period with a 10% decline. In terms of imports from India, Pharmaceutical products continued to have the highest growth rate (18%), while Nuclear Reactors and Mechanical Appliances continued their downward trend during this year (9%). A notable feature of Canadian imports from India is that the shares of each of the top 10 imports do not vary widely, all coming within the 3-7% range of total imports.
Analysis
Canada’s total trade balance with India has historically been very low, and the trend has been continuing this year. The total trade balance, including exports and imports, is less than 1% of Canada’s total global trade balance. This is despite the significant 32% growth in Canadian exports over the corresponding period from last year. Canada’s exports to India have maintained their growth trajectory over the course of 2017, staying at nearly eight times its imports from India. By contrast, its growth in worldwide exports is only 1.5 times that of the growth in its worldwide imports. Canada enjoys a YTD trade surplus of $106 million with India, although India is a minor trade partner of Canada. As with prior months of this year, Canada maintains a trade deficit with the world, amounting to nearly $10 billion in the YTD reporting period. With respect to competitors of India’s top 5 exports to Canada, the US and China always feature as the top competitor in each of the five categories. India faces very tough competition from these two largest trading partners of Canada.
France
(Source : Embassy of India, Paris)
Trade – In Jan-Sep 2017, India France bilateral trade stood at € 7.64 billion (+17.44%) as compared to the corresponding period the previous year. India’s exports to France increased by 10.52% during this period with a rise in exports of following top 10 category products: mineral fuels & oils (38.93%); nuclear reactors, boilers, machinery and mechanical appliances (9.6%); automobiles and parts (42.5%); electrical machinery (10.15%), footwear (1.32%), articles of leather (2.19%). However there was a drop in exports of gems and jewellery (-6.91%). knitted or crocheted articles of apparel & clothing accessories (-0.54%) & non knitted or crocheted articles of apparel & clothing accessories (-0.77%) & organic chemicals (-0.68%).
Meanwhile, French exports to India increased by 26.4% during the same period: Exports of following top 10 ranked products increased: aircraft & spacecraft (81.99%); nuclear reactors, boilers, machinery & mechanical appliances (53.47%); miscellaneous chemical products (14.56%); electrical machinery & equipment (13.21%); plastics and articles thereof (8.8%); & pharmaceutical products (0.93%). However, exports of optical, photographic, cinematographic, measuring, checking, precision, medical or surgical instruments and apparatus & parts thereof fell by 22%, organic chemicals by 10.08% & those of iron & steel by -17.84% and articles of iron & steel by -38.28%.
Investment – According to statistics released by Business France, “There are over 150 Indian companies operating in France, where they employ more than 7,000 people. Eleven new investments from India were recorded in 2016, creating or maintaining 171 jobs. Indian investments in France in 2016 were often in high value-added activities, particularly R&D and engineering (36%), decision-making centres (27%), including a European headquarters, and business services (18%). Investments came in a variety of sectors, including software and IT services (18%), energy and recycling (18%), aerospace, naval and railway equipment (18%), and textiles and clothing (18%) sectors. Indian companies invested primarily in the Auvergne-Rhône-Alpes (27%), Ile de France (Paris region) (27%) and Bourgogne Franche-Comté (18%) regions. Selected investment projects in 2016 were from:
Royal Enfield [in 2016 this Indian firm announced that it would be establishing its pan-European headquarters in Paris (Ile de France region), with the opening of a concept store in Levallois-Perret]. Guesswork [a winner in French Tech Ticket, season 1, this Indian start-up markets a mobile app that helps small online retailers connect with customers. Guesswork won a one-year residency for 2016 in the Startup42 business incubator in the Parisian suburb of Kremlin-Bicêtre (Ile de France region)]. Etosha: [this specialist in flavours, fragrances and essential oils for agri-food, personal care (deodorants, perfumes and soaps) and homecare (detergents) recently established a French subsidiary in Grasse (ProvenceAlpes-Côte d’Azur region) that will create 10 jobs over the next three years]. Dymond Cleantech: [a winner in French Tech Ticket, season 1, this Indian start-up has developed an electrochemical water purification technology based on diamond electrodes. In 2016, it was resident in the La Paillasse business incubator in Paris (Ile de France region), where it had co-working space and access to coaching sessions].
Tunisia
(Source : Embassy of India, Tunis)
Status of ongoing major investments by Indian PSU’s / Pvt. Sector in Tunisia and proposed Indian investments in Tunisia
India Tunisia Joint Venture: US$450 million was launched in 2006 in Tunisia for manufacturing Phosphoric Acid. Its production started in 2013. Two Indian companies Coromandel Fertilizers Ltd and the Gujarat State Fertilizers Ltd have 30% shares in the project.
Other Projects: Indian companies M/s KEC International Ltd and Jyoti Structures Ltd have a presence in Tunisia for erection of electric transmission lines. An assembly plant of Mahindra pickup trucks is established in Tunisia with a target to produce up to 2500 trucks per year. Indian Auto Company, Mahindra and Mahindra, provides the vehicles as knocked-down kits, to be assembled by the Tunisian company, with full technical support from the Indian company. Mahindra has further diversified its product portfolio by introducing SUV class vehicles. M/s TATA Motors commenced assembly of pick-up trucks with Tunisian companies ‘Le Moteur’ and ‘Icar’ in June 2015. TATA’s flagship Tunisian model Tata Xenon has been very popular as 2000 vehicles have been sold in short span of 2 years. In next few months, TATA is exploring the possibility to introduce small commercial and vehicle heavy vehicle.
Analysis of Investment opportunities in Tunisia
Tunisian Government provides many incentives to promote foreign investment in Tunisia. About 3353 foreign companies operate in Tunisia in diverse sectors. The Government has primarily encouraged export-oriented FDI in key industrial sectors, such as call centers, electronics, aerospace and aeronautics, automotive parts, and textile/apparel manufacturing. Foreign participation is allowed in the privatization program of state-owned or state-controlled enterprises. This has attracted a significant share of Tunisia’s FDI in recent years. The privatization programme has taken place mainly in telecommunications, banking, insurance, manufacturing, and fuel distribution. The foreign investment in Tunisia during 2016 was worth US$ 0.901 billion.
Foreign investment flow reached 1, 648.4 MTD, growing 13.6% in the first nine months of 2017 in comparison with the same period last year. It included 1, 592. MTD in foreign direct investment (FDI) which posted a 13.2% rise in comparison with last year - and 56.4 MTD in portfolio investments, up 27.7% in comparison with 2016.
Status of Trade and investment related issues taken up by the Mission with the Government of Tunisia
Mission continuously follow up with Tunisian authorities at various levels, improvement of production of phosphate by India-Tunisia joint venture company, “Tunisian-Indian Fertilizer SA (TIFERT S.A.), acceptance GoI’s LOC for the manufacturing pipeline for the smooth supply of raw material from the phosphate mining area to the plant, easing and expediting registration process of Indian medical drugs etc. Mission is also following up a GoI’s proposal for offer concessional Line of Credit under IAFS-III for various projects.