EEPC INDIA :: Info Bulletin

Contents

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Highlights

Govt. Notifications/ Circulars

Public Notice No. 32/2015-2020 - Enlistment under Appendix 2E of M/s Expo Overseas Entrepreneurs Association (EOEA) Indore Madhya Pradesh- Authorized to issue Certificate of Origin (Non-Preferential) - reg.

Notification No. 64/2019-Customs (N.T.) - Tariff Notification in respect of Fixation of Tariff Value of Edible Oils, Brass Scrap, Poppy Seeds, Areca Nut, Gold and Silver- Reg.

Notification No. 65/ 2019-Customs (N.T.) - Amending Notification No. 12/97-CUSTOMS (N.T.), dated the 2nd April, 1997 so as to include Barhi, Distt Sonepat, Haryana.

Notification No. 37/2019-Customs (ADD) - Seeks to impose the definitive anti-dumping duty on the imports of "Electrical Insulators" originating in, or/and exported from China PR.

Circular No. 31/2019-Customs - Revised Norms for Execution of Bank Guarantee under Advance Authorisation, DFIA and EPCG Schemes.

My dear fellow exporters,

When slowdown of export as well as of the economyhave made Indian business as well as exporting community skeptical, there is reason for both to gear up with new expectations. The Government of India, very recentlyannounced some much needed measures to boost Indian exports as well as to revive economic growth. You all know that our export supportive schemes like MEIS, Interest equalization schemes needs to be replaced as they were considered ‘non-compatible’ by WTO. The Indian Government proposed to replace those schemes with the much talked about Scheme for Remission of Duties or Taxes on Export Product (RoDTEP) which, in effect, was expected to more than adequately incentivize exporters than existing schemes put together. A fully electronic refund module for Input Tax Credit (ITC) was also proposed to be implemented by the end of September 2019.

Export finance was of utmost importance for the government and several measures were put forward including Expanding scope of Export Credit Insurance Scheme (ECIS) by ECGC andrevising Priority Sector Lending (PSL) norms for Export Creditin favour of exporters. A number of effective measures were also adopted by the government for spreading awareness on utilization of benefits provided under FTAs.

A couple of steps were also announced especially for the engineering sector to address some long pending concerns on testing & certification and standards. A Working Group on Standards was proposed to be set up to ensure time bound adoption of all necessary mandatory technical standards by the Industryand their effective enforcement to elevate the quality and performance. Another one was to develop affordable testing and certification infrastructure in PPP mode to enable exporters to get all internationally accepted tests and certifications done within India. Both the measures were expected to overcome non-tariff barriers in exports.

EEPC India sincerely appreciate these moves and thank the government as successful implementation of the same will surely enhance shipments of goods from India an will strengthen India’s negotiation power in global trade in turn.

Ravi Sehgal

Amidst India’s faltering merchandise export growth and prolonged contraction in export credit growth, exporters have at least seen some silver lining as both the domestic government and the monetary regulatory authority RBI have been in consultation to ease priority sector lending norms for exports in order to ensure higher flow of credit towards export sector, according to news source. The Commerce and Industry minister has very recently held a meeting with senior public-sector bankers to push for easier and higher flow of credit disbursalfor exporters at cheaper rates. The government is expected to announce a slew of measures to boost export growth very soon while the RBI is also likely to change credit norms in favour of the exporters.

The measures to reinvigorate export credit has been the demand of the exporters as many MSME exporters have already been forced to go out of business due to excessive financial crunch and many are facing the same threat. To ensure availability of hassle-free credit to small exporters is a priority for the commerce minister.According to the latest RBI data, export credit of scheduled banks shrank as much as 36.1% year-on-year as of June 21, even on a low base of 42.7% contraction a year earlier.

The interest subvention provided to the exporters to the extent of three to five percent on bank credit has to make way for suitable alternative as WTO has raised objection to this kind of schemes on the ground of non-compliance. An alternative mechanism to facilitate export credit is desperately required. EEPC India has already suggested refund of embedded taxes for the exporters.

EEPC India, as a premiere trade and investment promotion body under the Ministry of Commerce and Industry, wholeheartedly thank the government for its initiative to revive exports from India.

Canada
(Source : High Commission of India, Ottawa)

Products with Export Potential for India

Electrical or Electronic Machinery and Equipment (HS-85) - The total market size of electrical machinery in India is anticipated to reach US$ 100 billion by 2022 from US$ 24 billion in 2013. The electrical machinery sector consists of generation, transmission and distribution machinery. In order to become a global force, Indian machinery sector needs to understand these changes and evolve to serve the user industries with the next generation products through integration of equipment with information technology like autonomous haulage or unmanned vehicles equipped with GPS, CCTV cameras, inertial guidance systems, and leverage dispatch route planning and guidance software for functioning.

Optical, Medical, Photographic, Scientific and, Technical Instrumentation (HS-90) - One of the potential items of India’s exports to Canada must include Optical, Medical, Photographic, Scientific and Technical Instrumentation. US, china and Mexico are the top markets for the import of this HS 2 category. India is not in the top ten. India’s has competitive disadvantages in the Optical, Medical, Photographic, Scientific and Technical Instrumentation market, but it also represents key opportunities for India to improve its position in the global economy through focused innovations.

Significant Trends in Trade and Investment

Details of significant trends - Canada’s total trade with India increased by 13.78% viz-a-viz Jan-June 2018. Canadian exports to India and imports from India both decreased in June 2019 viz-a-viz Jan-June 2018.

Analysis - The total trade with India from Jan-June 2018 was $3.5 billion USD. However, for Jan- June 2019, the total trade is $4.0 billion USD.

Globally, Canadian exports retreated in June 2019. The International sales were down in almost every major product category and to nearly all of Canada’s principal export destinations. With the available half yearly data of 2019, the inference is that it is shaping up to be a weak year for Canadian exporters.

Details of significant trends - India is the 12th largest market for Canadian Imports year to date. For Jan- June 2019, Canada’s total imports from India increased by 3.70% in comparison to Jan- June 2018. Imports decreased from India in June 2019 in comparison to June 2018 by 7.70%.

Analysis - The total import figure of Jan-June 2019 is $2.1 billion USD. However, for Jan- June 2018 the figure was $2.0 billion USD. The Top products of import from India are Nuclear Reactors, Boilers, Articles of Iron or Steel, Organic Chemicals (Including Vitamins, Alkaloids and Antibiotics), Pharmaceutical Products, and Motor Vehicles, Trailers, Bicycles, Motorcycles and Other Similar Vehicles.

Details of significant trends - Overall Canadian global imports decreased by 4.3%, in mostly all categories.

Analysis - Total imports were down in all but two major product categories i.e., farm, fishing and unfinished food products; as well as metal and mineral products. The biggest declines were in aerospace and energy. Aerospace imports were $607 million lower than they were in May 2019 – a 25.8% drop – while energy imports were $474 million lower (14.8%). The decline was noticeable in imports of industrial machinery and consumer goods also. For the second consecutive month, Canadians imported fewer goods from the United States. Imports from the United States fell by 3.8% in June – a decline of close to $1.3 billion. Imports from the US are now at their lowest monthly level since January 2018. There were declines in imports from the EU also in June. Led by a sharp decline in purchases of German goods, EU-sourced imports fell by $702 million compared to May – a decline of 12.2%. Meanwhile, June witnessed a modest increase in imports from Asia. Imports from China, Japan and South Korea were all slightly higher than they were in June.

Details of significant trends - India is the 9th largest market for Canadian exports year to date. For Jan- June 2019, Canada’s total exports to India increased by 27.10% in comparison to Jan- June 2018. The total exports decreased by meagre 0.13% in June 2019 viz-a-viz 2018.

Analysis - The total export figure for Jan-June 2019 was $1.9 billion USD. However, for Jan- June 2018 the figure was $1.5 billion USD. The Top products of export from Canada to India were: Mineral Fuels, Mineral Oils, Bituminous Substances and Mineral Waxes, Pearls, Precious Stones or Metals, Coins and Jewelry, Fertilizers, Edible Vegetables and Certain Roots and Tubers, Pulp of Wood and The Like; Waste and Scrap of Paper or Paperboard. The exports in the following categories saw remarkable increase: Aircrafts and Spacecrafts and Edible Vegetables and Certain Roots and Tubers.

Details of significant trends - Canada`s global exports fell by 5.3% in June, reaching a total value of $50.3 billion.

Analysis - The largest decline was in energy exports on a dollar value basis, which fell by $804 million (7.4%) compared to May 2019 followed by the aerospace sector, where deliveries were $744 million lower. However, as the value of aerospace exports is a fraction of oil, gas and other energy products, the $744 million leads into a 25% decline.

However, Canada did make export gains in one important market in June: The United Kingdom. Exports to UK were $296 million higher compared, which represents a partial

rebound from a sharp drop in May. The increase was modest in the markets of Algeria, Indonesia, Peru and Spain.

Canada’s Manulife partners with Mahindra Finance to form Indian joint venture

Canadian financial services group Manulife has agreed to take a 49 per cent stake in the asset management arm of India’s Mahindra & Mahindra Financial Services Ltd for USD 35 million. Mahindra & Mahindra Financial Services Ltd, which operates as Mahindra Finance, will retain a 51 per cent stake in the asset management company. The deal will help Mahindra AMC expand its fund offerings and retail fund penetration in India. It will also combine Mahindra’s domestic market strength with Manulife’s global wealth and asset management capabilities. The Canadian company primarily operates as Manulife globally and as John Hancock in the United States. It had assets under management and administration of over USD 849 billion as of March 31, 2019.