Industries Commissionerate,
Government of Gujarat
E-mail :comind@gujarat.gov
.in
:comind@gujarat.gov.in
“The Five Pillars of Prosperity :
Agriculture, Manufacture, Navigation,
Information Technology, Commerce”
GoG-AMA Centre for International Trade
PAGE:
2-3
Gujarat-Global
Pharmaceutical Hub
PAGE:
PAGE:
4
6-7
Profile of Turkey
Editor’s Note
•
•
•
•
•
Maximum value addition is taking
place in pre-manufacturing services
comprise R&D, design and testing.
Post-manufacturing services capture
value through branding, marketing and
retailing.
India should focus on high value jobs
in pre-manufacturing services such as
research, engineering and design by
capitalising on its comparative
advantage — actual or potential —
given the availability of low cost
technically qualified manpower. The
Internet of Things is another big
opportunity to tap. For example, in
Gujarat, growth of technical textiles
will bring additional value added
revenue compared to low-value
garments.
Trade News
Contents:
Value addition to India’s Exports
Many of India’s key exports such as
apparel are low-margin contract
manufacturing that does not make
much money for manufacturers,
because manufacturers don’t own the
brands. A suit being retailed for $2500
in Tokyo or London gives just $250 to
its makers in Tirupur. Logistics related
inefficiencies further squeeze margins.
Moreover, India also has to deal with
manufacturing through robotics and 3D
printing that are going to take away
the advantage that comes from labour
abundance.
Vol. 12 ♦ No. 4
For Private Circulation
April 2016
Insight ......................... 2-3
Country profile ............. 4
Logistics ..................... 5
Trade News ................. 6-7
WTO ........................... 8
Editor:
The Indian textile industry has
strength across the entire value chain
from natural to man-made fiber to
apparel to home furnishings. To avoid
competition from lower end producers
such as Bangladesh, Vietnam etc.,
it must move up the value chain
through developing designing
capabilities in western clothing,
branding and investment in market
research.
One successful role model is Airbus
Industries’ annual procurement of high
value items from India. Over 6,000
people at more than 45 suppliers, both
public and private, are directly
engaged in providing Engineering &
IT Services, Aero-structures, Detail
parts & Systems, Materials and
Cabins to the Group for several of its
leading platforms including A380,
A350 XWB, A320 Family, A330,
C295W, A400M, Eurofighter, Tiger and
NH90. From current $500mn., by
2020, the export will rise to $2 billion.
Value addition in Indian farm exports
will come from greater R&D in
Suhayl Abidi
manufactured food rather than
exporting commodities which are the
present case today.
Turning out highly educated workforce
calls for overhauling of the education
system which is focused on rote
learning and scoring high marks in
exams, and not on questioning and
critical thinking — prerequisites for
innovation. Further, the government
should focus its energy on five or six
strategic sectors that have strong
backward and forward linkages with
other sectors. These sectors are
automobile, defence, housing and
infrastructure, pharmaceuticals,
electronics, and agro-processing and
retail.
Write to us
Please write to us at ama@amaindia.org
for feedback, suggestions, comments etc.
This will help us in tailoring our offering
to meet your knowledge needs in
international trade.
April 2016 ♦ Vol. 12 ♦ No. 4 ♦ 1
INSIGHT
2
industry features more than 50
biotechnology companies (14 per cent
of India’s) and 66 support
organisations The thrust areas of the
biotech industry in the State include
healthcare,
pharmaceuticals,
agriculture biotechnology, industrial
enzymes. bioinformatics, contract
research, marine and environmental
biotechnology.
Gujarat-Global
Pharmaceutical Hub
Gujarat, an established manufacturing
base - for bulk drugs and formulations,
is poised to capture global
opportunities to become a Global
Pharmaceuticals Hub. It plays host to
major players including India’s second
oldest drug-maker Alembic, Cadila
Healthcare Ltd (ZydusCadila), Cadila
Pharmaceuticals Ltd (CIL), Intas and
Torrent Pharmaceuticals. Sun Pharma
and ZydusCadila have a global
presence too. Some highlights:
Turnover of Gujarat Pharmaceutical
industry was worth USD 7.8 billion in
2013-14.
•
Presence of more than 50
Biotechnology companies and 66
support organizations
Gujarat now has 3,637 licensed units
engaged in this industry. Of these,
nearly 800 are active in direct
manufacturing of drugs. Only 20 per
cent of these are medium or major
manufacturers while 80 per cent are
small-scale units. These include 384
units approved by the World Health
Organisation’s Good Manufacturing
Practice certification (WHO-GMP),
and 29 units approved by the United
States Food and Drug Administration
(USFDA). It is also leading in research
& development and various SMEs,
research organisations and academic
institutions have filed nearly 1,000
patents over the last five years.
•
5,585 manufacturing licenses;
Home to - 40% of CRO in the
country
•
40% of machinery for Pharma
sector manufactured by Gujarat
•
Largest Manufacturer of I.V. sets
in India; Only manufacturer of
Balsum
•
70% of cardiac stents & 50% of
intraocular lenses manufactured in
Gujarat
•
Only manufacturer of a digestive
enzyme, Pink Papain, in the world
•
58% of orthopaedic implants
manufactured in Gujarat
•
Only manufacturer of ranitidine
hydrochloride in the country
•
40% of India’s CRAMS companies
•
Gujarat contributes 40% to India’s
total pharmaceutical production
•
Pharma exports from Gujarat in
2013 stood at USD 2.83 billion
(28% of India’s pharma export)
•
Pharma
sector
provides
employment to around 75,000
people
Gujarat is an established
manufacturing base for bulk drugs and
formulations. It manufactures and
exports different dosage forms
including generic drugs, intricate
vaccines, r-DNA products, cytotoxic
drugs, external preparations, sex
hormone drugs, small and large
volume
parenteral,
Active
Pharmaceutical Ingredients, hi-tech
cardiac stents, bio-pharma products
etc.
•
Annual turnover of the
Biotechnology sector is USD 200
million
In recent decades, biotechnology has
also emerged in a big way. The
landscape of Gujarat’s biotech
2 ♦ Vol. 12 ♦ No. 4 ♦ April 2016
The pharmaceutical industry is
concentrated in four clusters of
Ahmedabad, Vadodara, Ankleshwar
and Bhavnagar. The State has six
pharmaceutical Special Economic
Zones (SEZs) and as many as 90
pharmacy colleges.
During the last decade, nearly 300
pharma companies of Gujarat either
migrated to or set up units in incentiveproviding States such as Uttarakhand,
Sikkim and Himachal Pradesh.
However, with the 10-year tax holiday
period coming to an end, many of
these are returning to Gujarat.
The third largest in volume and tenth
largest in terms of value, the Indian
pharmaceutical market is expected to
grow at a compound annual growth
rate (CAGR) of 23.9 percent to reach
$55 billion by 2020. The US is the apex
destination for Indian pharma exports
followed by the United Kingdom. US
accounts for about 25 percent of
India’s pharma exports.Exporting drug
intermediates, active pharmaceutical
ingredients, finished dosage
formulation and bio-pharmaceuticals
to more than 200 countries, Indian
pharmaceutical industries are
generating large chunks of revenue
from exports.
Latin America is becoming a rising
destination of pharma products and in
FY2015, crossed $1 billion in revenue
with Brazil as the largest market. The
good news is that there is scope for
India to increase exports even further.
The Latin American pharma market—
estimated to be around $80 billion
today—is expected to touch $100
billion over the next five years. The
governments of the region (majority of
them centre-left) are promoting
generic medicines to cut the cost of
healthcare in their budgets as well as
for the consumers, and are spending
Contd. on next page
INSIGHT
3
Contd. from previous page
more on healthcare as part of their
inclusive development agenda.
However, India’s export of generics to
Mexico, Chile and Peru will face
challenges when these three
countries ratify the Trans-Pacific
Partnership (TPP), which is said to
be more MNC-friendly with stricter
patent protection.
As GDP growth rises in Africa, it too
will continue to be an important fast
growing destination.However,
Gujarat’s pharma exports to African
countries has declined by 40% in past
six months. The state exports drugs
worth Rs. 8,000 crore annually to
Africa, largely due to currency
fluctuations.
To explore further opportunities of
growth, the Indian pharmaceutical
industry players, particularly the large
ones have set up their subsidiary
companies, regional offices or taken
over local companies in other
geographies and many have even set
up their manufacturing plants in
developed nations too. All these
activities have been continuing since
the last 10 years particularly which
have made the Indian pharmaceutical
industry command a strong global
presence.
Global Drug Market
2012-13 2016-17 %Growth
Global pharma
market (in $ bn)
962
1200
24.7%
Global generic
market (in $ bn)
274
432
57.7%
Global generic
market (in $ bn)
28.5%
36%
2012-13 2014-15 %Growth
Indian pharma
generic drug
exports
(in $ bn)
15
25
66.7%
A look at the generic drug market
scenario of the world, as above table
shows, as to how the same is acting
as a key driver of the global
pharmaceutical market. The generic
drug market is expected to grow at
nearly at 60 percent by the year 20162017 and contribute nearly 36 percent
of the total market in the year 20162017.
The percentage contribution of the
generic pharmaceutical market to the
world is expected to increase from
28.5 percent in 2012-2013 to 36
percent in 2016-2017. Indian
pharmaceutical export medicines
contribute to nearly 5 percent of the
total world’s consumption of generic
drug medicines in the current
scenario. Indian pharmaceutical
industry has been eyed as the key
contributor in terms of export growth
to the sector since 2008 – with a
CAGR of 13 percent during the period
of 2008-2013.
Quality issues have cast its shadow
on pharmaceutical exports in recent
years with USFDA coming down
heavily on many plants including that
of Cadila. Companies have to realise
that they must maintain their quality
to the manufacturing standards of
major countries such as US, Japan
etc. if it wants to continue its dream
run.
In a move that will further inflate prices
of drugs in the United States, the U.S.
government has made it mandatory for
Active Pharmaceutical Ingredients
(APIs) to be manufactured locally. At
present, nearly 80 per cent of drug raw
material requirement is met by India
or China.The decision has already
sent Indian pharmaceutical exporters
into a tizzy, as it will significantly
impact Indian drug exports. Before the
new norms came into effect, U.S.based companies were allowed to
procure APIs from countries like India
and China, make the fixed formulations
(final product) in the U.S. and sell the
drugs to the U.S. government.
The Government of Gujarat has
provided encouragement to the
pharmaceutical industry through
several policy decisions and initiatives
– a scheme for assistance to innovative
projects; support to R&D institutes;
promotion of generic drugs by giving
them preference in government
purchases; incentives to encourage
R&D in the sector in terms of various
tax benefits; establishment of Gujarat
Genomics Initiative, Genetic
Diagnostic centres and Gene Banks;
establishment of Centre of Excellence
for Clinical Research and various
sectors of biotechnology etc. The
central government is also considering
setting up an exclusive tech park for
medical devices in Gujarat.According
to the latest reports, GST, when
implemented, will free the decisions
on warehousing and distribution from
tax considerations. In future it would
be based entirely upon operational
and logistics efficiency. Moreover, with
the unveiling of Pharma Vision 2020
by the Government of India,
investments in the sector are likely to
grow as it will help boost foreign direct
investments.
Some of the new developments in
Gujarat pharmaceutical industry
are:Cadila Healthcare Ltd announced
the launch of a biosimilar for
Adalimumab - for rheumatoid. Intas is
the first global company to launch a
biosimilar version of Lucentis, the
world’s largest selling drug for
treatment of degenerative eye
condition called Razumab.
GoG-AMA Centre for International Trade
Diploma programme on
SHIPPING
AND LOGISTICS
5 days 9.30 a.m. to 5.00 p.m.
Saturdays & Sundays
Starting on Saturday,
May 14-15, May 21-22 and May 28, 2016
(BATCH-7)
For Registration, Please Contact:
Ahmedabad Management Association
Phone: 079-26308601 to 06
E-mail: ama@amaindia.org
April 2016 ♦ Vol. 12 ♦ No. 4 ♦ 3
COUNTRY PROFILE
4
Profile of
Turkey
in West Asia, and is among the
fifteen most promising investors
for 2014-2016. However, number
of greenfield projects fell to 108
from 149.
Focus areas for investment are
agriculture & food, automotive,
chemicals, electronics, pharmaceuticals, alternative/renewable
energy & infrastructure.
Highlights:
Located at the crossroads of Europe,
Asia, Africa and the Middle East,
Turkey is a regional commercial hub
and an ideal location for promoting
economic growth, especially in areas
of trade, finance and foreign
investments. Turkey is one of the
largest upper middle-income
countries. With a Gross Domestic
Product (GDP) of $ 799.54 billion,
Turkey is the 17th largest economy
in the world. In less than a decade,
per capita income in the country has
nearly tripled and now exceeds $10,
500. Turkey is a member of the
OECD and the G20.
Turkey’s strategic location allows
investors to access a potential
market of 1.5 billion people, a
combined GDP of USD 26 trillion and
foreign trade of USD 8 trillion.
GDP growth is projected to increase
to above 4% in 2017, as political
uncertainties are assumed to fade,
employment continues to rise, and
the exchange rate depreciation and
the gradual strengthening of global
markets support export growth.
Turkey’s inflation rate will decline to
7.5% by the end of 2016, from 8.8%
in 2015. FDI amounted to USD 12.5
billion in 2014, an increase on
2013.According to the UNCTAD 2014
World Investment Report, Turkey has
become the largest recipient of FDI
4 ♦ Vol. 12 ♦ No. 4 ♦ April 2016
•
•
•
·
•
•
•
•
•
•
•
•
Turkey’s exports are expected to
grow 13.9% annually to US$ 295 bn
in 2017, making Turkey the 29th
largest exporter worldwide. Similarly,
import demand will grow with an
average of 9.1% per year to US$ 406
bn in 2017, meaning that Turkey will
take the 21st position on the global
list of largest importers. By 2017,
Turkey willmainly import fuels, ores
You may also
see DVD of
17th largest economy in the world
Turkey
Per capita income tripled in last decade
GDP grows four times in the last decade
Situated at crossroad of Asia, Africa, Western Europe. Central &
Eastern Europe
An important energy terminal and corridor in Europe connecting
the East and the West
Customs Union with the EU since 1996 and Free Trade
available at
Agreements (FTA) with 20 countries
AMA Media Outlet
Largest youth population compared with the EU (Eurostat)
Half the population under the age of 30.7 (2014, TurkStat)
Easy access to 1.5 billion customers in Europe, Eurasia, the Middle East and
North Africa
Access to multiple markets worth USD 25 trillion of GDP
Corporate Income Tax reduced from 33% to 20 %
Currently ranks 17 in size among all economies in the world, is aiming to improve its
position to 10 by 2023.
In 2014, Turkey accounted for 0.8
percent of global exports, and 1.3
percent of global imports. Underlined
by rise in both exports and imports,
Turkey’s total trade (exports +
imports) increased more than two-fold,
from US$ 190.3 billion in 2005, to
reach US$ 399.9 billion in 2014.
Turkish exports are well diversified,
ranging from natural resources and
low value-added products such as
metals, precious stones, energy,
apparel, and food stuffs, to higher
value goods including vehicles and
machinery. In 2014, Turkey’s export
basket comprised motor vehicles,
machinery, iron and steel, electrical
goods and gold.
Because of its own economic growth
and that of its main trading partners,
& metals and industrial machinery,
which together account for 41% of
total imports of Turkey. Similarly,
Turkey’s exports will mainly consist
of textiles (including fibers, yarn and
products), ores & metals and road
vehicles & transport equipment.
India’s bilateral trade with Turkey has
increased significantly by more than
five-fold in the last decade, with a
total trade of US$ 7.5 billion in 2014.
While India’s exports to Turkey
amounted to US$ 6.9 billion in 2014,
accounting for 2.8 percent of Turkey’s
global imports, India’s imports from
Turkey have also risen, from US$
219.9 million in 2005 to US$ 586.7
million in 2014, depicting close to a
three-fold increase. The potential
Contd. on next page
LOGISTICS
5
g
Sri Lanka Ports Authority keen
to facilitate Myanmar transhipments through Colombo Port
Sri Lanka Ports Authority (SLPA)
reportedly plans to grant a 10 per
cent discount on transhipment
handling charges of vessels carrying
shipments to Myanmar through
Colombo port.The decision aims at
attracting the fast growing
transhipment volumes from Eastern
India and Bangladesh to Colombo
port, reports said.
SLPA said that the transhipment
volumes from East Indian and
Bangladesh ports have been
increasing, though Singapore still
claims the biggest portion.
Transhipment of Myanmar cargo
through Colombo port has seen a
sharp rise in recent years,
according to reports.
SLPA said a feeder service between
Colombo port and Myanmar’s
Yangon port was commenced
recently to facilitate trade between
the two countries, a release said.
g
Absence of FSSAI laboratories
at Indian ports hampering trade:
BRIEF
The absence of Food Safety and
Standards Authority of India (FSSAI)
laboratories at Indian ports is one
of the major hurdles that is
hampering trade. It not only delays
the entry and exit of products but
also leads to increased logistic
costs.Apart from it, frequent
breakdowns in the Custom
Electronic Data Interchange (EDI)
systems and shortage of round-theclock functioning container freight
stations were among the key factors
hampering the growth of the Indian
ports.
These were some of the highlights
of a comparison study of select
ports in India which was released
by the Bureau of Research on
Industry
and
Economic
Fundamentals (BRIEF), an
economic research organisation.
g
2. An increasing focus on quality
and product sensitivity.
3. Regulation is on the rise.
4. Market pressures drive demand
for supply chain efficiency.
5. Manufacturers are outsourcing
more processes to 3PLs.
6. Cold chain is experiencing some
mode shifting.
7. Sustainability initiatives are
driving investment.
8. Packaging is evolving to meet
new needs.
The Big Chill: 10 Trends in Cold
Chain Logistics
9. Technology investment remains
critical.
The heat is on food and pharma
companies to keep refrigerated
freight frosty.
10.Customer habits persist as the
cold chain’s weakest link.
With its capital-intensive equipment,
strict temperature requirements,
and energy dependence, the cold
chain has always been a demanding
logistics segment. Now the sector
is grappling with additional
challenges—from increases in the
sensitivity, quality standards, and
volume of many of its goods, to
continually mounting regulations.
Here are 10 trends impacting the
cold chain, and some strategies
manufacturers and logistics service
providers use to adapt and thrive.
http://www.inboundlogistics.com/
cms/article/the-big-chill-10-trends-incold-chain-logistics/
1. Cold chains are becoming more
global.
Complete article can be viewed at:
Contd. on previous page
items for India’s exports to Turkey
identified broadly include, inter alia,
mineral fuels and distillation products;
machinery and instruments; electrical
and electronic equipment; iron and
steel; vehicles other than railway,
tramway; plastics and articles; pearls
and precious stones; pharmaceutical
products; rubber and articles; cereals.
Among services industry, IT and
business services hold particular
interest to Indian companies.
Your gateway to knowledge…
GoG-AMA LIBRARY CORNER ON-LINE DATABASES
Members are welcome to use these databases
KOMPASS: Kompass is a business to business import and export
directory that enables you to gather information about other companies
and promote your company in the global marketplace. It is a business to
business directory which has 2.3M companies in 70 countries.
Trade Portals of India: It provides trade information, country information
and trade leads.
For details please contact AMA Library
April 2016 ♦ Vol. 12 ♦ No. 4 ♦ 5
TRADE NEWS
6
g
India’s exports contract for 15th
month on tepid demand: During
the April-February period, exports
contracted 16.7% to $238.4 billion
while imports shrank 14.7% to
$351.8 billion, leading to a trade
deficit of $113.4 billion.
The trade deficit narrowed further
from its previous month’s low, data
released by the commerce ministry
highlighted. Exports shrank 5.66%
in February and imports contracted
5.03%, leaving a trade deficit of $6.5
billion.
in currency. The imposition of
minimum import price resulting in
increase in steel prices by 15% has
further blunted the competitive edge
of Indian engineering sector. While
engineering exports have declined by
about 16% in first 11 months of the
current fiscal, auto & auto
components, cycle & cycle parts,
hand tools, industrial & electrical
machineries are the worst sufferer.
g
Shipments of 14 out of the 30 top
export items grew in February,
against 13 in the previous month.
Among the major items, export of
gems and jewellery (11.2%),
pharmaceuticals (8.8%) and
chemicals (4.5%) increased, while
export of engineering goods
(-11.2%), readymade garments
(-0.72%) and petroleum products
(-28.3%) fell.
g
g
Good news at last for Indian
exporters: Upswing in US
economy bodes well: The US
economy has grown 1.4% between
October and December 2015 - faster
than the estimated 1%. It grew at
2.4% over the entirety of 2015, which
is good news for the world economy.
The significance-Indian exports have
been declining for the last 15 months
in a row but a growth in the US
economy means demand for Indianmade goods will increase again. The
US share in India’s exports has
increased from 13.67% in 2014-15
to 15.41% in April to December
2015.
Minimum import price hurting
exports and MSME units in
manufacturing: FIEO : Mr S C
Ralhan, President, FIEO said that
exporters are already working on low
margins and facing cut-throat
competition besides huge volatility
6 ♦ Vol. 12 ♦ No. 4 ♦ April 2016
g
g
g
g
US hikes anti-dumping duty on
Indian shrimps, exports may fall:
The preliminary average duty has
been increased to 4.89% in the 10th
annual review of dumping duties,
compared to 2.96% in the ninth
review. The US government has
raised the anti-dumping duty on
import of frozen shrimps from India,
and the exporters apprehend drop in
exports.The preliminary average duty
has been increased to 4.89 per cent
in 10th annual review of dumping
duties, compared to 2.96 per cent
in ninth review which covered
February 1, 2013 , through January
31, 2014 .
Most Indian sectors maintaining
market share on exports: Rita
Teaotia: Indian industries have
managed to maintain and increase
their market share in most of the
sectors despite countries all over the
world experiencing fall in exports,
Union Commerce Secretary Rita
Teaotia said today.”... it is not just
India that has seen fall in exports,
China last month reported 25 per
cent fall in exports. Europe, US, (in)
all countries the demand has
contracted, this is the situation,”
Teaotia told the reporters.
She said sectors like pharmaceutical
gems and jewellery have been good
news for the country in exports.
Pharma sector has continued to
remain robust and to increase its
market share across the globe,
textile sector and garments export
in some markets continued to
remain robust, she said, adding that
gems and jewellery has certainly
“held its own.”
India’s exports dip 5.66% to
$20.73 billion in February: India’s
exports fell 5.66 percent to USD
20.73 billion in February. For the
same month, imports also declined
5.03 percent to USD 27.28 billion.
Exporters risk being blacklisted
when new EU rule kicks in:
Indian exporters enjoying preferential access into the EU market
through the Generalised System of
Preferences (GSP) scheme face a
tough technical challenge.From
next year, they may have to selfcertify the origin of their goods,
instead of accredited agencies, in
order to avail the benefits under the
scheme. This could prove to be a
complicated process and might
also lead to black-listing of firms if
errors creep in.
Merchant exporters to benefit
from interest subvention
scheme: Merchant exporters in
sectors such as carpets, handicrafts
and certain farm produce, where
producers do not export on their
own, are likely to be allowed to avail
of the interest subvention scheme.
Engineering exports except for the
last three months have performed
very well, she said.
g
Gems, jewellery exports dip
14.5%: Gems and jewellery exports
declined 14.5 per cent to $ 25.95
billion during the first 10 months of
the current fiscal due to slowdown
in global demand.In the April-January
period of last fiscal, the exports
stood at $30.35 billion, according to
the data from Gems and Jewellery
Export Promotion Council. Besides
global slowdown, the rejection of
Contd. on next page
TRADE NEWS
7
account for 46 per cent of the
country’s merchandise exports. The
share of the top five — including the
next three best-performing States:
Tamil Nadu, Karnataka and Andhra
Pradesh — is over 69 per cent of
India’s entire export earnings, the
study said. This finding is based on
the analysis of data between 200708 and 2014-15, Assocham said.
Contd. from PREVIOUS page
consignments is one of the reasons
for dip in the value of exports.
g
g
Rupee devaluation not the right
tool to boost exports: Raghuram
Rajan: While India’s exports of
goods and services have slowed
significantly over the last couple of
years in line with the emerging
market trend following a slowdown
in global demand, RBI governor
Raghuram Rajan dismissed the idea
that devaluation of the currency
would be the right tool to push it. He
instead advocated on the need to
improve productivity to achieve the
objective of remaining competitive in
the market and push export growth.
g
Special Export-processing Zones
(SEZs) have played an important role
in promoting exports from the betteroff States. “For instance, Gujarat has
been highly successful in tapping the
potential of SEZs within its
jurisdiction.
g
Budget 2016: Government to take
measures to support export
sector says Arun Jaitley: The
government will give more support to
exporters in a move toboost falling
overseas shipments.” The duty
drawback scheme has been widened
and deepened to include more
products and countries. The
government will continue to take
measures to support the export
sector,” Finance Minister Arun Jaitley
said in the Budget for 2016-17.
GUJARAT TRADE NEWS
g
Maharashtra, Gujarat corner 46%
of India’s exports: study: A study
by industry lobby ASSOCHAM has
said Gujarat and Maharashtra
Now, growers plan to increase
export of mangoes to the US: US
market fetches an exporter four
times the price.Mango growers in
the country are planning to increase
the volume of export of their produce
to the United States this year. Last
year, India exported 271 metric
tonnes of mangoes to the US.
Officials hope the figure will go up to
400 tonnes this year.
The US market would fetch an
exporter four times the price than to
any other country. Last year, the price
fetched per tonne of exports was Rs
70,360. In the US, it was Rs 2.55
lakh. It is the fear of maintaining
standards that is keeping Indians
away from this market. Varieties like
Alphonso are too sweet for the
palate of Americans. It is Kesar that
sells in those markets. A single
Kesar fetches close to a dollar.
However the packing, quality
maintenance and paper work
involved puts off most traders from
approaching the US market.”
The minister proposed to amend the
Customs Act to provide for deferred
payment of customs duties for
importers and exporters with proven
track record and to increase the
limitation period from one year to two
year in cases not involving fraud,
suppression off acts and wilful
mis-statement.
The government also plans to extend
the facility of direct port delivery to
more importers.
this month.The zone is close to
India’s number one traffic handling
major port of Kandla and the
country’s biggest non-major port
Mundra of the Adani group which
also holds distinction of being the
first Indian port-the govt or non govtto cross coveted handling mark of
100 million ton.
g
Kandla SEZ shows no let- up in
exports when all others are
down: The other SEZs in the
country are showing downward
export trend while KASEZ continues
to be a live, exporting zone ,likely to
touch all-time high exports figure
worth Rs.4000 crores at the end of
this fiscal of 2015-16 at the end of
Dairy segment gets Russia
exports boost : India’s efforts to
boost sagging farm exports has got
a shot in the arm as Russia has
agreed to drop a stringent condition
that was obstructing Indian supplies
of dairy products to that country,
sources said. Once formalities are
completed, dairy majors like Amul
and Mother Dairy will be able to take
advantage of strong demand in a
potentially big market.
An import protocol is expected to
be signed soon with Russia’s
Federal Service for Veterinary and
Phytosanitary Surveillance, which
will pave the way for Indian dairy
product supplies to that country, the
sources said.Once dairy majors are
able to export and subsequently
strengthen their position there, such
exports will add $150-200 million in
the first year itself.
GoG-AMA Centre for International Trade
USEFUL TRAINING PROGRAMMES
•
How to Locate &
Retain an Overseas Buyer
Saturday, April 16 • 9.30 a.m. to 1.00 p.m.
•
How to Calculate Export Price
Saturday, April 16 • 2.00 p.m. to 5.00 p.m.
•
Certificate Programme on
Exports and Imports
Monday to Saturday, April 25 to May 26
8.00 to 10.00 a.m
•
Import Documentation
and Procedures
Thursday, April 28 • 9.30 a.m. to 5.00 p.m.
For Registration, Please Contact:
Ahmedabad Management Association
Phone: 079-26308601 to 06
E-mail: ama@amaindia.org
April 2016 ♦ Vol. 12 ♦ No. 4 ♦ 7
WTO
is likely to experience a trade
surplus with countries like Vietnam,
Mexico, Peru and Chile, if it joins
the group. Hence, the cost of
participating in the TPP is much
higher than not participating in the
group.
8
g
Trans-Pacific trade deal puts
India in a spot: With the signing
of the Trans Pacific Partnership
(TPP) agreement, one of the
biggest and most significant trade
deals in recent times, there is
widespread speculation on how the
TPP will affect India. The majority
view is that this deal would
adversely affect India’s trade and
welfare.Experts say it would be
increasingly difficult for India to
export to the majority TPP partners
even if it becomes a part of RCEP
(Regional
Comprehensive
Economic Partnership). Most
significantly, the TPP may isolate
India from being a significant export
partner with the US, with whom it
enjoys a preferential access.
India’s total trade with TPP
countries has increased over time,
reaching $152 billion in 2014, with
$78 billion exports and around $74
billion imports, making a trade
surplus with these countries.But
the trade diversion during the postTPP situation would adversely affect
India’s exports to these countries
by an estimated $190 million
annually.
In the US market, textile products
would incur the highest market loss
for the Indian exporter, by an
estimated $56 million annually,
followed by organic chemicals ($5.5
million), nuclear reactors, boilers,
machinery and mechanical
products ($5 million). On the
contrary, if it joins the group, India’s
exports would rise by around $5.3
billion annually as against the rise
in import by $10.4 billion leaving a
net deficit in balance of trade of $5.1
billion.
India will experience the highest
trade deficit with the Japan followed
by Australia, Singapore and
Malaysia.On the other hand, India
8 ♦ Vol. 12 ♦ No. 4 ♦ April 2016
Yet India not becoming a party to
the agreement is a right choice at
this stage.
Currently, India has signed or is in
the process of signing a number of
bilateral and regional Free Trade
Agreements (FTAs) including the
Bay of Bengal Initiative for MultiSectoral Technical and Economic
Cooperation (BIMSTEC), South
Asian FTA (SAFTA), Indo Asean
FTA, etc.
Whether these FTAs will result in
gains to the country or not is still an
issue for discussion. At present,
India enjoys FTAs with only three
countries amongst the present TPP
signatories.
g
g
India-Mercosur PTA expansion
on anvil: Ahead of Uruguayan
President Tabare Vazquez’s visit in
the second quarter, India will be soon
undertaking negotiations to discuss
the possibility of expanding an
agreement on tariffs with South
American bloc Mercosur countries
to boost trade and services. The
expansion of the agreement will be
of strategic importance to boost
trade relations between the two
countries and the trade volume
target set at $30 billion in 2030.
RCEP trade deal: Why does it
matter: Negotiations on a mega
trade deal — the Regional
Comprehensive
Economic
Partnership of Asia and the Pacific
(RCEP) — began this month. This
proposed trade pact, which aims at
bringing the ten member states of
the ASEAN and its six free-trade
agreement partners, including the
five biggest economies of the
region — Australia, China, India,
Japan and South Korea — is crucial
from India’s point of view. The
negotiations, if successful, will not
only help India to protect its export
interests but will also strengthen
its strategic and economic status
in the region.
With the recent signing of the Trans
Pacific Partnership — another
comprehensive regional trade deal
among 12 advanced economies in
the Pacific Rim region — from
which India was sidelined, has
become more important to speed
up the RCEP negotiation. The TPP
deal gives its member states dutyfree access to each other, thus
making imports from non-member
countries — like India and China
— uncompetitive. According to an
estimate, India will lose as much
as $50 billion of current exports to
these countries, with sectors like
pharmaceuticals, textiles and
chemicals likely to suffer the most.
In this scenario, wrapping up the
RCEP deal, with its potential to
create a $22.7 trillion market, can
certainly help reduce the potential
negative impacts of the TPP deal.
In addition, the proposed pact, if
implemented, will not only
complement our existing trade
agreements with ASEAN and
some RCEP states, but it will also
help India to harmonize our trade
and investment regimes gradually
with those of other countries of the
group. This could have a positive
impact on Indian economy,
attracting more FDI and opening
up greater opportunities for Indian
companies to explore. The pact
also has potential to create a winwin situation, by pushing, on the
one hand, integration of the India
economy
into
a
more
sophisticated manufacturing
network of the region and, on the
other hand, adding India’s service
prowess to the manufacturing
muscle of its partners.
Published by GoG-AMA Centre for International Trade, AHMEDABAD MANAGEMENT ASSOCIATION, Core-AMA
Management House, Torrent-AMA Management Centre, ATIRA Campus, Dr Vikram Sarabhai Marg, Ahmedabad 380015
Phone: 26308601 • Fax: 26305692 • Email: ama@amaindia.org • Website: www.amaindia.org, www.gogama.org