In the world of export-import, each shipment counts. And you cannot afford to make any “uninformed investment”. So, if you have any doubt or a question, ask us. Our team of experts at The Dollar Business Intelligence Unit will be happy to answer your queries. Your question(s), if approved, will also be published on www.thedollarbusiness.com, and/or in forthcoming issue of The Dollar Business

Q: I own a hotel in Guntur. I use a tonne of whole cashew nuts for my restaurant every month. I am planning to import 1st grade cashew nuts from Vietnam. Is the idea viable? What is the new Exim Policy regarding import of cashew nuts? (Ammiraju Mutyala, Proprietor, Devika Foods, [email protected])

Dear Ammiraju: Although West African countries like Côte d’Ivoire or Ivory Coast, Tanzania, Guinea-Bissau, Benin, Ghana, Mozambique, etc. are still the biggest source of Indian cashew nuts imports, importing cashew from Vietnam does make sense given the country’s proximity to India (which means lower freight cost) and considering that the quality of the Vietnamese cashew nuts has been continuously improving over the last few years. In fact, as per latest shipment data, the highest volume and value of dried cashew nuts in shell are being imported from Tanzania and Indonesia at prices that range between Rs.85 to Rs.92 per kilogram. Mangalore and Tuticorin ports are the ports of destination for most consignments originating from the two exporting nations. Please however note that this price is C.I.F. value and does not include either customs duty on cashew nuts (which at present is a high 30%) or logistics-related costs that will be incurred in the process of transporting the imported product to your factory from the port of destination. However, what acts in favour of Vietnam is the lower customs duty of 12.5% since India has a Trade in Goods Agreement with Vietnam under the Framework Agreement on Comprehensive Economic Cooperation between the country and the Association of Southeast Asian Nations (ASEAN). As far as the new Foreign Trade Policy regarding import of cashew nuts is concerned, not much seems to have changed from the older version. The new Foreign Trade Policy 2015-20 is available on www.thedollarbusiness.com. Download and read it.

Response by: Steven Philip Warner, Editor-in-Chief, The Dollar Business

Q: We want to re-export goods imported from China without unloading the consignment at an Indian port. We would like to know: (1) What permission do we require and from whom; (2) Whether we are liable to pay customs/import duties; and (3) What export incentives are we entitled to? (Ashok, Export Executive, PRJ Sanitary, [email protected])

Dear Ashok: If you want to re-export goods imported from China without much hassle, we suggest you unload the container from the ship and store it in a bonded warehouse at port area till the time you actually re-export the goods to the country of your preference. All you will have to do is file a Into Bond Bill of Entry. The said bill of entry is filed when the imported goods are not required immediately by an importer for domestic consumption or are required to be re-exported to some other destination. The consignment can be stored in a warehouse without payment of duty under a bond and cleared later when required for domestic consumption on payment of appropriate duty or can be re-exported directly without paying any duty. The only condition attached to this is that your product should fall under “free to export and import” category. Further, since the goods are not meant for consumption in India, you are not liable to pay customs/import duties. This means you are also not entitled to any export incentive.

Response by: Shakti Shankar Patra, Executive Editor, The Dollar Business

Q: Under the new FTP, can we make application to DGFT for Advance Licence for imports for orders received from SEZS in INR? (Kamal Kishore Dubeu, Partner, D. D. Enterprises, [email protected])

Dear Kamal: Yes, you can apply for an advance licence. You can import goods against that advance licence and manufacture the product you want using those imported goods for the purpose of supplying them to an SEZ. Supply to an SEZ is considered as Deemed Exports. But, in order to fulfil your export obligation you need to ensure that the payment made to you in INR is transferred to your account from the Exchange Earner’s Foreign Currency (EEFC) Account of the SEZ unit to which you are supplying.

Response by: Manish K. Pandey, Editor, The Dollar Business

Q: We are into agri-machinery import business. We now want to export pulses to Arab countries. Please advise us? (Srinivas Rao Garapati, Managing Partner, Sri Vijayadyrga Imports & Exports, [email protected])

Dear Srinivas: India’s exports of pulses to the Arab world vary from country to country. While exports to countries like Algeria, Jordan, Kuwait, Lebanon, Libya, Morocco, Oman, Tunisia, and United Arab Emirates have grown by 22.33%, 51.05%, 14.59%, 14.96%, 352.92%, 276.40%, 49.33%, 34.05%, 7.19% year-on-year respectively in FY2014, pulses exports to nations like Bahrain, Egypt, Qatar, Saudi Arabia, and Yemen have shown a de-growth of 3.74%, 40.37%, 24.13%, 27.37%, 42.63% respectively in FY2014. However, overall, India’s exports of pulses to the Arab region have been growing at a CAGR of about 15% over the last five years, with Libya and Morocco being the fastest growing markets for Indian pulses in the region. Even the region’s import of pulses from the world has been continuously rising, clocking a CAGR of 8% over the last five years. Considering this, we would say the region, particularly Libya and Morocco, does presents an opportunity for Indian pulses exporters.

Response by: Dr. A. K. Sengupta, Chief Consulting Editor, The Dollar Business

Q: In Deemed Export, there is a benefit called “Deemed Export Drawback”. What really is it? How can it be availed? (Apurba Karuri, Store Incharge, Vama Foods Pvt. Ltd., [email protected])

Dear Apurba: Duty drawbacks, essentially, are post-export replenishment/remission of duty on inputs used in export products. In other words, many governments, particularly those in highly protected economies, refund all taxes paid by an exporter – be it customs duty, service tax or excise duty – so that the products remain competitive in the international markets. And this process of refunding all taxes involved in the manufacturing/production process, once the export is completed, is called duty drawback. Now coming to your question, let’s be clear that there is technically no difference between “Exports” and “Deemed Exports” and both are treated at par when it comes to availing benefits. Supplies to entities like SEZ, EOU, STP, EHTP, BTP, against Advance Licence, are considered as “Deemed Exports” (Refer to Para 7.02 of Foreign Trade Policy 2015-20 for the complete list of categories to which supply of goods against advance licence by a manufacturer is considered as “Deemed Exports”) and as such the benefits that are available to a regular exporter are also available to a supplier who is supplying to one of the aforesaid entities. Therefore, “Deemed Export Drawback” is nothing but regular “Duty Drawback” available to an exporter and can be availed in the same manner as regular drawback.

Response by: Steven Philip Warner, Editor-in-Chief, The Dollar Business

Q: I am looking for an export opportunity for Natural Palmyra Jaggery in Gulf, Middle East and Scandinavian countries. Please advise me. (Ravi, Owner, Merchant Exporter, [email protected])

Dear Ravi: Export of Palmyra Jaggery [ITC HS Code: 17029010] from India has been limited to a few countries with Bahrain, Kuwait, Oman, Sri Lanka, UAE, UK and USA being the biggest markets for Indian Palmyra Jaggery. These markets, particularly the Middle East market, have been growing at double-digit over the last few years. As far as Scandinavian countries are concerned, the last time a consignment of Palmyra Jaggery left India for one of the Scandinavian nations was in FY2012 to Norway. Even when it comes to sourcing Palmyra Jaggery from the rest of the world, Scandinavian imports are not relatively high. Hence, it’s advisable to focus on the Middle East market when it comes to exports of Palmyra Jaggery from India.

Response by: Manish K. Pandey, Editor, The Dollar Business

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