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SAARC region: Land of untapped opportunities
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Bikky Khosla | 09 Jul, 2013
According to recent official figures released by the government, India's
export to the SAARC countries for the April 2012 to January 2013 period
stood at $11.53 billion. In 2009-10, 2010-11, 2011-12, exports to
these seven region stood at $8.39 billion, $11.65 billion and $13.03
billion, respectively. These figures clearly indicate that our exports
to the neighbouring region have continued to stay low despite our
geographical proximity and cultural affinity.
Why our trade with these South Asian countries -- Afghanistan,
Bangladesh, Bhutan, Nepal, Maldives, Pakistan and Sri Lanka -- has failed
to pick up although South Asian Association for Regional Cooperation
(SAARC) has crossed so many years since its formation? I think there
are several reasons for this: first, disparities in the market size --
for example, small countries like Nepal cannot be a major export
destination for India. Second, all these countries compete with each
other in a narrow range of products, particularly in textiles, apparel,
and other light manufactured goods. Third, each of these countries
suffers from poor infrastructure and lack of technology adoption and
this acts as a barrier to intra-SAARC trade.
In addition, an improved India-Pakistan relationship is crucial for increasing trade among the member states of SAARC. In recent years, we have seen some improvement in this direction, but it seems we still have a long way to go. Recently, the SAARC Chamber of Commerce & Industry has urged the newly elected Pakistan Prime Minister to speed up the decision to grant the much-awaited Most Favoured Nation (MFN) status to India. I think this confidence building measure should be taken by the Pakistan side as soon as possible. In addition, a better political relationship between the countries is crucial for intra-SAARC trade.
Despite these challenges, however, I think there is still enough scope for Indian exporters to increase their trade with the SAARC region. There is no doubt that these nations have quite a similar export basket and they tend to specialise in broadly similar items for exports, but at the same time it is equally true that India enjoys the best position among them in terms of relatively diversified export structure. In addition, India shares a land border with four members and sea borders with two SAARC countries. So, our exporters should make the best of this geographical proximity and try to dig out new opportunities.
It is a really sorry state of affairs that despite huge scope for India
to increase its exports to these South Asian neighbours, till date
trade is very low. During April to January 2012-2013, our total exports
amounted to around $239.6 billion, but exports to SAARC countries
amounted to only $11.53 billion, which is around 4.8 percent of total
trade. So, we have a long way to go, and I think India, as the largest
economy in the region, should show other countries the way forward.
I'd like your feedback on the challenges and opportunities you face when exporting to the SAARC countries. What can improve the situation?
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Custom Duty
Tushar Jain | Tue Jul 16 10:10:39 2013
The main problem is Custom Duty at the neighbouring countries is quite huge like if a importer from Bangladesh want to import cosmetics from India he has to end up paying approx 100-125% of Invoice Value as custom duty thus increasing his landing price and due to which his imported goods become very expensive.
As these countries share common border with India there are many illegal way to import or export goods which also act as barrier for building strong business tie-ups, this stops the right importer to import in a legal way as people who import illegally doesn't have to pay custom duty and they sell that products at a cheaper rate as compare to the selling price of a legal importer.
Costs more
Harish | Thu Jul 11 12:02:15 2013
In small I say that courier to Dubai costs INR2000 and the same costs to Pakistan INR3500.
Courier companies see countries like these as insecure regions.
Even if the Indian govt. wishes to sell, are they ready for creating the right atmosphere?
SAARC trade
R.K.Seethapathi Naidu | Thu Jul 11 02:04:05 2013
Srilanka may be the "FRIENDLY" nation for India & her troups:People from Tamil Nadu viewing it very serious!
Ever since India assisted Rogue Sri Lanka to kill more 1,50,000 during May, 2009, it is the end of the road for Sri Lanka:If India continue to have "RELATIONSHIP" with Sri Lanka, there is every possibility that the roads connecting India & Tamil Nadu will be closed once for all: Why traders are eager to do business in DEATH HOUSES? Similar way, countries helped Sri Lanka to achieve their long time goal of mass killing of tamil community will be dealt as enemy countries.
I want to meet buyers personally
J. Shunmugam | Thu Jul 11 00:53:44 2013
I just started a private limited company for exporting sea foods. I need (i) huge financier for purchasing of plant and machinery, (ii) I want rigid buyers at different countries, for which I have to meet them in person for making business relation and enter into the contract. I need finance for this also. Could Govt. help me at least in getting them with their contact address, email id,telephone as updated information. China, Japan, Indonesea, Malaysia, Singapore, Germany, USA --I need buyers from these countries. I want to export chilled, frozen and value added products of sea foods. I need finance to acquire, land, plant and machinery with export orders. How best Govt. of India will help me? I am having presently only one own house, costing 60 lakhs which can only be held as security margin. Please help us immediately. We are not financially sound enough. Kindly direct the Govt. authorised financing agencies to help us. Or otherwise, guide us to get foreigner investment in my company. Kindly arrange for FDI to errect freezing plant, marine vessel, chilling unit and specifically foreign import markets. I can manufacture and send the value added products as training imparted form CIFT, Kochi. I await reply immediately. My mail id: jshun.kolanji@gmail.com My contact No. 91-044-24611126 (or) 9345705005. I hope that Govt. will take necessary action to guide me properly.
Better ignore this region
Ragul Anand | Wed Jul 10 13:26:19 2013
None of mentioned countries are politically stable enough to concentrate on economic growth, they are either too small or they have huge intra terror treat, which keeps their governments too busy to look outside this constrains. Can't explore much in these region, authors view expressed is not so viable, as time & money spent on these market will never ever give a any notable return. Better ignore this region.
EXPORT TO AFRICA
Millington MAMBWE | Wed Jul 10 12:28:48 2013
India can export to Africa (Zambia in particular) for the same export result being looked at in SAARC!
KITWE, Zambia
Repatriation issues
Varun Gupta | Wed Jul 10 10:30:33 2013
I think key bottleneck working in this region remains Mobile repatriation and free trade policy; specially with countries like Bangladesh
Documentation customs / inspection - India in stone age
P B Ravikumar, GMV Projects and Systems, Chennai | Wed Jul 10 04:03:17 2013
Dear Sir,
Let us wake up to the facts:
For example for a very nearby country like Sri Lanka from Chennai, it takes 2 weeks to export a raw material like a steel plate. But if they order from Singapore or Kuala Lumpur, it takes only 7-8 days to reach them. Why? Just the documentation part!!!. It takes at least 2 days for any exporter to move the goods to bonded warehouse after making proper invoice & packing list.
AFTA / GSP certificate inspection : 2 more days
Customs inspection and stuffing: 2 days
Intervening holidays: 2 days
Next ship availability: 2 days
Sailing time clearance at Colombo port.
The above mentioned time is the best possible and it can only increase and never decrease.
We are far far behind in stone age type documentation customs / inspection procedure compared to other south Asian cities like Hong Kong, Manila, Singapore and Kuala Lumpur.
A committed leader is all we need what will set the ball rolling for change.
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Re: Documentation customs / inspection - India in stone age
Harish | Thu Jul 11 12:03:41 2013
My Friend I support your view. You are very clear & also very right.
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Thanks for the insight
Umesh Shivaraju | Wed Jul 10 00:03:09 2013
VERY WELL SAID...
Thanks for the insight.
We get some telephonic calls from Pakistan after finding us on Internet. We are worried to do any business with these guys. Because of the terrorist state Tag - and foreign policy.
However, we do business with Saudi Arabia, UAE and other countries occasionally.
If this article had specified some number on the actual potential for these countries to import, that would have been very useful.
Thanks, keep it up.
umesh@anushinfobase.com
Export to SAARC countries : Challenges
o.george | Tue Jul 9 18:04:50 2013
Our country is not considering ground realities from grass root level, or study properly before jumping in to action. Sri Lanka, Bhutan, Nepal & Bangladesh are potential countries for export if learnt well what their demands are, quality as per their budget demand are & volume supply at their required schedule are met with. Our incomplete market survey/study and abnormal delay in supply schedule are the reason for less business/export. Not to go wandering in Afghanistan and Maldives, let them come with requirement and supply strictly on our terms with out any negotiation. Avoid Pakistan and stop export. They tarnish our image by adulterating our supplies and showing to other countries, then promoting their produces/products. Why to take the donkey to sea for a drink, let the mule come to the pond. Exempt the sick minded and go with smaller but better. Also we have to improve ourselves, maintain stability, attract demand and deliver satisfaction to bag orders. We have red tapes, procedural delays, political delays, kick-backs and high rated price. Instead of struggling with all those hurdles, be straight and simple with affordable price and conditions to the small countries near to us. It is service to the needy nation, along with great reputation and respect to the country is gained. India is one of the richest country in the world, but we don't know how to manage it because of power hunger and lust of wealth.
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Re: Export to SAARC countries : Suggestions
Sunita Mondal | Thu Jul 11 09:27:22 2013
As the smuggling is rampant in most of the neighbouring SAARC countries particularly at the land boarders lying between India and Bangladesh as a result it caused a great problem to export business. Most of the required product goes through smuggling are cheaper than the exported goods. Moreover Chinese products are cheaper than Indian products and the importers of Bangladesh are enthusiastic to export from China.We may in this connection take following steps:
1. Check the smuggling.
2. Exempt export duty and VAT&CST for products to be exported to SAARC countries.
3. Incentives could be awarded to the exporter to SAARC countries.
4. VAT&CST registration to be made simple.
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