• GDP growth rate: 7.5% (2007)
• Inflation: 10% (2007)
• Foreign Reserves: US$ 50 billion (May 2008)
• Exchange rate (1 US $ TO Peso): 3.15 (2008)
• Foreign Debt: US $ 123 billion(2007)
• Foreign Trade: US $99 billion (exports: US $55 billion, imports: US $44 billion (2007).

• Viscose Spun & filament Yarn
• Polyester Viscose Yarn
• Shawls/Scarves
• Muffler and Polyester blended fabrics.

• Ad Valorem Mercosur Common External Tariffs (MCET) for apparel and textiles range from 3.5% to 21.5 percent.
• DIEMs are in force until 12/31/2007.
• Ad valorem (until 12/31/07): maximum 30% for some products and 35% for others.
• DIEMs vary ranging from $1 to $59 per kg.

DIEMs or Specific Duties: Following the opening of the Argentine economy in 1991, the first specific duties for apparel (DIEM) were established in 1993 (a decreasing fixed rate, ending in 2007) thus slightly reducing the volume of imports. According to WTO regulations, all apparel imports from member countries are subject to a maximum limit of 35 percent of the value of the imported goods. The importer pays the higher of the two calculations: FOB value (Extra Zone -applicable to imports of products of non-Mercosur countries- 20 percent) or weight (DIEM). DIEMs vary according to the product (ranging between $2 and $20 per kilo), however, one should expect to pay around 35 percent in import tariffs.

Import Restrictions
Argentina has restricted imports of used clothing and textiles, closeouts, irregulars, new and used rags, and scrap cordage of textile material wastes.

Distribution
The majority of agency and distribution agreements are flexible and can be negotiated individually. Most key Argentine importers are based in Buenos Aires, although a few of the larger organisations have branches in the provincial cities of Córdoba, Rosario and Mendoza. They generally opt for a network of distributors supported by travelling sales staff and rely on periodic visits from the provincial buyers to their HQ showroom in Buenos Aires. For certain product categories it is currently common practice to concentrate sales efforts on the Buenos Aires area to the detriment of the regions.

Before establishing any formal agreements, it is important that Indian exporters analysis the sales coverage strategy of their potential representative. It is normal, but not obligatory, to give sole representative rights for the whole of the country to one agent. This may initially be agreed for one year with a performance-tied option to extend for a longer period.

Whatever type of representation exporters may choose, it is strongly advised that the exporter visits the market regularly. Such visits are invaluable to the exporter to gain an appreciation of local market conditions, to oversee the work and support their local representative.

The high level of sophistication in the market offers the alternative of licensing arrangements and joint ventures to develop business in Argentina and provide a gateway into MERCOSUR. This might be a logical second step for exporters, particularly if they have already established a firm and successful foothold in the market.

Packing, marking and labeling
Labels of all products commercialised in country should contain the name and description of the product and country of origin, and quality or purity and net weight if the product is edible. Labels should also be in Spanish or have a sticker/label with the above-mentioned information in Spanish attached to the package.

Exterior packing cases should bear shipping marks and numbers on at least two sides (not top and bottom) with an indication of gross and net weights in metric units. Repetition of numbers in packages shipped under one bill of lading is prohibited.

Labelling on products (preferably in Spanish) must indicate the country of origin, the quantity, quality, and the measurement or net weight unit in the metric system. Where applicable, the purity or mixture should be shown on the label.

Importers are required to submit to the Bureau of Commerce and Industry samples of labels, container, wrapping and advertising material relating to any product sold at retail. Many products such as fruits and vegetables, textiles, hats, gloves, shoes, metal manufactures, bricks, tiles, glass manufactures, furniture, toys, paper products and fertilizers are subject to special labelling requirements which should be confirmed with the importers prior to shipment.

Exchange controls
In January 2002 the Argentine government overhauled its entire financial system and introduced a free exchange rate. After over a decade of the Argentine Peso being pegged to the US dollar ($1 = US $1), there is now a floating "free rate" for all transactions.

Restrictions have eased since they were first introduced in January 2002 and import statistics are showing an increase in trading of capital and intermediate goods. Payments of imports are now governed by two basic principles:

(i) only banks may transfer payments and
(ii) payments cannot be made without proof of customs clearance or a legal commitment to clear from customs once the goods arrive.

Documentation
Local procedures vary from product to product and are sometimes complex. It is always advisable to receive advice from the importer of your product about invoicing and document requirements to avoid any problems or delays. Generally, the following documents are required for freight shipments to Argentina:

• Commercial invoices, in quadruplicate
• Original bill of lading, airway bill or parcel post receipt (depending on the means by which the goods are sent).
• Packing list
• Certificates of origin, stamped by the Argentine Consulate in London (see useful contacts section) are required for many products, for example textiles, clothing and all those items subject to specific duties).
  

Anti dumping and countervailing
Safeguards are applied on imports of footwear, toys and several textile categories.   Several product categories originating mostly from Brazil, China, Korea and Taiwan have been subject to anti-dumping and countervailing measures. In the particular case of the EU this affects imports of wheat gluten, olive oil and tinned peaches.

Commercial samples and temporary Imports
Samples worth less than US $1000 ($2900 Peso) do not incur customs duty but do attract handling and storage charges. For samples over $1000 normal customs duties and clearance procedures apply. If samples are under the limit the package should clearly state "Sample with no commercial value" ("Muestras sin valor commercial" in Spanish).  Exporters should avoid sending samples to potential customers in Argentina unless they are specifically requested to and clear instructions and delivery instructions agreed. Most companies will baulk at having to pay customs duties plus charges for samples they have not requested.

Textile opportunities for Indian exporters
From exports of merely Rs.23.10 crore in 2003-04, Indian MMF exports have grown 147% to reach Rs. 57.08 crore in 2005-06.  Currently, India ranks 8th in imports of MMF textiles by Argentina.

Argentina has traditionally had a strong middle class segment. However, since the end of the last decade, due to a changing socio-economic scenario, the composition of the population has changed in terms of purchasing power and lifestyle. According to CCR Market Consultants, the Argentine population (39 million approximately) can be segmented as follows:

• Upper Class: 5%
• Upper Middle Class: 5%
• Middle-Middle Class: 20%
• Lower Middle Class: 30%
• Lower Class: 40%
  

Tips to successfully approach Argentine consumers:

• Locate a representative or distributor
• Have a long-term outlook
• Personalize your approach
• Be consistent in attention to service and delivery
• Provide fair credit terms
• Protect your trademarks and other intellectual property
• Have Spanish language capability
• Furnish materials in Spanish.
  

Since Argentina’s economy is expected to continue growing in the coming years due to rising consumption, increased general purchasing power and rapidly growing inflows of tourists buying Argentine textile and apparel products, there is good scope for Indian textile companies to increase exports to this country. Argentines are tough negotiators and personal relationships are important to develop before business is done. In addition, it should also be remembered that the pace of business in Argentina is slow and Argentines often need several meetings and extensive discussion to finalize deals.