Don’t grumble about exports, update yourself

By 17 Jan 2019

Manoj Mehta, the The chairman of (AIFMP) All India Federation of Master Printers' Export Promotion says the industry mustn’t grumble since there is no rule that can please everybody. He takes time out from his business trip in Dubai to respond to some questions that have been coming our way.

Many packaging converters believe exports growth is getting stronger and will percolate down?
Yes, the growth in packaging is getting stronger with the passage of time. I feel this growth will trickle down. Having said that, I feel, it will benefit those units, who are ready and fully prepared to avail the benefits.

Are you seeing this bullishness transpire based on your interaction with more than a hundred print associations at AIFMP?
Yes, I am. But as I have mentioned not all the companies will benefit. I feel the unit should have updated knowledge about global trade practices plus there should be a business system in place; and on the ground, there must be a strong team at work, who are techno-savvy.

The industry is talking about a black swan moment due to the events in China. Your view?
Surely, India has an advantage. A trade war between China and USA can offer an opportunity for our country. But this opportunity is not for all products. For example, engineering products will get maximum benefits but not food items.

But the Indian corrugation converters are in distress.
Paper trade will benefit but corrugators are under pressure. We need to examine the change in duty effects on the products of the corrugated industry. Someone should study the duty structure before and after the changes. Once the issue is studied, then we have to be competitive to accrue the benefits.

What's holding up exports even now? Export taxes and fees?
No. Actually, there are no taxes on export. There are no fees on export. The simple fact is: India is not competitive as compared to many countries. More than export fees, infrastructure and logistics are the two main factors which are holding our export. A mid-size Indian exporter is equally capable as any other exporter of the world.

You say no fees, but why is there a plea to the finance minister under GST reforms to put exports under "zero rate". One should not tax exports, says Vijay Kelkar, chairman of National Institute of Public Finance and Policy. Such a policy exists the world over and is WTO compatible. Hence the question.
I am talking about zero-rated supplies in GST. In any economy, the government tries to boost exports as much as possible. This helps the government in maintaining the country's economic growth, employment and balance of payments. To boost exports, the government provides certain reliefs and benefits to business houses. As exports are zero-rated supply, the supplier will eligible to claim an input tax credit in respect of goods or services used for the supplies even though they might be non- taxable or even exempt supplies. But it is subject to some riders and conditions which are bundled with formalities

Are there any benefits for re-exports?
Re-export of imported goods are allowed under Foreign Trade Policy 15-20 under Chapter 2 of HBP. The import duty can be refunded under section 74 of the Custom Act, 1962.

What are the export technical measures which should benefit our industry?  
As per my information, there are no technical measures taken by the Government, for our industry, specifically. But it’s a fair point. Something we should look into.

Any incentives for Indian goods?
There are export incentives on goods of Indian origin; and not on goods, which are merely routed through India. Re-export of goods to Nepal and Iran are governed by different rules, which have certain additional conditions.

Are there any quantitative restrictions like export license, quota and others?
There is no restriction on export of products covered under Chapter 48-49. Also, there are no quotas / export licences and any such restrictions. As far as I know, exports are encouraged by the government.

Can you share the names of state trading enterprises for exporting, or other selected export channels, which every Indian packaging exporter should be aware of?
Certain state trading agencies are nominated by the government, who are allowed to export or import, specific products. These are: MMTC, STC, FCI, IOL, NAFED etc. As industry experts know, the government is trying to reduce the role of these State Trading Enterprises (STE). Earlier they were known as channelling agencies.


If you have an export query, please share the question with us. We will request Manoj Mehta to respond to your question. Contact ramu@haymarketsac.com 


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