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GODS,
GUILTY
AND FALLEN ANGELS THE REAL EXPORTS STORY Artificial flowers - A blooming business!
With trade in permanent botanicals soaring at a record pace, the man-made replica of nature can earn you precious pennies
Eggs - Not so fragile profits
Indian egg producers, with a low-cost production base, should take advantage of synergy between health and economics
Duty Drawback - Drawing back exporters
The recent alterations in Drawback Rates mean little for an export community that is busy battling harsh times
Vol.3
Issue 02
February 2016
100
$2
Volume: 3 Issue: 02 February 2016 www.thedollarbusiness.com facebook.com/tdbIndia twitter.com/TheDollarBiz in.linkedin.com/in/thedollarbusiness/ President (VMPL) & Editor-in-Chief EDITORIAL & RESEARCH Editor Executive Editor Senior Editor Senior Editor (Online) Senior Assistant Editors Assistant Editor Assistant Editor (Online) Principal Correspondent Correspondents
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© Copyright 2014 No part of this magazine may be reproduced in whole or in part without an expressed permission of the publisher. The information on this magazine is for information purpose only. Manish K. Pandey, Editor, The Dollar Business, is responsible for the selection of news and content under PRB Act. Vimbri Media Pvt. Ltd. assumes no liability or responsibility for any inaccurate, delayed or incomplete information, or for any actions taken in reliance thereon. The information contained about each individual, event or organisation has been provided by such individual, event organisers or organisation without verification by us. All disputes are subject to exclusive jurisdiction of competent courts and forums in Hyderabad, Telangana. Printed and published by Avnish Goyal for Vimbri Media Pvt. Ltd. Published at 5-2-198/4, Distillery Road, Ranigunj, Secunderabad - 500 003, Telangana. Printed at: Kala Jyothi Process Pvt. Ltd., 1-1-60/5, RTC Cross Roads, Musheerabad, Hyderabad - 500 020, Telangana. FOR EDITORIAL/CONTENT Email: editorial@thedollarbusiness.com FOR ADVERTISEMENT Email: ads@thedollarbusiness.com FOR SUBSCRIPTION Email: subscription@thedollarbusiness.com . +91-40-67609999 For queries / comments you can send us an SMS at +91-888-633-1947
8 THE DOLLAR BUSINESS II FEBRUARY 2016
26 COVER STORY
THE GODS, THE GUILTY & THE FALLEN ANGELS!
...THE INDIAN EXPORT STORY CY2015 saw a series of contractions in India’s merchandise exports. While some sectors defied the trend and put in stellar export performances, others declined in spectacular fashion. The Dollar Business takes a look at the key factors that affected the export performance of India’s major industry sectors.
92 OPTAMAC
Kunal Mehra, Designated Partner, Optamac, talks about the attractiveness of real estate markets overseas for Indian investors, given the present gloomy outlook of the domestic market
20
24
OHAD HORSANDI
First Secretary, Embassy of Israel, speaks on the need of a comprehensive agreement between India and Israel that goes beyond what an FTA can deliver
12
18
72
Regional Director, Lufthansa Cargo, speaks about the state of the air cargo industry in India
MONOLOGUE
have failed to give the required impetus to exporters
PEOPLE SPEAK
From Sushma Swaraj on UK’s plan to end aid to India to Xi Jinping on China’s presence in world affairs
14
VELI POLAT
94
TDB FORUM
96
DATE BOOK
98
BORDERLINE
GLOBAL TRADE
US lifting Iran sanctions, stench of slavery in Thai seafood industry, S. Africa’s fruitful efforts and more
76
INDIA TRADE
Positive growth outlook for India, US poultry imports worry traders, eyeing Indonesia for rice exports and much more..
EGGS
Profit margins are not as fragile as they themselves are
82
DOCKYARD
MUMBAI PORT
Some trade shows you shouldn’t miss out in India and abroad in February and March
Editor’s column
The iconic port that had fallen on hard times seems to be on the road to revival
IMPORT’ONOMICS ARTIFICIAL FLOWERS
They are low maintenance, a joy to behold, and sourcing them can bring rich dividends to importers too
SECRET INGREDIENT
Questions about foreign trade that hit our mail box in January and, of course, their answers
88
POLICY FOCUS
DUTY DRAWBACK While big on intent, duty drawbacks FEBRUARY 2016 II THE DOLLAR BUSINESS 9
COVER STORY
THE INDIAN EXPORTS STORY
GLASS & CERAMICS PHARMACEUTICALS HANDICRAFTS GEMS & JEWELLERY AUTOMOBILES (INCL. AUTO COMPONENTS)
GODS
SECTORS THAT BOOSTED INDIA'S EXPORTS DURING A TIME WHEN THE ENTIRE WORLD FELT THE PINCH OF CAREFUL SPENDING ACROSS SECTORS, BY GOVERNMENTS, COMPANIES AND CONSUMERS ALIKE, HAVE BEEN LABELLED 'GODS'
26 THE DOLLAR BUSINESS II FEBRUARY 2016
GUILTY
CONSTRUCTION ENGINEERING CHEMICALS LEATHER SHIPS, RAILWAY & AIRCRAFT-MAKING METALS & MINERALS AGRICULTURE PLASTICS MEAT, POULTRY & SEAFOOD PROCESSED FOODS
WHEN TIMES ARE TOUGH, IT'S EASIER TO CONCEDE DEFEAT. THAT WAS THE CASE WITH MOST OF INDIA'S SECTORS THAT SURRENDERED TO THE HARDSHIPS THAT 2015 PRESENTED AT THE PORTS AND JOINED THE LEAGUE OF THE 'GUILTY'
AND FALLEN ANGELS
PETROCHEMICALS APPARELS & TEXTILES
SOME SECTORS SHOWED MIXED PERFORMANCES. EXPORTS OF PETROCHEMICALS FELL BUT IT HELPED REDUCE TRADE DEFICIT. EXPORTS OF APPARELS & TEXTILES DIDN'T BUDGE, BUT IT CONTINUED A SURPLUS STREAK, ALBEIT A SMALLER ONE BY VALUE
THE REAL EXPORTS STORY
I
t has been more than a year since India’s merchandise exports began a downhill journey. Come 2015end and it turned out to be the biggest collapse in India’s merchandise exports in a generation – the worst since 1957. While many blame increasing global headwinds for this downward spiral, there are several who believe that structural factors have taken a toll on India’s export-oriented sectors. Agreed! But remember, when you're talking about art on a large canvas, you tend to overlook the finer details. So, if you glance through the cumulative numbers, Indian exports have failed to defy gravity at large. However, a closer look at the numbers reveals more. The Dollar Business conducted a dissection of India’s exports numbers for CY2015 (January to September). Results showed that not everything was ugly. There were many sectors that did not only held ground, but continued to surprise critics by their stellar performances in these tough times. TDB categorised the country’s merchandise exports into 17 broad industry baskets and compared their performance during the January-September 2015 period to that of the corresponding period in CY2014. Based on their performances they were grouped as either GODS, GUILTY or FALLEN ANGELS. 'Gods' are sectors that despite global headwinds continued to perform and reported a year-on-year growth in outbound shipments. 'Guilty', as understood are those that proved a drag on the country’s exports. There were 10 sectors that reported a degrowth in exports and were actually responsible for India’s dismal performance in exports. Then there are 'Fallen Angels' – though these didn't contribute positively to India’s exports growth, but they did some good in some respects. In petrochemicals, while exports fell, imports fell by a bigger value. As such the trade deficit shrunk by over 33%. In apparels & textiles, while exports remained stagnant in rupee terms, the sector continued its run as a trade surplus agent for the nation! What is perhaps the biggest lesson from this exclusive coverage is that generalising India's exports is wrong. You would have read many-a-report about India's shrinking value of exports – but all that's incomplete without real analyses of what went wrong and across which sectors. The Dollar Business give you a chance to learn precisely that. Flip on to read our nation's 'real' exports story… FEBRUARY 2016 II THE DOLLAR BUSINESS 27
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