CIRCULAR ECONOMY MARKET INDONESIA … · 2019-09-10 · 1 IndianEngineeringExports Rs150 ie 2 I Magazine of EEPC INDIA (formerly Engineering Export Promotion Council) engineering

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IndianEngineeringExportsRs150

ie2 I Magazine of EEPC INDIA (formerly Engineering Export Promotion Council) www.eepcindia.org

engineering the future 1

CIRCULAR ECONOMY I MEDICAL DEVICES I MARKET INDONESIA

VOL. 12, ISSUE NO. 5, AUGUST 2019

CALLING

The African Continental Free Trade Area Agreement (AfCFTA) is set to make Africa the world’s largest free trade zone, opening up vast opportunities to global economies to boost trade ties with Africa

2

AUGUST 2019 l INDIAN ENGINEERING EXPORTS l 3

EXCLUSIVE MEMBER SECTION ATwww.eepcindia.org

An exclusive member’s section has been introduced on EEPC India’s website. The User ID and Password has been sent to members on their email ID that is on record with EEPC India. If any member has not received it, please contact EEPC India at: [email protected].

The email IDs of some members are not

available with EEPC India. Please provide your

email ID at [email protected] so that we can

mail the details to you. It is also recommended

that all members view their details in the

Member’s Directory on EEPC India’s website and

verify their email ID.

All members are also requested to provide

mobile numbers of key contact persons over

email. This will enable EEPC India to send

important alerts and messages on SMS.

EDITOR Suranjan Gupta Executive Director, EEPC India

PRINTED AND PUBLISHED BY Suranjan Gupta, Executive Director, for and on behalf of the owner, EEPC India Vanijya Bhavan, 1st Floor International Trade Facilitation Centre 1/1 Wood Street, Kolkata 700 016

PRINTED AT Swapna Printing Works Pvt Ltd52 Raja Rammohan Sarani, Kolkata 700 009

PUBLISHED FROM EEPC India Vanijya Bhavan, 1st Floor International Trade Facilitation Centre 1/1 Wood Street, Kolkata 700 016

CONSULTING EDITOR Aditi Chowdhury

DESIGNED BY Bee Ideas20/3 Ballygunge Place, Kolkata 700 019 [email protected]

Address all correspondence to the Consulting Editor email: [email protected]

The views expressed in the magazine are not necessarily those of EEPC India.

VOL. 12, ISSUE NO.5, AUGUST 2019 I Rs150

IndianEngineeringExportsie 2 | Magazine of the Engineering Export Promotion Council

www.eepcindia.org LETTERS

DENIAL OF GST REFUNDThis is further to our letter regarding the denial of GST refund. Due to the continued delay, we are facing a liquidity crunch and are unable to execute the work already secured by us. This is turn creates credibility issues with our clients as we are unable to meet their deadlines.Based on your suggestion, we applied for a small PC limit with our bankers, Canara Bank. We also requested them to issue the Gold Card and extend the benefits under the scheme to us. We have been banking with them for more than eight years and have a satisfactory record of repayment. Our request for Gold Card and PC limits was unceremoni-ously denied without offering any valid reasons.

All this while the INR has appreciated 10 percent against the greenback, re-sulting in complete erosion of the profit margins.

The Government has asked Banks and other financial institutions to support exporters and SMEs. Our organisation qualifies on both counts. Once again, we would like to state that:• We are facing a severe liquidity crunch• Our legitimate IGST refund is being denied due to a trivial technical error• Our consignment has reached the destination country (KSA) and has been claimed/cleared by the buyer• On account of the above there is no chance of fraud (or other malpractices) and the claim made by us is genuine• Our Bank has also denied the legit-imate request for a small CC limits without any valid reason

Confirmed orders worth more than $36,000 are held up due to this situation

We have visited Customs Office at JNPT on three occasions but our pleas to them were not even given due consideration. We are willing to make a representation to the Ministry of Com-merce (or any other suitable agency) for an urgent resolution of our issues.

We request you to take up our case in earnest. A Council Member

***

As per your advice, we are submitting our unclaimed IGST refund details to you.

We have still not received the attached SB IGST amount. We have found no error, even after several checks.

We hereby request you to please inter-vene and arrange to release the payment. If you require further details please let us know. It has been several months now.A Council Member

***

FOREX RETAIL PLATFORM FOR CCIThe Clearing Corporation of India Ltd (CCI) has started a Foreign Exchange Retail Platform. The platform provides for an anonymous and order driven dealing in the USD/INR currency pair for customers of banks. The customers can access the platform through the Internet and place buy/sell orders as per their requirement. The procedure and registration on this platform is provided in the link given below for your ready reference and necessary action.

https://www.ccilindia.com/AboutUs/Pages/FxRetailPlatform.aspx

Members may like to avail of this facility of CCI and also get in touch with their bankers to get better forex rates.S Gupta, Executive Director, EEPC India

***

METAL PRICE MONITORWe thank you very much for sharing the Metal Price Monitor. Kindly send the Metal Price Monitor for August 2019. It is very useful and we hope you will send the details every month. Venkatesh R, Accounts Department, Barani Hydraulics India Private Limited, Coimbatore

4 l INDIAN ENGINEERING EXPORTS l AUGUST 2019

5 I MONTHLY MUSINGS

30 I WTO TALK

52 I OVERSEAS AFFAIRS

82 I ECOWATCH

88 I DO YOU KNOW?

90 I HOME AFFAIRS

104 I EEPC INDIA OFFICES

106 I EEPC INDIA CALENDAR OF EVENTS

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India’s medical devices sectorGrowing disposable income, increasing spending in healthcare systems by both government as well as private parties, and emergence of India as a sought-after medical tourist destination is leading to tremendous growth prospects in the Indian healthcare industry.

SPOTLIGHT06

20The overuse of resources the world over has led to an alarming state of the environment. Harnessing technology to promote the principles of circular economy of reduce, recycle, and reuse will go a long way in sustainable development of the world

Circular economy for productivity and sustainability

TECH FRONTIERS

India-Indonesia bilateral trade

Challenges of a bank manager MARKETS

EXPERT EYE

75

31

Besides the continuing global trade disputes, India’s engineering exporting community is hamstrung by the lack of adequate credit flow

Engineering exports fall again

OVERSIGHT

56

Africa callingThe African Continental Free Trade Area Agreement (AfCFTA) is set to make Africa the world’s largest free trade zone since the establishment of the WTO in 1994, opening up vast opportunities to global economies to boost trade ties with Africa

WORLDVIEW I

How the working environment of banks has changed in step with globalisation and liberalisation


MONTHLY MUSINGS

From the Chairman’s Desk

We need clarity on liberalisation of tariffs chapter-wise. Our suggestion is that raw materials should be opened up first, then intermediate products, and thereafter final goods, to promote Make in India and prevent inverted duties being exacerbated further

TRADE Wars and Trade Negotiations have been the two dominant themes of the month gone by. Let me begin with the lat-

ter since I and my colleagues played some role in hoping to form the Government of India’s nego-tiating stance in RCEP.

The Regional Comprehensive Economic Part-nership Agreement (RCEP) is a proposed free trade agreement (FTA) between the ten mem-ber-states of the Association of Southeast Asian Nations (ASEAN) and its six FTA partners RCEP negotiations were formally launched in November 2012 at the ASEAN Summit in Cambodia.

In 2017, prospective RCEP member-states ac-counted for a population of 3.4 billion people with a total gross domestic product (GDP, PPP) of $49.5 trillion, approximately 39 percent of the world’s GDP, with the combined GDPs of China and India making up more than half that amount. RCEP is the world’s largest economic bloc, covering nearly half the global economy. The 8th Inter-sessional Ministerial Meeting was held in Beijing recently and before that the Commerce and Industry Min-ister, Mr Piyush Goyal had a series of consultations with various stakeholders to understand their concerns. EEPC India was present in three of such meetings in Mumbai and Delhi. While many issues were discussed, our main contention with respect to RCEP could be summed up as follows:(i) RCEP is essentially becoming a Free Trade Agreement between India and China. We believe the RCEP will be used by China to have such an agreement as otherwise India would never agree to a bilateral trade agreement. We already have an FTA with ASEAN and comprehensive economic arrangements with Japan, Korea, Singapore, and Malaysia in the RCEP region. (ii) We have a huge trade deficit in the RCEP region, particularly, with China and the ASEAN countries. Industry fears that dropping of tariffs will exacerbate the trade deficit from China, in particular, and there-by pour water into Prime Minister’s call for Make in India. We have, therefore, suggested a cautious approach of back-loading tariff drops, if at all the government signs the RCEP. (iii) We need clarity on liberalisation of tariffs chapter-wise. Our suggestion is that raw materi-als should be opened up first, then intermediate

products, and thereafter final goods, to promote Make in India and prevent inverted duties being exacerbated further. Moreover, all tariff line-wise import substitution measures taken since 2014 should be in the exclusion list; and (iv) Last but not the least, the Rules of Origin should be the same as that of ASEAN FTA to prevent spaghetti bowl effects for exporters.

At the time of writing, the Government of India has issued a Press Release, which says ‘the Com-merce Secretary Dr Anup Wadhawan, led a dele-gation to the 8th RCEP Inter-sessional Ministerial meeting held in Beijing on 2-3 August 2019. During the meeting, he highlighted India’s contribution in shaping the RCEP negotiations till date. He advo-cated a spirit of understanding accommodation and flexibility towards reaching balanced outcome in the negotiations. India’s concerns regarding market access and other issues leading to imbalanced trade between some of the partner countries was specifically flagged during the meetings.’

Lack of space prevents me from giving a more detailed comment than to just state that trade wars have begun to simmer, once again, as the US threat-ens to impose a further 10 percent increase in duties on $300 billion. As expected, China, too, has vowed to retaliate. Simultaneously, Japan and South Korea have begun their own trade battles over export con-trols put by the former.

Clearly, these are difficult times for those in the foreign trade sector. However, we need to contin-ue to look for new markets and new products to tackle and emerge successfully from the global trade headwinds.

The good news for our member-exporters is that EEPC India has opened four chapters in the last three months – Coimbatore, Tamil Nadu in May, Bhilai, Chhattisgarh in June, Jamshedpur, Jharkhand and Belgavi, Karnataka in July. We plan to launch 17 Chapters in 16 States to reach out to engineering exporters in Tier-II and III cities, who for various reasons cannot effectively utilise our services.

Ravi Sehgal


India’s medical devices sector: Prospects and challenges

SPOTLIGHT

Growing disposable income, increasing spending in healthcare systems by both government as well as private parties, and emergence of India as a sought-after medical tourist destination is leading to tremendous growth prospects in the Indian healthcare industry. As a key component of that industry, the medical devices sector is also assuming growing importance in the government and has been proclaimed as a Sunrise sector. To promote exports of this industry, the government is encouraging EEPC India to participate in a number of exhibitions abroad, one such exhibition being the India Engineering Pavilion in Ethiopia in January 2020. This article looks at the major dynamics of the Indian industry vis-à-vis the global industry with special emphasis on industry structure, trade trends, and importance of Africa as a major exports destination. It also critically explores the regulatory environment of the Indian medical devices sector in an attempt to identify issues that may impact its growth.


DRIVEN by factors such as in-creasing number of patients with lifestyle diseases, easier access to

medical services in developing countries, especially India and China, and extensive R&D in terms of innovation and tech-nology, the global medical devices in-dustry is poised for significant growth in the coming years. As per a recent report, globally the medical devices industry sales is expected to reach $595 billion by 2024 growing at a CAGR of 5.6 percent between 2017 and 2024.1The global devices market is categorised mainly into seven segments, which in-clude: • Diagnostic imaging• Orthopaedic and prosthetic devices• Patient aids• Consumables• Dental products• IV diagnostics• Others

While diagnostic imaging constitutes the largest segment of the global mar-ket, it is also expected to exhibit slowest growth in the coming years. In vitro fer-tilisation (IVF) is expected to emerge as the number one device area in 2024 and neurology will be the fastest growing de-

vices market. Both North and South America to-

gether constitute the largest market for the industry, followed by Western Eu-rope. In recent years, the Asia-Pacific has also emerged as a major market led by countries such as Japan, China, South

Korea, and India.The production of medical devices is

largely led by the US. During 2017, the country had nine of the top 15 medical devices producers globally,2 while Eu-rope continued to remain the traditional market for medical devices.

EEPC INDIA

GLOBAL TRADE SCENARIO IN MEDICAL DEVICES SECTOR

GLOBALLY both exports and im-ports of medical devices have grown at a CAGR of 3.7 percent

and 3.9 percent respectively between 2014 and 2018.

The USA, Germany, China, the Neth-erlands, and Ireland remain the top five exporters globally, and all of them have exhibited a healthy growth between 2014 and 2018. Together the top five constitute 48.3 percent of the total global exports. India is ranked 31st among the global ex-porters and contributes around 0.47 per-

Figure5: Trade balance of top five exporters vis-à-vis India

Source: ITC Trade Map

281.

51

284.

19

271.

57

274.

32

279.

9

203.

73

298.

76

302.

22

326.

01

331.

18

2014 2015 2016 2017 2018Export Import

Figure1: Major markets in global medical devices industry in 2015

45.0%

America

Western Europe

Asia

Estern Europe

Middle East and Africa

21.0%

4.0%

3.0%

27.0%


cent of the total global exports.Barring Ireland, all the top five ex-

porters also feature in the list of top five global importers of medical devices and constitute around 46.6 percent of the to-tal global imports. India is at 17th place among the global importers and contrib-utes around 1.6 percent of the total global imports.

It needs to be pointed out that all the top five exporters except China enjoy a positive trade balance in the medical de-vices sector.

Figure6: Trade trends for Indian medical devices sector ($ million)


64.9

462

.04

2.9

45.5

327

.09

18.4

4 28.2

9

21.0

17.

28

18.7

7 29.1

2

15.6

82.

98 12.7

0

1.53 5.21

-3.6

8

64.9

4

USA Germany Netherlands IrelandChina India

Export Import Trade balance

Figure3: Export trend of top 10 medical devices exporters globally vis-à-vis India, 2014-18


USA Germany Netherlands Switzerland Singapore France IndiaJapanBelgiumChina Ireland

2.5% 2.6%

6.8% 6.6%

1.4%

4.1%

-2.9%

-0.2%

3.7%

8.5%

5.1%

Figure4: Import trend of the top 10 medical devices importers globally vis-à-vis India, 2014-18


USA Germany Netherlands CanadaUKFrance IndiaJapan BelgiumChina Italy

6.9%

2.4%

9.0

6.2%

-0.2%

2.1%

-1.3%

0.1%

1.3%

0.8%

8.3%

SPOTLIGHT


THE INDIAN MEDICAL DEVICES INDUSTRY

THE Indian medical devices indus-try was valued at $10 billion in 2017 and is expected to reach $25 billion

by 2025, growing at an average annual rate of 15 percent.3 In terms of market size it is among the top 20 in the world and also fourth-largest in Asia following Japan, China, and South Korea. As per a recent KPMG report, the Indian medical devic-es industry is expected to become one of the top five markets by 2030.4 Owing to its high growth potential, this sector is expect-ed to attract significant investment in the future. Hence it has been proclaimed as the Sunrise segment of the healthcare industry.

There are several factors that are cur-rently driving the growth of this market in India such as increase in public spending on healthcare, rising income and innova-tion in healthcare technology.

Structure of the industryThe medical devices industry is highly fragmented with a significant number of MNCs dominating the business. However, manufacturing is mostly limited to SMEs whereas the MNCs are mostly involved in distribution of imported devices. It needs to be mentioned that the market is mostly dominated by imported products which comprise around 80 percent of the total domestic sales. Also most of the device exports pertain to the consumables and disposables segment. Technology-wise the industry is still at a nascent stage with ma-jor production happening in the consumer durables segment followed by diagnostic imaging.

In terms of manufacturing the industry has over 800 manufacturers located in five clusters across the country, only 10 percent of whom have a turnover of more than $8 million. Apart from these the government has also aimed at building medical devices parks to encourage manufacturing. Some of the major medical devices clusters are listed in Table1.

Table1: Major medical devices clustersState Product segments

Haryana Medical consumables, Dental equipment

Delhi Medtech innovators

Tamil Nadu Diagnostics, Critical life support systems, Ophthalmology

Karnataka Insulin pens, Skanray, Bigtech labs

Gujarat Stent manufacturing

Source: https://www.advamed.org/sites/default/files/resource/medical_industry_in_india_-_the_evolving_landscape_oppurtunities_and_challenges_white_paper.pdf

Figure6: Trade trends for Indian medical devices sector ($ million)

Source: DGCI&S

3.95

Export Import Trade balance

1.09

4.13

1.20 1.27

5.29

1.54

-2.86

2015-16 2016-17 2017-18 2018-19

-2.93-3.40 -3.75

4.67

Figure6: Major growth drivers of the Indian medical devices industry

Increase in healthcare expenditure

Medical tourism

Penetration of health insurance

Higher disposable income

Technological advancement

Agingpopulation

Chronic lifestyle diseases

DEMAND

DRIVERS


Table2: Top 10 medical devices exported from IndiaHS Code Product description 2015-16 2016-17 2017-18 2018-19 CAGR %

901839 Catheters and the like; Other needles 195.89 217.75 256.82 300.06 15.3

901890 Other Instruments and appliances of medical science 202.83 190.69 194.15 218.8 2.6

902230 X-ray tubes 70.64 77.6 84.8 125.91 21.2

901819 Other electro-diagnostic apparatus including those for functional exploratory examination or checking physiological parameters

53.02 43.91 63.05 109.54 27.4

902290 Other, including parts and accessories 95.3 102.11 101.16 97.79 0.9

902214 Other, for medical, surgical or veterinary uses 25.43 39.97 40.59 61 33.9

382200 Composite diagnostic/laboratory reagents excl goods of heading 3002/3006 32.62 52.99 45.95 54.91 19.0

902139 Other 30.46 36.53 38.58 48.65 16.9

902110 Orthopaedic or fracture appliances 25.29 28.21 32.16 38.52 15.1

901832 Tubular metal needles and needles for suture 27.16 32.12 36.45 35.58 9.4

Source: DGCI&S

Table3: Top five products exhibiting highest export growth between 2015-16 and 2018-19

HS Code Product description 2015-16 2016-17 2017-18 2018-19 CAGR %

902212 Computed tomography apparatus 1.93 5.28 11.8 12.37 85.8

902131 Artificial joints 3.76 7.15 14.14 19.01 71.6

902750 Other instruments and apparatus using optical radiations (UV, visible, IR) 3.62 5.54 12.22 17.95 70.5

901910 Machino-therapy appliances; Massage apparatus; Psychological aptitude-testing apparatus

0.87 1.44 2.64 3.12 53.1

901811 Electro-cardiographs 8.92 13.94 15.81 30.01 49.8

Source: DGCI&S

Trade scenario of the medical devices sector in IndiaExports of medical devices from India exhibited a healthy growth trend with a CAGR of 12.3 percent in the last four years. However, at the same time im-ports also grew at a CAGR of 10.2 per-cent and overall there is a trade deficit which has grown at 9.4 percent in the last four years.

Item-wise export-import trendsTable2 lists the top 10 medical devices exported from India.

Observation: All the top 10 exported products have enjoyed a positive CAGR

between 2015-16 and 2018-19. Table3 shows the products which

underwent maximum growth between 2015-16 and 2018-19.

Table4 lists the top 10 medical devic-es imported by India.

Observation: All the top 10 imported products have enjoyed a positive CAGR between 2015-16 and 2018-19.

Table5 shows the products which underwent maximum growth between 2015-16 and 2018-19.

Major export destinations of India The USA and China are the top export

destinations for Indian medical devices and constitute almost 27.6 percent of the total medical devices exports. Ta-ble6 shows the top five export destina-tions for India. Together they constitute 42.6 percent of the total medical devic-es exports and have exhibited positive growth between 2014 and 2018.

Major import partners for IndiaThe USA also features as the largest im-port partner for the Indian medical de-vices industry. Table7 shows the top five import partners for India. together they constitute 62.2 percent of the total med-ical devices exports and have exhibited positive growth between 2014 and 2018.

SPOTLIGHT


Table5: Top 5 products exhibiting highest import growth between 2015-16 and 2018-19


901820 Ultra-violet/infra-red ray apparatus 0.77 0.77 1.32 2.73 52.5

901814 Scintigraphic apparatus 3.06 5.58 5.22 8.49 40.5

902213 Other, for dental uses 4.65 6.49 13.1 12.01 37.2

902219 Apparatus based on use of X-rays, for other use including radiography /radiotherapy apparatus

44.53 69.07 79.06 97.61 29.9

902221 Apparatus based on use of alpha, beta/gama radiations for medical, surgical, dental/veterinary use including radiography/radiotherapy apparatus

18.46 27.23 22.71 39.4 28.8

Source: DGCI&S

Table6: Top 5 export destinations for India

Importer 2014 2015 2016 2017 2018 CAGR %

USA 188.61 186.10 215.62 231.24 313.11 13.51

Singapore 85.15 89.29 95.24 85.08 111.78 7.04

China 74.87 78.02 84.13 88.91 99.13 7.27

Germany 59.73 57.21 65.25 83.55 79.61 7.44

Brazil 33.86 21.20 33.78 45.07 52.47 11.58


Table4: Top 10 medical devices imported by India


901890 Other instruments and appliances of medical science 544.8 577.2 621.13 742.14 10.9

382200 Composite diagnostic/laboratory reagents excl goods of heading 3002/3006

346.13 360.53 423.54 476.31 11.2

902780 Other instruments and apparatus of heading 9027 313.44 330.51 370.87 372.23 5.9

902790 Microtome; Parts and accessories of heading 9027 233.34 267 264.29 319.79 11.1

901839 Catheters and the like; Other needles 177.16 193.46 246.31 289.41 17.8

902290 Other, including parts and accessories 194.34 238.07 272.6 286.26 13.8

902720 Chromatographs and electrophoresis instrument 181.97 200.82 191.07 210.35 4.9

902214 Other, for medical, surgical or veterinary uses 127.22 108.35 151.56 187.99 13.9

902730 Spectrometers, spectrophotometers and spectrographs using optical radiation

141.05 138.57 171.35 176.12 7.7

901812 Ultrasonic scanning apparatus 100.14 112.51 138.46 166.15 18.4

Source: DGCI&S


Table7: Top 5 import destinations for India

Exporter 2014 2015 2016 2017 2018 CAGR %

USA 1,022.96 1,026.84 1,077.36 1,162.60 1,151.76 3.01

Germany 578.63 578.96 579.02 660.81 720.72 5.64

China 393.21 454.51 459.45 547.40 602.18 11.24

Singapore 208.61 209.68 245.66 321.31 501.14 24.50

Japan 264.54 277.94 309.95 320.96 316.15 4.56


EMERGING DESTINATIONS FOR INDIA’S MEDICAL DEVICES

AFRICAThe African medical devices market is growing at a steady rate and is expect-ed to exhibit a CAGR of 6.3 percent and reach $7069.61 million by 2023.5 Factors such as growing middle income group, increasing healthcare expenditure, in-creasing number of medical tourists, proliferation of hospitals, government programmes and support, and increas-ing incidence of lifestyle diseases have significantly contributed to the growth of the medical devices market in Africa.

Looking at the high potential of the African market, EEPC India has been participating in a number of medical devices exhibitions in the region. In Au-gust 2019, EEPC will organise the India Pavilion in Nigeria Pharma Manufac-turer’s Expo, one of the premier medical devices exhibitions in Africa. Following this, in January 2020, EEPC India is or-ganising the Indian Engineering Pavil-ion in Ethiopia where medical devices will be a focus sector.

NigeriaNigeria’s medical system is still under-

developed and the country loses at least

$1.5 billion every year for the purpose of

medical tourism.6 Most private clinics

are unable to afford new medical equip-

ment and are dependent on refurbished

or used ones. However, recently the gov-

ernment adopted some positive steps

that are expected to go a long way in

expanding the Nigerian medical devices

market. The medical devices subsectors

which are in high demand include di-

agnostic equipment and medical dis-

posables, especially those for testing for

malaria parasites, drug abuse, and in-

fectious diseases such as HIV/AIDS and

tuberculosis. China is the major suppli-

er of the low-tech equipment that the

country can afford. Also, a zero-import

duty applies to all medical equipment

as per legislation, but according to the

President of the Healthcare Federation

of Nigeria (HFN) in practice an import-

er could pay rates up to 10 percent.

India Pavilion in Nigeria Pharma

The 5th Nigeria Pharma Manufacturers’

Expo 2019, which will be organised over

28-29 August, is an excellent opportuni-

ty for Indian medical devices manufac-

turers and exporters, as over 4000 phar-

ma trade professionals from across the

region including Nigeria, Ghana, Mali,

Chad, Cameroon, EQ Guinea, Central

African Republic, Senegal, The Gam-

bia, Ivory Coast, Niger, Burkina Faso,

and Benin among others are expected to

attend this exhibition. EEPC India has

been a longstanding participant in this

exhibition.

EthiopiaAs a country Ethiopia has a large, pre-

dominantly rural, and impoverished

population with poor access to safe wa-

ter, housing, sanitation, food and health

service. With a growing middle class,

there is also an increase in non-infec-

tious diseases such as cancer, diabetes,

SPOTLIGHT


FUTURE OPPORTUNITIES FOR INDIAN MEDICAL DEVICES INDUSTRY

MENA (MIDDLE EAST AND NORTH AFRICA) REGION

THE MENA medical devices mar-ket is projected to grow at a steady CAGR of 5.4 percent over the pe-

riod 2015-20 and reach a market value of $9.8 billion by 2020.7 The key drivers behind the growth of the medical devices market in the region are: greater demand for healthcare stemming from population growth, expansion of the private health-care system, increasing medical tourism with Dubai positioned as a hub, and plans to develop an integrated medical city in the Giza, Egypt. The United Arab Emirates would be one of the leaders in the MENA medical devices market as it would remain the preferred base for mul-tinational medical devices companies to establish their regional headquarters. Giv-en the growing importance of the medical devices industry in the region and the ad-vantageous position that UAE offers, it is an advantage for EEPC India to organise the India Pavilion in Arab Health.

DubaiThe UAE market for medical devices was estimated at 3.7 billion AED in 2016.8 Population growth, changing epidemiol-ogy, growing medical tourism industry, healthcare infrastructure developments, expanding health insurance, digital trans-formation, new technologies, and the research drive under the Dubai Science Park are some of the key factors driving its growth.

The UAE is the fourth-largest medical devices market in the MENA region and has among the highest medical devices ex-penditure per capita in the region. As per industry estimates, the market will regis-ter a 2015-20 CAGR of 8.2 percent, which will take the value to AED5.3 billion ($1.4 billion) by 2020. Consumables and diag-nostic imaging in addition to other de-vices represent the top market sizes. The pharma and medical equipment sector remains one of the six target sectors set by

Dubai Industrial Strategy 2030. The UAE hosts around 18 multinational companies in the medical devices business who use Dubai as regional distribution hub, in ad-dition to around 10 major multinationals in pharmaceuticals distribution, and a few local manufacturers.

India Pavilion in Arab Health 2020The Arab Health Exhibition and Congress is the largest healthcare exhibition and medical congress in West Asia and the sec-ond-largest in the world. It is a four-day event being held over 27-30 January 2020 at the Dubai International Convention and Exhibition Centre in Dubai, United Arab Emirates. EEPC India, which will be organising the India Pavilion in Arab Health 2020, has been historically asso-ciated with this event and the previous editions witnessed significant influx of visitors.

APART from the growing upper and middle class and increasing domestic expenditure in health-

care, India is gradually becoming one of the most sought-after nations among its neighbours for medical tourism purpos-es. As per recent estimates of the Min-istry of Tourism, India’s medical tour-

ism industry is expected to grow by 200 percent by 2020, hitting $9 billion.9 In 2017, India attracted substantial num-ber of medical tourists from neighbour-ing SAARC nations as well as African countries such as Nigeria and Kenya. Therefore, the medical devices sector is going to assume much more importance

in the coming years. The Central Drugs Standard Control

Organisation (CDSCO) published the new Medical Device Rules, 2017, which came into force on 1 January 2018. The new rules have been formulated to pro-mote domestic manufacturing and to regulate import and manufacturing in

heart diseases, hepatitis B and C, and high blood pressure. Currently, more than 16,600 healthcare centres deliver health services in Ethiopia. The govern-ment encourages private sector partici-pation in the area of quality of care and quality of service. Equipment and ser-vices to new hospitals and health centres is a leading subsector in the Ethiopian healthcare industry.

Indian Engineering Pavilion in EthiopiaGiven the growing importance of the sector in the Ethiopian market, EEPC India with support from the Ministry of Commerce and Industry has organ-ised the Indian Engineering Pavilion in Ethiopia during 4-6 January 2020. In this exhibition, medical devices have been kept as a major sector besides other key engineering exports. Also, this exhibition

coincides with ITME Africa 2020, which is being organised by the India ITME So-ciety, Ethiopian Chamber of Commerce and Sectoral Associations (ECCSA) and EEPC India. Together these two exhi-bitions can provide significant oppor-tunities to the Indian medical devices manufacturers and exporters in the Ethiopian market.


line with the GHTF (global harmoni-sation task force) guidelines and are in line with these rules’ risk-based classi-fication. The regulatory licenses issued for import, manufacture, or sale of medical devices have been made per-petual in nature to cut down on un-necessary and time-consuming paper-work, in a bid to increase ease of doing business in India. These modifications in the rules also enable Indian manu-facturers to export finished high-qual-ity products from India to the world. Looking at the growing importance of the industry, the government has taken several positive steps towards its devel-opment. • In December 2018, the government also formed the National Medical De-vices Promotion Council under the aegis of DIPP and includes represent-atives from the healthcare industry and quality promotion institutions. This step is aimed to give a greater fillip to the medical devices sector. • The government has allowed foreign direct investment in medical device manufacturing sector without any prior approval from the government, thereby encouraging business to quickly scale-up existing operations by infusing cap-ital or engage in time-sensitive strategic acquisitions.• The third feature is the presence of laws that do not permit manufacturers and importers of medical device to pro-mote their product directly to the cus-tomer as cures for certain prescribed conditions and illnesses.• The already robust intellectual prop-erty rights regime in India has been strengthened further by tweaking the rules for grant of patent and trademark in the last two years. • The Government of India has intro-duced various fiscal measures to pro-mote research, development, manufac-turing, and import of medical devices. For instance, the government has incen-tivised scientific research and develop-

ment by providing weighted deduction for the expenses incurred on that front. There is minimal or no import duty on certain medical devices.

While these are positive steps towards further growth of the industry, there are certain negative factors, too, the im-pact the Indian industry

First and foremost there is a need to restrict the import of refurbished or second-hand medical devices into India. While refurbished machines are supposedly properly restored devices to the original safety and effectiveness by the original manufacturer as well as the certified refurbishing companies, it is difficult to verify whether it has actually been restored to the original safety and effectiveness and adequately calibrating this is difficult. Availability of spare parts after five-seven years of life is doubtful in any electronic item. Most importantly, import of these de-vices can lead to significant loss for the domestic industry which majorly com-prises MSMEs, by bringing in:• loss of job creation owing to the harm caused to local manufacturing, and• loss of revenue, owing to reduction of import duty revenue by ‘reduced cost’ while increasing the healthcare burden owing to inadequate/ineffective treat-ments.

Furthermore since the industry is regulated by multiple regulations, even simple tasks such as rectification of er-roneous declaration on a label get de-layed.

ConclusionWhile the Indian medical devices in-dustry is undoubtedly showing a high growth prospect, high dependence on imports is a significant factor that may impact the growth in future. Though there are several factors that have been encouraging imports, dearth of high-end technology is a significant dis-couraging factor. Therefore, not only in terms of import reduction, if India

wants to become a member of the key exporters of medical devices in the coming years, there is an urgent need for the industry to move up the tech-nology ladder. With sufficient technol-ogy infusion the Indian medical devices industry can flourish gradually. Fur-thermore collaborations between gov-ernment and the private sector along with suitable policy initiatives and lo-cal-level innovation can make India a global hub for medical devices in the coming years.

Notes 1 http://info.evaluategroup.com/rs/607-YGS-364/images/WPMT2018.pdf

2 https://www.usitc.gov/publica-tions/332/journals/final_china_and_medtech_gvc_jice_508_compliant.pdf

3 https://www.ibef.org/arab-heatlh-2017/download/EEPC-IBEF-Arab-Health-Supplement-30-Jan-201.pdf

4 https://assets.kpmg/content/dam/kpmg/xx/pdf/2017/12/medical-devic-es-2030.pdf

5 https://www.medgadget.com/2018/06/africa-medical-devices-market-expand-ing-tremendously-to-make-great-im-pact-in-near-future-by-2023.html

6 https://www.export.gov/article?id=Ni-geria-Medical-Equipment

7 https://www.reciprocus.com/sites/default/files/2017%20Medical%20Devic-es%20Market%20Snapshot.pdf

8 http://www.dedc.gov.ae/StudiesAndRe-searchDocument/Medical-Devices-Sec-tor-Report.pdf

9 https://edition.cnn.com/2019/02/13/health/india-medical-tourism-indus-try-intl/index.html

SPOTLIGHT


Challenges of a bank managerHow the working environment of banks has changed in step with globalisation and liberalisation

EXPERTEYE

Prof T R Shastri is a Bengaluru-based retired Banker

T R SHASTRI

WORKING in a bank was con-sidered a well-paying secured job, offering growing oppor-

tunities to young graduates; an island of prosperity in the midst of ocean of poverty. Bankers were even looked down with contempt and jealousy by onlook-ers for the differentiated environment, occasional air-conditioning, the neck-ties some of the occupants were wearing

and their apparent richness due to ‘our’ money. The other jobs that were availa-ble to the youngsters like that of teaching, government service or others in private sector were less attractive in terms of pay-out, privilege and perquisites. The oppor-tunities for joining banks increased with nationalisation and expansion of branch network. However, this crescendo de-clined with alternative jobs coming up in better paying IT and non-banking finan-cial sector in subsequent decades.

After nationalisation, though the banks continued as commercial banks, the public sector banks (PSBs) were con-

sidered as instruments through which development plans of the government need to be implemented. Their presence everywhere (in India, there are 1.2 lakh bank branches – highest in the world – compared to 1.55 lakh post offices), PSBs’ vulnerability to owners’ demands, and populist belief that loans lead to prosper-ity made them the soft target for pushing traditional banking products and imple-menting non-conventional ideas such as selling application forms, collecting taxes, opening accounts of reluctant customers, disbursing target based loans and pure aadhaar enrolments and updates.


Mobility with globalisationThe concept of a gig economy (i.e. a free market system in which temporary posi-tions are common and organisations con-tract with independent workers for short-term engagements) is gradually becoming a norm and acceptable. Hence the safety of a government-like job, a safety-net in a job, or a job for lifetime has lost its charm as an attractive feature even in In-dia. Banking skills did not have fungibility in the job market earlier. However, now young bankers switch from one (private or public sector) bank to another (private sector), to an NBFC, a technology compa-ny dealing with banks, or the ubiquitous start-ups, or fintech companies. The ear-lier attraction of possible overseas posting is vanishing because banks are reducing their overseas presence rapidly for variety of reasons. These added to the downside of the bank managers’ job.

The perception of the various stake-holders on the role of branch manager is also not positive. A deputy governor of RBI had called branch managers as lazy managers in 2003 for not lending but pre-ferring to put money in G-Secs. They have been branded as cabin managers (avoid-ing the field) and generally disliked by customers. Christopher Alkan, financial journalist based in Europe in his article ‘Visit a branch and take a pew,’ says that ‘Entering a bank branch has often been

viewed as an unpleasant chore – much like a trip to the dentist.’ He further re-cords that research by retail experts has even shown that high street shoppers actually pick up their pace near banks, making branches toxic for neighbouring stores. This means, normal retail shops do not wish a bank to be the neighbour. This observation may not be valid in dense Indian circumstances but it is true that customers prefer to go to banks only if it cannot be avoided. The customer dissat-isfaction is corroborated by the number of complaints received by the Banking Ombudsman, which increased from 1.02 lakh to 1.64 lakh between 2015-16 and 2017-18.

Rural posting is ‘mandatory’ in banking service, since many do not wish to be so posted. When posted, they start counting the number of remaining days, every day. A typical bank manager in a rural area would have arrived from another place, leaving the family in a nearby city with better educational facilities for his chil-dren with no deep commitment to the current domicile. With the current farm loan waiver or rescheduling schemes, pro-spective borrowers pressurise the branch managers to disburse the loan, assuring that their ‘political party’ will ensure loan waiver, when due for repayment. Anyway since the manager is under tremendous pressure to reach the target for such loan

disbursals and is unlikely to be there for recovery work of those loans, s/he dis-burses loans without much regard to vi-ability. In fact, RBI has a master circular to banks on how to extend banks’ con-tribution in providing relief by resched-uling of existing loans and sanctioning of fresh loans in 12 circumstances including draught and flood. Ingenious managers are able to accommodate the pressures under one of these circumstances but are likely to carry the resultant stress even during the next posting. Thus, in a typical village, the number of cattle financed by a branch is likely to be much higher than that in its command area.

Bank managers who are posted to branches in cities face different types of challenges. They are expected to be ex-perts in everything, from lathe machines to aircraft, while appraising the propos-als, understand the psyche while dealing with disparate colleagues and demand-ing customers, familiar with technology, and be conversant with several dozens of bank products, processes and documen-tation. Regulators, press, society at large, auditors, and internal senior officials are likely to be visiting, supervising or ‘mys-tery-shopping.’ The branch manager is considered as the CEO of the branch, eu-phemistically, or at least for all the failures.

Stress factors in bankingMost textbooks on banking are titled ‘law and practice of banking,’ thus confirming that law of banking is different from the practice. A branch manager is expected to follow the practice without violating the law, mostly a catch 22 situation. These create lot of pressure on the branch man-agers. In most banks, transfer is mandato-ry for a branch manager once in at least three years, thus permanently depriving a steady and supporting family life. Several state governments have threatened action and even imprisoned branch managers for not sanctioning loans, even if for valid reasons. Such actions and loan waiver schemes have vitiated the credit culture, as

We are pleased to publish the 100th article by Prof. T R Shastri, a former banker based in Bengaluru. His articles over the last ten years, published in Indian Engineering Exports, covered a wide range of areas – from banking reforms to export trade – including areas as diverse as non-resident status, industrial policy, and withholding tax. The core focus area of all the articles has always been to familiarise banking practices and foreign exchange processes to our members. We trust these published articles have been of interest to our readers.

Prof. T R Shastri


pointed even by RBI seniors, thus adding to the misery of branch managers.

According to the American Institute of Stress, the four main causes of stress are workload (46 percent), people issues (28 percent), juggling work/personal lives (20 percent), and lack of job security (6 percent). This general observation in the USA may not be fully applicable to the banking sector in India. But it is well un-derstood that the banking sector is still workforce-intensive and depends hugely on people skills for success notwithstand-ing technological progress and procedur-al rigour. But unfortunately, neither at the time of induction nor in subsequent grooming, HR handling skills are priori-tised as much as banking domain exper-tise. For example, in the professional Cer-tified Associate examination conducted by the industry body, Indian Institute of Banking & Finance, only one out of eight modules deals with HR management in banks and is one of the 11 electives one can choose or reject from. The objective of the examination – ‘CAIIB aims at pro-viding advanced knowledge necessary for better decision making covering Treasury Management, Risk Management, Balance Sheet Management, Credit Management, International Banking, Economic Anal-ysis, etc’ – does not even mention the lowly skills of handling people. Dealing with often contradictory expectations of different stakeholders such as owners, colleagues, seniors, customers, regulators, and society at large is one of the main challenges for bank managers and most are not trained to handle that well. That leads to frustration, reduced productiv-ity, and a general negative vibe on the banking career itself.

In an analysis on `Level of Stress in Workplace’ conducted by ASSOCHAM, banking was in the top 10 sectors of stress workplaces along with other sectors like retail and card franchise companies to de-liver on deadlines. Though banknetIndia reported this years ago, it could be still be true. In the ranking of 130 occupations

based on stress levels by the National Institute for Occupational Safety and Health (US-based federal agency respon-sible for conducting research and making recommendations for the prevention of work-related injury and illness), bank tellers are at 28th place.

In a study titled ‘Work-Related Stress in the Banking Sector: A Review of In-cidence, Correlated Factors, and Major Consequences’ published in the interna-tional journal Frontiers in Psychology, the factors in today’s banking activities were listed as ‘demanding targets, fierce com-petition, fewer available jobs, a constant demand to increase qualifications, inten-sified and overloaded tasks, and increased control and pressure on workers,’ – all of which could increase the occupational stress risk. This research states that de-regulation of labour markets, emerging technologies, and new types of jobs have significantly reshaped working lives, thus impacting both banks and the working population’s health. In this new manage-ment model, bank employees have expe-rienced a full redefinition of their tasks, becoming bank sellers rather than bank employees. Five studies were conducted in Europe, nine in Asia (including India), four in America, and two in Africa. All studies in this review show that work-place stress is a critical banking sector issue with potentially negative effects on workers’ and organisations’ psychological and physical health. These observations are majorly true for Indian bank manag-ers also; globalisation has brought these issues to our doorsteps.

Who wants to work in a bank?The prestigious UK magazine, The Bank-er, in its February 2019 issue, mentions that attracting talent in the wake of the financial crisis is proving a challenge, in the editor’s article, ominously titled ‘Who wants to work in a bank?’ he observes that usual jobs of hard-pressed cashiers taking cheques and paying cash, those fielding calls from the call centre, and even the

popular picture of hotshot traders en-gaged in frenetic bouts of deal-making are becoming unattractive after the glob-al financial crisis, to hire the best and the brightest for a career in banking. This is true in India also, both for job availability and preference.

The Institute of Banking Personnel Selection is an autonomous body that conducts recruitment tests for clerks and officers of PSBs, RRBs and a few oth-er public sector financial institutions in India. The number of candidates it re-cruits and supplies to the banking system is a rough indication of the headcount growth in the banking industry and the number of applications shortlisted is an indication of the job-seekers’ perception. Sadly, both are not encouraging, though the banking system was considered as one of the top job creators in the country till recently. The number of candidates who were tested by IBPS during 2016-17 was 1.07 crore (highest in IBPS history) and it declined to 69 lakh during 2018-19, i.e. in three years, as per the website of IBPS. The number of candidates who appeared for the common recruitment of clerks declined from 19.62 lakh to 14.15 laks between 2017-18 and 2018-19, while the similar number for probationary officers and specialist officers declined from 16.55 lakh to 11.69 lakh and from 2.01 lakh to 1.57 lakh respectively.

As reported by a financial newspaper, traditional labour-intensive jobs like pass-book updating, cash deposit and with-drawal, funds transfer (earlier through massive demand drafts), most deposit-re-lated work like fixed deposits and account servicing, KYC verifications, and salary uploads are digitally done, increasing job redundancies. Both the private-sector banks and PSBs are trying robotics to han-dle front office routines, centralised back office operations to hasten turnarounds, self-service mode for customer interac-tions – all reducing the need for manual workers. With this, the number of vacan-cies itself is declining. For example, purely

EXPERTEYE


based on the number of vacancies as per IBPS notification, that for clerks had fallen from 33,488 in FY15 to 19,243 in FY17 and to 7883 in FY18. The vacancies for proba-tionary officers came down from 16,721 in FY15 to 8822 in FY17 and 3562 in FY18. During FY18, SBI’s employee strength fell by 18,973 due to retirements, etc. but only 3211 joined. The total staff strength came down from 2,79,803 as on 1 April 2017 to 2,64,041 as on 1 April 2018. In 2018-19, 14 PSBs declared zero vacancy in probation-ary officer/management trainee category.

Expectation gapsA degree in engineering has become the default degree for youngsters and they desire a technology-related job, prefera-bly with possible overseas posting. With that not forthcoming, many join banks and hence we see engineers at most bank branch counters, though their engineering skills are least relevant there. The frustra-tion of not being in the desired career path but being at a completely new work gets reflected in the body language and cus-tomer dealings. Imagine the embarrassing encounter of such a banker for selling an insurance policy to a young techie, who happened to be an ex-classmate.

A number of factors influence the attrac-tiveness of jobs including remuneration, social status, physical comfort, perceived job satisfaction, and growth prospects. Every prospective employee agrees that a commercial organisation can grow only if there is business growth and that is possible only if there are persons working for busi-ness development. Naturally, sales jobs ac-count for larger share of the total number of jobs created by any commercial estab-lishment, including banks. This job profile requires good communication skills, high level of perseverance, high energy level, emotional intelligence and aptitude for repetitive work, integrity, and managing customer’s expectations. However, there is a marked aversion for sales jobs, that too in outbound sales jobs.

A leading bank conducted an internal

survey seeking preference of three job pro-files – front-end sales job, branch-based customer servicing job, and operations job. The sample size was over 10 percent of the employees across demographic profiles such as education, service length, gender, location, etc. The survey results are given on page ... the following interesting conclu-sions can be drawn from this survey: • There is great aversion towards sales job across all employees. • The aversion is higher among female and ‘urbanised’ employees.• Experienced employees have lesser aver-sion for sales job; though this may also be due to the fact that the nature of sales at higher levels is less of feet on the street and hence acceptable.

Some of this is understandable. Sales require persuasion, influencing someone else’s decision-taking, readiness to face ad-verse responses, and talking to strangers. Our socio-ethnic culture discourages the last requirement. Parents tend to advise their children, particularly daughters, to avoid direct eye contact with strangers. Our social security makes us believe that every stranger is unreliable. Praising oth-ers is not considered as a virtue. Competi-tive spirit is built in at an early age and any failure is not tolerated by parents. Selling is considered as a zero-sum game where one party gains at the cost of the counterparty. Hence, we have a great impasse. We have a large pool of youngsters coming out of the colleges with fancy degrees from MBAs to

BTechs with a high expectation of a job profile, knowing all about strategy to com-puter graphics, but not having any specific skills to understand, or persuade, or even converse with people.

Every year, more than 10,000 organ-isations from over 58 countries partner ‘Great Place to Work Institute’ for assess-ment, benchmarking and planning ac-tions to strengthen their workplace cul-ture. In its assessment for BFSI sector this year (2019), 69 organisations participated (probably, none of the PSBs). The list of top 20 places contains only four banking institutions, that too small finance banks and small banks. This indicates either most banks did not participate or did not get se-lected. Both are ominous of the perceived working conditions in banks. The govern-ment, RBI, and private sector owners have been taking a number of remedial steps, especially at leadership level, as a short-term measure to tackle the leadership vac-uum arising out of large-scale retirement at the top. However, what is also needed is a relook at the quality of new joinees, the initial inputs, and grooming for a bright future both for them and banks. The non-financial working environment has to be made promising. Only those will en-sure sustainable banking, in the long run. Issues like high workload, people handling challenges, career stagnancy, etc are com-mon across all industries. But since public money is involved, it is better to prioritise banking environment for relook.

Survey on preference for job profiles (%)Preference for Front-end sales job Branch-based service

and sales jobPure back office job

Female employees 5 23 72

Male employees 12 28 60

Employees with <2 years’ experience

9 26 65

Employees with >4 years’ experience

21 23 56

Overall for the survey population

10 26 64

Source: Internal survey by a leading bank


The overuse of resources the world over has led to an alarming state of the environment. Harnessing technology to promote the principles of circular economy of reduce, recycle, and reuse will go a long way in sustainable development of the world

NATIONAL PRODUCTIVITY COUNCIL

Circular economy for productivity and sustainability

BY and large, today’s manufacturing takes raw materials from the envi-ronment and turns them into new

products, which are then disposed into the environment after use. It is a linear process with a beginning and an end. In this system, limited raw materials even-tually run out. Waste accumulates, either incurring expenses related to disposal or else polluting – indeed. In a circular economy, however, products are designed for durability, reuse and recyclability, and materials for new products come from old products. As much as possible, everything is reused, remanufactured, recycled back into a raw material, used as a source of energy, or as a last resort, disposed of.

India has the opportunity to save mon-ey, make money and do good by adopting the principles of the circular economy. It has the opportunity to leapfrog oth-er economies and establish a leadership position. Traditionally, the Indian econ-omy has been one where reusing, re-pur-posing, and recycling have been second nature. In a world that is increasingly running out of natural resources, this thinking is an asset that must be leveraged by businesses, policymakers, and citizens in an organised manner and expanded to include other elements to make the econ-omy truly circular.

TECH FRONTIERS


Several building blocks of circularity are deeply ingrained in Indian habits, as ex-emplified by the high rates of utilisation and repair of vehicles and the distributed recovery and recycling of materials post-use. Often handled informally, these activ-ities provide the only source of livelihoods to some of the poorest populations. By turning these existing trends into core de-velopment strategies, India could generate significant economic savings, while mas-sively cutting down on carbon emissions.

Restorative and regenerative by design, a circular economy aims to keep prod-ucts, components, and materials at their highest utility and value at all times. A cir-cular economy is a continuous cycle that

preserves and enhances natural capital, optimises resource yields, and minimis-es system risks by managing finite stocks and renewable flows. The concept of cir-cular economy, a metaphor that neatly resonates with Mahatma Gandhi’s ardent lifelong quest for efficiency in production, sufficiency in consumption, and what he could well have called ‘conservancy’ of re-sources and ‘deficiency’ in wastes, captures well the desirable characteristics of the fu-ture we will all have to live in – and how to get there.

The world’s growing and the increas-ingly affluent population has caused an overuse of resources, higher price levels and increasing market volatility. An ambi-

tious long-term vision of a circular econ-omy, built on the current strengths of the Indian market and engaging business, pol-icy, and education in its realisation, could, on the contrary, provide the basis for a regenerative development path towards long-term prosperity.

A circular economy reduces resource dependency and resource use, including energy, thereby reining in production costs, narrowing market exposure, and limiting costs stemming from resource extraction and generation. It additionally leads to the introduction of economically viable methods of reducing pollution, and separating harmful from reusable waste material.

THE PRINCIPLES OF CIRCULAR ECONOMY

TOWARDS CIRCULAR ECONOMY BY 3R PRINCIPLE

Principle 1: Preserve and enhance natu-ral capital by controlling finite stocks and balancing renewable resource flows.

A circular economy enhances natural capital by encouraging flows of nutri-ents within the system and creating the conditions for regeneration of soil and other living systems. Whenever possible, utility is provided virtually or as a service rather than as a physical product. When resources are needed, the circular sys-tem favours technologies and processes that use renewable or better performing resources. The circular economy seeks to address several challenges to natural capital:1. Threatened stock and variable quality of fresh water.2. Soil degradation.3. Loss of biodiversity4. Depletion of fish stocks and degrada-

tion of marine ecosystems.Principle 2: Optimise resource yields by circulating products, components, and materials at their highest utility at all times, in both technical and biological cycles.

This entails designing for refurbishing, remanufacturing, and recycling to keep products, components, and materials cir-culating and contributing to the econo-my.

As in a linear system, increasing yields is useful and requires ongoing system im-provements. But unlike a linear system, a circular system would not compromise effectiveness – which requires a fine bal-ance between efficiency and long-term resilience. The circular economy seeks to address several resource challenges.1. Materials consumption: If India main-tains the economic development pace of

the past few decades, it stands to more than triple its demand for resources by 2030. This process could be effectively contained by adopting the circular econ-omy principles.2. Nutrient loss: The deterioration of soil due to loss of nutrients is a significant trend in India and this could be reduced for effective gains.

Principle 3: Foster system effectiveness by revealing and designing out negative externalities.

The negative externalities of economic activity include land degradation; air, wa-ter, and noise pollution; release of toxic substances; and GHG emissions. A cir-cular economy would reveal the cost of these externalities – in other words, out-line their risks and potential economic impact.

CIRCULAR consumption is an indispensible part of a circular economic system for sustaining

economic growth and mitigating en-

vironmental degradation and resource depletion. The challenge to put circular consumption into practice can be ad-dressed by the 3R Principle that is based

on Reduce, Recycle, and Reuse. The prin-ciple reflects on the scope for converting wastes into valuable products and mak-ing the Mission Zero Waste a reality. This


Mission emphasises 100 percent scientific waste management in 400 targeted cities of the country.

Solid waste managementIn respect of the Indian solid waste man-agement scenario, it is indicative that MSW generation is estimated to be 1.43 lakh tonnes per day. Of this MSW pro-cessed/treated is about 35,602 tonnes per day (24.8 percent). Further, the number of wards with 100 percent D2D (door-to-door) collection being achieved has been in 61,846 (73 percent of wards) and that the number of wards with 100 percent source segregation are 30,749 (36 percent of wards).

The Government of India Policy In-terventions to encourage conversion of Waste to Wealth and various Ministries and Departments are engaged in the im-plementation process. In this regard 35 percent funding is being provided as vi-ability gap funding/grant by the Govern-ment of India for all solid waste manage-ment projects such as:a. Waste to Compost b. Waste to Energyc. Plastics in Road Constructiond. Construction and Demolition Waste Management

In addition are the development and notification of six Waste Management Rules, 2016 and capacity-building initi-atives in cities for various stakeholders. These rules are concerning Solid Waste Management, Plastic Waste Management, Construction and Demolition Waste, Hazardous Wastes, Bio-Medical Wastes, and Electronic Wastes Management.Further, is the initiative in India on Swa-chh Survekshan (i.e. Cleanliness Survey) for cities, and development of the star rat-ing system to achieve garbage-free cities.

Many countries have started practis-ing circular economy and lessons can be learnt on futuristic approaches, like clus-tering ULBs of South Australia for effec-tive integrated solid waste management, where larger ULBs could lead the action,

is worth emulating.In Ambikapur, administrative reforms

like habitation clusters, contract man-agement, partnerships, open technolo-gy sourcing, renewable obligations, and awareness campaigns, etc. can result in novel and customised solutions to the waste problems towards a closed loop waste cycle.

Perspectives on industry initiatives on 3R also are reflected upon and highlight-ed in Figure1.

In essence, it is to be highlighted that the behavioural change in society are piv-otal to be achieved by various interven-tions including infrastructural, financial, and technological initiatives which could help progress towards a zero-waste soci-ety within the framework of the circular economy.

Reducing water pollutionThe significance of water security is linked to various sustainable develop-

Table1: Typical composition of municipal solid waste in IndiaType Total (metric tonnes) %

Biodegradable 62,510 47

Paper 10,640 8

Rubber 11,970 9

Metal 1,330 1

Glass 1,330 1

Rags 6,650 5

Others 5,320 4

Inert 33,250 25

Eco friendly sanitary napkins

Fly ash bricks made from industrial wasteSustainable Furniture made from TetraPak

Low cost decentralised solution for processing of waste

Biodegradable shopping bags

Eco‐friendly cutlery and food packaging material PET bottle recycling systems

Figure1: A pictorial feature of industry initiatives to promote 3R

TECH FRONTIERS


ment goals. Water is critical for socio-economic development, healthy ecosys-tems, and for human survival itself. The pressure on global water resources (both surface and ground water) is increasing due to growing gap between water sup-ply and demand, anthropogenic water pollution, and climate change impacts. Urban centres in the Asia Pacific regions are highly vulnerable to water security issues and urban resilience is a concern internationally. The concern regarding water sharing disputes (domestic and international) is also an issue to be tack-led. On the domestic water consumption side, focus should be on development of innovative water saving appliances.

Rainwater harvesting will be the corner-stone of the urban circular water econo-my development.

Advancing 3Rs and circular econo-my encourage the use of treated water and sustainable use of water resources to achieve a number of benefits such as safe drinking water and effective sanita-tion system, among others. As regards wastewater reuse applications the key is innovations in wastewater treatment and recycling technologies. A perspec-tive on this is outlined in Figure2.

To achieve the circular water economy option, there is a need to revisit the con-ventional centralised water and waste-water treatment to decentralised system

which promotes better water reuse ap-plications.

There are other innovative solutions like Phyco-remediation that refers to the use of algae for treating wastewater. Algae are green, microscopic plants that survived extremely harsh, prehistoric environmental conditions and helped produce oxygen on earth and bring down the earth’s temperatures. Nature also uses algae to treat rivers and lakes. Since millennia, our civilisations have spawned near rivers, but pollution had never been a problem because of the remediation work carried out by algae. However, because of the surge in popu-lation growth, construction of dams and

Maintaining Water Quality through Wastewater Reclaim and Reuse

Qual

ity o

f wat

er

Main categories of water reuse

Time sequence

Even though WW is 99.98 percent pure water

The 0.02 percent contaminants is still a

problem

Treatment Effluent Ag

ricul

ture

Recycled water

Indu

stria

l use

s

Pota

ble

reus

e

Ultra-pure recycled water

Drinking water

Natural fresh water

Urba

n

C Visvanathan/Asian Institute of Technology, Thailand Water quality and security in Asia Pacific: What 3R and Circular Economy can Offer?

Figure2: Waste water treatment and reclamation perspective

Wat

er

treat

men

t

Municipal and industrial uses

Wat

er re

use

Was

tewa

ter t

reat

men

t

TECH FRONTIERS


barrages, and especially because of the addition of industrial effluents, the pol-lution loads in rivers have shot up signif-icantly. The experimental outcomes were encouraging when micro-algae-based water treatment technology was used on a 10-km stretch of river Mausam at Malegaon and 0.4 acres Lakshmi Tal at Jhansi on sample basis.

Preventing land pollutionThe problem of land degradation is due to open dumping, open burning, spill-ages of oil and other contaminants etc, and other causes such as deforestation, overgrazing, agricultural activities, in-dustrialisation, overexploitation for fuel wood, etc.

Land pollution has a number of ad-verse effects on the physical, chemical, and biological properties of the land that reduces its productivity. Further, the land becomes the breeding ground for dis-ease-causing insects and vectors. Open burning and illegal dumping also allow the percolation of harmful substances in the food chain.

It has also been seen from the records that more than 35 percent of the 50 big-gest landfill sites are located in the Asia and the Pacific.

There is huge potential for imple-menting 3R and circular economic de-velopment strategies to prevent phys-ical and chemical degradation of land as well as effective utilisation of organic waste and biomass for sustainable farm-ing and energy. Remediation of already polluted land, rehabilitation of deserted lands, landfill mining, utilisation of or-ganic waste and biomass for sustainable farming, continuous mass campaign to prevent open burning, waste recovery through composting, and enforcing ap-propriate legislation encouraging earn-ing from the waste recovered materials, are some of the solutions. It is required to have a national target for respective states, national and state level strategies and policy development, robust supply

chain, and technological support to pre-vent the land degradation for realising circular economy.

Prevention of air pollutionAir pollution is an intensifying environ-mental challenge in Asia and the Pacific, where uncontrolled, unmonitored and unregulated biomass burning and open burning from open dump sites is still inevitable. Air pollutants like particulate matter, black carbon, methane, etc are released to the atmosphere, essentially interrelated to short-lived climate pol-lutants (SLCP) or greenhouse gas emis-sions with significant impacts on human health, agriculture, forests, and habi-tats. Air pollution affects environmental health, social, and economic aspects. Ex-posure to air pollution outdoors and in-

doors costs $5.11 trillion per year and has consequential health impact in terms of non-communicable diseases, i.e. stroke, heart disease, respiratory disease, and lung cancer.

In terms of trans-state air pollution from biomass burning creating haze re-quires green agriculture system for uti-lisation of biomass residue. Sustainable management of air emissions and air quality management strategies are key to achieve circular economy.

Protection of coastal and marine ecosystemThe impact on coastal and marine eco-systems due to poor waste disposal practices, in particular plastics waste, is a major concern. Scientific studies say more than 5 trillions of plastics are

Figure3: Plastics in oceans and water bodies – impacts and pathway to food chain


floating in the ocean, whereas much more are deposited and accumulated in bottom sediments. They bring toxic chemicals to organisms such as fish and shellfish, causing concern about food se-curity. Disposal of micro-plastics to the ocean has major impacts on the marine ecosystem as these materials are ingest-ed by marine organisms causing severe food security issues.

There is a need to consider a wide spectrum of 3R options as part of circu-lar economy to reduce the generation of plastic wastes. Among them, reduction of production of unnecessary single-use plastics could be helpful, considering long-term environmental impacts.

Indian stakeholders can learn from global initiatives such as Clean Seas Campaign and North West Plastic Ac-tion Plan (NOWPAP) for solving the

issue. In this context strengthening the policies related to marine pollution, capacity building of local and national bodies, development of marine research and development activities, and raising awareness can be critical.

Greening of small manufacturing enterprises (SMEs)Greening of SMEs is important to achieve decoupling economic progress vis-à-vis resource consumption, lead-ing to circular economy. It is indicated that SMEs are the major contributors worldwide to industrial activity as part of supply chains and that significant pollution is also generated by SMEs. A perspective on resource efficient clean-er production (RECP) initiative and the challenges faced in effecting behavioural change in SMEs and obtaining respon-

siveness towards modernisation needs to be reflected upon, with recognition that technology costs can be a deterrent, and that governmental initiatives and support can enable and assist SMEs to-wards green industrial development.

In order to green SMEs, a concept of GLEAN (Green Lean) which is a combi-nation of Material Flow Cost Account-ing (MFCA) and LEAN management, developed by NPC could be put into practice. The application of MFCA in production has been demonstrated in SMEs and the implication of adopt-ing MFCA with LEAN is that it clearly leads to higher process efficiency and reduction/elimination of waste. The fundamental strategy behind imple-menting MFCA with LEAN is the eval-uation of the operations and activities in terms of efficiencies. Since MFCA is a management accounting method, it does not automatically resolve this loss. In fact, it is necessary to clarify the cause of the loss occurring in each pro-cess and change the design, materials/parts, manufacturing method, process-ing, equipment, etc, and to eliminate the cause, for which PDCA (Plan, Do, Check, and Act) approach of LEAN principles when clubbed with MFCA fits well in the framework and delivers sustainable outcomes to help SMEs to achieve resource efficiency.

CAPTURING THE BENEFITS OF CIRCULAR ECONOMY

THE circular economy is a new way of creating value, and ultimately prosperity. It works by extending

product lifespan through improved design and servicing, and relocating waste from the end of the supply chain to the begin-ning – in effect, using resources more ef-ficiently by using them over and over and only once.

Indian businesses are well placed to lead the way in the transition. Business-

es stand to realise substantial profit from the circular economy opportunities. Five recommendations could guide companies seeking to capture this value.• Build circular economy knowledge and capacity.• Innovate to create new products and business models and demonstrate their success.• Integrate circular economy principles into strategy and processes.

• Collaborate with other businesses, poli-cymakers, and the informal economy.• Invest in circular economy opportunities.

Profit opportunities for businesses through increasing innovation and de-mand for new business services: By apply-ing circular economy principles, business-es could generate new ideas and explore new ways of working, especially in digital technology. Indian innovation hubs could

THERE IS A NEED TO CONSIDER A WIDE SPECTRUM OF 3R OPTIONS AS PART OF CIRCULAR ECONOMY TO REDUCE THE GENERATION OF PLASTIC WASTES. AMONG THEM, REDUCTION OF PRODUCTION OF UNNECESSARY SINGLE-USE PLASTICS COULD BE HELPFUL, CONSIDERING LONG-TERM ENVIRONMENTAL IMPACTS

TECH FRONTIERS


CIRCULAR ECONOMY’S OPPORTUNITIES IN INDIA1. Cities and constructionAs India invests in long-term infrastructure to improve citizens’ quality of life, for ex-ample, through the Smart Cities Mission, it could incorporate circular economy prin-ciples into the design of the infrastructure needed to provide water, sanitation, and waste services at scale, creating effective urban nutrient and material cycles. More systemic planning of city spaces, integrated with circular mobility solutions, can con-tribute to higher air quality, lower conges-tion, and reduced urban sprawl. Flexible use of buildings and urban spaces, enabled by digital applications, can increase utilisa-tions rates, getting more value out of the same assets. Higher efficiency and lower overall building and infrastructure costs could also help meet the housing needs of the urban poor without compromising safety and quality.

Circular economy principles can con-tribute to this construction activity in ways that create economic value and decou-ple development from the use of virgin, non-renewable resources. Renewable and recycled materials and modular construc-tion methods can minimise waste and

reduce construction costs. Buildings can be designed to be adaptable to changing needs and contribute to the regenerative urban ecosystem during their use phase (energy generation, connection to nutrient cycling systems, etc.).

2. Food and agricultureIndia can adopt a regenerative, restor-ative agricultural system that combines modern technology with traditional practices to meet India’s growing food demand. There is an urgent need for an agricultural system framework which retains natural capital, boosts econom-ic and ecological resilience, and delivers a stable supply of fresh, healthy, and di-verse food to India’s growing population besides closing the gap in nutrient loops.Leveraging the current small-farm struc-ture, India could create large-scale net-works of farmers, interconnected and symbiotic in their practices and com-mitted to regenerative approaches. Com-bining local knowledge and traditional methods (like working with a large va-riety of species) with modern technol-ogy (like precision farming and digital-

ly-enabled asset and knowledge-sharing systems) could increase yield while sig-nificantly decreasing requirements for re-sources such as water, synthetic fertilisers and pesticides.

Reducing food waste across the supply chain could make the Indian food system even more effective. This would require optimising production and digitising food supply chains to match supply and demand more easily. Urban and peri-ur-ban farming can bring food production closer to consumption, reducing food waste and transportation requirements. Composting and an aerobically digesting food waste with no other valuable use and post-consumption nutrients (those contained in human excreta) allows res-toration of nutrients to the soil and pro-duction of energy.

3. Mobility and vehicle manufacturingCircular economy principles can con-tribute to a mobility system that would meet the growing needs of the Indian population, especially in cities, while limiting negative externalities, such as

help businesses implement new approach-es and capture new profit opportunities.

Material cost savings and reduced expo-sure to resource price volatility: A circular economy would significantly lower costs for businesses related to the use of virgin materials. Less material use would also re-duce their exposure to volatile raw materi-als prices and strengthen resilience.

Economic growth: As mentioned earlier, circular economy practices are making more productive use of material inputs (including looping of products, compo-nents, and materials) and increasing rev-enue from emerging circular activities.

While some sectors (e.g. the material ex-traction industry) would expect reduced activities, overall more activity would happen across the economy, boosting eco-nomic growth.

Benefits for citizens1. Lower cost for products and services. In the circular economy scenario, cash-out cost in the three focus areas would be Rs14 lakh crore ($218 billion, 11 per-cent of India’s GDP) lower in 2030 and Rs40 lakh crore ($624 billion, 30 percent of India’s GDP) lower in 2050, compared with the current scenario.2. Greater utility and choice. The ad-ditional choice or quality that circular

models provide would enhance the util-ity, or benefit experienced by customers. Choice increases as producers provide systems that enable tailoring products or services to better meet customer needs. For example, applying circular economy principles in mobility would give cus-tomers more vehicle options, without increasing the number of vehicles on the road.

3. Reduced negative externalities, e.g. congestion, pollution. The analysis sug-gested beneficial impact from applying circular economy approaches to address issues like congestion, pollution, and ill-health.


The Government of India has done sub-stantial work towards policy interven-tions and formulation such as1. Notification of National Ambient Air Quality Standards2. Formulation of environmental regu-lations/statutes3. Setting up of monitoring network for assessment of ambient air quality4. Introduction of cleaner/alternate fuels like gaseous fuel (CNG, LPG, etc), etha-nol blend etc5. Promotion of cleaner production pro-cesses6. Launching of National Air Quality in-dex by the Prime Minister in April 20157. Implementation of Bharat Stage IV (BS-IV) norms in 63 selected cities and universalisation of BS-IV by 20178. Decision taken to leapfrog directly from BS-IV to BS-VI fuel standards by 1 April 20209. Taxing polluting vehicles and incenti-vising hybrid and electric vehicles10. Comprehensive amendments to var-ious Waste Management Rules including Municipal Solid Waste, Plastic Waste, Hazardous Waste, Bio-medical Waste and Electronic Waste notified 11. Notification of Construction and Demolition Waste Management Rules;12. Ban on burning of leaves, bio-mass, municipal solid waste13. Promotion of public transport net-work of metro, buses, e-rickshaws and promotion of car pooling, Pollution Under Control, lane discipline, vehicle

maintenance14. Revision of existing environmental standards and formulation of new stand-ards for prevention and control of pollu-tion from industries15. Regular coordination meetings at official and ministerial level with Delhi and other State Governments within the NCR16. Issuance of directions under Section 5 of Environment (Protection) Act, 1986 and under Section 18(1)(b) of Water (Prevention and Control of Pollution) Act, 1974 and Air (Prevention and Con-trol of Pollution) Act, 198117. Installation of online continuous (24x7) monitoring devices by major in-dustries18. Preparation of action plan for sew-age management and restoration of wa-ter quality in aquatic resources by State Governments19. Implementation of National River Conservation Plan for abatement of pol-lution in identified stretches of various rivers and undertaking conservation ac-tivities which inter-alia include intercep-tion and diversion of raw sewage, con-struction of sewerage systems, setting up of sewage treatment plants, low-cost san-itation facilities, education and aware-ness creation, community participation, electric/improved wood crematoria, and riverfront development20. India’s National Manufacturing Pol-icy focuses on promotion and adoption of Green technologies and Green manu-

facturing especially with its MSMEs21. Government of India has embarked upon an initiative of creating 100 smart cities across the country and waste man-agement and resource conservation are significant part of this important initi-ative22. Government of India is in process of finalising national goals under UN’s sus-tainable development goals23. Government of India has promoted the concept of Zero Effect Zero Defect Effect in order to achieve Green econom-ic growth24. Government of India has emphasised focused on Development of MSMEs and making them competitive and sustain-able in order to achieve increased eco-nomic growth in manufacturing sector.

The following actions are required to lead the way to the transition to circular econ-omy:1. Set direction and show commitment.2. Create enabling regulatory frameworks and remove policy barriers.3. Represent the interests of groups like the informal sector, or facilitate collab-orative initiatives among businesses, the public sector, and other stakeholders4. Support circular models through pub-lic procurement and infrastructure.5. Embed circular economy principles into education.6. Conduct research and pilot projects to create a knowledge base and establish proof points.

POLICY INITIATIVES

GHG emissions, congestion, and pollu-tion.

Taking reparability, remanufacturing, and recycling into account in vehicle design and creating the appropriate re-verse cycle infrastructure can reduce the need for virgin, non-renewable resourc-es and energy. Building vehicles that rely on zero-emission propulsion tech-

nology could reduce negative externali-ties like GHG emissions, pollution, and dependence on imported fossil fuels. As car ownership is currently low, adoption could be rapid as ownership expands.

A multimodal, door-to-door, on-de-mand mobility system, embracing vehi-cle-sharing trends and leveraging digital innovation, could provide efficient and

effective transportation with high ve-hicle usage and occupancy rates. Mass transit as the backbone combined with other forms of transport – including ve-hicle as a service – for convenient last-mile connectivity can create convenient door-to-door journeys. Technological innovation can help plan these journeys and make travelling safer and faster.

TECH FRONTIERS


WTO TALK

United States initiates WTO dispute against Indian duties on US importsThe United States has requested WTO dis-pute consultations with India concerning additional duties applied by India on cer-tain imports of US goods. The request was circulated to WTO members on 4 July.The United States claims that the addition-al duties, which India imposed through a series of notifications issued between June 2018 and June 2019, are inconsistent with provisions of the WTO’s General Agree-ment on Tariffs and Trade (GATT 1994) by unfairly discriminating against US imports vis-à-vis those from other WTO members and by according less favourable treatment to US goods than that provided for in In-dia’s schedule of concessions.

India – additional duties on certain products from the United StatesRequest for consultations by the United StatesThe following communication, dated 3 July 2019, from the delegation of the United States to the delegation of India, is circu-lated to the Dispute Settlement Body in ac-cordance with Article 4.4 of the DSU.My authorities have instructed me to re-quest consultations with the Government of India (‘India’) pursuant to Article 4 of the Understanding on Rules and Proce-dures Governing the Settlement of Dis-putes (‘DSU’) and Article XXIII of the Gen-eral Agreement on Tariffs and Trade 1994 (‘GATT 1994’) with respect to India’s im-position of additional duties with respect to certain products originating in the United States (‘additional duties measure’).India does not impose the additional duties measure on like products originating in the territory of any other WTO Member. India also appears to be applying rates of duty to US imports greater than the rates of duty set out in India’s schedule of concessions.1

The legal instruments through which In-dia imposes the additional duties measure include the following:Government of India, Ministry of Finance, Department of Revenue, Notification No. 48/2018 – Customs, June 20, 2018;• Government of India, Ministry of Fi-nance, Department of Revenue, Notifica-tion No. 49/2018 – Customs, June 20, 2018;• Government of India, Ministry of Finance, Department of Revenue, Notification No. 56/2018 – Customs, August 3, 2018;• Government of India, Ministry of Fi-nance, Department of Revenue, Notifica-tion No. 62/2018 – Customs, September 17, 2018;• Government of India, Ministry of Fi-nance, Department of Revenue, Notifica-tion No. 77/2018 – Customs, November 1, 2018;• Government of India, Ministry of Fi-nance, Department of Revenue, Notifica-tion No. 80/2018 – Customs, December 15, 2018;• Government of India, Ministry of Finance, Department of Revenue, Notification No. 03/2019 – Customs, January 29, 2019;• Government of India, Ministry of Fi-nance, Department of Revenue, Notifica-tion No. 06/2019 – Customs, February 26, 2019;• Government of India, Ministry of Finance, Department of Revenue, Notification No. 11/2019 – Customs, March 29, 2019;• Government of India, Ministry of Fi-nance, Department of Revenue, Notifica-tion No. 14/2019 – Customs, May 1, 2019;• Government of India, Ministry of Fi-nance, Department of Revenue, Notifica-tion No. 15/2019 – Customs, May 14, 2019;• Government of India, Ministry of Fi-nance, Department of Revenue, Notifica-tion No. 16/2019 – Customs, June 15, 2019;

• Government of India, Ministry of Fi-nance, Department of Revenue, Notifi-cation No. 17/2019 – Customs, June 15, 2019;• as well as any amendments, replace-ments, related measures or implementing measures.The additional duties measure appears to be inconsistent with:• Article I:1 of the GATT 1994, because In-dia fails to extend to products of the Unit-ed States an advantage, favour, privilege or immunity granted by India with respect to customs duties and charges of any kind imposed on or in connection with the im-portation of products originating in the territory of other Members, and• Article II:1(a) and (b) of the GATT 1994, because India accords less favourable treat-ment to products originating in the Unit-ed States than that provided for in India’s schedule of concessions.1

The additional duties measure appears to nullify or impair the benefits accruing to the United States directly or indirectly under the GATT 1994.

We look forward to receiving your re-ply to the present request and to fixing a mutually convenient date to hold consul-tations.

Notes 1. India has stated publicly that its addition-al duties are permitted under the Agreement on Safeguards. The United States has not adopted a safeguard measure in connection with any issue in this dispute. The Agree-ment on Safeguards is therefore not impli-cated in this dispute, and India’s additional duties could not be consistent with Articles 8.2 or 8.3 of the Agreement on Safeguards.

Source: WTO website


Engineering exports fall again

Besides the continuing global trade disputes, India’s engineering exporting community is hamstrung by the lack of adequate credit flow

OVERSIGHT

POLICY WONK

DURING June 2019, merchandise exports from India declined for the first time in fiscal 2019-20 on

a year-on-year basis. After registering 0.64 percent and 3.93 percent growth in the first two months of this fiscal re-

spectively, the month of June 2019 saw 9.71 percent decline in India’s merchan-dise exports over the same month last fiscal. During the month, merchandise export was at $25.01 billion as against $27.7 billion in June 2018. In rupee

terms, merchandise exports conceded 7.52 percent decline in the reporting month.

Imports in June 2019 were $40.29 billion, which was 9.06 percent lower in dollar terms over imports of $44.3


billion in June 2018. Oil imports in June 2019 were $11.03 billion which was 13.33 percent lower compared to $12.73 billion in June 2018. Oil imports in April-June 2019-20 were $34.85 bil-lion which was 0.62 percent higher in dollar terms compared to $34.64 billion over the same period last year. Non-oil imports in June 2019 were estimated at $29.26 billion which was 7.34 per-cent lower in dollar terms compared to $31.58 billion in June 2018. Non-oil im-ports in April-June 2019-20 were $92.19 billion which was 0.62 percent lower in dollar terms compared to $92.77 billion in April-June 2018-19.

Trade deficit in June 2019 narrowed down by 8 percent to $15.28 billion from $16.6 billion in June 2018. On a cumulative basis, trade deficit mounted by 2.3 percent to $45.96 billion in April-June 2019-20 from $44.94 billion dur-ing the same period last fiscal.

AFTER witnessing y-o-y growth in May 2019, Indian engineering ex-ports declined by 2.31 percent in

June 2019 over the same month last fiscal. It registered 4.54 percent growth in May after a 7.7 percent y-o-y decline in April 2019. Engineering exports were at $6.36 billion in June 2019 as against $6.51 bil-lion in the same month last fiscal.

Cumulative engineering exports dur-ing the first quarter (April-June) of 2019-20 also witnessed 1.85 percent decline over the same period last fiscal. It was $20.08 billion during the first quarter of 2019-20 as against $20.46 billion during the same period last fiscal. Share of en-gineering exports in total merchandise exports was somewhat higher at 25.4 percent during June 2019 as compared to 24.2 percent during May 2019. On a cu-mulative basis, it was 24.8 percent during April-June 2019-20.

The monthly engineering figures for

2019-20 vis-à-vis 2018-19 are depicted in Table1 as per the latest quick estimates. Figure1 depicts the monthly trend in en-gineering exports during fiscal 2019-20 vis-à-vis fiscal 2018-19.

Correlation between manufacturing production and engineering exportsThe engineering sector is an important

component of the broader manufactur-ing sector and the share of engineering production in overall manufacturing output is quite significant. As exports happen over and above production gen-erally, some correlation between manu-facturing production growth and engi-neering export growth should exist. We briefly look at the trend in manufacturing growth as also engineering export growth

ENGINEERING EXPORTS

After showing somewhat optimistic perfor-mance in the first quarter (Q1) of 2019, global economic activity has been losing pace as apprehended, reflecting further slowdown in trade and manufacturing activities. Among the developed economies, US saw its best first quarter in the last four years with 3.2 percent growth supported by higher government spending, increase in private investment, and lower imports. However, factory activity and retail sales moderated in April. The recent drop in import volumes may cause a disruption in global value chains and lead to weaker export and investment growth in the coming quarters.

Economic activity in the Euro area has remained weak with 1.5 percent y-o-y growth in Q1 due to muted industrial activity and weak business confidence. Leading indicators point to a further slowdown in the Euro area in Q2.

In the UK, GDP growth for Q1 picked up on high retail sales and government expenditure. However, the outlook is clouded by uncertainty

relating to global trade tensions and Brexit.

The Japanese economy accelerated in Q1 on net exports gains and increased public invest-ment. In April, industrial production improved, while retail sales fell.

Economic activity has slowed in many emerg-ing market economies during Q1 of 2019.

The Chinese economy grew at the same pace as in the previous quarter, but that was slightly better than expectations. However, data on industrial production and retail sales suggest that the growth momentum may weaken in Q2.

The Russian economy, which had shown some signs of recovery in Q4:2018, weakened in Q1 on muted domestic activity and trade.

Economic activity in South Africa contracted in Q1 led mainly by a sharp decline in manufac-turing activity.

Brazil’s economy contracted in Q1 for the first time since 2016 and there are fears that it could return to recession.

Source: RBI

SUMMARY ON GLOBAL TRENDS

Table1: Engineering exports ($ million)

Month 2018-19 2019-20 Growth (%)

April 7020.54 6477.51 -7.73

May 6928.08 7242.49 4.54

June 6512.31 6361.98 -2.31

April-June 20460.93 20081.98 -1.85

Source: DGCI&S, Govt of India

OVERSIGHT


to see if they move in tandem. It may be mentioned that manufacturing has 77.63 percent weightage in India’s industrial production.

The new fiscal 2019-20 saw engineer-ing exports growth and manufacturing growth moving in opposite directions in April and May 2019 respectively. In April 2018, manufacturing growth accelerat-ed while engineering exports dropped to negative. While in May, engineering exports recorded growth and manufac-turing growth decelerated. Perhaps, the trend in Table2 shows a lagged effect of a month. We will need to see how this plays out during the course of the rest of the year. The growth rates in engineering ex-ports and of manufacturing in the coun-try during the current fiscal in shown in Table2.

We also present the month-wise corre-sponding revised engineering exports for 2018-19 vis-à-vis 2017-18.

Impact of exchange rateHow has the exchange rate changed in June 2019 vis-à-vis June 2018? We look at the monthly average exchange rate for both June 2019 and June 2018. Table4 provides the same:

During June 2019, the official exchange rate of the rupee vis-à-vis the dollar de-preciated by 2.43 percent over June 2018. A noteworthy feature has been the rela-tive hardening of the rupee since January 2019, indicated by the narrowing in the rate of depreciation over corresponding months of last year.

Panel-wise engineering exportsWe begin by looking at the engineering panel-wise exports for the month of June 2019 vis-à-vis June 2018. The data is giv-en in Table5.

Some observable trends are:• Exports of engineering goods in June 2019 declined by around 2.31 percent to $6361.98 million compared to $6512.31 million in June 2018. • Year-on-year decline was witnessed

in 16 out of total 33 engineering panels. These include some of the key panels such as iron and steel, non-ferrous met-als, electrical machinery, aircrafts, space-craft and parts, and several panels under industrial machinery. • The cumulative total of this fiscal (April-June 2019-20) also exhibited a de-cline from the same period last year. In cumulative terms too, 15 out of 33 panels exhibited a y-o-y decline.• Iron and steel figures continued to drop by 11.2 percent during June 2019 with an overseas shipment recording $653.72 million from $735.48 million in the same month last year.• Products of iron and steel showed an

insignificant rise resulting in cumulative fall in iron and steel and products of iron and steel which dropped by 7.9 percent from the same period last year.• The fall in major segments in non-fer-rous metals is one of the major features of June 2019. Heavyweight segments like copper, aluminium, zinc, and lead re-corded more than 15 percent decline in June 2019 over June 2018. In cumulative terms, too, five out of seven non-ferrous panels experienced a decline in June 2019 when compared to June 2018. • The industrial machinery panel also exhibited a decline in both monthly and cumulative terms. Four out of six pan-els exhibited decline in June 2019 when

Table2: Engineering exports growth vis-à-vis manufacturing growth, 2019-20

Month/Year Engg exports growth (%) Manufacturing growth (%)

April-March 2017-18 16.81 4.5

April 2019 -7.72 4.0

May 2018 4.54 2.5

June 2019 -2.31 N A

April-June 2019 -1.85 N A

Source: Department of Commerce and CSO

10.0

APRIL June2018-19 Growth (%)2019-20

MAY

5.0

7.0

-7.7

6.5 6.9 6.56.47.2

4.5

0.0

6.0

4.0

2.0

0.0

-2.0

-2.0

-6.0

-8.0

-10.0

Figure1: Trend in monthly engineering exports 2019-20 vis-à-vis 2018-19 ($ billion)

$ bi

llion

Source: QE, Ministry of Commerce; EEPC India analysis


Table 3: Revised engineering exports for 2017-18 ($ million)

Months 2017-18 2018-19 Growth (%)

April 5902.86 7020.54* 18.93

May 6047.26 6928.08* 14.57

June 5703.28 6512.31* 14.19

Quarter 1 17653.40 20460.93* 15.90

July 5595.63 6111.92 9.23

August 5766.60 6979.96 21.04

September 7088.19 6769.70 -4.49

Quarter 2 18450.42 19861.58 7.65

October 5669.59 6153.58 8.54

November 6872.84 5737.61 -16.52

December 7163.56 6911.61 -3.52

Quarter 3 19705.99 18802.80 -4.58

January 6217.28 6294.12 1.24

February 6332.92 6439.29 1.68

March 7839.32 9156.46 16.80

Quarter 4 20389.52 21889.87 7.36

April-March 76199.33 81015.18* 6.32

* Revised data Source: DGCI&S

compared to June 2018. Industrial boilers witnessed 32.18 percent growth, making it the highest recorded y-o-y growth within the broader panel in June 2019. Machin-

ery for injecting moulds, valves and ATMs also witnessed 5.82 percent growth. The maximum decline in June 2019 occurred in air-condition and refrigerators. In cu-

mulative terms though, the record is a bit better as the decline is witnessed in only three panels and the total decline is also marginal at 0.51 percent compared to 5.72 percent decline in June 2018.• Electrical machinery and equipment, which generally exhibits rise and is a ma-jor export for India, also experienced a decline of 3.3 percent in June 2019 when compared to June 2018, though in cumu-lative terms there was an 8.83 percent rise in exports in April-June 2019 when com-pared to April-June 2018. • The automobiles panel recorded 6.6 percent negative growth during June 2019, moving down from $1356.98 mil-lion in June 2018 to $1267.28 million in June 2019. The decline was accounted for by the drop in y-o-y exports of motor vehicles/cars by 8.9 percent and two and three wheelers by 15.03 percent. Marginal rise in exports was only witnessed in auto components. In cumulative terms though the picture is grim as all three sub-pan-els recorded a decline in April-June 2019 when compared to the same period last year. Overall in cumulative terms the total automobiles panel recorded a 4.42 percent decline. • Exports of aircrafts and spacecraft parts and products recorded decline in both monthly (42.9 percent) and cumulative (40.7 percent) terms. On the other hand, ship, boats and floating bodies exhibited a significantly high growth in exports in both monthly (104.41 percent) and cu-mulative (18.9 percent) terms. • Some other miscellaneous sectors such as office equipment, electrodes accumula-tors, hand tools and cutting tools, bicycle and parts, cranes lifts and winches, and medical and scientific instruments experi-enced growth in exports in both monthly and cumulative terms, although decline in both terms was exhibited by the other construction machinery panel.

Top 25 destinations for Indian engineering exportsWe now look at the export scenario of

Table 4: Average exchange rate

Average exchange rate (1 USD to INR) Change y-o-y (%) Direction

Month 2018 2019

January 63.64 70.73 11.14 Depreciation

February 64.37 71.22 10.64 Depreciation

March 65.02 69.48 6.86 Depreciation

April 65.64 69.42 5.76 Depreciation

May 67.53 69.77 3.32 Depreciation

June 67.79 69.44 2.43 Depreciation

Source: RBI, FBIL, EEPC Research

OVERSIGHT


Table5: Trends in engineering panel exports for June 2019 compared to June 2018 ($ million)June 2018 June 2019 Growth (%) Apr-Jun 2018 Apr-Jun 2019 Growth (%)

1. Iron and steel and products made of iron and steel

A Iron and steel 735.48 653.72 -11.12 2350.12 2061.25 -12.29

B Products of iron and steel 585.22 589.50 0.73 1722.14 1689.03 -1.92

Subtotal 1320.70 1243.22 -5.87 4072.26 3750.29 -7.91

2. Non-ferrous metals and products made of non-ferrous metals

A Copper and products 69.23 54.43 -21.38 245.15 185.35 -24.39

B Aluminium and products 542.75 418.56 -22.88 1469.76 1203.53 -18.11

C Zinc and products 68.34 48.85 -28.52 217.38 138.82 -36.14

D Nickel and products 6.81 5.50 -19.24 19.63 45.18 130.16

E Lead and products 32.68 19.50 -40.33 95.83 74.35 -22.41

F Tin and products 0.77 0.97 25.97 1.59 2.53 59.12

G Other non-ferrous metals 44.36 43.84 -1.17 133.61 131.88 -1.29

Subtotal 764.94 591.65 -22.65 2182.95 1781.64 -18.38

3. Industrial machinery

A Industrial machinery like boilers, parts, etc 49.84 65.88 32.18 156.85 223.76 42.66

B IC engines and parts 235.25 206.30 -12.31 593.46 619.67 4.42

C Pumps of all types 77.99 80.67 3.44 238.78 251.21 5.21

D Air condition and refrigerators 189.09 142.20 -24.80 501.30 386.86 -22.83

E Industrial machinery for dairy, food processing , textiles etc 467.27 452.92 -3.07 1411.38 1362.94 -3.43

F Machine tools 43.67 38.96 -10.79 127.06 117.41 -7.59

G Machinery for injecting moulding, valves and ATMs 133.29 141.05 5.82 372.23 422.01 13.37

Subtotal 1196.40 1127.98 -5.72 3401.06 3383.86 -0.51

4. Electrical machinery 718.6 694.9 -3.30 1998.24 2174.61 8.83

5. Automobiles

A Motor vehicle/cars 701.27 638.47 -8.96 2088.02 1981.25 -5.11

B Two and three wheelers 199.79 169.76 -15.03 544.82 496.34 -8.90

C Auto components/part 455.92 459.05 0.69 1366.39 1345.01 -1.56

Subtotal 1356.98 1267.28 -6.61 3999.23 3822.6 -4.42

6. Aircrafts and spacecraft parts and products 185.11 105.7 -42.90 530.33 314.48 -40.70

7. Ships boats and floating products and parts 285.34 583.27 104.41 2209.27 2626.85 18.90

8. Other engineering products

A Medical and scientific instruments 141.57 144.92 2.37 411.04 433.77 5.53

B Railway transport 22 33.76 53.45 92.93 94.8 2.01

C Hand tools and cutting tools 58.86 65.86 11.89 177.59 201.83 13.65

D Electrodes accumulators 4.1 5.04 22.93 12.18 14.87 22.09

E Accumulator and batteries 30.89 32.47 5.11 90.15 102.76 13.99

F Bicycle and parts 29.75 30.06 1.04 90.68 96.34 6.24

G Cranes, lifts and winches 39.56 46.96 18.71 110.18 135.68 23.14

H Office equipment 9.68 21.3 120.04 20.3 51.12 151.82

I Other construction machinery 131.33 122.06 -7.06 439.14 383.44 -12.68

J Prime mica and mica products 1.64 8.8 436.59 6.19 15.47 149.92

K Other misc. items 209.58 230.18 9.83 601.27 679.35 12.99

Subtotal 678.96 741.41 9.20 2051.65 2209.43 7.69

Total engineering exports 6512.31 6361.98 -2.31 20460.93 20081.98 -1.85

Source: Department of Commerce, Government of India


a) Slowdown in global trade demand has been a major reason behind poor performance by engineering exports this month. In their latest edition of Global Economic Prospects (June 2019), the World Bank clearly predicted that global trade growth in 2019 would only be 2.6 percent, slightly lower than what was witnessed during the 2015-16 global slowdown and the weakest since the global financial crisis. The organisation further added that factors such as further escalation of trade tensions between major economies, sharper-than-expected slowdowns in major economies and renewed financial turmoil in several emerging markets would continue to depress global demand and make recovery slower. Negative exports trend has been witnessed in a number of economies including the US, Japan, and the EU. China is also witnessing an overall sluggish trade due to the ongoing tariff war with the USA. China’s June 2019 exports fell by 1.3 percent when compared to June 2018.b) The withdrawal of India from US-GSP benefits is also expected to show negative impact on India’s exports, given that the USA is a major export destination. Experts opine that while India may have had opportunities of capturing key US markets on the sidelines of the US-China trade war,

withdrawal from US-GSP may have negative impact on that scope. c) The decline in June 2019 has also been on the account of the high export base of June 2018 which has been a remarkable period for Indian exports. d) Some heavy ticket exports products which have shown drastic fall both monthly as well as on cumulative basis are:i. Exports of primary steel under Chapter 72: fell by 11.12 percent in June 2019 and 12.29 percent in April-June 2019ii. Exports of copper and copper products under Chapter 74: fell by 21.38 percent in June 2019 and 24.39 percent in April-June 2019iii. Exports of aluminium and its products under Chapter 76: fell by 22.88 percent in June 2019 and 18.11 percent in April-June 2019iv. Exports of zinc and products: fell by 28.52 percent in June 2019 and 36.14 percent in April-June 2019v. Exports of lead and its products: fell by 40.33 percent in June 2019 and 22.41 percent in April-June 2019

The cumulative impact of the fall in the five product lines is $253.42 million for June 2019 and 714.94 million in April-June 2019.

Products with negative growth in June 2019 compared to June 2018

1100

600

100

-400

735.5

585.2

69.2

542.8

68.3

653.7

418.6

48.9

589.5

54.4

$ bi

llion

JUNE 2018 JUNE 2019

Iron and Steel Products of Iron and Steel Copper and Products Alumunium and Products Zinc and Products

Figure2: Slump in ferrous and non-ferrous metal exports, April 2019 v/s April 2018

OVERSIGHT



Data for panels experiencing a decline in the month June 2019 vis-à-vis June 2018

TableA: Chapter 72: Iron and steel

Month Value in $ million Volume in ‘000 metric tons

2017-18 2018-19 Growth (%) 2019-20 Growth (%) 2017-18 2018-19 Growth (%) 2019-20 Growth (%)

April 900.36 837.85 -6.94 715.13 -14.65 1286.78 1018.92 -20.82 1006.47 -1.22

May 787.41 776.79 -1.35 692.45 -10.86 1118.11 887.05 -20.67

June 691.32 735.22 6.35 653.72 -11.09 952.27 860.81 -9.6

July 850.94 804.63 -5.44 1337.84 973.33 -27.25

August 895.7 1053.20 17.58 1300.25 1390.23 6.92

September 1064.53 843.61 -20.75 1573.40 1060.93 -32.57

October 941.68 755.77 -19.74 1105.94 1298.89 17.45

November 1203.34 710.46 -40.96 1798.01 873.76 -51.4

December 1069.17 686.95 -35.75 1520.10 886.88 -41.66

January 916.07 816.34 -10.91 1225.15 1140.27 -6.93

February 877.47 802.75 -8.51 1135.12 1164.31 2.57

March 1014.38 906.9 -10.6 1264.94 1291.34 2.09

Total 11212.4 9730.47 -13.22 2061.3 14352.97 11555.38 -19.49 1006.47

TableB: Chapter 74 – copper and products



April 208.75 109.54 -47.53 67.11 -38.73 33.06 15.12 -54.26 7.46 -50.66

May 241.27 66.38 -72.49 63.79 -3.90 37.94 7.35 -80.62

June 285.15 69.22 -75.73 54.43 -21.37 46.05 7.03 -84.73

July 261.6 55.51 -78.78 42.89 6.42 -85.04

August 324.04 77.73 -76.01 46.69 9.35 -79.97

September 345.68 95.73 -72.31 49.63 12.72 -74.37

October 301.99 108.38 -64.11 44.01 15.32 -65.18

November 302.29 113.35 -62.50 42.62 15.26 -64.20

December 310.50 109.86 -64.62 43.37 15.29 -64.75

January 321.91 75.44 -76.56 43.83 9.11 -79.22

February 253.24 56.65 -77.61 36.41 5.93 -83.71

March 324.85 127.43 -60.77 45.00 16.00 -64.45

Total 3481.27 1065.22 -69.40 185.33 511.50 134.90 -73.63 7.46



TableC: Chapter 79 – zinc and products



April 56.73 79.65 40.40 44.18 -44.53 19.28 22.91 18.84 13.62 -40.55

May 54.36 69.39 27.65 45.79 -34.01 19.35 20.70 7.00

June 61.62 68.34 10.91 48.85 -28.52 22.05 20.23 -8.23

July 44.7 35.67 -20.20 15.45 11.19 -27.60

August 50.39 30.59 -39.29 16.87 10.34 -38.67

September 91.57 45.05 -50.80 26.43 16.71 -36.79

October 86.6 29.62 -65.80 25.29 10.66 -57.83

November 102.62 46.07 -55.11 29.41 15.42 -47.59

December 110.29 48.85 -55.71 31.85 16.75 -47.42

January 83.07 68.44 -17.61 23.51 24.22 3.01

February 78.35 44.43 -43.29 21.22 14.88 -29.88

March 135.37 36.86 -72.77 36.27 11.87 -67.27

Total 955.67 602.96 -36.91 138.82 286.98 195.88 -31.74 13.62

TableD: Chapter 76 – aluminium and products



April 395.75 410.14 3.6 407.91 -0.5 164.35 163.31 -0.6 178.78 9.47

May 291.4 512.52 75.9 384.1 -25.1 129.38 197.5 52.7

June 331.32 540.59 63.2 418.56 -22.6 147.6 207.71 40.7

July 341.04 473.28 38.8 150.35 185.55 23.4

August 359.46 502.17 39.7 156.97 198.46 26.4

September 451.66 492.31 9.0 192.78 202.27 4.9

October 405.08 475.74 17.4 170.3 200.96 18.0

November 420.6 467.29 11.1 174.01 197.06 13.2

December 474.94 471.97 -0.6 196.09 195.45 -0.3

January 437.08 461.33 5.5 178.89 202.68 13.3

February 383.55 408.01 6.4 152.94 178.03 16.4

March 519.83 487.93 -6.1 197.78 208.88 5.6

Total 4811.71 5703.28 18.5 1210.57 2011.44 2337.86 16.2 178.78

OVERSIGHT



Reasons for the fall Iron and steel • There was a fall in the exports by 10.9 percent (i.e. $692.45

million) in June 2019 vis-à-vis June 2018 ($776.79 million). In cumulative terms it declined by 12.8 percent in April-June 2019 vis-à-vis April-June 2018. Steel exports in June 2019 declined by 3 percent when compared to April 2019.

• Decline in exports was witnessed in some of India’s major export destinations including Indonesia (-67.3), Spain (-51.63), Korea (-31.49), Netherlands (19.63), Italy (11.79), and Turkey (34.59) percent, respectively in the month of June 2019 compared to June 2018. • The fall in exports to the EU countries is on account of the quota imposed by the EU on 14 India steel products post-September 2018. Thus, the base effect of this quota on steel exports growth to EU countries will impact post-September 2019 steel exports.• Exports to China exhibited a healthy growth of 46.52 percent in June 2019 when compared to June 2018 which is positive news. However, China is witnessing an overall sluggish trade due to the on-going tariff war with the USA. China’s June exports fell by 1.3 percent when compared to June 2018. If this trend continues it will have a declining impact on India’s exports to China. • On the domestic front, higher input prices are also affecting the steel exports from India.

Copper and copper products • There was a fall in exports by 21.38 percent in June 2019

vis-à-vis June 2018. • Fall in exports have been witnessed to the UK (12.2), Germany (29.2), and Saudi Arabia (74.3) percent, respectively. While exports to the USA exhibited a marginal rise of 4.6 percent there was significant rise in exports to China (194.1 percent).• The industry is still reeling from the impact of the shutdown of the 400 KT Tuticorin smelter of Sterlite which accounted for 40 percent of the country’s copper smelting capacity, though the base effect has reduced the fall considerably.• Furthermore recent reports by the industry show that China has stepped up domestic copper production (increase of almost 8 percent in 2018) due to which the country’s

demand for copper concentrate has increased drastically, thereby creating pressure on the concentrate market. As per reports, China’s import of copper concentrate increased by 13.7 percent in 2018 compared to 2017. Simultaneously, the copper concentrate production is expected to see a deficit in 2019 due to reduced production in several regions. For instance, Grasberg in Indonesia, the world’s second-largest copper mine, is having major production problems due to changes in rules by the government. On the other hand Chile’s Codelco, the world’s top copper mine reported an 18 percent y-o-y drop in its first quarter copper production. Therefore, rising copper concentrate demand by Chinese and globally falling production of the same is creating issues for Indian copper producers.• Also imposition of export tax by Indonesia is making our imports expensive. Indonesia is an FTA partner of India under the India-ASEAN FTA and the government should take up this issue at G2G level.• Additionally, the 2.5 percent duty on copper concentrate is leading to inverted duty structure. The government could consider removal of this duty in order to help the industry becoming globally competitive.• On the domestic front the copper wire industry is reeling from the impact of inverted duty as the basic input that copper cathode can be imported in India at 5 percent whereas the final product can be imported dutyfree under India-ASEAN FTA.

Aluminium and aluminium products • There was a fall in exports by 22.88 percent in June 2019

when compared to June 2018. • Aluminium exporters of primary products like ingots say that the fall is due to the US market being impacted as supplies from Canada and Mexico, no longer affected by Section 232, are displacing Indian exports while domestic regulations in US are making it difficult for India to exports aluminium products. • Significantly, global prices of aluminium, too, have fallen which further acts as a disincentive for exports from the country.



Table6: Engineering exports country-wise, 2018-19 ($ million)

Country June 2018 June2019 Growth (%) Apr-Jun 2018-19 Apr-Jun 2019-20 Growth (%)

USA 913.0 990.5 8.5 2775.8 2921.1 5.2

UAE 292.4 333.8 14.2 1678.2 1695.7 1.0

Singapore 226.4 281.5 24.3 709.4 1065.3 50.2

Germany 282.1 274.8 -2.6 839.5 789.8 -5.9

Nepal 238.1 235.5 -1.1 756.5 684.8 -9.5

UK 282.8 200.6 -29.1 704.0 631.6 -10.3

Bangladesh 213.4 188.7 -11.6 650.8 631.4 -3.0

Mexico 266.0 219.1 -17.6 762.8 620.0 -18.7

Malaysia 104.6 152.7 46.0 262.9 616.1 134.3

Korea 161.5 165.2 2.2 527.1 503.3 -4.5

Italy 194.4 154.1 -20.8 598.6 490.5 -18.1

China 145.0 139.1 -4.1 446.8 456.3 2.1

Thailand 140.0 125.8 -10.1 349.2 407.1 16.6

Indonesia 163.7 139.4 -14.8 441.1 405.4 -8.1

South Africa 119.6 138.6 15.9 576.8 385.3 -33.2

Nigeria 116.5 130.0 11.6 312.6 367.2 17.4

Cyprus 0.5 0.7 25.2 2.6 352.3 13432.6

France 122.0 102.2 -16.3 343.9 334.4 -2.7

Saudi Arabia 92.5 93.5 1.1 364.0 294.6 -19.1

Vietnam 75.0 85.0 13.2 198.8 289.1 45.4

Japan 120.8 93.3 -22.7 332.7 263.0 -20.9

Belgium 115.5 80.5 -30.3 501.8 258.2 -48.5

Brazil 87.5 88.4 1.0 250.1 255.4 2.1

Sri Lanka 147.4 97.8 -33.7 320.5 252.8 -21.1

Turkey 181.6 76.3 -58.0 557.2 241.3 -56.7

Top 25 countries total

4802.3 4587.0 -4.5 15263.7 15211.9 -0.3

Grand total 6512.3 6362.0 -2.3 20460.9 20082.0 -1.9

Share % total engineering exports

73.7 72.1 74.6 75.7

Note: Highlighted figures indicate negative growthSource: Department of Commerce, Govt of India

OVERSIGHT


the top 25 nations that had the highest demand for Indian engineering products during June 2019 over June 2018 in abso-lute value. The data are given in Table6.

The country-wise engineering export figures for June 2019 show the following facts:• In most of the 25 countries, we wit-ness uneven growth patterns over last month’s performance. • The termination of US GSP on 5 June 2019 does not seem to have an over-ly negative impact on Indian exports, at least in June 2019. This could be be-cause exports had already been contract-ed out and the margins lost may have been shared by both the exporters and importers. We will need to monitor the trend in the next few months. The US retained its numero uno position, being the top exporting destination for India’s engineering products during June 2019 over June 2018 as well as for April-June 2019 over April-June 2018, registering a positive growth rate.• Among the ASEAN countries under the top 25 engineering exports destina-tions, Malaysia once again recorded the highest growth during April-June 2019 over April-June 2018. Like the previous period, barring Indonesia, all the other four countries – Singapore, Malaysia, Thailand, and Vietnam – recorded pos-itive cumulative growth during April-June 2019 over April-June 2018.• India’s engineering exports to Cyprus recorded the highest positive cumulative growth once again during April-June 2019 over April-June 2018.• All the European nations falling under the top 25 engineering exports destina-tions recorded negative growth during April-June 2019 over April-June 2018.• India’s engineering exports to China continued to recorded positive cumu-lative growth during April-June 2019 over April-June 2018, after a prolonged hiatus.• India’s engineering exports to its top 25 nations accounted for 75.7 percent

of India’s total engineering exports in April-June 2019, which is marginally higher than its share in April-June 2018.• India’s engineering exports to its top 25 destinations during April-June 2019 over April-June 2018 recorded negative growth in line with the negative growth in India’s total global engineering ex-ports during the same period.

Figure3 shows the share percentage of India’s top 25 exporting destinations comprising an export share of 67 per-cent of India’s global engineering ex-ports during April-June 2019.

We now look at the regional distribu-tion of engineering exports for April-June 2019 as opposed to April-June 2018. Table7 gives this picture.

• EU ranked as the region with highest shipment of engineering products from India during April-June 2019 over April-June 2018 with a share of 19.2 percent of total engineering exports.

• India’s exports to ASEAN+2 recorded highest positive growth during April-June 2019 over April-June 2018.• India’s exports to North America and ASEAN+2 ranked second and third in global shipments of Indian engineering goods in April-June 2019 with a share of 18.6 percent and 16.2 percent of total engineering exports respectively.• Like before, barring ASEAN+2 and CIS, all the other major regions recorded negative cumulative growth in exports of engineering products from India during April-June 2019 over April-June 2018.

Engineering panels – country-wise analysisWe now analyse the performance of some of the important products during June 2019. We have taken the major pan-els and computed the top importers and sharp declines to get an idea of the cur-rent trade pattern. (Tables 7-16)

Source: EEPC India analysis

Figure3: Share % of India’s top exporting destinations in April-June 2019

UAE, 11.1%

USA, 19.2%

Bangladesh 4.2%

Mexico 4.1%

Korea 3.3%

Nepal 4.5%

U K 4.2%

Singapore 7.0%

Germany 5.2%

Malaysia 4.1%


Export of iron and steel

• Nepal, UAE, and Vietnam were the three top three importers of Indian iron and steel during April-June 2019 with market shares of 13.75, 8.68, and 6.28 percent respectively.• Oman, Vietnam, China, Russia, and Malaysia recorded more than 35 percent y-o-y growth in exports of Indian iron and steel during April-June 2019-20 compared to April-June 2018-19.• Indonesia, Taiwan, Spain, Korea, and Netherlands experienced sharp fall to the extent of more than 40 percent in exports during April-June 2019-20 com-pared to same period last fiscal.

Export of products of iron and steel• USA, UAE, and Germany were the top three importers of India’s products of iron and steel during April-June 2019-20 with 25.1, 6.7, and 5.7 percent shares

Table7: Region wise exports trend ($ million)

Regions June 2018 June 2019 Growth (%) Apr-Jun 2018-19 Apr-Jun 2019-20 Growth (%)

EU 1379.83 1144.08 -17.09 4247.59 3855.34 -9.23

North America 1240.52 1272.32 2.56 3742.01 3732.10 -0.26

ASEAN+2 860.80 936.98 8.85 2448.13 3253.00 32.88

Middle East and West Asia (MEWA) 643.71 628.79 -2.32 2933.82 2600.46 -11.36

Africa 648.63 637.30 -1.75 2001.31 1917.43 -4.19

South Asia 656.08 569.29 -13.23 1885.06 1728.60 -8.30

NE Asia 509.83 467.62 -8.28 1535.14 1432.88 -6.66

Latin America 301.57 294.88 -2.22 842.76 799.79 -5.10

Others 210.07 336.67 60.27 654.64 555.01 -15.22

CIS 61.26 74.05 20.87 170.48 207.37 21.64

Grand total 6512.31 6361.98 -2.31 20460.93 20081.98 -1.85

Note: *Figures have been rounded off. **Myanmar has been included in ASEAN+2 and not in South Asia, since ASEAN is a formal economic grouping.Source: DGCI&S; Department of Commerce, Govt of India


Figure 4: India’s region wise exports during April-June 2019

North america 19%

CIS 1%

EU 19%

South Asia 9%

Latin America 4%

Others 3%

N E Asia 7%

ASEAN+2 16%

MIDDLE EAST AND WEST ASIA (MEWA) 13%

Africa 9%

OVERSIGHT


Table8: Export of iron and steel ($ million)Country June 18 June 19 Growth % Apr-Jun 18-19 Apr-Jun 19-20 Growth %

TOP 5 IMPORTERS

Nepal 101.43 106.57 5.07 306.96 283.51 -7.64

UAE 46.34 68.24 47.25 138.05 178.97 29.64

Vietnam 27.82 22.09 -20.60 51.36 129.55 152.22

Italy 41.81 36.88 -11.79 197.28 118.46 -39.95

China 23.78 34.85 46.52 61.99 111.37 79.65

HIGH CUMULATIVE GROWTH

Oman 3.16 10.87 244.20 10.36 41.54 300.94

Vietnam 27.82 22.09 -20.60 51.36 129.55 152.22

China 23.78 34.85 46.52 61.99 111.37 79.65

Russia 7.23 11.92 64.88 20.71 30.02 44.98

Malaysia 18.39 20.55 11.72 56.07 76.26 36.00

Bangladesh 18.85 24.17 28.22 67.96 92.26 35.76

UAE 46.34 68.24 47.25 138.05 178.97 29.64

SHARP CUMULATIVE DECLINE

Indonesia 26.97 8.82 -67.30 77.12 30.97 -59.85

Taiwan 10.68 11.02 3.24 61.67 31.64 -48.69

Spain 17.93 8.67 -51.63 83.79 44.23 -47.21

Korea 34.88 23.90 -31.49 130.47 73.71 -43.51

Netherlands 13.23 10.63 -19.63 48.58 27.89 -42.59

Italy 41.81 36.88 -11.79 197.28 118.46 -39.95

Turkey 13.56 8.87 -34.59 43.36 27.19 -37.28

Source: Department of Commerce Government of India

Table9: Export of products iron and steel ($ million)Country June 18 June 19 Growth % Apr-Jun 18-19 Apr-Jun 19-20 Growth %

TOP 5 IMPORTERS

USA 127.50 146.47 14.87 378.28 422.53 11.70

UAE 34.56 33.64 -2.65 125.41 112.65 -10.17

Germany 33.74 33.69 -0.13 100.19 96.41 -3.78

UK 23.64 25.48 7.80 71.10 74.23 4.40

Canada 20.26 19.59 -3.31 60.20 58.58 -2.68


Malaysia 3.20 2.80 -12.73 8.90 12.72 42.89

Philippines 2.14 2.24 4.69 7.76 10.15 30.89

China 5.54 5.97 7.69 14.92 18.37 23.08

France 12.79 14.43 12.85 37.09 42.75 15.26

Saudi Arabia 10.78 14.64 35.74 37.78 42.23 11.77

USA 127.50 146.47 14.87 378.28 422.53 11.70


Table9: Export of products iron and steel ($ million) contdCountry June 18 June 19 Growth % Apr-Jun 18-19 Apr-Jun 19-20 Growth %


Iraq 17.99 0.49 -97.25 18.76 1.47 -92.18

Tanzania 17.68 2.43 -86.24 25.97 8.05 -69.00

Oman 10.07 7.10 -29.47 25.24 14.86 -41.13

Qatar 11.78 7.68 -34.80 40.00 25.57 -36.06

Kuwait 5.05 3.42 -32.18 15.70 10.69 -31.90

Singapore 6.14 4.35 -29.06 17.23 12.00 -30.32

Brazil 8.63 5.49 -36.39 22.83 16.28 -28.68


Table10: Export of industrial machinery ($ million)Country June 18 June 19 Growth % Apr-Jun 18-19 Apr-Jun 19-20 Growth %

TOP 5 IMPORTERS

USA 195.12 183.09 -6.16 569.07 547.99 -3.70

Thailand 50.03 53.97 7.87 110.66 172.90 56.25

Bangladesh 49.06 48.44 -1.25 150.70 165.33 9.70

Germany 53.89 53.59 -0.56 151.72 158.85 4.70

China 44.26 48.81 10.28 137.40 132.42 -3.63


Korea 11.65 21.58 85.28 34.47 60.44 75.35

Thailand 50.03 53.97 7.87 110.66 172.90 56.25

Nigeria 29.51 34.01 15.25 93.59 121.18 29.47

Japan 10.06 15.62 55.35 29.56 37.38 26.45

France 24.70 20.42 -17.32 62.93 78.64 24.97

Egypt 19.24 27.56 43.22 55.90 66.00 18.07

UAE 30.71 36.43 18.63 103.35 121.81 17.86

Oman 9.87 11.77 19.23 37.18 42.93 15.48


Iran 25.16 6.53 -74.06 54.02 14.66 -72.87

Algeria 10.35 3.85 -62.80 28.52 14.28 -49.93

Turkey 42.78 25.48 -40.44 137.29 76.61 -44.20

Spain 17.04 14.94 -12.31 68.08 52.37 -23.08

Saudi Arabia 34.12 20.29 -40.53 89.17 70.18 -21.30

Netherlands 16.44 17.81 8.36 53.41 42.66 -20.13

Kenya 16.62 10.10 -39.21 40.61 32.80 -19.23

Sri Lanka 14.40 11.50 -20.13 38.20 31.93 -16.42


OVERSIGHT


Table11: Export of automobiles ($ million)Country June 18 June 19 Growth % Apr-Jun 18-19 Apr-Jun 19-20 Growth %

TOP 5 IMPORTERS

Mexico 132.88 121.54 -8.53 421.76 350.97 -16.78

South Africa 65.34 89.64 37.19 220.43 233.34 5.86

USA 70.35 54.19 -22.96 276.02 222.46 -19.40

Nigeria 34.36 43.87 27.67 86.64 117.62 35.76

Bangladesh 39.77 33.87 -14.84 128.26 108.77 -15.20


Israel 1.81 7.02 287.33 2.45 38.52 1472.65

Vietnam 0.00 11.98 - 2.71 27.22 904.86

Kuwait 3.25 6.54 101.51 4.67 15.45 230.54

Saudi Arabia 13.54 31.70 134.06 36.44 86.51 137.37

Italy 10.09 17.42 72.71 34.52 71.45 106.97

Algeria 13.53 7.06 -47.83 41.15 80.69 96.07

Congo 5.85 6.56 12.19 11.92 18.15 52.33

Nigeria 34.36 43.87 27.67 86.64 117.62 35.76


Argentina 5.45 0.54 -90.15 22.04 2.70 -87.77

Belgium 9.46 0.52 -94.53 24.87 4.12 -83.45

Egypt 13.70 1.67 -87.84 35.30 9.29 -73.68

Australia 9.50 2.60 -72.64 24.99 8.01 -67.95

Ecuador 5.63 2.21 -60.76 24.67 9.02 -63.42

Sri Lanka 70.96 19.04 -73.16 133.18 56.47 -57.60

Canada 10.80 1.46 -86.51 38.35 17.24 -55.04

UK 29.27 10.70 -63.46 49.13 26.78 -45.49

Note: Automobiles sector includes motor vehicles and two- and three-wheelersSource: Department of Commerce Government of India

Table12: Export of nonferrous metals ($ million)Country June 18 June 19 Growth % Apr-Jun 18-19 Apr-Jun 19-20 Growth %

TOP 5 IMPORTERS

Korea 95.08 100.37 5.56 308.30 297.81 -3.40

USA 89.67 87.79 -2.10 250.26 231.44 -7.52

Malaysia 40.78 63.12 54.79 80.77 207.41 156.80

China 4.84 16.84 247.62 60.79 92.02 51.36

Taiwan 22.53 28.70 27.40 58.94 69.83 18.47


Singapore 1.34 10.60 690.75 2.98 31.91 971.87

Egypt 0.88 11.30 1188.38 2.72 13.27 388.58

Malaysia 40.78 63.12 54.79 80.77 207.41 156.80

Poland 1.74 2.45 40.69 5.42 11.48 111.92

Oman 3.50 7.32 109.00 9.72 20.40 109.93

China 4.84 16.84 247.62 60.79 92.02 51.36

Congo 5.85 6.56 12.19 11.92 18.15 52.33


Table12: Export of nonferrous metals ($ million) contdCountry June 18 June 19 Growth % Apr-Jun 18-19 Apr-Jun 19-20 Growth %


Greece 3.45 0.20 -94.10 56.89 0.79 -98.61

Bulgaria 3.55 0.15 -95.80 30.45 0.48 -98.43

Turkey 55.05 4.06 -92.62 192.01 9.94 -94.82

Mexico 69.02 14.85 -78.49 139.01 47.06 -66.15

Italy 50.05 19.27 -61.50 93.73 47.30 -49.53

Spain 17.78 4.83 -72.85 52.90 29.08 -45.02

Netherlands 25.41 10.95 -56.91 53.17 29.66 -44.23

Vietnam 9.12 8.23 -9.82 33.55 19.08 -43.13


Table13: Export of electrical machinery and components ($ million)Country June 18 June 19 Growth % Apr-Jun 18-19 Apr-Jun 19-20 Growth %

TOP 5 IMPORTERS

USA 129.04 201.97 56.51 410.78 592.63 44.27

Germany 90.86 80.94 -10.92 259.40 243.57 -6.10

UK 50.56 55.32 9.42 130.22 201.12 54.45

Singapore 55.54 36.21 -34.81 131.49 136.55 3.85

France 26.86 13.75 -48.80 60.37 59.20 -1.95


Mexico 2.62 17.94 586.03 21.32 44.74 109.81

Korea 6.01 2.77 -53.95 11.71 24.10 105.76

Nigeria 4.70 12.18 159.36 17.98 31.92 77.60

UK 50.56 55.32 9.42 130.22 201.12 54.45

Poland 5.65 11.08 96.10 17.16 26.26 53.05

USA 129.04 201.97 56.51 410.78 592.63 44.27


China 46.86 9.14 -80.50 103.79 27.78 -73.23

Japan 28.23 8.00 -71.65 62.17 21.14 -66.00

Canada 2.13 3.43 61.03 18.17 9.26 -49.06

Indonesia 10.72 3.08 -71.23 20.79 12.41 -40.30

Belgium 44.82 13.15 -70.65 81.95 48.96 -40.26

Netherlands 7.79 5.94 -23.74 22.26 14.93 -32.95

Turkey 18.78 3.98 -78.82 33.46 22.97 -31.36

UK 29.27 10.70 -63.46 49.13 26.78 -45.49


OVERSIGHT


Table14: Export of aircrafts and spacecrafts ($ million)Country June 18 June 19 Growth % Apr-Jun 18-19 Apr-Jun 19-20 Growth %

TOP 5 IMPORTERS

USA 45.82 41.29 -9.88 143.55 124.46 -13.30

UK 39.82 19.96 -49.89 79.72 46.93 -41.14

France 22.16 10.68 -51.79 69.51 33.98 -51.12

Singapore 27.96 8.42 -69.87 78.14 26.49 -66.10

Malaysia 4.45 5.69 27.77 10.75 13.60 26.58


Spain 0.13 0.33 165.83 0.46 0.96 110.64

Israel 0.59 2.50 324.48 5.41 9.92 83.33

Mexico 0.40 0.88 119.82 1.35 2.09 54.75

Denmark 0.21 0.50 134.37 0.44 0.67 49.76

Philippines 0.34 0.52 51.84 1.14 1.52 34.19

Malaysia 4.45 5.69 27.77 10.75 13.60 26.58

Sweden 0.73 0.67 -7.85 2.76 3.26 18.45


Seychelles 19.63 0.01 -99.95 19.63 0.05 -99.73

Belgium 0.31 0.02 -92.46 11.31 1.18 -89.59

Switzerland 0.87 0.73 -15.82 14.03 3.25 -76.84

Germany 8.98 5.29 -41.09 41.41 13.19 -68.16

Singapore 27.96 8.42 -69.87 78.14 26.49 -66.10

France 22.16 10.68 -51.79 69.51 33.98 -51.12

Russia 1.57 0.26 -83.41 7.52 3.95 -47.46

UK 39.82 19.96 -49.89 79.72 46.93 -41.14


Table15: Export of ships boats and floating structures and parts ($ million)Country June 18 June 19 Growth % Apr-Jun 18-19 Apr-Jun 19-20 Growth %

TOP 5 IMPORTERS

UAE 96.65 93.17 -3.60 1046.69 948.06 -9.42

Singapore 88.37 172.03 94.67 351.40 714.44 103.31

Cyprus 0.00 0.00 - 0.00 349.98 -

Malaysia 0.00 21.73 - 0.00 191.33 -

Indonesia 17.48 28.08 60.60 37.07 89.70 142.00


Bhutan 0.00 0.00 - 0.00 0.01 1275.97

Denmark 0.00 0.00 - 0.01 0.05 476.83

Mauritius 0.00 0.00 - 1.85 5.89 218.33

Indonesia 17.48 28.08 60.60 37.07 89.70 142.00

Singapore 88.37 172.03 94.67 351.40 714.44 103.31

Australia 0.01 0.01 57.76 0.01 0.01 62.54


Table15: Export of ships boats and floating structures and parts ($ million) contdCountry June 18 June 19 Growth % Apr-Jun 18-19 Apr-Jun 19-20 Growth %


Belgium 0.00 0.00 - 150.05 0.00 -100.00

Nigeria 24.87 0.00 -100.00 24.87 0.00 -100.00

Oman 0.00 0.00 - 187.76 0.00 -100.00

Qatar 28.01 0.00 -100.00 29.01 0.00 -100.00

South Africa 0.00 0.00 - 198.48 0.00 -100.00

Saudi Arabia 0.00 0.02 - 104.60 4.71 -95.49

Bangladesh 0.00 0.00 - 20.07 2.39 -88.09

Note: Export figures in case of some nations are showing zero due to rounding off but actually they are very small in valueSource: Department of Commerce and CSO

Table16: Export of auto components ($ million)Country June 18 June 19 Growth % Apr-Jun 18-19 Apr-Jun 19-20 Growth %

TOP 5 IMPORTERS

USA 95.03 110.94 16.74 289.94 314.32 8.41

Brazil 25.63 24.12 -5.92 71.86 72.76 1.26

Bangladesh 29.96 20.37 -32.00 80.21 64.89 -19.10

Germany 20.47 21.53 5.17 60.99 63.10 3.44

Turkey 33.91 19.81 -41.58 101.34 60.21 -40.59


Saudi Arabia 0.55 0.98 79.16 2.45 5.56 126.53

Peru 1.53 2.02 32.02 3.61 6.92 91.65

Malaysia 1.93 2.39 23.42 5.75 9.80 70.60

UAE 11.80 16.89 43.16 26.41 44.17 67.24

Philippines 2.21 4.68 111.40 8.40 13.58 61.74

Czech Republic 1.51 2.12 40.07 4.61 7.02 52.51

Chile 1.47 2.42 64.90 4.52 6.57 45.26

Korea 3.97 6.04 52.03 11.36 16.32 43.56


Myanmar 2.36 1.28 -45.70 8.75 4.32 -50.70

Turkey 33.91 19.81 -41.58 101.34 60.21 -40.59

Sri Lanka 8.16 4.48 -45.12 18.06 12.40 -31.37

Kenya 1.93 1.96 1.81 5.94 4.17 -29.83

Netherlands 2.95 2.07 -29.76 8.50 6.56 -22.88

Japan 12.78 13.99 9.46 50.41 39.19 -22.26

Spain 4.19 3.27 -22.02 14.50 11.49 -20.71

Source: Department of Commerce and CSO

OVERSIGHT


respectively in India’s global import of the same.• Malaysia, Philippines, and China expe-rienced more than 20 percent growth in import of products of iron and steel dur-ing April-June 2019-20.• Iraq, Tanzania, Oman, Qatar, and Ku-wait conceded substantial decline in im-ports by more than 30 percent for the product group from India during April-June 2019.

Export of industrial machinery• USA was the largest importer of Indian industrial machinery during April-June 2019-20 with 16.2 percent share in India’s global import of the product group. Thai-land and Bangladesh were the two imme-diate followers with 5.1 and 4.9 percent shares respectively. • Korea, Thailand, Nigeria, Japan, and France were among the major importing nations that witnessed highest growth in imports of industrial machinery from India during April-June 2019-20 over the same period last fiscal.• Among the major importers, Iran, Al-geria, Turkey, Spain, Saudi Arabia, and the Netherlands recorded over 20 percent y-o-y decline in imports during April-June 2019-20.

Export of automobiles• Mexico, South Africa, and USA were top three importers of India’s automobiles dur-ing April-June 2019-20 with 14.2, 9.4, and 8.9 percent shares respectively in India’s global exports over the same period last fiscal. • Israel, Vietnam, Kuwait, Saudi Arabia, and Italy recorded over 100 percent growth in im-ports of the product group from India dur-ing April-June 2019-20 over the same month last fiscal. • Argentina, Belgium, Egypt, and Australia saw their imports of automobiles fall by more than 65 percent during April-June 2019-20 compared to the same period last fiscal.

Export of non-ferrous metals• Korea, USA, and Malaysia were the top

three importers of India’s non-ferrous metals and products during April-June 2019-20 with 16.7, 12.9, and 11.6 percent shares respectively in India’s global im-port of the same.• Singapore, Egypt, Malaysia, Poland, and Oman experienced more than 100 percent growth in import of non-ferrous metals and products during April-June 2019-20.• Greece, Bulgaria, Turkey, and Mexico conceded substantial decline in imports by more than 60 percent for the prod-uct group from India during April-June 2019-20 vis-à-vis same period last fiscal.

Export of electrical machinery and components• USA, Germany, and UK were the three top importers of Indian electri-cal machinery and components during April-June 2019-20 with market shares of 27.25, 11.2, and 9.25 percent respec-tively. Germany and France experienced a drop in imports during April-June 2019-20 compared to April-June 2018-19.• Mexico and Korea recorded more than 100 percent growth in imports from In-dia during April-June 2019-20 vis-à-vis April-June 2018-19. Nigeria, UK, and Poland recorded more than 50 percent growth in imports of India’s electri-cal machinery and components during April-June 2019-20 when compared with April-June 2018-19. • China experienced sharp decline in its imports (73.23 percent) in April-June 2019-20 when compared to April-June 2018-19. It is also the case for Japan and Canada, which experienced more than 45 percent drop.

Export of aircrafts and spacecrafts• USA, UK, and France were the top three importers of India’s aircrafts and spacecrafts during April-June 2019-20 with around 39.57, 14.92, and 10.8 per-cent shares respectively in India’s total global exports of the product.

• Spain, Israel, and Mexico registered substantial growth of more than 50 per-cent in import of the product group from India during April-June 2019 as com-pared with the same period last fiscal. • On the flipside, demand for India’s air-crafts and spacecrafts from Seychelles, Belgium, Switzerland, Germany, Singa-pore, and France dropped more than 50 percent on a y-o-y basis during April-June 2019-20 when compared to April-June 2018-19.

Export of ships, boats and floating structures and parts • UAE, Singapore, and Cyprus became the largest importers of ships, boats and floating structures followed by Malaysia and Indonesia. Their respective shares are 36.1, 27.2, 13.3, 7.28, and 3.41 per-cent.• Imports to Cyprus and Malaysia re-corded significantly large increase as they had practically no imports in April-June 2018.• However, sharp decline was noticed in exports to Saudi Arabia and Bangladesh. In fact exports to these countries have been less than $5 million in April-June 2019-20. Whereas the exports dropped to zilch for Belgium, Nigeria, Oman, Qatar, and South Africa.

Export of auto components• USA remained the top importer of auto components in April-June 2019-20 with a share of 23.37 percent. It was fol-lowed by Brazil, Bangladesh, Germany, and Turkey with respective shares of 5.4, 4.8, 4.7, and 4.8 percent.• Saudi Arabia, Peru, and Malaysia re-corded maximum increase of more than 70 percent in imports from April-June 2019-20 when compared to April-June 2018-19.• However, Myanmar, Turkey, and Sri Lanka recorded significant decline of more than 30 percent in April-June 2019-20 when compared to April-June 2018-19.


IMPORT ANALYSIS OF ENGINEERING GOODS

INDIA’S engineering imports during June 2019 were valued at $7828 million compared to $8890.9 million in June

2018, recording negative growth of 12 percent in dollar terms.

Cumulative engineering imports dur-ing April-June 2019-20 were recorded at $24.85 billion as against $25.57 billion during the same period last fiscal regis-tering fall of 2.8 percent.

Engineering imports for the year 2018-19 was recorded at $104.2 billion as against $93.9 billion during 2017-18 and $81.83 billion in 2016-17, registering a cumulative growth of 10.9 and 11.6 per-cent respectively.

The share of engineering imports in India’s total merchandise imports in June 2019 is similar to that during June 2018 estimated at 19.6 percent.

The monthly engineering import fig-ures for fiscal June 2019 vis-à-vis June 2018 is depicted in Table17 as per the latest availability of data. Figure5 depicts the monthly trend in engineering im-ports for June 2019 and June 2018.

Trend in two-way engineering tradeWe now present the trend in two- way yearly trade for the engineering sector from 2014-15 to 2018-19 as well as the first three months of the current fiscal 2019-20 depicted in the Table18.

Figure6 depicts the yearly trend in en-gineering trade from 2014-15 to 2018-19 as well as April-June 2019-20 of the cur-rent fiscal.

ConclusionBoth merchandise as well as engineering exports from India conceded drop in ex-ports during the month of June 2019 and also on a cumulative basis during the first quarter of the ongoing fiscal. However, it can be said that engineering exports outperformed the broader merchandise

export as the former recorded lower de-cline at 2.31 percent as compared to 9.71 percent decline in merchandise exports during June 2019. This fall in exports was led mainly by y-o-y decline in shipments of major exported product groups like iron and steel, aluminium and products, industrial machinery, electrical machin-ery, and automobiles.

On a cumulative basis, all these major exported product groups saw decline in shipment other than electrical machin-ery. It seems that external factors like the US-China tariff war, protectionist policies adopted by several developed regions like Europe and the US, withdrawal of GSP benefit to Indian exporters by the US, and growing geopolitical disputes in West Asia

Table17: Engineering imports ($ million)

Month 2018-19 2019-20 Growth (%)

April 8139.45 8143.84 0.1

June 8536.0 8875.2 4.0

June 8890.89 7827.95 -12.0

Source: Department of Commerce, Govt of India

Figure5: Trend in monthly engineering imports for 2019-20 vis-à-vis 2018-19 ($ billion)

9.0

8.8

8.6

8.4

8.2

8.0

7.8

7.6

7.4

7.2

8.1

8.5

12%

8.1

8.9 8.9

$ bi

llion

2018-19

April May June

2019-2020


7.6

OVERSIGHT


were among the causes of the decline. The impact of protectionist policies adopted by both the EU and US was apprehended to increase cross-dumping in other regions and create further pressure on Indian ex-porters. The impact is already witnessed in the slowing imports of ferrous and non-ferrous metals. WTO in its quarter-

ly World Trade Outlook report projected global merchandise exports growth to fall from 3.9 percent in 2018 to 3.7 percent in 2019.

Bach home, factors like somewhat high cost of procuring inputs and high ocean freight rate have been affecting the profit-ability of the exporters since months. Shut-

down of the Sterlite factory has affected production of copper and consequently export of various products. Frequent fluc-tuations in the rupee due to the continuing global disputes are also a cause of concern for the exporters. In addition, lack of ade-quate credit flow to the export sector is also leading to fund crisis for the exporters.

Table18: Engineering trade ($ million)

2014-15 2015-16 2016-17 2017-18 2018-19 Growth % Apr-Jun 2018 Apr-Jun 2019 Growth %

Engineering export 70661.2 58351.58 65239.19 76199.33 81017.29 6.3 20460.93 20081.98 -1.9

Engineering import 77279.45 75859.72 81834.75 93897.2 104163 10.9 25566.34 24846.99 -2.8

Trade balance -6618.25 -17508.14 -16595.6 -17697.9 -23145.7 -5105.4 -4765.0

*Figures for 2016-17, both for engineering export and import, are updated as per latest Quick Estimate values

$ bi

llion

Figure6: Trend in monthly engineering trade ($ billion)

April-June 2018 April-June 2019

70.7

77.3

120.0

100.0

80.0

60.0

40.0

20.0

0.0

-20.0

-40.0

58.4

75.9

65.2

81.876.2

93.9

81.0

104.2

20.5 25.6

20.124.8

2014-15 2015-16

Engineering Export Engineering Import Trade Blance

2016-17 2017-18 2018-19


India Pavilion at GIFA, METEC,Therm Process, and NEWCAST 2019EEPC India organised the India Pavilion at GIFA 2019 in Dusseldorf, Germany. The international trade fair quartet of GIFA, METEC, Therm Process, and Newcast is the world’s leading meeting place for foundry technology, metal production and processing, and thermal process technology. (1) The Consul General of India in Frankfurt, Germany, Ms Pratibha Parker, inaugurating India Pavilion at GIFA 2019. On her right is Ms Anima Pandey, Regional Director (ER) & Director, Membership, EEPC India. (2) Ms Pratibha Parker, signing the Visitors’ Book in the EEPC India booth at the India Pavilion. (3) & (4) The Consul General on a tour of the India Pavilion at GIFA 2019.

1 3

4

2

OVERSEAS AFFAIRS


EEPC India’s recce visit to Bangladeshfor INDEE Bangladesh 2020A two-member EEPC India team were on a preparatory visit to Dhaka, Bangladesh for INDEE Bangladesh 2020. EEPC India is organising the 2nd edition of its flagship event Indian Engineering Expo (INDEE) in Dhaka over 22-24 January 2020. INDEE Bangladesh 2020 is supported by the Ministry of Commerce & Industry, Government of India, and the Indian High Commission in Dhaka. Besides, major associations in Dhaka such as FBCCI, IBCCI, BEIOA, and BEMMA, are supporting the event.

During the visit, meetings were held with various stakeholders including the High Commission of India in Dhaka, BEIOA, FBCCI, and BEMMA. The EEPC India team discussed issues related to the forthcoming INDEE Bangladesh and also matters such as marketing, publicity, and awareness support for the event. The 9th edition of IESS, to

be held in Coimbatore over 4-6 March 2020, was also discussed during the meetings. (5) Mr Gurvinder Singh, Director Exhibitions, and Ms Pallavi Saha, Sr Dy Director, EEPC India, in a meeting with Mr Jahangir Bin Alam, Secretary and CEO, India-Bangladesh Chamber of Commerce & Industry. (6) Mr Gurvinder Singh and Ms Pallavi Saha, in a meeting with Mr Minul Islam Bhuyian, President, Bangladesh Electrical Merchandise Manufacturers Association, and other members of BEMMA. (7) The EEPC India team with members of the Federation of Bangladesh Chambers of Commerce & Industries (FBCCI) in Dhaka. Shah Md Maksudul Haque, Dy Secretary (International), FBCCI; Mr Gurvinder Singh; Mr Hussain Jamil, Secretary General, FBCCI; Ms Pallavi Saha; and Ms Farjana Nur Purani, Officer (International), FBCCI. (8) The EEPC India team with members of the Bangladesh Engineering Industry Owners’ Association (BEIOA) in Dhaka. Mr Gurvinder Singh; Mr Mosaruf Hossain Mir, Consultant, BEIOA; Ms Pallavi Saha; and Mr Abdur Razzaque, President, BEIOA.

5 6

7 8

OVERSEAS AFFAIRS

AFRICA CALLING The African Continental Free Trade Area Agreement (AfCFTA), the 54-country trade bloc which came into force on 30 May 2019, is set to make Africa the world’s largest free trade zone since the establishment of the WTO in 1994, opening up vast opportunities to global economies to boost trade ties with Africa

WORLDVIEW

FRICA today is definitely a ‘happening continent.’ It is home to over half a dozen of the fastest-growing countries of this decade. Africa’s collective GDP is expected to touch $3.6 trillion in 2020. In 2017, the African Development Bank reported Africa as the world’s second-fastest-growing economy. Going by country, Ethiopia had the fastest-grow-ing economy in the world in 2017. Ivory Coast, Tanzania, Senegal, Kenya, Uganda, Rwanda, and Mozambique are do-ing fine, too. Several international business observers have named Africa as the future economic growth engine of the world. Africa is not there yet, but its growth rate is definite-ly impressive.

A

- President Wade of Senegal, at the opening ceremony of the monument The African

Renaissance that now stands in Dakar and depicts a couple holding their baby to the sky to beckon

the dawning of an African century

Africa has arrived in the 21st century standing tall and more ready than ever to take its destiny into its hands


A young MK Gandhi in South Africa

Uzbekistan

Ethiopia

Forecast GDP growth, 2017

Tanzania

Djibouti

Laos

Cambodia

Myanmar

Philippines

Nepal

India

8.3%

7.6%

7.5%

7.2%

7.2%

7%

7%

6.9%

6.9%

6.9%

The world's fastest growing economies

Source: World Bank

INDIA-AFRICA MILLENNIA-OLD BONDS AFRICA and India are separated by

the Indian Ocean. The geograph-ical proximity between the Horn

of Africa and the Indian subcontinent has played an important role in the develop-ment of the relationship since ancient times.

Little is known about contacts made between Indians and Africans before the first century CE. The only surviving source, Periplus Maris Erythraei (Periplus of the Erythraean Sea) – which dates to the mid-first century – refers to trade relations between the Kingdom of Aksum (modern day in Northern Ethiopia) and Ancient India around the first millennium. Helped by the monsoon winds, merchants traded cotton, glass beads, and other goods in ex-change for gold and soft-carved ivory. The influence of Indian architecture on the Af-rican kingdom shows the level of trade de-velopment between the two civilisations.

Under Ptolemaic rule, Ancient Egypt dispatched two trade delegations to In-dia. The Greek Ptolemaic dynasty and India had developed bilateral trade using the Red Sea and Indian ports. Controlling the western and northern end of other trade routes to Southern Arabia and In-

The African Continental Free Trade Area Agreement (AfCFTA) – the 54-country trade bloc which came into force on 30 May 2019 and which is ex-pected to boost intra-African trade by elimination of import duties and non-tariff barriers, providing opportu-nities for expansion of trade ties – will make Africa, in terms of the number of countries participating, the world’s larg-est free trade zone since the establish-ment of the World Trade Organisation, in 1994. India views this development as a vast opportunity to boost trade and economic ties with Africa, as do many other countries.

WORLDVIEW


dia, the Ptolemies had begun to exploit trading opportunities with India prior to the Roman involvement but, according to the historian Strabo, the volume of com-merce between India and Greece was not comparable to that of later Indian-Roman trade. The Periplus Maris Erythraei men-tions a time when sea trade between India and Egypt did not involve direct sailings. In India, the ports of Barbaricum (mod-ern Karachi), Barygaza, Muziris, Korkai, Kaveripattinam and Arikamedu on the southern tip of India were the main cen-tres of this trade.

With the establishment of Roman Egypt, the Romans took over and further developed the already existing trade. Ro-man trade with India played an important role in further developing the Red Sea route. Starting around 100 BCE a route from Roman Egypt to India was estab-

India’s total exports to Africa, region-wise ($ million)Region in Africa 2014-15 2015-16 2016-17 2017-18 2018-19

Central Africa 1251.3 1251.5 1044.9 1142.8 1342.1

East Africa 10152.3 7311.9 6728.8 6532.5 7377.5

North Africa 5711.7 4595.0 4407.3 4874.3 5888.6

Other South African countries 3214.0 1968.3 1510.9 1593.3 1856.4

Southern African Customs Union (SACU) 5532.4 3804.0 3785.7 4042.0 4377.5

West Africa 6980.2 6108.3 5651.7 6719.0 7698.3

Grand total 32841.89 25039.02 23129.36 24903.95 28540.33

India's total imports from Africa, region-wise ($ million)Region in Africa 2014-15 2015-16 2016-17 2017-18 2018-19

Central Africa 265.8 530.8 368.7 479.3 554.3

East Africa 1442.0 1326.8 1319.1 1403.8 1550.3

North Africa 4065.8 2892.8 2929.2 4026.5 5728.1

Other South African countries 5259.4 3629.5 3947.1 6412.8 5643.2

Southern African Customs Union (SACU) 7567.2 6546.8 7255.6 8633.7 7555.0

West Africa 20034.6 16740.6 13024.9 16833.2 20083.9

Grand total 38634.88 31667.27 28844.71 37789.2 41114.73


lished, making use of the Red Sea to cross the Arabian Sea directly to southern In-dia. Traces of Indian influences are visi-ble in Roman works of silver and ivory, or in Egyptian cotton and silk fabrics. The Indian presence in Alexandria may have influenced the culture but little is known about the manner of this influence. Clement of Alexandria mentions the Buddha in his writings and other Indian religions find mentions in other texts of the period. Relations attained stronger levels during medieval times due to the development of trade routes between the Mediterranean and Asia, through Arabia.

The presence of Africans in India dates back to the eighth century CE.

During British colonial rule in the In-dian subcontinent and large parts of Afri-ca, Bombay was already a centre of ivory trade between East Africa and Britain.

The stay of Mahatma Gandhi in South Africa between 1893 and 1915 remains one of the main events which paved the road to the modern-day political rela-tions.

Contemporary tiesIndia’s partnership with Africa is based on a model of cooperation which is re-sponsive to the needs of African coun-tries. It is demand-driven and free of conditionalities, based on a history of friendship, historical ties, and a sense of deep solidarity and not limited only to the bilateral political level. The ever-chang-ing myriad geopolitical demands of the world have been continuously observing the perpetual renewal of newer coopera-tive constructs. The concept of Indo-Af-rican synergy strengthened in popularity when late South African President Nelson

Mandela, on a visit to India, spoke of it with much conviction and the growing socioeconomic interconnectedness.

Today, India and Africa have compre-hensive diplomatic mechanisms at all three levels - continental, regional, and bilateral – and through multilateral fora. India-Africa trade has multiplied and diversified in the last 15 years. India is ranked as the third-largest export desti-nation in Africa. India sources nearly 18 percent of its crude oil and also its LNG requirement, mostly from the West Afri-can region. Indo-African bilateral trade stood at $69.655 billion during 2018-19, a 12.06 percent rise over $62.693 billion over the previous year with a 13.6 percent growth in Indian engineering exports to Africa over the same period, totalling $7.913 billion during 2018-19.

With the African continent, Indian in-vestments are steadily growing in a range of sectors and India has become the fifth-largest investor in Africa with cu-mulative investments at over $54 billion. Sizeable investments have been made in oil and gas, mining, banking, phar-ma, textiles, and other sectors in African countries. Several Indian companies have entered into joint ventures in Africa. They have the experience, technology, and cap-ital to unlock these African resources and create value for host governments. Many important firms from Africa also have es-tablished their presence in India.

The Duty Free Tariff Preference scheme announced by India for least developed countries (LDCs) benefitted African na-tions and has contributed towards steady increase in the bilateral trade figures by extending duty-free access to 98.2 per-cent of India’s total tariff lines. At least 38 African countries enjoy the benefits of the Indian DFTP scheme.

Africa is a continent which receives nearly 20 percent of Indian pharmaceu-ticals. Many of India’s pharma companies have established units in various parts of Africa, including Ethiopia, Uganda, DRC, Zambia, and Ghana. Medicines and med-

Engineering exports to Africa, region wise ($ million)

Region in Africa 2017-18 2018-19

Central Africa 348.3 464.2

East Africa 1408.2 1529.4

North Africa 1582.0 1693.1

Other South African countries 220.2 290.6

Southern African Customs Union (SACU) 1380.8 1622.3

West Africa 2023.2 2314.3

Grand total 6962.6 7913.9

India-Africa bilateral trade ($ million)2014-15 2015-16 2016-17 2017-18 2018-19

India's total exports to Africa 32841.9 25039.0 23129.4 24904.0 28540.3

Growth % -23.8 -7.6 7.7 14.6

India's total imports from Africa 38634.88 31667.27 28844.71 37789.2 41114.73

Growth % -18.0 -8.9 31.0 8.8

India's trade balance with Africa -5793.0 -6628.3 -5715.4 -12885.3 -12574.4

India's engineering exports to Africa 8504.25 6642.15 5826.66 6964.13 7913.9

Growth% -21.9 -12.3 19.5 13.6

Share % of total exports to Africa 26 27 25 28 28

WORLDVIEW


ical equipment such as Bhabhatrons and phototherapy machines from India are being used as lifesaving drugs and equip-ment in Africa.

In pursuance of the Asia Africa Growth Corridor trilateral cooperation among India, Japan, and Africa, India is collab-orating with Japan and Kenya to build a cancer hospital, and is collaborating with the UAE and is in discussion with Ethio-pia to set up a Centre for IT Excellence. India is also helping the African countries to bridge the digital divide.

The India-South Africa Three-Year Strategic Programme of Cooperation (2019-21) is an instance of the cardinal ‘Look West’ or ‘Link West’ policy of In-dia, moving beyond the generic notion of associating West and Central Asia within the concept, refurbishing the importance

of extended neighbourhood.India and South Africa have been work-

ing together right from the establishment of the Indian Ocean Rim Association (IORA) in maritime affairs in 1997 and BRICS (Brazil, Russia, India, China, South Africa) in 2010, as a gateway to the Afri-can continent and two of the most recent collaborations among others like the G-20 and the India-Brazil-South Africa (IBSA) Dialogue Forum.

Every year, thousands of bright minds from the African continent come on self-financing basis to Indian universities and colleges. As many as 13 current or former Presidents, Prime Ministers, and Vice-Presidents in Africa have attended educational or training institutions in India. The list includes the current Pres-idents of Nigeria and Mozambique and

the Vice President of Tanzania. Six current or former chiefs of armed forces in Africa trained in India’s military institutions.

During the last four years, six IT centres were established in South Africa, Egypt, Morocco, Lesotho, Ghana, Namibia, and Tanzania; a CGARD Technology Centre in Madagascar; seven vocational training centres in Ethiopia, Rwanda, Burundi, Burkina Faso, the Gambia, Zimbabwe, and Egypt. A technology centre was also established in Zimbabwe. Entrepreneur-ship centres are being set up in some countries. Several similar projects are at various stages of execution.

India is one of the largest contributors to UN Peacekeeping Missions in Africa which have played an important role in bringing peace and stability to the Afri-can continent.


EEPC India has been regularly mo-bilising participation and also con-ducting Buyer-Seller Meets in Afri-

can countries to boost engineering trade ties between India and the African nations.

Kenya Pharma, Nigeria Pharma are regular events on the EEPC India calen-dar. Global Expo Botswana has been an

addition since 2018. Further to this, Buyer Seller Meets in African Nation including Botswana, Mozambique, Zambia, and South Africa to name a few, and regular participation from Africa at EEPC India’s annual show, IESS, manifest the depth and regularity of the association EEPC India has been able to build. During 2019-20,

EEPC India is participating in three events in Africa – Global Expo Botswana being held over 6-9 August 2019, Gaborone; Ni-geria Pharma, 28-29 August 2019; and the Indian Engineering Pavilion in Ethiopia coinciding with ITME Africa 2020 to be held over 14-16 February 2020 in Addis Ababa.

EEPC INDIA IN AFRICA

The Sahara desert is the largest desert in the world and is bigger than the USA

UNIQUE AFRICA

THE origin, the cradle of human-kind, Africa is the oldest inhabited place on earth; the only continent

with fossil evidence of Homo sapiens and their ancestors as they went through all the key stages of evolution. Some unique facts about this exotic continent:• Kenya’s Kalenjin, the running tribe, have produced most of the world’s fastest long-distance runners, fetching 40 per-cent of the top honours available to men in international athletics. • Africa is the youngest continent on earth with 60 percent of its popula-tion less than 25 years. Nigeria bags the world’s youngest with a median age of 14.8 years. Nigeria had sent the youngest team to the Russia 2018 World Cup.• Africa is the world’s second-largest continent covering an area of over 30 million sq km.• Africa is home to the world’s largest living land animal, the African elephant, which can weigh up to 7 tons.• The Sahara is the largest desert in the world and is bigger than continental USA.• Africa is the world’s hottest continent with deserts and drylands covering 60 percent of land surface area (e.g. Kalaha-ri, Sahara and Namib).• Lake Malawi has more fish species than any other freshwater system on earth.• The River Nile is the longest river in the world with a total length of 6650 km.

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• Africa has over 85 percent of the world’s elephants and over 99 percent of the remaining lions are on the African continent.• The Serengeti (Tanzania) hosts the world’s largest wildlife migration on earth with over 750,000 zebra marching ahead of 1.2 million wildebeest as they cross this amazing landscape.• Africa is the world’s second driest con-tinent (after Australia).• The continent has the largest reserves of precious metals with over 40 percent of the gold, over 60 percent of cobalt, and 90 percent of the platinum reserves.• Lake Victoria is the second-largest freshwater lake in the world.• Africa has eight of the 11 major biomes and the largest remaining populations of lion, elephant, rhinoceros, cheetah, hye-na, and leopard in the world.

The canvas upon which the continent’s epic story is written is itself astonishing, and reason enough to visit. From the tropical rainforests and glorious tropical coastline of Central Africa to the rippling dunes of the Namib Desert, from the sig-nature savannah of the Serengeti to jag-ged mountains, green-tinged highlands and deep-gash canyons that mark the Great Rift Valley’s continental traverse – wherever one finds oneself on this big, beautiful continent, Africa has few peers when it comes to natural beauty.

Africa is the world’s second-largest and second most-populous continent, being behind Asia in both categories. At about 30.3 million km2 including adjacent is-lands, it covers 6 percent of earth’s total surface area and 20 percent of its land area. With 1.2 billion people as of 2016, it accounts for about 16 percent of the world’s human population. The conti-nent is surrounded by the Mediterranean Sea to the north, the Isthmus of Suez and the Red Sea to the northeast, the Indian Ocean to the southeast and the Atlantic Ocean to the west. The continent in-cludes Madagascar and various archipel-agos. It contains 54 fully recognised sov-

ereign states, nine territories and two de facto independent states with limited or no recognition.

Africa’s average population is the youngest amongst all the continents; the median age in 2012 was 19.7, when the worldwide median age was 30.4. Algeria is Africa’s largest country by area, and Nigeria is its largest by population. Afri-ca straddles the equator and encompass-es numerous climate areas; it is the only continent to stretch from the northern temperate to southern temperate zones.

Africa hosts a large diversity of ethnic-ities, cultures, and languages. In the late 19th century, European countries colo-nised almost all of Africa; most present states in Africa originated from a process of decolonisation in the 20th century. Af-rican nations cooperate through the es-tablishment of the African Union, which is headquartered in Addis Ababa.

Oldest inhabited territoryAfrica is considered by most paleoan-thropologists to be the oldest inhabit-ed territory on earth, with the human species originating from the continent. During the mid-20th century, anthro-pologists discovered many fossils and ev-idence of human occupation perhaps as early as seven million years ago. Central eastern Africa, particularly, is widely ac-cepted as the place of origin of humans and the Hominidae clade (great apes), as evidenced by the discovery of the earliest hominids and their ancestors. The Sa-helanthropus tchadensis, Australopithecus africanus, A afarensis, Homo erectus, H habilis, and H ergaster, the earliest Homo sapiens found in Ethiopia, date to cir-ca 200,000 years ago. Fossil remains of several species of early apelike humans thought to have evolved into modern man, such as Australopithecus afarensis (radiometrically dated to approximate-ly 3.9-3 million years BP (BP = before present, used to measure radiocarbon ages), Paranthropusboisei (c. 2.3-1.4 mil-lion years BP) and Homo ergaster (c. 1.9

million–600,000 years BP) have been dis-covered.

After the evolution of Homo sapiens approximately 150,000 to 100,000 years BP in Africa, the continent was mainly populated by groups of hunter-gatherers. These first modern humans left Africa and populated the rest of the globe dur-ing the Out of Africa II migration dated to approximately 50,000 years BP, exiting the continent either across Bab-el-Man-deb over the Red Sea, the Strait of Gibral-tar in Morocco, or the Isthmus of Suez in Egypt.

Other migrations of modern humans within the African continent have been dated to that time, with evidence of early human settlement found in Southern Af-rica, Southeast Africa, North Africa, and the Sahara.

The size of the Sahara has historical-ly been extremely variable, with its area rapidly fluctuating and at times disap-pearing, depending on global climatic conditions. At the end of the Ice ages, estimated to have been around 10,500 BCE, the Sahara had again become a green fertile valley, and its African pop-ulations returned from the interior and coastal highlands in sub-Saharan Africa, with rock art paintings depicting a fertile Sahara and large populations discovered in Tassilin’Ajjer dating back perhaps 10 millennia. However, the warming and drying climate meant that by 5000 BCE, the Sahara region was becoming increas-ingly dry and hostile. Around 3500 BCE, due to a tilt in the earth’s orbit, the Sa-hara experienced a period of rapid deser-tification. The population trekked out of the Sahara region towards the Nile Valley below the Second Cataract where they made permanent or semi-permanent set-tlements. A major climatic recession oc-curred, lessening the heavy and persistent rains in Central and Eastern Africa. Since this time, dry conditions have prevailed in Eastern Africa and, increasingly during the last 200 years, in Ethiopia.

The domestication of cattle in Africa


preceded agriculture and seems to have existed alongside hunter-gatherer cul-tures. It is speculated that by 6000 BCE, cattle were domesticated in North Africa. In the Sahara-Nile complex, people do-mesticated many animals, including the donkey and a small screw-horned goat which was common from Algeria to Nu-bia.

Around 4000 BCE, the Saharan climate started to become drier at an exceeding-ly fast pace. This climate change caused lakes and rivers to shrink significant-

ly and led to increasing desertification. This, in turn, decreased the amount of land conducive to settlements and helped to cause migrations of farming commu-nities to the more tropical climate of West Africa.

By the first millennium BCE, ironwork-ing had been introduced in Northern Af-rica and quickly spread across the Sahara into the northern parts of sub-Saharan Africa, and by 500 BCE, metalworking gradually became commonplace in West Africa. Ironworking was fully established

by roughly 500 BCE in many areas of East and West Africa, although other re-gions did not begin ironworking until the early centuries CE. Copper objects from Egypt, North Africa, Nubia, and Ethiopia, dating from around 500 BCE have been excavated in West Africa, suggesting that Trans-Saharan trade networks had been established by this date.

Around 3300 BCE, the historical record opens in Northern Africa with the rise of literacy in the Pharaonic civilisation of ancient Egypt. One of the world’s earli-est and longest-lasting civilisations, the Egyptian state continued, with varying levels of influence over other areas, un-til 343 BCE. Egyptian influence reached deep into modern-day Libya and Nubia, and, according to scholars, as far north as Crete. An independent centre of civilisa-tion with trading links to Phoenicia was established by Phoenicians from Tyre on the northwest African coast at Carthage.

European exploration of Africa began with ancient Greeks and Romans. In 332 BCE, Alexander the Great was welcomed as a liberator in Persian-occupied Egypt. He founded Alexandria in Egypt, which would become the prosperous capital of the Ptolemaic dynasty after his death.

Following the conquest of North Afri-ca’s Mediterranean coastline by the Ro-man Empire, the area was integrated eco-nomically and culturally into the Roman system. Roman settlement occurred in modern Tunisia and elsewhere along the coast. The first Roman emperor native to North Africa was Septimius Severus, born in Leptis Magna in present-day Lib-ya – his mother was Italian Roman and his father was Punic.

Christianity spread across these areas at an early date, from Judaea via Egypt and beyond the borders of the Roman world into Nubia; by 340 CE at the lat-est, it had become the state religion of the Aksumite Empire. Syro-Greek mis-sionaries, who arrived by way of the Red Sea, were responsible for this theological development.

Wildebeest making the annual migration in the Serengeti

WORLDVIEW

10–12 I OCT I 2019HO CHI MINH CITY, VIETNAM

India Partner Country at Metalex Vietnam

India will be the Partner Country at METALEX Vietnam, one of the most established exhibitions in the South East Asia Region. Metalex will be held concurrently with ROBOTEX and WELDING Vietnam at The Saigon Exhibition & Convention Center from 10–12 October 2019. The show has already got the country pavilions from Korea, Japan, USA, Taiwan, Thailand and Singapore.

EEPC India invites participation at the India Pavilion at Metalex Vietnam 2019.

Participate through EEPC India and enjoy substantial savings!

Scan to get details and become an exhibitor


Africa has largest remaining populations of lion, elephant, rhinoceros, cheetah, hyena, and leopard in the world

In the early 7th century, the new-ly-formed Arabian Islamic Caliphate ex-panded into Egypt, and then into North Africa. In a short while, the local Berber elite had been integrated into Muslim Arab tribes. When the Umayyad capital Damascus fell in the 8th century, the Is-lamic centre of the Mediterranean shifted from Syria to Qayrawan in North Af-rica. Islamic North Africa had become diverse, and a hub for mystics, scholars, jurists, and philosophers; Islam spread to sub-Saharan Africa, mainly through trade routes and migration.

Today, Africa contains 54 sovereign countries, most of which have borders that were drawn during the era of Euro-pean colonialism.

Largest presence in southern hemisphere Africa is the largest of the three great southward projections from the largest landmass of the earth. Separated from Europe by the Mediterranean Sea, it is joined to Asia at its northeast extremity by the Isthmus of Suez (transected by the

Suez Canal), 163 km wide. Geopolitically, Egypt‘s Sinai Peninsula east of the Suez Canal is often considered part of Africa, as well.

The coastline is 26,000 km long, and the absence of deep indentations of the shore is illustrated by the fact that Eu-rope, which covers only 10.4 million sq km – about a third of the surface of Af-rica – has a coastline of 32,000 km. From the most northerly point, Ras ben Sakka in Tunisia, to the most southerly point, Cape Agulhas in South Africa, is a dis-tance of approximately 8000 km. Cape Verde, the westernmost point, is a dis-tance of approximately 7400 km to Ras Hafun, the most easterly projection that neighbours Cape Guardafui, the tip of the Horn of Africa.

Africa’s largest country is Algeria, and its smallest country is Seychelles, an ar-chipelago off the east coast. The smallest nation on the continental mainland is the Gambia.

The African Plate is a major tecton-ic plate straddling the equator as well as the prime meridian. It includes much of

the continent of Africa, as well as ocean-ic crust which lies between the continent and various surrounding ocean ridges. Between 60-10 million years ago, the So-mali Plate began rifting from the African Plate along the East African Rift. Since the continent of Africa consists of crust from both the African and the Somali plates, some literature refers to the African Plate as the Nubian Plate to distinguish it from the continent as a whole.

Geologically, Africa includes the Ara-bian Peninsula; the Zagros Mountains of Iran and the Anatolian Plateau of Turkey mark where the African Plate collided with Eurasia. The Afrotropic ecozone and the Saharo-Arabian desert to its north unite the region biogeographically, and the Afro-Asiatic language family unites the north linguistically.

The climate of Africa ranges from tropical to subarctic on its highest peaks. Its northern half is primarily desert, or arid, while its central and southern areas contain both savannah plains and dense jungle (rainforest) regions. In between, there is a convergence, where vegetation

WORLDVIEW


patterns such as sahel and steppe domi-nate. Africa is the hottest continent on earth and 60 percent of the entire land surface consists of drylands and deserts.

Range of freedomAfrica boasts perhaps the world’s larg-est combination of density and ‘range of freedom’ of wild animal populations and diversity, with wild populations of large carnivores (such as lions, hyenas, and cheetahs) and herbivores (such as buffa-lo, elephants, camels, and giraffes) rang-ing freely on primarily open non-private plains. It is also home to a variety of ‘jun-gle’ animals including snakes and pri-mates and aquatic life such as crocodiles and amphibians. In addition, Africa has the largest number of megafauna species, as it was least affected by the extinction of the Pleistocene megafauna.

Africa has over 3000 protected areas, with 198 marine protected areas, 50 bio-sphere reserves, and 80 wetlands reserves.

Visual art and architectureAfrican art and architecture reflect the diversity of African cultures. The region’s oldest known beads were made from Nassarius shells and worn as personal ornaments 72,000 years ago. The Great Pyramid of Giza in Egypt was the world’s tallest structure for 4000 years, until the completion of Lincoln Cathedral around the year 1300. The stone ruins of Great Zimbabwe are also noteworthy for their architecture, as are the monolithic churches at Lalibela, Ethiopia, such as the Church of Saint George.

Music and danceEgypt has long been a cultural focus of the Arab world, while remembrance of the rhythms of sub-Saharan Africa, in particular West Africa, was transmitted through the Atlantic slave trade to mod-ern samba, blues, jazz, reggae, hip hop, and rock. The 1950s through the 70s saw a conglomeration of these various styles with the popularisation of Afrobeat and

Highlife music. Modern music of the con-tinent includes the highly complex choral singing of southern Africa and the dance rhythms of the musical genre of soukous, dominated by the music of the Democrat-ic Republic of Congo. Indigenous musical and dance traditions of Africa are main-tained by oral traditions. Arab influences are visible in North African music and dance and, in Southern Africa, western in-fluences are apparent due to colonisation.

Sports All 54 African countries have football (soccer) teams in the Confederation of African Football. Egypt has won the Afri-can Cup seven times, and a record-mak-ing three times in a row. Cameroon, Ni-

geria, Senegal, Ghana, and Algeria have advanced to the knockout stage of recent FIFA World Cups. South Africa hosted the 2010 World Cup tournament, becoming the first African country to do so.

Cricket is popular in some African na-tions. South Africa and Zimbabwe have Test status, while Kenya is the leading non-test team and previously had One-Day International cricket (ODI) status. The three countries jointly hosted the 2003 Cricket World Cup. Namibia is the other African country to have played in a World Cup. Morocco in northern Africa has also hosted the 2002 Morocco Cup, but the na-tional team has never qualified for a major tournament. Rugby is a popular sport in South Africa, Namibia, and Zimbabwe.

Kenya produces some of the finest long-distance runners in the world


Modern buildings in Gaborone

SAFARI TOURISM IN BOTSWANA

BOTSWANA, one of Africa’s most stable countries, is the continent’s longest continuous multi-party de-

mocracy. Sparsely populated, Botswana protects some of Africa’s largest areas of wilderness. Safari-based tourism – tight-ly-controlled and often upmarket – is an important source of income. Botswana is the world’s largest producer of diamonds and the trade has transformed it into a middle-income nation. The country has one of Africa’s most-advanced treatment programmes, however, and medicine for the virus is readily available.

India’s relations with Botswana have been close and friendly. India established

diplomatic relations with Botswana im-mediately after its independence in 1966 and opened its diplomatic mission in Gaborone in 1987. Botswana established its Mission in New Delhi in 2006.

Botswana is an active member of Southern African Development Com-munity (SADC), South African Customs Union (SACU), WTO and other Inter-national organisations. Botswana offers a business-friendly atmosphere and wel-comes foreign investment. Botswana State Enterprises such as Local Enterprise Au-thority, Botswana Investment and Trade Centre (BITC) have played an important role in the development of small scale in-

dustries in Botswana. Botswana opened a trade office called the Botswana Export Development and Investment Authority (BEDIA) in Mumbai in 2010. The office was subsequently renamed the Botswana Investment and Trade Centre (BITC).

India’s engineering exports to Botswa-na have also increased from $7.98 million in 2016-17 to $11.83 million in 2017-18, recording a high growth of 48.25 percent. The major engineering exports to Bot-swana are products of iron and steel, in-dustrial machinery for dairy, agriculture, food processing, textiles, paper, chem-icals, etc, and electric machinery and equipment.

WORLDVIEW


Gaborone growing fastGaborone the capital and largest city of Botswana will be host to Global Expo Botswana. It has a population of 231,626 based on the 2011 census, about 10 per-cent of the total population of Botswana. Its agglomeration is home to 421,907 in-habitants at the 2011 census.

Gaborone City is situated between Kgale and Oodi Hills, near the conflu-ence of Rivers Notwane and Segoditshane in the southeastern corner of Botswana, and 15 km from the South African bor-der. The city is served by the Sir Seretse Khama International Airport. It is an ad-ministrative district in its own right, but is the capital of the surrounding South-east District. Locals often refer to the city as Gabs.

The city of Gaborone is named after Chief Gaborone of the Tlokwa tribe, who once controlled land nearby. Because it had no tribal affiliation and was close to fresh water, the city was planned to be the capital in the mid-1960s when the Bechuanaland Protectorate became an independent nation. The centre of the city is a long strip of commercial busi-nesses, called Main Mall with a semicir-cle-shaped area of government offices to its west. Gaborone is one of the fast-est-growing cities in the world.

Gaborone is the economic capital as well as the government capital; it is head-quarters to numerous companies and the Botswana Stock Exchange. Gaborone is also home to the Southern African De-velopment Community (SADC), a re-gional economic community established in 1980. Many languages are spoken there, Setswana (Tswana) being the main tongue. English, Kalanga, and Kgalagadi are also spoken.

Centre of national economyGaborone is the centre of the national economy. The headquarters of important financial institutions such as the Bank of Botswana, Bank Gaborone, Banc ABC, and the Botswana Stock Exchange are

centrally located, as well as the head-quarters for Air Botswana, Consumer Watchdog, Botswana Telecommunica-tions Corporation, and Debswana, the joint diamond mining venture between De Beers and the Botswana government. Several international companies have in-vested in the city, among them Hyundai, SABMiller, Daewoo, Volvo, and Siemens. Orapa House, owned by Debswana, is where the diamonds mined from Debswana are sorted and valued. Orapa House is located at the intersection of

Khama Crescent and Nelson Mandela Drive. It has a unique style of architec-ture that allows the optimal amount of indirect sunlight to shine through the windows in order to accurately sort di-amonds.

A Diamond Technology Park was recently opened; this is as part of Bot-swana government’s vision for establish-ment of downstream diamond industry. Companies dealing in diamonds have established their local operations in the park

The Global Expo Botswana being held over 6-9 August 2019 in Gaborone is the largest business meet in the southern African country organised by BITC (Botswana Investment and Trade Centre). GEB was conceptualised as a premier business-to-business exposition to attract foreign direct investment, expand of domestic investment, promote exports of locally produced goods and services, and promote trade between Botswana and other countries.

GEB is a major trade and investment plat-form offering exhibitors an opportunity to do

business in one of Africa’s stable and fastest growing economies as well as the Southern African region.

Visitors at the event include international buyers, government procurement agencies, product importers and agents, small , mid-, and large-scale wholesale traders and retail-ers from southern Africa, traders and industry representatives from surrounding countries like South Africa, Zambia, Zimbabwe, Namib-ia. The theme for the Global Expo Botswana 2019 is ‘Harnessing the power of emerging markets for economic growth.’

Global Expo Botswana


An offshore drilling well in the Gulf of Guinea

OIL WEALTH IN NIGERIA

NIGERIA is one of sub-Saharan Af-rica’s largest economies. Its GDP in 2017 was estimated at $376.4

billion. The Nigerian economy relies heavily on oil as its main source of for-eign exchange earnings and government revenues. Within the economy, servic-es are the largest sector of the economy, accounting for about 50 percent of total GDP. Agriculture, which in the past was the biggest sector, now weights around 23 percent. Crude petroleum and natural gas constitute 11 percent of total GDP. Industry and construction account for the remaining 16 percent of GDP.

Over the last one decade, the country’s fundamentals like growth in GDP, busi-

ness climate, increased transparency, fis-cal management, have improved signif-icantly. The government also is working to develop stronger public-private part-nerships for roads, agriculture, and pow-er. The beginning of Nigeria’s recovery in early 2017 opened new ways for invest-ment inflows into the country. Also the real GDP of the country is projected to grow at 2.2 percent, spurred by increased infrastructure spending and restoration of oil production. The Nigeria Economic Recovery and Growth Plan (2017-20), fo-cuses on five key areas, namely: improv-ing macroeconomic stability; economic growth and diversification; improving competitiveness; fostering social inclu-

sion; and governance and security.For fostering industrialisation in the

country, the Nigeria Industrial Revolu-tion Plan (NIRP) has been implemented on a priority basis. The priority sectors identified under the plan are mining and quarrying and manufacturing. Nigeria aims at encouraging manufacturing in-dustry and business activities through this plan.

India-Nigeria bilateral tradeIndia is the sixth-largest exporter to Ni-geria for the pharma machinery sector, covering 10 percent of the import market of the country. India exported over $8.1 million worth of goods to Nigeria for the

WORLDVIEW

Exhibit at West Africa’s biggest pharma exhibition

Participate through EEPC India to get big benefits!

Nigeria Pharma Manufacturers’ Expo 201928-29 AUGUST 2019 LAGOS, NIGERIA

The 5th Nigeria Pharma Manufacturers’ Expo 2019 is an excellent platform for machinery and engineering equipment for the pharmaceutical industry. Over 4000 pharma trade professionals from across the West African region, including Nigeria, Ghana, Mali, Chad, Cameroon, EQ Guinea, Central African Republic, Senegal, Gambia, Ivory Coast, Niger, Burkina Faso and Benin are among those who are expected to attend the exhibition.

Scan to become an exhibitor


year 2018. India being one of the leading suppliers to Nigeria, the Nigerian author-ities are encouraging the participation of Indian firms. Nigeria accounts for about 17 percent of India’s engineering export to the African Continent.

Lagos, most-populous cityLagos, which will host the 5th Nigeria Pharma Manufacturers’ Expo 2019, is a city in the Nigerian state of Lagos. The city, with its adjoining conurbation, is the most populous in Nigeria and on the African continent. It is one of the fast-est-growing cities in the world and one of the most populous urban areas. Lagos is a major financial centre in Africa; the megacity has the fourth-highest GDP in Africa and houses one of the largest and busiest seaports on the continent.

Lagos initially emerged as a port city that originated on a collection of islands, which are contained in the present-day local government areas (LGAs) of Lagos Island, Eti-Osa, Amuwo-Odofin and Apa-pa. The islands are separated by creeks, fringing the southwest mouth of Lagos Lagoon, while being protected from the Atlantic Ocean by barrier islands and long sand spits such as Bar Beach, which stretch up to 100 km east and west of the mouth. Due to rapid urbanisation, the city expanded to the west of the lagoon to include areas in the present-day Lagos Mainland, Ajeromi-Ifelodun, and Surul-ere. This led to the classification of Lagos into two main areas: the Island, which was the initial city of Lagos, before it ex-panded into the area known as the Main-land. This city area was governed directly by the Federal Government through the Lagos City Council, until the creation of Lagos State in 1967, which led to the splitting of Lagos city into the seven LGAs, and an addition of other towns (which now make up 13 LGAs) from the then Western Region, to form the state.

Lagos, the capital of Nigeria since its amalgamation in 1914, went on to be-come the capital of Lagos State after its

creation. However, the state capital was later moved to Ikeja in 1976, and the fed-eral capital moved to Abuja in 1991. Even though Lagos is still widely referred to as a city, the present day Lagos, also known as Metropolitan Lagos, and officially as Lagos Metropolitan Area is an urban ag-glomeration or conurbation, consisting of 20 LGAs, 32 LCDAs including Ikeja, the state capital of Lagos State. This con-urbation makes up 37 percent of Lagos State’s total land area, but houses about 85 percent of the state’s total population.

Economy of Lagos The city of Lagos is a major economic focal point in Nigeria, generating around 10 percent of the country’s GDP. Most commercial and financial business is car-ried out in the central business district situated on the island. This is also where most of the country’s commercial banks, financial institutions and major corpora-tions are headquartered. Lagos is also the major information communications and telecommunications (ICT) hub of West

Africa and potentially, the biggest ICT market in the continent. Lagos is devel-oping a 24-hour economy and has also been ranked as one of the most expen-sive cities in the world. In some parts of Lagos, residents have one of the highest standards of living in Nigeria and in Af-rica. At the same time, a sizeable propor-tion of the residents live in slums without access to piped water and sanitation.

The Port of Lagos is Nigeria’s leading port and one of the largest and busiest in Africa. It is administered by the Nigerian Ports Authority and it is split into three main sections: Lagos port, in the main channel next to Lagos Island; Apapa Port, site of the container terminal; and Tin Can Port, both located in Badagry Creek, which flows into Lagos Harbour from the west. The port features a railhead. The port has seen growing amounts of crude oil exported, with export figures rising between 1997 and 2000. Oil and petrole-um products provide 14 percent of GDP and 90 percent of foreign exchange earn-ings in Nigeria as a whole.

The Nigeria Pharma Manufacturers’ Expo, to be held over 28-29 August 2019 in Lagos, is an opportunity for stakeholders in the health

sector to exchange information, products, services and ideas towards achieving the health-related Millennium Development Goals and other developmental initiatives in Nigeria and the West African region.

The 5th Nigeria Pharma Manufacturers’ Expo 2019 is an excellent trade platform for India machineries and engineering equipments for the pharmaceutical industry, focusing on Central and West African markets and present-ing a promising platform to Indian exporters to assist in international trade. Over 4000 pharma trade professionals from across the region including Nigeria, Ghana, Mali, Chad, Cameroon, EQ Guinea, Central African Repub-lic, Senegal, the Gambia, Ivory Coast, Niger, Burkina Faso, and Benin amongst others are expected to attend this exhibition.

Nigeria Pharma Manufacturers’ Expo

WORLDVIEW


Addis Ababa at night

LAND OF NATURAL CONTRASTS

ETHIOPIA is a country in the north-eastern part of Africa, known as the Horn of Africa. It shares borders

with Eritrea to the north, Djibouti to the northeast, Somaliland and Somalia to the east, Kenya to the south, South Sudan to the west and Sudan to the northwest. With over 102 million inhabitants, Ethiopia is the most populous landlocked country in the world and the second-most populous nation on the African continent with a total area of 1.1 million sq km. Its capital and largest city is Addis Ababa, which lies a few miles west of the East African Rift that splits the country into the Nubian

and Somali tectonic plates. Some of the oldest skeletal evidence

for anatomically modern humans has been found in Ethiopia. During the late 19th-century Scramble for Africa, Ethio-pia and Liberia were two nations that pre-served their sovereignty from long-term colonisation by a European colonial pow-er and many newly-independent nations on the continent subsequently adopted its flag colours. The country was occupied by Italy in 1936 and became Italian Ethiopia (part of Italian East Africa) until it was liberated during World War II. Ethiopia was also the first independent member

from Africa of the 20th-century League of Nations and the United Nations. In 1974, the Ethiopian monarchy under Haile Se-lassie was overthrown by the Derg, a com-munist military government backed by the Soviet Union. In 1987, the Derg estab-lished the People’s Democratic Republic of Ethiopia, but it was overthrown in 1991 by the Ethiopian People’s Revolutionary Democratic Front, which has been the ruling political coalition since.

The nation is a land of natural con-trasts, with its vast fertile west, its forests, and numerous rivers, and the world’s hot-test settlement of Dallol in its north. The Ethiopian Highlands are the largest con-tinuous mountain ranges in Africa, and the Sof Omar Caves contains the largest cave on the continent. Ethiopia also has the most UNESCO World Heritage Sites in Africa. Additionally, the sovereign state is a founding member of the UN, the Group of 24 (G-24), the Non-Aligned Movement, G-77, and the Organisation of African Unity. Its capital city Addis Aba-ba serves as the headquarters of the Afri-can Union, the Pan African Chamber of Commerce and Industry, the United Na-tions Economic Commission for Africa, the African Standby Force, and many of the global NGOs focused on Africa. The country now has the largest economy (by GDP) in East Africa, having the largest population in the region.

India-Ethiopia bilateral relations India and Ethiopia have long-standing economic and commercial relations, which are centuries old and can be traced back over 2000 years of recorded history. During the Axumite Kingdom, Indian traders had links with the ancient port of Adul is in the eastern part of Ethiopia and traded silk and spices for gold and ivory. In recent years, with the opening up of the Ethiopian economy, business ties be-tween the two countries have grown sig-


nificantly, especially in the areas of trade, investment, agriculture and infrastructure projects. The economic dimension of the bilateral relationship has now become its most important.

Bilateral trade in 2015 stood at $1.2 bil-lion, of which India’s exports to Ethiopia were over $1.153 billion and imports were $55.1 million. Iron and steel products are India’s major export items to Ethiopia, accounting for 17.2 percent of India’s to-tal exports to Ethiopia. It is followed by rice (12.7), pharmaceuticals (10.6), trans-port equipment (5.6), machineries (5.5), sugar (5.2), paper products (4.5), plastics (3.3), rubber (3.2), and textile and cloth-ings (3), percent, respectively. Major im-ports by India from Ethiopia are pulses, precious and semi precious stones, vege-tables and seeds, leather, and spices. India is the second-most important source of imports for Ethiopia, contributing 7.4 percent of all of Ethiopia’s imports next to China. The areas with most promising potential for investments in the country are agriculture, food-processing, leather and leather products, textiles and gar-ments, horticulture, sugar and related in-dustries, chemicals industry, pharmaceu-tical industry, cement industry, metal and engineering industry, tourism, construc-tion, mining, and oil and hydropower.

Leading non-agricultural sectors and investment include renewable energy, information technology and commu-nications (ICT), construction, tourism and aviation. Sub-sectors such as mobile banking services and outsourcing ser-vices, website software and technologies, software development for e-Government services, and ICT training services are going to be among the major investment opportunities in the country. The ambi-tious road construction and expansion projects in the country also offers oppor-tunities either to directly involve in the construction work or export of construc-tion machinery, chemicals, and building materials as well as consultancy and su-pervision services.

Political capital of AfricaAddis Ababa, which will host ITME Afri-ca 2020, is the capital and largest city of Ethiopia. As a chartered city, Addis Ababa also serves as a capital city of Oromia. It is where the African Union is headquartered and where its predecessor the Organisa-tion of African Unity (OAU) was based. It also hosts the headquarters of the United Nations Economic Commission for Africa (ECA), as well as various other continen-tal and international organisations. Addis Ababa is therefore often referred to as ‘the political capital of Africa’ for its histori-cal, diplomatic, and political significance for the continent. The city lies a few kilo-metres west of the East African Rift which splits Ethiopia into two, through the Nu-bian Plate and the Somali Plate. The city is populated by people from different re-gions of Ethiopia. It is home to Addis Aba-ba University.

The economic activities in Addis Ababa are diverse. According to official statis-tics from the federal government, some 119,197 people in the city are engaged in trade and commerce; 113,977 in manufac-turing and industry; 80,391 homemakers of different variety; 71,186 in civil admin-istration; 50,538 in transport and commu-nication; 42,514 in education, health, and social services; 32,685 in hotel and cater-ing services; and 16,602 in agriculture. In addition to the residents of rural parts of

Addis Ababa, the city dwellers also partic-ipate in animal husbandry and cultivation of gardens. Some 677 hectares of land is irrigated annually, on which 129,880 quintals of vegetables are cultivated. It is a relatively clean and safe city. The city has recently been in a construction boom with tall buildings rising in many places. Various luxury services have also become available and the construction of shop-ping malls has recently increased. Accord-ing to Tia Goldenberg of IOL, area spa professionals said that some people have labelled the city, ‘the spa capital of Africa.’

References 1 https://indiaincgroup.com/africas-impor-tance-india/2 https://www.quora.com/What-positive-aspects-of-Africa-are-unique-and-sets-the-continent-apart-from-the-rest-of-the-world3 https://en.wikipedia.org/wiki/African_Continental_Free_Trade_Agreement4 https://www.cnbc.com/2019/07/11/afri-ca-free-trade-what-is-the-afcfta.html5 https://blog.nationalgeographic.org/2013/10/31/getting-to-know-africa-in-terestingfacts/6 https://www.orfonline.org/expert-speak/connectivity-beyond-neighbours-indi-as-brimming-interest-in-south-afri-ca-through-the-asia-africa-growth-corri-dor-49182/7 EEPC India Research

The Indian Engineering Pavilion in Ethiopia coinciding with ITME Africa 2020 to be held over 14-16 February 2020 in Addis Ababa, is being organised by the India ITME Society, Ethiopian Chamber of Commerce and Sectoral Associations (ECCSA), and EEPC India. The event will bring multiple growth opportuni-ties for the engineering and textile industry, manufacturing, agriculture, water manage-ment, pharmaceuticals, airlines, hotels, transport, tourism and financial institutions,

and will contribute to the development of the region in many ways. The foundation for this growth mainly rests on the strong economic indicators, attractive growth potential and the fact that the African continent is now the No.1 destination for business prospects. The Indian Engineering Pavilion in Ethiopia 2020 prom-ises to become the focal point and catalyst for economic growth, employment generation, and technology up-gradation in Ethiopia and other countries in the African continent.

ITME Africa 2020

WORLDVIEW


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India-Indonesia bilateral tradeEEPC INDIA

INDONESIA has been a key econom-ic partner for India in Southeast Asia with the relationship between the two

countries stretching back almost two millennia. The two countries recently celebrated 70 years of bilateral relations. Not just history; the two nations also share contemporary issues. Both the na-tions are plural; both have adopted liber-alisation and have fast-spaced economies. India regards Indonesia as a key ally in ASEAN. Further Indonesia is playing a significant strategic role in helping India enhance its association with the other ASEAN countries. Both India and Indo-nesia are member states of the G-20, the E-7 countries, the Nonaligned Move-ment, and the United Nations.

In recent times, both India and Indo-nesia have increasingly become more important in each other’s trade baskets. However, recently India has raised con-cerns over the rising trade deficit with In-donesia, which has reached $10.57 billion in the last concluding fiscal 2018-19. Our balance of trade is heavily in favour of Indonesia and thus both countries need to work towards establishing sustainable trade by diversifying the export basket.

On these lines, a meeting was held be-tween Prime Minister Narendra Modi and Indonesia’s President Joko Widodo where the leaders discussed ways to deep-en trade and enhance cooperation in a number of key areas including economy, defence, and maritime security. During the meet, the two leaders pledged to dou-ble their efforts to boost bilateral trade to $50 billion by 2025.

Given this background, this article fo-

cuses on India-Indonesia bilateral trade over the years – pre- and post-ASE-AN-India FTA (AIFTA) and suggest ways of narrowing the balance of trade.

Indonesia’s economy in briefIndonesia has made remarkable progress in its social and economic development in the past few decades. Since the 1998 Asian financial crisis, its economy has grown tenfold and per capita income eightfold.

Indonesia’s GDP growth rate in 2018 stood at 5.2 percent and ranked 6th among the 10 ASEAN nations (https: //www.adb.org/countries/indonesia/econ-omy#tabs-0-0).

Indonesia’s per capita GDP growth is expected at 4 percent in 2019 and 4.1 percent in 2020 as per the ADB (https: //www.adb.org/countries/indonesia/econ-omy#tabs-0-1).

India-Indonesia bilateral tradeIndonesia is the second-largest trading partner of India among the ASEAN na-tions after Singapore. Indonesia ranked

among the top 10 trading partners of India during the last three years. The growth in exports from India to Indone-sia during 2018-19 vis-à-vis 2017-18 was 33.1 percent while the growth in global exports from India was 8.75 percent dur-ing the same. There has been negative growth in imports from Indonesia to India (3.62 percent) but India’s global imports have increased by 10.41 percent during the period. The top items for which India recorded substantial trade deficit in 2018-19 as against 2017-18 were mineral fuels, animal or vegetable fats and oils, ores, chemical products, rubber and articles, inorganic chemicals, paper and paperboard, wooden articles, pulp of wood, and manmade fibres, etc.

India’s balance of trade, which is heav-ily in favour of Indonesia, has raised se-rious concerns and remedial measures are sought. The Indian government feels that there is considerable potential for expanding trade in the agricultural, auto-mobiles, engineering products, IT, phar-maceuticals, biotechnology, and health-care sectors.

Table1: India-Indonesia bilateral trade ($ million)

2014-15 2015-16 2016-17 2017-18 2018-19 CAGR

India’s total exports to Indonesia 4043.32 2819.49 3488.12 3963.77 5275.6 6.9%

India’s total imports from Indonesia 15004.64 13131.93 13427.99 16438.8 15843.94 1.4%

Total trade 19047.96 15951.42 16916.11 20402.57 21119.54 2.6%

BOT -10961.3 -10312.4 -9939.87 -12475 -10568.3

Source: www.commerce.nic.in


INDIA-INDONESIA ENGINEERING TRADE

THE top 10 engineering products India exported to Indonesia in 2018-19 are given in Table3. The

major engineering import items from Indonesia includes iron and steel, copper and products, tin and products, nuclear reactors, industrial machinery for dairy and agriculture, products of iron and steel, motor vehicles/cars, electric ma-chinery and equipment and so on.

Evidently, the two nations comple-ment each other in a number of areas. Trade meetings and delegation-level talks could do more to promote better trade, and government-to-government contact would reassure the business community of both countries.

India-Indonesia trade agreementsIndia at present trades with Indonesia under the ASEAN-India FTA (AIFTA). The AIFTA is a free trade area among the 10 member states of the Association of Southeast Asian Nations (ASEAN) and India. The initial framework agreement was signed on 8 October 2003 in Bali, In-donesia and the final agreement was on 13 August 2009. The free trade area came into effect on 1 January 2010.

The two countries have committed to improve bilateral cooperation through a strategic partnership which was formed in 2005. On these lines, the two coun-tries are in the process of negotiating a Comprehensive Economic Cooperation Agreement (CECA).

Impact of FTA on merchandise tradeWe see from Figure1 that India’s mer-chandise exports and imports vis-à-vis Indonesia has increased over the years from 2008-09 to 2018-19. India’s total exports to Indonesia have increased from $2.56 million in 2008-09 to $5.28 mil-lion in 2018-19, registering a CAGR of 7 percent. We find that post AIFTA India’s

exports to Indonesia have increased but not considerably. On the other hand In-dia’s imports from Indonesia has almost doubled post FTA from $8.66 million in 2009-10 to $15.84 million in 2018-19, registering a CAGR of 9 percent over the years from 2008-09 to 2018-19. This disparity in export-import growth rates have led to the increase in trade deficit which is reflected in the last 11 years.

Impact of FTA on engineering tradeIndia’s engineering exports to Indonesia has increased post AIFTA from $753.6 million in 2009-10 to $2331.3 million in 2018-19, registering a CAGR of 15 per-cent over the years from 2008-09 to 2018-19. India’s engineering imports have also increased considerably from $296.6 million in 2009-10 to $1494.1 million in 2018-19, registering a CAGR of 22 per-cent. However India has maintained a

positive balance of trade in the case of engineering goods all through, barring just 2015-16.

Thus there has been a positive effect of the FTA, which has resulted in increase of India’s engineering exports to Indonesia as seen from Figure2

Observation: Thus India’s rising trade deficit with Indonesia is due to the surge in merchandise imports, which has in-creased manifold as seen from Figure1. Has the FTA strengthened India’s posi-tion as an engineering export partner in Indonesia?So now we try to find the position of In-dia as a supplier of engineering goods to Indonesia in the global context.

Indonesia’s engineering imports and India’s shareCase1: India ranks among the top 5For the product groups shown in Table3,

Table2: India-Indonesia bilateral engineering trade ($ million)2015-16 2016-17 2017-18 2018-19 CAGR %

India’s engg exports to Indonesia 839.48 1405.61 1753.58 2331.33 40.6

India’s engg imports from Indonesia 1130.4 1128.29 1246.54 1494.1 9.7

BOT -290.92 277.32 507.04 837.23


Table2: India’s top 10 engineering exports to Indonesia ($ million)2018-19

Ships, boats and floating structures 734.6

Motor vehicle/cars 369.56

Iron and steel 275.81

Industrial machinery for dairy, agriculture, food processing, textiles, paper, chemicals, etc 173.06

Electric machinery and equipment 166.59

Auto components/parts 118.75

Nuclear reactors, industrial boilers and parts 103.29

Products of iron and steel 58.73

Air condition and refrigeration machinery and parts, industrial furnaces, water heaters and centrifuges and compressor

52.74

Zinc and products made of zinc 28.62


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we find India ranking among the top five global suppliers to Indonesia. However, the predominance of China and Japan, with whom Indonesia has bilateral trad-ing agreements, is evident in some of the items. Moreover this proves that China and Japan have been able to realise the potential of trading agreements effective-ly with Indonesia, unlike India.

Furthermore, new disruptive NTBs from Indonesia also erode competitive-ness of Indian exporters. For instance, subsequent to AIFTA, large exports of CBU vehicles were made to Indonesia. However from August 2018, the Minis-try of Industry of Indonesia suddenly imposed import restrictions in the form of import quota on CBUs including im-ports from India. This has discouraged and reduced exports of CBUs from India. Similar import licenses have also been imposed on cast alloy grinding media (HS code 73259100). The process of ob-taining the license is also cumbersome which further discourages exporters.

So doing away with these trade restric-tions is expected to increase India’s share in Indonesia’s import basket and help In-dia move up in the rankings.Case2: India’s share ranges from 1-5 percent For the above product groups shown in Table4, we find India’s share in Indone-sia’s import basket to range from 1-5 per-cent. But India exports substantial vol-umes globally for the same. Thus India’s share can certainly be increased if the ex-isting tariffs under AIFTA be reduced to zero, as enjoyed by China and other sup-pliers to Indonesia. This additional trade surplus in engineering products will help India in maintaining a favourable mer-chandise trade balance with Indonesia and narrow down the trade deficit.

Case3: India’s has insignificant exports to IndonesiaFor the product groups shown in Table5, we find India’s exports to Indonesia to be meagre, in spite of India having sub-

stantial global exports. We find countries like Germany, Canada, and Switzerland to be important suppliers for Indonesia for the products listed here. Therefore, India’s geographical proximity has given no additional advantage to India and this indicates that there is lack of level play-ing field for Indian exporters to certain extent.

In this context it is to be mentioned that Indian exporters of used reusable

marine machinery spares under the HS codes 8408, 8409, and 8502 face issues when exporting directly to Indonesia. Consequently they have to take the Sin-gapore route which adds to their cost.

Further some exporters report that while their products are zero-rated under AIFTA, problems in obtaining certificate of origin (Form A) discourages them from opting for the preferential route. The entire process is manually done and

Figure1: India-Indonesia merchandise trade

20.00

15.00

10.00

5.00

0.00

-5.00

-10.00

-15.00India's total exports to Indonesia India's total imports to Indonesia Balance of Trade

6.67

3.06

2.56

-4.11-5.59

-4.22

-8.09-9.55

-9.90

-9.94 -10.57

-12.48

-10.31

-10.96

8.66

5.70

9.92

14.77

14.88

6.68

14.75

15.00

4.855.33

13.13 13.43

3.49 3.962.82

5.28

4.04

16.44

15.84

$ bi

llion

FTA Signed

Figure2: India-Indonesia engineering trade

1000.0

1500.0

2000.0

2500.0

500.0

0.0

-500.0

2008

-09

2009

-10

2010

-11

2011

-12

2012

-13

2013

-14

2014

-15

2015

-16

2016

-17

2017

-18

2018

-19

1121.3

366.9 456.9250.7

6557400.4

327.9277.3

507.0

837.2

FTA Signed

India's eng exports to Indonesia India's eng imports to Indonesia Balance of Trade

$ bi

llion


consumes a significant amount of time. So it is suggested that it should be made digital to cut down on the time and cost.

Considering the three cases we have found that India has not reaped much advantage on account of the AIFTA. Thus India needs to diversify and explore much more in the Indonesian market, under the AIFTA. So we suggest more G2G lev-el intervention to boost engineering ex-ports to reduce the overall trade deficit with Indonesia.

Identification and diversifying our exports to IndonesiaIn this regard we have conducted a thor-ough analysis of trade data for both India and Indonesia. In the analysis we have considered India’s exports to both world and ASEAN and Indonesia’s global im-ports. Along with this we have taken into consideration the present tariff schedule under AIFTA and also most favoured na-tion (MFN) rates for those products not covered under AIFTA. Additionally we have looked into the tariff schedule under the China-ASEAN FTA to understand the competition faced by our products in comparison to China.

Observations a. In many cases while Indian exports are subjected to tariff under AIFTA, China enjoys zero tariff under China-ASEAN FTA.b. We are also of view that China enjoys price competitiveness advantage too on top of tariff advantage. For instance, it was found that in case of pipeline valves (HS code: 84818030), prices offered by Chinese exporters to Indonesian buyers are 15 to 20 percent less than the prices offered by Indian exporters. We suggest that the government should give some in-centives to the industry to offset the price difference with China.

We have identified 91 tariff lines at 8-digit level for which there is scope for enhancement of India’s export in the In-donesian market. For all these products

it is found that Indonesia has substantial imports from the world and India’s pen-etration is comparatively low and below the potential.

It was also found that in case of 51 products tariff is already zero. Therefore, it is surprising that Indian business could not utilise the duty-free access to enhance its penetration in Indonesia. Efforts are required to encourage export of these products and to reduce India’s trade defi-cit with Indonesia.

For the other 40 products there is tar-iff but for most of the products the tariff ranges between 3-5 percent.

It needs to be mentioned here that for 26 products among these 40 products, In-dian exports are subjected to tariff under AIFTA but Chinese exports are zero-rat-ed. These are a cause of concern and gov-ernment-level negotiations are needed for tariff elimination and further export promotion.

In this context these 91 products are identified as potential products for ex-ports to Indonesia.

Way forwardSo what steps can India take to overcome the trade deficit with Indonesia?

With tariff elimination, it can be ex-pected that India’s exports to Indonesia will increase in the short and medium term. However, in order to match up to the level of China, India needs to have separate bilateral trading agreements with Indonesia. Plurilateral trade agree-ments like AIFTA or the RCEP (which is in the negotiation stage) does not always help in boosting exports, which the bi-lateral does. Bilateral trade agreements are easier to negotiate than multilateral trade agreements, since they only in-volve two countries. This implies they can go into effect faster, reaping trade benefits more quickly.

Further India needs to improve its in-frastructure and connectivity with ASE-AN. India should enhance its connec-tivity with ASEAN instead of dragging its feet. Connectivity through road, rail, maritime, and air can foster trade inte-gration between Indonesia and India.

Table3: Indonesia’s top importers, 2018 ($ million)Products Major players Imports In 2018 Share (%)

Zinc and products made of zinc 1.Korea 137.10 28.45

2.Australia 109.32 22.69

3.Japan 71.38 14.81

4.India 46.71 9.69

Nuclear reactors, industrial boilers and parts 1.China 646.42 41.43

2.Japan 289.41 18.55

3.India 193.33 12.39

Motor vehicle/cars 1.Japan 967.58 32.60

2.Thailand 603.14 20.32

3.India 469.68 15.82

Auto components/parts 1.Japan 1838.41 47.72

2.Thailand 875.54 22.73

3.China 331.04 8.59

4.USA 105.34 2.73

5.India 90.69 2.35

Source: www.trademap.org

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Table4: Share of India’s exports in Indonesia’s import basket ($ million)Products Major players Imports in 2018 Share (%)

Iron & steel 1. China 2169.1 21.2

2. Japan 1867.6 18.2

3. Korea 854.4 8.3

4. South Africa 702.9 6.9

5. Russia 537.6 5.2

7. India 402.0 3.9

Products of iron & steel 1. China 1499.32 38.57

2.Japan 788.10 20.27

3.Singapore 309.46 7.96

4.Thailand 157.86 4.06

5.Korea 139.26 3.58

13.India 61.35 1.58

Aluminium and products made of aluminium 1.China 945.55 41.19

2.USA 143.48 6.25

3.Australia 139.20 6.06

4.Malaysia 136.53 5.95

5.UAE 121.26 5.28

14. India 33.17 1.44

Copper and products made of copper 1.Japan 363.79 25.19

2.China 360.72 24.98

3.Thailand 104.04 7.20

4.Philippines 101.10 7.00

5.Myanmar 62.56 4.33

13. India 14.23 0.99

Lead and products made of lead 1.Korea 46.12 27.01

2.Malaysia 24.94 14.61

3.Australia 14.46 8.47

4.Vietnam 13.12 7.68

5.Japan 11.28 6.61

8.India 9.56 5.60

IC engines & parts 1.Japan 848.23 40.11

2.Thailand 546.88 25.86

3.China 280.42 13.26

4.USA 72.34 3.42

5.Singapore 70.47 3.33

8.India 39.01 1.84

Industrial machinery for dairy, agriculture, food processing, textiles, paper, chemicals, etc 1.China 4313.62 27.44

2.Japan 3720.06 23.66

3.Thailand 1405.73 8.94

4.Germany 967.07 6.15

5.Singapore 581.86 3.70

11.India 412.32 2.62


Developing well-connected quality ports, projects including Kaladan Multi-Mod-al Transit Transport and India-Myan-mar-Thailand Trilateral Highway (ex-pected by the year 2019) are welcome steps in this regard.

ASEAN-India Air Connectivity Report of ASEAN-India Centre at RISDC high-lights the importance of ASEAN-India Air Transport Agreement, which will en-

hance air connectivity, and carry tourist and business travellers, high-value fragile goods and perishable commodities in shorter time.

Alongside, India must focus on en-couraging and adopting trade facilita-tion measures like simplification and harmonisation of trade procedures, set-ting regional single windows for custom clearance, recognition of custom transit

documents and proper coordination be-tween border authorities.

However, India’s exports shares to In-donesia will be pale in comparison to China, if India is not able to climb up the value chain. Thus technology upgrada-tion is the only way for India to buckle up and move up the value chain.

The technology intensity of India’s engineering export portfolio has not

Table4: Share of India’s exports in Indonesia’s import basket ($ million) contd

Products Major players Imports in 2018 Share (%)

Pumps 1.China 382.38 29.82

2.Japan 287.09 22.39

3.USA 117.34 9.15

4.Thailand 89.47 6.98

5.Australia 68.70 5.36

10.India 20.73 1.62

Air condition and refrigeration machinery parts 1.China 1223.34 46.06

2.Thailand 393.22 14.80

3.Japan 243.43 9.16

4.USA 137.60 5.18

5.Malaysia 122.34 4.61

9.India 58.91 2.22

Machinery for ATMs, injecting moulding machinery, valves, etc 1.China 77.92 23.81

2.Japan 51.89 15.85

3.Australia 42.17 12.88


5.USA 24.66 7.53

7.India 15.48 4.73

Two and three wheelers 1.Vietnam 21.09 25.55

2.Japan 15.66 18.96

3.Germany 15.30 18.54

4.Thailand 12.21 14.79

5.China 7.72 9.35

6.India 4.41 5.34

Source: www.trademap.org

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Table5: Indonesia’s major importers, 2018 ($ million) Products Major players Imports in 2018 Share (%)

Nickel and products made of nickel 1.Australia 68.86 53.08

2.Japan 17.73 13.67

3.Switzerland 5.11 3.94

4.Madagascar 4.50 3.47

5.Germany 4.11 3.16

17.India 0.75 0.57

Tin and products made of tin 1.Malaysia 7.37 48.96


3.Japan 2.05 13.63

4.Vietnam 0.57 3.79

5.Korea 0.46 3.04

10.India 0.03 0.19

Machine tools 1.China 314.46 32.34

2.Japan 287.03 29.52

3.Taipei, Chinese 105.28 10.83

4.Germany 57.42 5.91

5.Italy 36.50 3.75

13.India 4.20 0.43

Electric machinery and equipment 1.China 43.25 0.43

2.Japan 11.97 0.12


4.USA 5.49 0.05

5.Germany 4.68 0.05

10.India 2.04 0.02

Aircrafts, spacecrafts and parts 1.USA 438.34 48.27

2.Singapore 118.46 13.04

3.France 116.81 12.86

4.Germany 49.30 5.43

5.Canada 29.02 3.20

59.India 0.01 0.00

Ships, boats, floating structures 1.China 346.48 26.59

2.Singapore 271.45 20.83

3.Japan 160.78 12.34

4.Korea 141.73 10.88

5.Niue 129.10 9.91

31.India 0.19 0.01

changed significantly over the decade and India still primarily exports low and medium technology intensive engineer-ing goods. The share of high tech goods is slightly more than 6 percent of the overall engineering export basket. This

scenario needs to be changed for making high tech products like nuclear reactors and electrical machinery India’s calling in Indonesia.

This is where the ‘think big’ and ‘act big’ appendage will actually come to play.

Thus for a big leap, India must move up the manufacturing and technology fron-tier, with greater propensity and capacity to export products like electrical machin-ery, nuclear reactors, iron and steel, and vehicles to Indonesia.


ECOWATCHInflationRetail Inflation rose for the fourth straight month to 3.18 percent in June 2019CPI inflation was recorded at a high-er 3.18 percent in June 2019 as against 3.05 percent in May 2019, 2.99 percent (revised) in April 2019, 2.86 percent in March 2019 and 2.57 percent in February 2019 after moderating to a19-month low of 1.97 percent (revised downward) in January 2019.This rise was attributed to hardening of inflation in food and bev-erages that went up to 2.37 percent from 2.08 percent in May, 1.38 percent in April 2019 and 0.66 percent in March 2019.

Within food and beverages, inflation were higher for pulses and products, meat and fish, fruits, milk and products, prepared meals, snacks, sweets etc, spices, and cere-als and products. However, the inflation for vegetables, sugar and confectionery, oils and fats, and non-alcoholic beverages declined in the month concerned.

The inflation for housing was flat but that for miscellaneous items dropped in June 2019. Within the miscellaneous items, health and education became

dearer.Core CPI inflation (CPI excluding the

food and beverages, and fuel and light groups, as well as petrol and diesel prices for vehicles) softened once again to 4.09 percent in June 2019 from 4.23 percent in May, 4.55 percent in April, and 5.01 per-cent in March 2019. Core CPI was higher at 5.4 percent in February 2019, 5.36 per-cent in January 2019, 5.73 percent in De-cember 2018, 5.7 percent in November, and 6 percent in October 2018.

CPI inflation: June 2019Index Change m-o-m (%) Change y-o-y (%) Financial year average

2018-19 2017-18

Combined CPI 142.9 0.63 3.18 3.43 3.58

Rural (2012=100) 143.6 0.84 2.21 3.01 3.60

Urban (2012=100) 142.1 0.42 4.33 3.93 3.58

CPI: Occupation-wise

CPI for industrial workers (2001=100) 314 (May 2019) 0.64 8.65 5.45 3.08

Source: CSO, MOSPI, Labour Bureau, Govt of India

WPI-based Inflation continued to decline in June 2019Unlike CPI, the wholesale price index-based (WPI) inflation in India softened further to 23-month low of 2.02 percent in June 2019 from 2.45 percent in May, 3.07 percent in April and from 3.18 percent in March 2019 as the inflation for fuel and power group turned negative and that of manufactured products eased.

WPI and CPI inflation from April 2017

Apr-

16

May

-16

Jun-

16

Jul-1

6

Aug-

16

Sep-

16

Oct-1

6

Nov-

16

Dec-

16

Jan-

17

Feb-

17

Mar

-17

Apr-

17

May

-17

Jun-

17

Jul-1

7

Aug-

17

Sep-

17

Oct-1

7No

v-17

Dec-

17

Jan-

18

Feb-

18

Mar

-18

Apr-

18

May

-18

Jun-

18

Jul-1

8

Aug-

18Se

p-18

Oct-1

8

Nov-

18

Dec-

18

Feb-

19M

ar-1

9

Apr-

19

May

-19

Jun-

19

Jan-

19

Source: CSO, Office of the Economic Advisor, Govt. of India

WPI

3.18

2.02

CPI

6.0

5.0

4.0

3.0

2.0

1.0

0.0


WPI inflationary trend for manufactured items (product-group wise) related to engineeringThe following two charts represent the trend of WPI-based inflation for some important manufactured product groups that fall under the engineering sector.

5.00

6.00

7.00

4.00

3.00

2.00

1.00

0.00

-1.00

-2.00

-3.00

Machinery and Equipment

Motor Vichicles, Trailers and Semi-Trailers

Other Transport Equipment

Trend of WPI-based inflation for some manufactured products – II

Source: Office of the Economic Advisor, Govt of India

Apr-

16

Jun-

16

Aug-

16

Oct-1

6

Dec-

16

Feb-

17

Apr-

17

Jun-

17

Aug-

17

Oct-1

7

Dec-

17

Feb-

18

Apr-

18

Jun-

18

Aug-

18

Oct-1

8

Feb-

19

Dec-

18

Apr-

19

Jun-

19

20.00

Basic Metals

Fabricated Metal Products, Except Machinery and Equipment

Mild Steel - Semi Finished Steel

Electrical Equipment

15.00

10.00

5.00

0.00

-5.00

-10.00

-15.00

Trend of WPI-based inflation for some manufactured products – I

Apr-

16

Jun-

16

Aug-

16

Oct-1

6

Dec-

16

Feb-

17

Apr-

17

Jun-

17

Aug-

17

Oct-1

7

Dec-

17

Feb-

18

Apr-

18

Jun-

18

Aug-

18

Oct-1

8

Feb-

19

Jun-

19

Apr-

19

Dec-

18


Industrial production Industrial growth toppled in May 2019 from seven-month high in AprilIndia’s industrial production, after reg-istering year-on-year growth for 23 straight months to April 2019, dropped in May 2019. IIP for April 2019 has been revised upward to 4.3 percent from 3.4 percent of the initial estimate while IIP in May 2019 registered a lower 3.1 per-cent growth. The IIP figure for March 2019 has also been revised upward to 0.35 percent growth from 0.1 percent de-

cline. Subdued performance of manufac-turing and mining sector dragged down the overall IIP growth in the month con-cerned. Electricity was the only sector to register good growth.

Use-based analysis showed that other than consumer durables, all other seg-ments recorded y-o-y growth in May 2019. However, growth in capital goods and intermediate goods were below 1

percent. Consumer non-durables and

infrastructure/construction goods on

the other hand supported the overall IIP

growth with impressive output growth.

In terms of industries, 12 out of the 23

industry groups (as per two-digit NIC-

2008) in the manufacturing sector wit-

nessed positive y-o-y growth during May

2019.

Sector-wise industrial growth (measured by IIP): May 2019

Weight (%) Growth y-o-y (%) Cumulative (Apr-May)

2019-20 2018-19

General index 100 3.1 3.7 4.1

Mining 14.37 3.2 4.1 4.8

Manufacturing 77.63 2.5 3.2 4.2

Electricity 7.99 7.4 6.7 3.1

Primary goods 34.05 2.5 3.7 4.3

Capital goods 8.22 0.8 1.0 8.1

Intermediate goods 17.22 0.6 1.2 0.2

Infrastructure/construction goods 12.34 5.5 6.4 8.1

Consumer durables 12.84 -0.1 1.0 5.4

Consumer non-durables 15.33 7.7 6.9 2.6

Source: CSO, MOSPI, Govt of India

ECOWATCH

Inflationary trend for key manufactured products related to engineeringName of the product/group Inflationary trend

Basic metal Falling

Mild steel-semi finished steel Falling

Fabricated metal products Falling

Electrical Equipment Slightly downward

Machinery and equipment Slightly upward

Motor vehicles, trailers and semi-trailers Rising

Other transport equipment Rising sharply


Output growth in subsectors of manufacturing that fall under engineering sectorIndustry code Description of the segment Weight in IIP (%) Growth y-o-y in May 2019 Growth in Apr-May 2019-20

24 Manufacture of basic metals 12.80 7.6 8.0

25 Manufacture of fabricated metal products, except machinery and equipment

2.65 -8.7 -9.6

27 Manufacture of electrical equipment 3.00 -2.6 1.0

28 Manufacture of machinery and equipment 4.77 2.3 2.4

29 Manufacture of motor vehicles, trailers and semi-trailers 4.86 -6.2 -5.6

30 Manufacture of other transport equipment 1.78 2.0 -1.0

Source: CSO, MOSPI, Govt of India

Output growth in engineering sector as measured in IIPThe table above shows the y-o-y production growth of the subsectors of manufacturing that apparently fall under the engineering sector. During May 2019, three out of six industry groups (as per two-digit NIC-2008) recorded y-o-y decline in output as depicted in the table. On a cumulative basis during April-May 2019-20, three product groups conceded decline in output over the same period last fiscal.

Indian foreign trade: June 2019 (Merchandise)• During June 2019, merchandise ex-ports from India declined for the first time in fiscal 2019-20 on a y-o-y basis. After registering 0.64 percent and 3.93 percent growth in the first two months of this fiscal respectively, the month of June 2019 saw 9.71 percent decline in In-dia’s merchandise exports over the same month last fiscal. During the month, merchandise export was at $25.01 billion as against $27.7 billion in June 2018. In rupee terms also, merchandise exports

conceded 7.52 percent decline in the re-porting month.• Cumulative merchandise exports dur-ing April-June 2019-20 were $81.08 bil-lion, which was 1.69 percent lower than the $82.47 billion of exports recorded during the same period last fiscal. • Imports in June 2019 were $40.29 bil-lion, which was 9.06 percent lower in dol-lar terms over imports of $44.3 billion in June 2018.• Cumulative value of imports for the

period April-June 2019-20 was $127.04

billion as against $127.41 billion during

the period of April-June 2018-19, regis-

tering a negative growth of 0.29 percent.

• The trade deficit in June 2019 nar-

rowed down by 8 percent to $15.28 bil-

lion from $16.6 billion in June 2018. On

a cumulative basis, trade deficit mounted

by 2.3 percent to $45.96 billion in April-

June 2019-20 from $44.94 billion during

the same period last fiscal.

Source: CSO, EEPC Research

Apr-

17

May

-17

Jun-

17

Jul-1

7

Aug-

17

Sep-

17

Oct-1

7

Nov-

17

Dec-

17

Jan-

18

Feb-

18

Mar

-18

Apr-

18

May

-18

Jun-

18

Jul-1

8

Aug-

18

Sep-

18

Oct-1

8

Nov-

18

Dec-

18

Jan-

19

Feb-

19

Mar

-19

Apr-

19

May

-19

IIP

Manufacturing

12.0

10.0

8.0

6.0

4.0

2.0

0.0

-2.0

Trend in overall IIP and manufacturing growth from April 2017


Key features of India’s BoP during January-March of 2018-19• India’s current account deficit (CAD) at $4.6 billion (0.7 percent of GDP) in Q4 of 2018-19 narrowed from $13 billion (1.8 percent of GDP) in Q4 of 2017-18 and $17.7 billion (2.7 percent of GDP) in the preceding quarter. • The contraction of the CAD on a y-o-y basis was primarily on account of a lower

trade deficit at $35.2 billion as compared

with $41.6 billion a year ago.

• In the financial account, net foreign di-

rect investment at $6.4 billion in Q4 of

2018-19 remained at the same level as in

Q4 of 2017-18.

• Net inflow on account of external com-

mercial borrowings to India increased to

$7.2 billion in Q4 of 2018-19 from $1 bil-

lion a year ago.

• In Q4 of 2018-19, there was an accretion

of $14.2 billion to the foreign exchange

reserves (on BoP basis) as compared with

$13.2 billion in Q4 of 2017-18.

India's merchandise trade – June 2019

$ bi

llion

40

30

20

10

0

-10

-20

Source: Ministry of Commerce, Govt of India; EEPC Research

Exports Oil Imports Non-Oil Imports Trade Blance

27.7

12.7

3

25.0

1

11.0

3

31.5

8

29.2

6

-16.

60

-15.

28

Jun - 18

Jun - 19

Merchandise trade: June 2019 ($ million)June 2019 Growth m-o-m (%) Growth y-o-y (%)

June 2019 Apr-Jun 2019-20

Exports 25.01 -16.6 -9.71 -1.69

Imports 40.29 -11.2 -9.06 -0.29

Trade deficit 15.28 -0.5 -8.0 2.3

Source: Ministry of Commerce, Govt of India

Balance of payments

BoP during 2018-19 • The CAD increased to 2.1 percent of GDP in 2018-19 from 1.8 percent in 2017-18 on the back of widening of the trade deficit. • Trade deficit widened to $180.3 billion in 2018-19 from $160 billion in 2017-18.• Net FDI inflows at $30.7 billion in 2018-19 were marginally higher than $30.3 billion in 2017-18.• In 2018-19, there was a depletion of $3.3 billion of the foreign exchange reserves (on a BoP basis).

ECOWATCH


Foreign exchange rates – Indian rupee against major traded currencies, June 2019Currency/Time period USD GBP EUR JPY (=100)

% change in June 2019 -1.27 -0.75 0.81 -0.17

Direction Appreciation Appreciation Depreciation Appreciation

% Change in 2019 -1.25 -1.36 -1.78 1.20

Direction Appreciation Appreciation Appreciation Depreciation

Source: RBI reference rates

The rupee appreciated vis-à-vis the dollar in June 2019. During 2018, the rupee reached its record low of 74.5 per US dollar in the first half of October 2018, but recovered to some extent to finally end the year slightly below 70 per USD. During the first five

months of 2019, rupee remained stable at around 69-70 per US Dollar and then strengthened to enter the level of 68 per USD in June 2019 with a 1.27% appreci-ation over the month. Rupee appreciated

by 1.25 percent during 2019 till June.

Note: For real time data and statistics, please visit EEPC India website: https: //www.eepcindia.org/forex-rate.aspx-?id=none&ms=26&page=Forex-Rates

Credit growth of scheduled commercial banks(SCBs) y-o-y (%)Sector Between 26 May 2017 and 25 May 2018 Between 25 May 2018 and 24 May 2019

Gross bank credit 10.9 11.5

Non-food credit 11.1 11.4

Industry 1.4 6.4

Micro and small (mfg only) 0.2 1.1

Medium 4.1 3.0

Large 1.5 7.4

Priority sector 6.2 9.9

Micro and small enterprises 8.9 11.8

Manufacturing 0.2 1.1

Export credit -48.1 -30.9

Source: RBI

• Credit disbursal towards industry accelerated substantially in 2019 on a negative base.• Credit disbursal towards manufacturing has been improving slowly.• Export credit disbursal from foreign banks continued to be dismal.

Prevailing policy rates, ratios, and interest rates as on 25 July 2019Instruments Existing rates

Policy repo rate 5.75

Reverse repo rate 5.50

Marginal standing facility rate 6.00

Bank rate 6.00

Cash reserve ratio (CRR) 4.00

Statutory liquidity ratio (SLR) 18.75

Lending/deposit rates

Base rate 8.95-9.40

MCLR (overnight) 8.00-8.40

Savings deposit rate 3.50

Term deposit rate > 1 year 6.25-7.30

Source: RBI


1.What are considered as the building blocks for engineering materials?A. AtomB. MoleculeC. NucleonD. Proton

2. The engineering materials known as ‘plastics’ are more correctly called ...A. PolyB. PlasticsC. CopolymersD. Polymers

3. What is the amount of energy is required to fracture a given volume of material?A. Ultimate strengthB. Allowable strengthC. Modulus of elasticityD. Impact strength

4. What type of steel has a carbon as its principal hardening agent?A. Iron steelB. Carbon steelC. AlloyD. Iron carbon

5. A steel cannot qualify for the stain-less prefix until it has at least what proportion of Chromium?A. 10.5%B. 3%C. 12%D. 15%

6. What do you call the removal of zinc from brasses?A. DezincificationB. DecentraliseC. ExtractionD. Cohesion

7. What field of study encompasses the procurement and production of metals?A. MetallurgyB. AlloyC. EnergyD. Duellurgy

8. Efficiency of a machine is the ratio ofA. Power output to power inputB. Power input to power outputC. Total work done to total energyD. Total energy to total power

9. Which of the following has lowest resistance grounding on earth?A. SandB. ClayC. Surface loam soilD. Limestone

10. Which of these deals with the geom-etry of motion?A. KinematicsB. StaticsC. DynamicsD. Kinetics

11. It is a pictorial representation in solving a systemA. AnalyticalB. PolygonC. GraphicalD. Mathematical

12. What is a reference sheet for the elements that can be used to form engi-neering materials?

A. Periodic table

B. Truth table

C. Building blocks of materials

D. Structure of materials

DO YOU KNOW?

We look forward to your active participation, so send us your answers asap. The names of the first three winners will appear in our next issue. Mail your answers/correct options to: [email protected]

We have no winners for the July Quiz

1. C: Aluminium is the most abundant metal in nature in the earth’s crust, it is never found free in nature.

2 C: Karbi Anglong District, Assam is where Garampani Wildlife Sanctuary is located. It is one of the oldest sanctuaries containing hot water spring and waterfalls and is surrounded by Nambor Sanctuary housing 51 rare species of orchid.

3 C: Fully rigid design is the method of design of steel framework for greatest rigidity and economy in weight.

4 D: All of the above: Galileo was an astronomer who developed the telescope, discovered four satellites of Jupiter, and discovered that the movement of the pendulum produces a regular time measurement.

5 D: The ultraviolet rays convert skin oil into Vitamin D. So Sun exposure can bring about an improvement in health.

6 B: Euclid is the father of Geometry.

7 B: Quality Control processes involve gathering and analysing statistical information on a manufactured product to verify that it conforms to predetermined standards and specifications.

8 A: Shakuntala Devi is the person, who holds pride of place for beating computers as a mathematical wizard. She was also known as the ‘human computer’ for her ability to make incredibly swift calculations.

9 D: Design Process is an engineering method which uses a logical sequence of steps that begins with a specific problem, or perceived need, and results in a solution.

10 D: Aluminium. In Product Engineering, for aluminium the cutting speed is maximum when machining with high-speed steel tools.

11 A: Marie and Pierre Curie invented the radioactive element radium. On 20 April 1902, Marie and Pierre Curie successfully isolate radioactive radium salts from the mineral pitchblende in their laboratory in Paris.

12 B: Batch Type Production was invented by Henry Ford, which is still used in a similar form to manufacture cars today.

Answers to the previous instalment of Do You Know? appearing in IndianEngineeringExports Vol.12 Issue 4, July 2019

Export India: Unleashing India’s Engineering Exports PotentialEXPORT INDIA outlines a roadmap for Indian engineering exporters to unleash the country’s exports potential and achieve an aspirational target of US$200 billion for engineering exports by 2025, almost a threefold increase from actual exports in 2017-18.

PRICERs2,500 + GST for membersRs3,000 + GST for non-members

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‘Focus on infrastructure in UnionBudget 2019-20 will to help exports’The EEPC India Chairman, Mr Ravi Sehgal, along with senior colleagues and EEPC India officers, viewed the live telecast of Union Budget 2019-20 presented on 5 July 2019 in Parliament by the Union Finance Minister, Ms Nirmala Sitharaman, in EEPC India’s Eastern RO in Kolkata.

Among those present at the live viewing session of the Budget were Mr Arun Kumar Garodia, Vice Chairman; Mr BD Agarwal, Regional Chairman (ER); Mr G K Madhogaria, Dy Regional Chairman (ER); Mr DK Seksaria, Regional Committee Member (ER); Ms Anima Pandey, Regional Director (ER) & Director (Membership), EEPC India; and Mr Kousik Bhattacharjee, Sr Executive Officer, RO Kolkata.

Commenting on the Budget later, Mr Sehgal said that the provisions

to boost investment in key infrastructure such as roads, rails and cargo movement, would go a long way in increasing exports. As well recognised in the Economic Survey, exports are the key growth drivers of an economy. The emphasis on Make in India should strengthen India’s manufacturing capabilities and encourage value addition in exports.

The ease doing business is a laudable effort in the Budget as also the priority to high-end technology areas like commercial use of space knowhow. The government’s emphasis on MSMEs would further help exporters, particularly in the small segments, he added. (1) Mr GK Madhogaria, Dy Regional Chairman (ER); Mr Arun Kumar Garodia, Vice Chairman; Mr Ravi Sehgal, Chairman; Mr BD Agarwal, Regional Chairman (ER); and Mr DK Seksaria, Regional Committee Member (ER), at the live viewing session of the Budget. (2) A view of the gathering. (3) The session in progress.

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3rd EEPC India chapter in JamshedpurEEPC India opened its third chapter in Jamshedpur (Jharkhand) on 3 July 2019. EEPC India is on an expansion mode with the plans to open 17 chapters in 16 states across India. This year, three chapters were inaugurated in a row – Coimbatore in Tamil Nadu, Bhilai in Chhattisgarh, and now Jamshedpur in Jharkhand. The Steel City and home to the first private iron and steel company of India, is the headquarters of the East Singhbhum district of Jharkhand and rich in minerals, including iron ore, coal, manganese, bauxite, and lime. Jamshedpur is the industrial capital of Jharkhand endowed with modern industries in iron and steel, truck manufacturing, tinplate production, cement, and other small- and medium- scale industries revolving around these products, Mr BD Agarwal, Regional Chairman (ER), EEPC India, said in his address at the inaugural session. Mr Inder Kumar Agarwal was named Convenor of the Jamshedpur (Jharkhand) Chapter, EEPC India.

EEPC India is currently operating with 10 offices in eight cities and over 13,000 members. It needs to service the engineering sector, which is spread across the country. Many industry segments are located in smaller towns where engineering exporters find it difficult to avail of its services. (4) Mr BD Agarwal, Regional Chairman (ER), EEPC India, delivering the welcome address. On his right, Mr Dipan Mitra, Manager, National Stock Exchange; Ms Anima Pandey, Regional Director (ER) and Director (Membership), and Mr Inder Agarwal, Convenor, Jamshedpur (Jharkhand) Chapter, EEPC India; Ms Ranjana Mishra, Regional Deputy Director, Jharkhand Industrial Area Development Authority (JIADA), Adityapur Region; and Mr Pawan Sureka, Chairman, Functional Committee, Export Awareness (ER), EEPC India. (5) Ms Ranjana Mishra, Regional Deputy Director, JIADA, Adityapur Region lighting the inaugural lamp. (6) Mr Inder Agarwal, receiving the plaque from Mr BD Agarwal.

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EEPC India signs pact with CSIR-AMPRIon alternative material in engineeringEEPC India Technology Centre, in its endeavour to gear up its members for the 4th Industrial Revolution, organised a full-day session on usage of Alternative Materials in Engineering to make products efficient, cost-effective, and light. The Council of Scientific and Industrial Research’s Advanced Materials and Processes Research Institute (CSIR-AMPRI) – the country’s premier R&D institution of advanced materials and processes – would impart the required expertise to EEPC India members on the use of alternative materials for exportable products. On the occasion, an MoU was signed between EEPC India and CSIR-AMPRI with the purpose of educating MSMEs on Materials Science and Engineering to move up the value chain for sustainability and to ensure high quality/standards of engineering exports.

Welcoming the participants, the Mr Ravi Sehgal, Chairman, EEPC India, touched upon the significance of the MoU, which will enable

engineering exporters to benefit from eminent scientists of AMPRI to bring about improvements in their production techniques using alternative materials. Indian engineering exports have been growing by ~10 percent in recent years, reaching a historic high of $81 billion during FY 2018-19, which is over 25 percent of India’s total exports. The Department of Commerce has conferred a mandate on EEPC India to set up Technology Centres across the country for helping MSMEs with new technologies. As globally Industry 4.0 is the new buzzword. Indian MSMEs should leapfrog one generation. ‘That is where EEPC Technology Centre comes in.’ Mr Sehgal said. Dr Avanish Kumar Srivastava, Director, CSIR-AMPRI, Bhopal, said the Government has allotted 2 percent GDP for R&D and they are always provided with the required funds. It is very important foryoung Indian engineers to go for start-ups with these alternative materials and become ‘job creators’ rather than being ‘job seekers.’

The rise in Indian engineering exports from $10 million in 1955 to $81 billion over a period of six decades reflects the amount of hard work

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done by EEPC India and the government and Industry cohesively. This work needs to continue to meet the aspirational target of $200 billion by 2025. (7) Dr SKS Rathore, Senior Principal Scientist, CSIR-AMPRI, and Mr Adhip Mitra, Additional Executive Director & Secretary, EEPC India, exchanging documents after signing the MoU on behalf of their respective organisations in the presence of Mr Mahesh K Desai, Sr Vice Chairman, EEPC India; Dr Avanish Kumar Srivastava, Director, CSIR-AMPRI, Bhopal; Mr Bhaskar Sarkar, Advisor, EEPC India Technology Centre; Mr Ravi Sehgal, Chairman, Mr Arun Kumar Garodia, Vice Chairman, Mr BD Agarwal, Regional Chairman (ER), and Mr GK Madhogaria, Dy Regional Chairman (ER), EEPC India. (8) The dignitaries displaying the signed MoU. (9) Seminar on Alternative Materials in Engineering in progress. (10) Mr Bhaskar Sarkar, Mr Ravi Sehgal, Dr Avanish Kumar Srivastava, and Dr SKS Rathore, at the Press Conference following the signing of the MoU. (11) Dr Avanish Kumar Srivastava responding to the press.

Steel price issue for MSME exportersEEPC India held a meeting with the Indian Steel Association (ISA) in its Head Office in Kolkata for initial discussions on the steel price issue for MSME exporters. The meeting, chaired by Mr Ravi Sehgal, Chairman, EEPC India, was attended by Dr Bhaskar Chatterjee, Secretary General, and Mr Ravindra Bhan, Director, Regulatory & Policy, ISA; and Mr PK Shah, Former Chairman, Mr Arun Garodia, Vice Chairman, Mr BD Aggarwal, Regional Chairman, EEPC India along with EEPC India Secretariat members. The meeting also discussed the issue of identifying embedded taxes which are not being refunded to exporters.

(12) Mr Ravinder Bhan, Director, Regulatory & Policy, and Dr Bhaskar Chatterjee, Secretary General & Exec Head, ISA; Mr BD Agarwal, Regional Chairman (ER), Mr Ravi Sehgal, Chairman, Mr PK Shah, Former Chairman, Mr Arun Kumar Garodia, Vice Chairman, Ms Anima Pandey, Regional Director (ER) & Director (Membership), and Mr Adhip Mitra, Additional Executive Director & Secretary, EEPC India, in the meeting.

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Northern Region Awards presentedEEPC India’s 49th Northern Region Awards were presented at a colourful ceremony in Shimla. The Himachal Pradesh Chief Minister, Mr Jai Ram Thakur, was the Chief Guest at the function. In her welcome address, Ms Kamna Raj Aggarwalla, Regional Chairperson (NR), said, ‘I ... wholeheartedly congratulate this year’s awardees for their contribution in raising the brand value of Indian engineering before the world through their exports.’

The government has identified exports as a key area to attain the goal of India’s transformation into a $5 trillion economy by 2025. Mr Piyush Goyal, Minister of Commerce and Industry, has ‘assured EEPC India that [the government] would make all efforts to ensure that engineering goods export double in the next five years and reach $200 billion by 2030,’ she added. (13) The National Anthem plays at the Awards ceremony: Mr Rakesh Suraj, Regional Director (NR), Mr Pradeep Kumar Aggarwal,

Dy Regional Chairman (NR), and Mr Ravi Sehgal, Chairman, EEPC India; Mr Jai Ram Thakur, Himachal Pradesh Chief Minister; Ms Kamna Raj Aggarwalla, Regional Chairperson (NR), Mr Gunit Rana, Dy Regional Chairman (NR), and Mr Suranjan Gupta, Executive Director, EEPC India. (14) Ms Kamna Raj Aggarwalla, Regional Chairperson (NR) welcoming the Chief Guest, Mr Jai Ram Thakur, Himachal Pradesh, Chief Minister. (15) The Chief Guest lighting the inaugural lamp. (16) Mr Jai Ram Thakur, Himachal Pradesh Chief Minister, delivering the keynote address (17) The Chief Guest, Mr Jai Ram Thakur, Himachal Pradesh Chief Minister, presenting the awards. (18) Ms Rita Gambhir, Sr Asst, EEPC India, being felicitated by Ms Kamna Raj Aggarwalla, Regional Chairperson (NR), EEPC India, for her excellent work especially in organising the award function, as the dignitaries applaud. Also present are Mr GP Malhotra, Sr Asst Director, and Mr Ashutosh Srivastava, Sr Executive Officer, EEPC India.

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Focus on AfricaThe increasing importance of African countries as major destinations for cooperation and trade has led EEPC India to take several promotional initiatives to raise awareness among its members through buyer-seller meets, participation in expos, meetings, seminars, and other interactive platforms.

BotswanaEEPC India attended a meeting at the Botswana High Commission inNew Delhi to discuss EEPC India’s role in organising the India Pavilionat Global Expo Botswana 2019 scheduled to be held over 6-8 August2019. (19) Mr CL Bagora, Sr Asst Director, EEPC India, Mr Herold Luke, Head of Chancery, Botswana High Commission, a High Commission official, and Mr Nishikant Jumde, Sr Joint Director, EEPC India at the meeting.

South AfricaA five-member delegation from South Africa led by the Department Trade and Industry (DTI), Republic of South Africa, visited EEPC India’s

office in Mumbai. Ms Valentine, Export Promotions, Department of Trade & Industry, South Africa (delegation leader); Mr Max Mabuti, Managing Director, Flat Foot; Mr Terry Kumira, CEO,Tamuda Engineering, Mr Jarrod, Business Development (HOD), Power Plant Electrical Technologies; and Mr Silas, Pr. Engineer, Samo Engineering. (20) Mr KL Dhingra, Regional Chairman (WR), EEPC India, chairing a meeting with the visiting South African delegation. The delegation leader, Ms Valentine, is second from left.

UgandaA delegation from Uganda, in India to identify exporters of food processing machineries, visited the EEPC India office in Ahmedabad accompanied by an Indian distributor. (21) (From right) Mr Buyonje Edward Timothy, Managing Director, Timu Timo Bakery & Confectionery, Kampala, Mr Sudhakaran Nair, Dy Director, SRO Ahmedabad, EEPC India, Mr Kabonge Brian, Operations Manager, Brao’z General Enterprises, Mr Harsh Shah, Civic Traders, Ahmedabad, and Mr Abhijit Gaikwad, Jr Assistant, EEPC India at the SRO Ahmedabad.

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Opportunities in Overseas MarketsEEPC India supported by ICICI Bank, organised a Session on Business Opportunities in Overseas Market in Hyderabad. The session was addressed by Mr Siva Prasad Reddy, State Coordinator (Telangana & Andhra Pradesh), EEPC India, Mr Rishikesh Dubey, Regional Head (Sales), ICICI Bank, Hyderabad, and Mr CH Nadiger, Regional Director, EEPC India (SR), and attended by 40 participants. Mr CH Nadiger gave a detailed presentation on export opportunities in overseas markets with a focus on doing business with Vietnam. He said that before venturing into any market – domestic or international – every business organisation should do in- depth research on market conditions, demand for the product, demographics, and above all, adaptability of the product to the market. To find an international buyer, he suggested that exporters participate in trade fairs and exhibitions organised by EEPC India, approach consultants and commission agents, make personal visits to the target country, attend buyer-seller meets, interact with foreign business delegates visiting India, and tap all personal contacts.

(22) Mr Siva Prasad Reddy, State Coordinator (Telangana & Andhra Pradesh), EEPC India, welcoming Mr Rishikesh Dubey, Regional Head (Sales), ICICI Bank, Hyderabad. (23) The session in progress.

Export awareness for MSME supportEEPC India WR Office together with MSME DI, Indore, DGFT, AIMP, ICMA, Indian Plastpack Forum and Pithampur Aydhogik Sanghthan organised an Export Awareness Seminar for MSME Support andNiryat Bandhu Scheme, in Indore. (24) Mr Nilesh Trivedi, Asst Director, MSME-DI, Indore; Mr Alok Dave, President, AIMP (Association of Industries, MP); Dr Rajat Srivastava, Regional Director & Director (Marketing & Sales), EEPC India; Mr Devender Singh, ITS, Dy DGFT, Bhopal; Mr S Suresh Babuji, Director, MSME-DI; Mr V Rajesh Gandhi, President, Indian Plastpack Forum and Mr Sunil Gureja, Jt Secretary, ICMA (Indian Confectionery Manufacturer Association) (25) The audience.

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Procedures for exportsEEPC India (SR) organised an Awareness Seminar on Opportunities and Procedures for Exports in Chennai in association with TIEMA. (26) The panellists: Mr S Nargunam, Committee Member, TIEMA; Mr K Srinivasan, IRS (Retd), GST; Mr Satya Rajasekhar, Asst DGFT, Chennai; Mr G Dhiraviyam, Director, TIEMA; Mr S Jamsuanpau, Branch Manager, ECGC Ltd; and Mr CH Nadiger, Regional Director (SR), EEPC India.

Doing business with VietnamEEPC India, together with Federal Bank, organised a Seminar on International Trade with focus on Doing Business with Vietnam, in Chennai. Mr Akshay Balasubramani, Federal Bank, gave a presentation on Trade Product Offering; Mr CH Nadiger, Regional Director (SR), EEPC India, discussed exports opportunities at EEPC India events worldwide with focus on Vietnam; Mr V Lakshmanan, Vice President,

Federal Bank, spoke on opportunities and challenges in international trade; and Mr Srinivas, Dy Vice President, Federal Bank, gave a presentation on international trade sanctions and EDPMS. (27) Mr Akshay Balasubramani, Federal Bank, addressing the participants. On his right, Mr CH Nadiger, Regional Director (SR), EEPC India; and Mr V Lakshmanan, Vice President, Federal Bank. (28) Mr Srinivas, Dy Vice President, Federal Bank (centre) is among the audience.

Finance and FTP for MSMEsEEPC India in association with Bhiwadi Chamber of Commerce& Industry (BCCI) organised an interactive Session on ExportAwareness, Finance and FTP for MSMEs, Bhiwadi. Yes Bank andReliance SEZ also participated in the interactive session, attendedby around 85 entrepreneurs. The BCCI represents the industries andtrade groups of the NCR industrial areas. (29) Mr Sanjay Baiswal, Regional Committee Member, EEPC (NR) and MD, Andees Consulting,

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presenting highlights of the FTP. Other speakers at the session (from left) Mr Dheeraj Batra, Regional Head, Yes Bank; Mr GP Malhotra, Sr Asst Director, EEPC India (NR), Mr RN Singh, President, BCCI; Mr Ramanathan Jaganathan, Reliance SEZ; and Mr KR Sharma, General Secretary, BCCI (not in picture).

Engineering statistics for Six SigmaEEPC India Technology Centre, Bengaluru conducted the first batch of one-day interactive training session on Engineering Statistics for

Six Sigma Projects for practising engineers nominated by MSMEs. Six sigma, a widely used methodology across sectors for process improvement, defect reduction, and variation reduction, has proven its efficacy in huge cost savings, productivity improvement, increased customer satisfaction, and repeated business over decades.

Being a systematic approach to problem solving, the use of core statistical tools has brought an important role of statistical software’s capability for accurate and quick results, but end users are totally

dependent on them as they lack of necessary technical knowledge. This has led to many MSMEs disengaging from six sigma projects.

Process owners, operational specialists, quality managers have a significant role in each industry on the quality of services and or products delivered to customers along with necessary stakeholders in the value chain. This along with efficient knowledge transfer in the areas of data analysis, statistical tools and techniques, and methodologies is essential for practising engineers, new joiners, and graduates.

The one-day interactive training session, aimed at improving basic knowledge on descriptive, inferential statistics, PPM calculations, normal distribution, normalisation and hypothesis testing, will help engineers to have a strong foundation of the statistical tools for better application of gained knowledge through statistical software. (30) Mr D Karthikeyan, Asst Head, EEPC India Technology Centre, Bengaluru, giving a presentation at the session on Statistical Concepts required for MSMEs to identify process improvement projects through Six Sigma Methodologies and Tools.

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Eastern Regional Committee meetingThe Regional Committee Meeting of EEPC India, Eastern Region, was held in the EEPC India (ER) office in Kolkata. (31) Mr BD Agarwal, Regional Chairman (ER), EEPC India, giving the welcome address. On his left Mr Ravi Sehgal, Chairman, and Mr LP Gupta, Dy Regional Chairman (ER), EEPC India; on his right Mr GK Madhogaria, Dy Regional Chairman (ER), Mr Adhip Mitra, Additional Executive Director & Secretary, and Ms Anima Pandey, Regional Director (ER) & Director (Membership), EEPC India. (32) Members at the meeting.

Builders’ hardware exporters meetEEPC India organised a seminar with the Builders Hardware ExportersAssociation, Aligarh on bilateral trade opportunities between Indiaand Kazakhstan and to discuss the benefits of participation inKAZBUILD, EEPC India’s event in Kazakhstan scheduled to be heldover 4-6 September 2019. Mr GP Malhotra, Sr Asst Director, and

Mr Sanjay Singh, Executive Officer, gave presentations on KAZBUILD. Mr Ramesh Chand Singhal, President, BHEA, and Mr RK Chatruvedi spoke about the industry strength and export market for Aligarh exportersand their difficulties. (33) Mr Sanjay Singh and Mr GP Malhotra in the meeting.

EEPC India Panel-16 meetingEEPC India’s Steel Structure including Transmission Line Tower Panel (P-16) held a meeting in Kolkata. (34) Mr Arun Kumar Garodia, Vice Chairman and Panel-16 Convenor, EEPC India, addressing the meeting. Ms Anima Pandey, Regional Director (ER) & Director (Membership), EEPC India, on his left. highlights of the FTP. Other speakers at the session (from left) Mr Dheeraj

Certification course in Foreign TradeEEPC India (WR) has been conducting a series of Certification courses

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in Foreign Trade Module: International Marketing, in its Mumbaioffice. (35) Dr Rajat Srivastava, Regional Director (WR) & Director (Marketing & Sales), EEPC India, presenting certificatesto one batch of successful candidates. (36) Prof. Arvind Khedkar, Faculty, imparting training to a new batch.

New members’ meetEEPC India SRO, Ahmedabad organised a meeting of new members in its office to apprise them of EEPC India’s range of activities, the various benefits/incentives/ subsidies provided by EEPC India to itsmembers, and the forthcoming international events during 2019 20. (37) Mr Shafi Maniar, Working Committee Member, SRO Ahmedabad, EEPC India, interacting with the new members. Mr Sudhakaran Nair, Dy Director, SRO Ahmedabad, EEPC India, is also present.

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CIM’s Review Meeting on Export CreditEEPC India attended a Review Meeting on Export Credit with Mr Piyush Goyal, Union Minister for Commerce & Industry, in Mumbai. Representatives of RBI, PSU Banks, ECGC, Exim Bank, FIEO, and others EPCs were also present. (38) Mr Aman Chadha and Mr PK Shah, Former Chairmen, and Mr Ravi Sehgal, Chairman, EEPC India attending the review meeting. (39) Mr PK Shah, Mr Aman Chadha, and Mr Ravi Sehgal interacting with Mr Piyush Goyal, Union Minister for Commerce & Industry.

International MSME Day 2019EEPC The Ministry of MSME, Government of India, organised a forum on Indian MSMEs, Global Aspirations on International MSME Day 2019 in New Delhi. (40) Mr. Suranjan Gupta, Executive Director, EEPC India, speaking at the forum. Ms Alka Arora, Joint Secretary, Ministry of MSME, is on his left.

International Opportunities for MSMEsEEPC India participated in the state level seminar on International Opportunities for MSMEs organised by the Government of Maharashtra on the occasion of the State awards ceremony, at the World Trade Centre, Mumbai. (41) Mr K L Dhingra, Regional Chairman (WR), EEPC India, speaking at the MSME panel discussion at the World Trade Centre, Mumbai. (42) The speakers in the panel: Dr Harshdeep Kamble, Development Commissioner (Industries Department), Government of Maharashtra; Mr KL Dhingra, Regional Chairman (WR), EEPC India; Mr Satish Gavai, Additional Chief Secretary (Industries), Dept of Industries, Government of Maharashtra; Dr P Anbalagan, Joint CEO, MIDC (Maharashtra Industrial Development Corporation); Mr Amar Banerjee, Head – Technology Transfer, BAARC; and Mr Ajay Thakur, CEO, SME Exchange, Mumbai.

EEPC India wins MICE awardEEPC India won the Top Ten Exhibitor Promoter Trade Associations

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Awards under the Outstanding Association Awards 2018-19 category at the Mice Conference Expo and Awards 2019 powered by Mice Affairs Magazine. The Ambassador of Vietnam to India, Nepal & Bhutan Mr Pham Sanh Chau, presented the awards at a ceremony in New Delhi. This award was presented to 10 associations, EPCs including HEPC (Handloom Export Promotion Council), and FIEO. (43) Mr Gurvinder Singh, Director (Exhibitions), EEPC India receiving the Top Ten Exhibitor Promoter Trade Associations Award on behalf of EEPC India from Mr Pham Sanh Chau, Ambassador of Vietnam to India, Nepal & Bhutan.

Honour for Rajat Srivastava(44) Dr Rajat Srivastava, Regional Director (WR) & Director (Marketing& Sales), EEPC India, receiving the 101 Fabulous Quality Leaders in the World award conferred by the World Quality Congress, a not-for-profit organisation.

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HO (Cell)Suranjan GuptaExecutive DirectorEEPC IndiaVandhna (4th Floor)11 Tolstoy Marg, New Delhi 110 001Tel: 91-11-23353353, 23711124/25Fax: 91-11-23310920e-mail: [email protected]

REGISTERED & HEAD OFFICEAdhip MitraAdditional Executive Director & SecretaryEEPC IndiaVanijya Bhavan (1st Floor)International Trade Facilitation Centre1/1 Wood StreetKolkata 700 016Tel: 91-33-22890651/52/53Fax: 91-33-22890654e-mail: [email protected]

REGIONAL OFFICESChennaiEEPC IndiaGreams Dugar (3rd Floor)149 Greams Road, Chennai 600 006Tel: 91-44-28295501/5502 Fax: 91-44-28290495e-mail: [email protected]

KolkataEEPC IndiaVanijya Bhavan (2nd Floor)International Trade Facilitation Centre1/1 Wood Street, Kolkata 700 016Tel: 91-33-22890673/74 Fax: 91-33-22890687e-mail: [email protected]

MumbaiEEPC IndiaB-202 & 220, Aurus Chambers Annex "B", 2nd Floor (behind Mahindra Tower)S.S. Amrutwar Marg, Worli, Mumbai 400 013Tel: 91-22-42125555 Fax: 91-22-42125556e-mail: [email protected]

New DelhiEEPC IndiaFlat No. 10 P, Q, N, 10th Floor, DCM Building16 Barakhamba Road, New Delhi 110 001Tel: 91-11-23314171/74 Fax: 91-11-23317795e-mail: [email protected]

BengaluruEEPC IndiaEmbassy Square, Flat 103148 Infantry RoadBengaluru 560 001Tel: 91-80-22261396 / 8669Fax: 91-80-22266914e-mail: [email protected]

HyderabadEEPC India'Soham Mansion' (1st Floor)No. 5-4-187/3 & 4/4, M. G. RoadSecunderabad 500 003Tel: 91-40-27536704 Telefax: 91-40-27536705e-mail: [email protected]

JalandharEEPC IndiaPlot Comm. 1, Focal PointJalandhar 144 012Tel: 91-181-2602264Fax: 91-181-2601124e-mail: [email protected]

AhmedabadEEPC IndiaTF-313/A (3rd Floor) ATMA House, Ashram RoadAhmedabad 380 009Tel: 91-9725663534/79-26588720e-mail: [email protected]

CIN: U51900WB1955NPL022644

EEPC India officesCHAIRMANRavi SehgalTel: 91-33-22903284 / 22878229Fax: 91-33-22879938e-mail: [email protected]@carnationindustries.com

SR VICE CHAIRMANMahesh K DesaiTel: 91-40-27617098 / 5131 Fax: 91-40-27614376e-mail: [email protected]

[email protected]

VICE CHAIRMANArun Kumar GarodiaTel: 91-33-40052700 Fax: 91-33-40052800e-mail: [email protected], [email protected]

REGIONAL CHAIRPERSONSEastern RegionB D AgarwalTel: 91-33-22487249 Fax: 91-33-22481879e-mail: [email protected], [email protected]

Northern RegionKamna Raj Aggarwalla Tel: 91-181-2642001/02/03/04 Fax: 91-181-2642005 e-mail: [email protected], [email protected]

Southern RegionK S Mani Tel: 91-491-253-5669, 253-9870, 253-6017 e-mail: [email protected]; [email protected]

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INDEE Bangladesh 202022–24 January 2020, Dhaka

India’s largest overseas engineering expo in Bangladesh again

EEPC India’s premier overseas engineering exhibition will be in Dhaka for the second time.

After the first edition in 2017, exports from India to Bangladesh surged by 26 percent.

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EEPC INDIA CALENDAR OF EVENTS

Name of the Event Place Date

India Pavilion in Nigeria Pharma Manufacturers Expo 2019 Nigeria 28 - 29 August 2019

India Pavilion in Asian Utility Week 2019 Malaysia 3 - 4 September 2019

India Pavilion in Kaz Build 2019 Kazakhstan 4 - 6 Septmber, 2019

India Pavilion at Lanka Pak Sri Lanka 11 - 13 Septmber, 2019

India Pavilion in International Fastener Expo Las Vegas, USA 17 - 19 Septmber, 2019

Expo in Edifica, Chile and BSM in Peru Chile + Peru 2 - 5 October, 2019

India Pavilion in MSV Brno 2019 Czech Republic 7 - 11 October, 2019

India Pavilion in Metalex 2019 Vietnam 10 - 12 October, 2019

K Fair 2019 Dusseldorf, Germany 16 - 23 October, 2019

Expo in Ferret Expo Guatemala and BSM in Honduras Guatemala + Honduras 7 - 10 November, 2019

India Pavilion at MACTECH Cairo, Egypt 13 - 16 November, 2019

India Pavilion in BIG FIVE 2019 Exhibition Dubai, UAE 25 - 28 November, 2019

India Pavilion in Nepal Medical Show 2019 Nepal 13 - 15 December, 2019

India Engineering Exhibition (INDEE) Dhaka, Bangladesh 22 - 24 January, 2020

RBSM at Imtex & Tooltech 2020 Bengaluru, India 23 - 28 January, 2020

India Pavilion in Arab Health 2020 Dubai, UAE 27 - 30 January, 2020

India Pavilion at ITME Africa 2020, Ethiopia Addis Ababa, Ethiopia 14 - 16 February, 2020

India Pavilion in Asia Pharma 2020 Dhaka, Bangladesh 28 February - 1 March 2020

India pavilion in Middle East Electricity 2020 Dubai, UAE 3 - 5 March, 2020

India Pavilion in International Hardware Fair (EISENWARENMESSE, Cologne) Cologne, Germany 1 - 4 March, 2020

International Home Houseware Show 2020 Chicago, United States 14 -17 March, 2020

India Pavilion in MCE Mostra 2020 Italy 17 - 20 March, 2020

International Engineering Sourcing Show (IESS - IX) India 4 - 6 March, 2020

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Date of publication: 1 AUGUST 2019, R.N.I. No: WBENG/2008/24569 Postal Registration No. KOL RMS/397/2018-2020

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CIRCULAR ECONOMY MARKET INDONESIA … · 2019-09-10 · 1 IndianEngineeringExports Rs150 ie 2 I Magazine of EEPC INDIA (formerly Engineering Export Promotion Council) engineering