In the world of export-import, each shipment counts. And you cannot afford to make any “uninformed investment”. So, if you have any doubt or a question, ask us. Our team of experts at The Dollar Business Intelligence Unit will be happy to answer your queries. Your question(s), if approved, will also be published on www.thedollarbusiness.com, and/or in the forthcoming issue of The Dollar Business

I want to import jute gunny bags (A-twill and B-twill bags) from Bangladesh, under HS Code 63051040, though Mundra Port in Gujarat. Can you explain the duty applicable on the products? (Dhaval Chaudhari, Owner, Farmkart Foods, Himatnagar, Gujarat, [email protected], +91-9427861XXX)

Dear Dhaval: We assume you are talking about the import of jute hessian bags, popularly known as jute gunny bags and jute sacking bags that fall under the HS Codes: 63051030 and 63051040, respectively. Interestingly, Bangladesh is the largest source of jute gunny bags for India. In fact, in FY2015 Bangladesh was the sole supplier of gunny bags to India and in FY2016 Bangladesh and Nepal were the main suppliers. Imports of jute gunny bags into India though have been declining over the last few years. In FY2016 India imported $1.95 million worth of gunny bags as against $2.91 million in FY2015, a decline of 32.89%.

There is a Basic Customs Duty (BCD) and Preferential Notification Duty of 10% each applicable on this item. Over and above these, there is an Education and Higher education Cess of 3%, a Countervailing Duty (CVD) of 12.5% and an additional cess of 1%. The total duty suffered on this item is 25.596% in normal scenarios. However, the government on January 5, 2017 imposed anti-dumping duties on imports of jute gunny bags (hessian fabric and sacking bags) from Bangladesh and Nepal, up to an amount of $351.72 per MT for a period of five years, making imports from these countries expensive. In case our assumptions about intended export product isn’t exact, please write to us.

Response by: Steven Philip Warner President (VMPL) & Editor-in-Chief, The Dollar Business

I am from Kashmir and I want to get into the business of manufacturing and exporting carpets. I specifically want to look at machine-made carpets, but I have not been able to find anyone who can help me with information regarding machine-made carpets. I want to know how much capital will be required to set up a small scale machine-made carpet factory? Is there a large enough market for machine-made carpets to make my business viable? I will be glad if you can help me. (Ilyas, CEO, Dar & Co., [email protected], +91-9796224XXX)

Dear Ilyas: We are glad to know that you want to get into the business of carpet exports. However, machine-made carpet manufacturing is a highly capital intensive business and will be difficult to operationalise in a small scale. It would be wise to not get into the machine-made carpet business without prior experience in this segment. I will advise you to enter the carpet business with hand-tufted woollen rugs. These rugs are part handmade and part machine-made, requires a small amount of investment, can be produced at a rapid pace and has good market acceptance.

Response by: Mahavir Pratap Sharma Chairman, Carpet Export Promotion Council

We have a trading company and are planning to import aluminum wire scrap from China. What necessary steps do you suggest we take to avoid any fraudulent activity on the part of the seller? We are buying just one container load and this is our first order and yet the seller doesn’t want to give any bank guarantee. They have invited us to inspect the goods in their warehouse. Are there any instances of a seller cheating even after the goods have been loaded for transportation? Please guide us as to the necessary precautions that we must take during the process of dealing with sellers in foreign countries. (Niraj Solanki, Manager, Tirthankar Engineering Works Pvt. Ltd., [email protected], +91-9920348XXX)

Dear Neeraj: Import of aluminum wire scrap is free with MFN basic customs tariff of 5%. However, since you are importing the item for the first time from a new supplier, you need to do your due diligence particularly when the buyer is not willing to work against a bank guarantee. It is better that you get the material inspected in China before the seller supplies it. You may want to use your own transporter/logistic company for transporting the material from China to India. It would be advisable to have a thorough cargo and marine insurance cover to safeguard the material during transit. Alternatively, you can also identify some bonded warehouses in India that can supply you the small quantity you require, at near international prices. These bonded warehouses, at times, import large quantities to work on economies of scale and get better prices as compared to the price you will be able to negotiate for the small amount that will be imported by you. When you require large volumes you can go for direct import.

Response by: Ajay Sahai Director General & CEO, Federation of Indian Exports Organisation (FIEO)

I am a manufacturer of soapstone powder and would like to get into its exports. Can you tell me the volume of exports from India and the major importing countries? Also, if you can explain the duty structure, which I must bear while shipping to the customer’s destination, it will help me decide the price I will offer the customer. And since there are many categories of soapstone powder, can you suggest a link or website that can help me in this regard? (Gajraj, Marketing Manager, G. S. Enterprises, Hyderabad, Telangana, [email protected])

Dear Gajraj: We assume that you want to export soapstone powder, otherwise known as Natural Steatite (crushed or powdered) that falls under the HS Code: 252620. India exported $32.47 million worth of soapstone powder in FY2016 and exports have grown by 10.87% over FY2015. This year we seem to be doing even better, having exported $29.87 million in the April 2016-January 2017 period. Nations that import a significant amount of soapstone powder from India include Indonesia, Thailand, UAE and Spain, with Indonesia taking the top spot. Exports to Austria too have been impressive this year. There are no duties on soapstone powder while exporting from India and usually the importer bears the customs duty in the destination country. So, you should not be worried about setting the price based on the destination country.

More of such pure, researched data is available to members of The Dollar Business CONNECT Programme. (You can read more on CONNECT on https://in.thedollarbusiness.com/memberships). Besides detailed Market Access and Potential Identification System (MAPS+) report, TDB CONNECT Programme members get access to unique features that ensure a more lucrative business beyond boundaries. In case our assumptions about intended export product isn’t exact, please write to us. The Dollar Business Intelligence Unit would like to hear from you.

Response by: Manish K. Pandey Editor, The Dollar Business

I want to become an exporter? How do I start? (Basith Ahamed, +91-9994917XXX,  [email protected])

Dear Basith: We are happy to hear of your decision to head into the world of foreign trade. Well, to start an export-import business, you first need to obtain an Importer-Exporter Code (IEC) from the DGFT. DGFT only accepts online applications for IEC issuance or modification and requires only three documents: (i) PAN; (ii) Cancelled cheque bearing entity’s pre-printed name or Bank Certificate; and (iii) Digital Photograph (3X3 cm). All you need to ensure is that details filled in the application should match with details in the uploaded documents. Having said that, an online application for IEC, however, can only be made using Digital Signature Certificate (DSC; Class II type). You can type the following URL in your browser – www.thedollarbusiness.com/memberships and subscribe to TDB GROW Programme. From applying for your IEC, DSC and assisting you with advanced, actionable, and useful analytics derived from impeccable and priceless research on exports/imports of the product of your choice from The Dollar Business Intelligence Unit, a dedicated team at TDB will do the hard work for you.

Response by: Dr. A. K. Sengupta Chief Consulting Editor, The Dollar Business