Special Economic Zone now operational at Nhava Sheva AND MORE…
A maritime news and analysis weekly, to help you make informed decisions in the weeks ahead.
Issue #161: 05 Aug, 2020
The Commerce Ministry is working towards an import monitoring system to track four classes of goods coming from China — engineering goods, electronic equipment, railway and auto parts. It may be noted that all the items on which India is considering import monitoring, account for up to 50 percent of imports from China and can be largely seen as a non-tariff barrier imposed by India on Chinese imports.
Shipwaves would like to advise all customers that with the monitoring mechanism in place, these imports will have to undergo a strict advance notice period and will be obliged to pay a fee. Therefore, it is advisable to plan import requirements from countries other than China.
The Commerce ministry has blocked the online system for exporters to avail tax incentives under the MEIS scheme from July 23 as the department of revenue (DoR) decided to limit the benefits under the scheme at Rs 9,000 crore for April-December 2020.
Shipwaves would like to advise all customers that according to an office memorandum of the Directorate General of Foreign Trade (DGFT), the Department of Revenue in May 2020 had conveyed that it may not be feasible to exceed MEIS allocation beyond Rs 9,000 crore for 2020–21 (up to December 2020). A request has been sent for reconsideration. However, the benefits will remain suspended till the change in policy.
In a major setback to many exporters, the Gujarat court said that the GST levied on the captive units of multinationals that supply services to other companies outside India is constitutional. This would mean that these entities will have to cough up 18% additional GST like any other domestic companies on such services provided by them to companies based outside India.
Shipwaves would like to advise all exporters to relook into their services to comply to this change. The High Court, however, asked the revenue department to consider the representations by the petitioners in this regard.
Indian rice exports slow as coronavirus disrupts supply chain: trade
India’s rice exporters are struggling to fulfil orders due to limited availability of containers and workers at mills and the biggest handling port on the east coast after novel coronavirus cases jumped in the region, industry officials told. Slowing shipments from the world’s biggest rice exporter could allow rivals like Thailand and Vietnam to raise supplies in the short term, and also carries the potential to push up global prices.
SOPA seeks restoration of export subsidy, increased import duty on edible oil
Ahead of an expected bumper crop season, the Soyabean Processors Association of India (SOPA) has asked for immediate restoration of the 5 per cent export subsidy for soyameal. In a letter to Union minister of Commerce and Industry Piyush Goyal, SOPA — the premier association of soyabean processors in the country — has also asked for restrictions on import of edible oil in the upcoming season. SOPA has, however, expressed concern about the stoppage of online registration of Merchandise Export from India Scheme (MEIS) claims by the Director General of Foreign Trade (DGFT) on its portal from April this year. In a letter written on July 28, Davish Jain, chairman of SOPA, has brought the issue to the attention of Goyal. The letter pointed out that there was no written communication or notice by the DGFT regarding the withdrawal or stoppage of the subsidy, and they felt it was a temporary measure due to non-receipt of funds from the Finance Ministry. Jain pointed out that international contracts are normally done three to five months in advance, and exports completed till date have already taken into account the MEIS incentive of 5 per cent. Suspension of the subsidy would stop all future exports of soya meal from India, with processors losing the market they have made inroads into after considerable efforts, stated Jain.
The First Reefer Container dispatched from Calicut to Dubai via Cochin Port
The first Consignment of Vegetable Cargoes by Reefer Container had dispatched from Calicut to Dubai via Cochin Port. Since lockdown, many Exporters had been struggling to dispatch their more perishable Vegetables Cargo by Air since Air charges had been growing steeply which an Exporter couldn’t meet resulting their loss of Export order from Middle Eastern Countries like UAE, Qatar, Saudi Arabia etc, and Kerala bringing a huge Forex to State exchequer. Airlines are charging ₹ 110/- per Kg, apart from other Charges like waybill, Sundry, Misc and Ground handling Etc. Now Multiple exporters combined collectively had an MOU with Maersk and Evergreen by chartering Twelve 40 foot Container with an average weight of 18+ MT with non-perishable Vegetables proceeded by Road to Cochin to stuff in Vessels routed to Dubai. Clearance has done by Qubes, Ernakulam. This is an eye opener to Kerala Maritime Board to start the Vessel movement from Beypore by providing Multimodal operation to Exporters’ warehouses, stuffing of Cargo to Vessel and transshipment to Cochin to Mother Vessel for Dubai/Qatar and Muscat. It is understood that many vessels like Great Sea Vembanad and TransAsia are willing for operation provided they are demanding for a Government based incentive scheme till a regular outward supply or Return cargo then only viable for operation.
Shipping Ministry waives off waterway usage charges to promote inland waterways
The shipping ministry said it has waived off waterway usage charges in a bid to promote inland waterways as a cheaper mode of transport. Water usage charge was applicable on use of all the national waterways by vessels, and the waiver, applicable immediately, will remain in effect for a period of three years. “The decision of waiving waterway charges will attract the industries to use the national waterways for their logistical needs,” Shipping minister Mansukh Mandaviya was quoted as saying in a statement. Presently, Inland Waterways Authority of India (IWAI) levies waterway usage charges at a rate of Rs 0.02 per gross registered tonnage (GRT) per kilometer for plying of Inland cargo vessels and Rs. 0.05 per gross registered tonnage (GRT) per kilometer for plying of Cruise vessels on national waterways.
Special Economic Zone now operational at Nhava Sheva
The Special Economic Zone (SEZ) at Jawaharlal Nehru Port, also known as Nhava Sheva, is now operational, as the hub at Navi Mumbai looks to boost exports by enabling port-led industrialisation. Five units have started construction activities, while two of them are operational at the SEZ, which is situated on 277 ha of free hold land owned by the port trust. The two units where activities are underway comprise OWS LLP and Krish Food Industry (India), while three more companies are expected to commence construction activities soon. Sanjay Sethi, IAS chairman, Jawaharlal Nehru Port Trust (JNPT), stated: “JNPT is confident of attracting leading global companies for making India a manufacturing hub as the infrastructure development underway in JNPT SEZ is as per the international benchmark. “The potential units investment and the employment generation will give a boost to the entire eco-system around JNPT region.” Until now, 19 micro, small and medium enterprises (MSMEs) and one free trade warehousing zone (FTWZ) co-developer have been allotted plots in the SEZ. Once fully occupied, the zone is expected to generated Rs 4,000 crores (US$530m) of investments.
CCI approves acquisition of Krishnapatnam Port Co by Adani Ports and Special Economic Zone
Fair trade regulator CCI on Wednesday (22 JULY) said it has given its nod to acquisition of Krishnapatnam Port Company Ltd by Adani Ports and Special Economic Zone Ltd. The proposed transaction involves acquisition of equity shareholding along with management control of 100 per cent of the total issued and outstanding preference share capital of Krishnapatnam Port Company, a combination notice filed with the regulator noted. Krishnapatnam Port Company is engaged as a developer and operator of the deep-water port at Krishnapatnam, Andhra Pradesh, while Adani Ports and Special Economic Zone Ltd is a customer-facing integrated port infrastructure services provider present across ten domestic ports in Gujarat, Goa, Kerala, Andhra Pradesh, Tamil Nadu and Odisha, the combination notice said.
Bangladesh starts work on Matarbari deep sea port
Bangladesh’s cabinet committee on Wednesday (22 JULY) appointed Japanese firm– Nippon Koei Company — to provide consultancy services for the construction of a deep seaport to handle its growing external trade in a deal worth $28m.The firm will work on detail design, tender assistance, and construction supervision of the JICA-funded proposed deep seaport at Matarbari area in south-eastern Bangladesh. The deep seaport will have a 16-metre water draft and will be able to accommodate 8,000 TEU post-Panamax vessels, lessening Bangladesh’s dependence on the feeder vessels to ferry export-import goods from the hub ports in Singapore, Colombo and Port Klang. The deep seaport, whose main navigational channel will be 350-metres wide, is expected to be completed by December 2026.
DP World takes stake in Unico Logistics
DP World, the Dubai-based port operator, is stepping up its vertical integration in the supply chain, with the planned purchase of a 60% stake in South Korea’s Unico Logistics. The transaction, subject to regulatory clearances, is expected to close in Q4 2020, and represents another strategic step in DP World’s vision to build an integrated suite of service offerings in direct connection with beneficial cargo owners. Established in 2002 by its president and CEO, Park Hyung-ju, Unico is one of the largest independent non-vessel operating common carrier (NVOCC)’s in South Korea. The company is active in the fast-growing transcontinental rail freight market between East-Asia, Central-Asia and Russia, moving containers along the Trans-Siberian Railway and Trans China Railway, using its owned containers, said to number around 14,000 TEU.
Shipwaves wishes you a great week ahead!
Happy Sailing!
