Samsara Newsletter

Week 39, 2018 (Sep 22 - Sep 28)

Policy & Economy News

India on robust growth path as GST, demonetisation effects abate: ADB

India to be USD 100 billion FDI destination by 2022: PHD Chamber

Business News - The India Boom Factor

Exports of Goods likely to grow 16% this fiscal: Commerce Secretary

India proposes free trade agreement with Bangladesh

India to export first consignment of non-basmati rice to China today: Commerce Ministry

India-South Asia trade has potential to triple to $62 billion, says World Bank

Spain-India trade ties to increase 20% yearly over 5 yrs

Shipping News

MSC and ZIM announce a New Cooperation on the India Sub-Continent - East Mediterranean Trade

Logistics News

CONCOR to build and run grain silos for Food Corporation

India's forwarders eye more use of barges to reduce logistics costs

Indian Port News

Shipping Ministry to make PCS mandatory for all Indian Ports

Ship turnaround time 'reduced by 25% to 64.4 hours in 2017-18': Shipping Ministry

Shipping Ministry considering new strategic Port for Transshipment operations

Cabotage law relaxation to boost trade at Cochin Port

Policy & Economy News

India on robust growth path as GST, demonetisation effects abate: ADB
Daily Shipping Times: New Delhi, Sept 27 Top
India's economy continues on a robust growth path, the Asian Development Bank (ADB) said while maintaining the growth forecast for the current fiscal at 7.3 per cent. However, depreciation of the rupee and volatile external financial markets pose challenges, the multilateral lending agency added, in an update of its flagship annual economic publication, the Asian Development Outlook (ADO) 2018.

Growth remains stable across most of developing Asia due to robust domestic demand, buoyant oil and gas prices and a consolidation of India's growth rebound, it said. "But escalating trade tensions will test the region's resilience, underscoring the importance of efforts to bolster trade ties among its countries," it added.

On India, the report said its economy continues on a robust growth path. "Its growth forecasts are unchanged at 7.3 per cent for 2018 and 7.6 per cent for 2019 as the temporary effects of the demonetisation of large banknotes and the introduction of the national Goods and Services Tax abate as expected," it said

India to be USD 100 billion FDI destination by 2022: PHD Chambers
Daily Shipping Times: New Delhi, Sept 28 Top
India is approaching towards USD 100 billion FDI inflow per annum by 2022 as volumes of foreign direct investment are increasing year after year, PHD Chamber of Commerce and Industry Vice President D K Aggarwal said recently. The annual FDI inflows in the Country increased from USD 36 billion in 2013-14 to USD 62 billion in 2017-18, said Aggarwal. Make in India has been instrumental during the last four years to attract FDI reforms in the Country. Despite the global challenges, the Country was able to attract tremendous flow of investments, said Aggarwal.

"We expect more improvement in the coming ratings of Ease of Doing Business as country has adopted a historic reform - the GST which is giving fruitful results," he added.

Business News - The India Boom Factor

Exports of Goods likely to grow 16% this fiscal: Commerce Secretary
Daily Shipping Times: New Delhi, Sept 27 Top
India's goods exports are likely to grow by at least 16 per cent in 2018-19 despite the difficult global environment, Commerce Secretary Anup Wadhawan has said.

Addressing the media, Wadhawan said, "It is through a policy of incentives, promotion and facilitation that we have been able to achieve this consistent pattern of export growth. In the last 25 months, except for one month, there has been consistent growth in exports," Wadhawan said.

He was positive that the 16 per cent growth in exports achieved in the April-August period would be maintained in the entire year.

"We have a comprehensive export strategy in place and those who made the policy are now implementing it. Exporters from various sectors are being consulted on a weekly basis to identify elements for the strategy," he added.

India's exports posted a 10 per cent growth to $303.52 billion in 2017-18. A 16 per cent increase in 2018-19 would push up the export figure to over $351 billion.

India proposes free trade agreement with Bangladesh
Daily Shipping Times: New Delhi, Sept 28 Top
India has proposed Bangladesh to consider negotiating a free trade agreement including goods, services and investment to promote two-way commerce and investments. Commerce and Industry Minister Suresh Prabhu, who is on Dhaka visit, has said that after Bangladesh graduates from the Least Developed Country (LDC) status, it will no longer have duty-free and quota-free access for its products to the Indian market under SAFTA (South Asia Free Trade Agreement).

"In view of this, he proposed that India and Bangladesh may consider signing a Comprehensive Economic Partnership Agreement (CEPA) which would trade in goods and services and investments," the Commerce and Industry Ministry said in a statement.

The two-way trade between the countries increased to $9.3 billion in 2017-18 from $7.52 billion in the previous fiscal.

Underlining the potential of jute as a natural and environment friendly fiber, he suggested that a Joint Business Group could examine the issues related to this sector. The Ministry, he said, is looking forward to develop a roadmap for resolving trade related issues with Bangladesh.

India to export first consignment of non-basmati rice to China today: Commerce Ministry
Daily Shipping Times: New Delhi, Sept 28 Top
China has allowed imports of non-basmati rice from India and the first consignment of 100 tonnes will be shipped today from Nagpur, the Commerce Ministry said.

The consignment will be received by China National Cereals, Oils and Foodstuffs Corporation (COFCO) which is a state-owned firm of the neighbouring Country, the Ministry said in a statement.

"After concerted efforts of the Government, 19 rice mills and processing units have been registered for export of non-basmati rice from India to China," it added.

In June, both the sides inked a protocol on phyto-sanitary (related with plants) requirements for exporting rice from India to China.

A major rice market in the world, China so far allowed import of only basmati rice from India.

Under the protocol, the shipments will have to comply with the Chinese plant quarantine laws and regulations.

Non-basmati rice exports from the country during April-February 2018 stood at USD 3.26 billion as against USD 2.53 billion in 2016-17.

Export of non-basmati rice assumes significance as India has time and again asked for greater market access for its agri-commodities in the Chinese market.

India wants to increase exports to China with a view to bridging the ballooning trade deficit, which has increased to USD USD 63.12 billion in 2017-18 from USD 51.08 billion in the previous fiscal.

India-South Asia trade has potential to triple to $62 billion, says World Bank
Daily Shipping Times: New Delhi, Sept 26 Top
India's current trade in goods with its neighbouring countries in the South Asian region is a mere 30.65 per cent of the potential trade of $ 62 billion, which can be boosted if certain restrictions on the current trade, like tariffs, port restrictions and other non-tariff barriers can be eased, a report from the World Bank said.

Currently, India's actual trade in South Asia accounts for $19.1 billion which is just three per cent of its total global trade at $637.4 billion and around $43 billion below the potential.

According to Sanjay Kathuria, lead economist at the World Bank, owing to economic and non-economic barriers, it is cheaper for India to import the same set of goods from Brazil as compared to its neighbour Pakistan, while for Sri Lanka or Bangladesh, imports from Nepal are more costly as compared to Brazil.

The report indicates that while the trade between India and Pakistan presently stands at $2 billion, without any trade barriers, this alone could go up to $37 billion which will far exceed India's current total trade with south Asian countries. Average tariffs in South Asia during 2016 stood at 13.6 per cent as against the global average tariff of 6.3 per cent.

"Despite significant liberalisation in tariff regimes, South Asian countries still maintain a long list of products which are exempted from the tariff liberalisation programme while several countries in this region maintain high para tariffs which have not been included in the free trade agreements", Kathuria said.

According to Kathuria, liberalisation of air services between India and Sri Lanka is an example how Countries stand to benefit from such a process.

The other key non-tariff issues impacting trade are lack of absorbing the imported goods in a consuming Country, issues at the borders and capacity of countries to produce testing and certification centres for exports.

Border Haat

According to the World Bank, India will be coming up with six more Border Haats (Border Marketplaces) taking the total to 10 from the existing four. These Border Haats, which are set-up on the zero line between India and Bangladesh, are crucial towards trust-building measures between the buyers and sellers from both India and Bangladesh.

Currently, on the Indian side of the border, two such Border Haats are located in Meghalaya in Kalaichar in West Garo Hills and Balat in East Garo Hills while another two are located in Tripura in Srinagar and Kamalsagar.

Spain-India trade ties to increase 20% yearly over 5 yrs
Press Trust of India - Kolkata, September 28 Top
The Ambassador of Spain to India, Jose R Baranano Friday said he expected his country's bilateral trade with India would increase on an average of 20 per cent every year over the next five years.

The bilateral trade between both the countries is around six billion USD presently, he said adding language and distance have been two of the biggest hinderances in regard to the growth of trade ties.

Baranano said there is lot of potential in tourism, education, renewable energy and agriculture sector.

"The economic condition across the globe is a bit messy but we hope that over the next five years the trade ties between the two countries would increase on an average of 20 percent every year" he told reporters.

The ambassador said, "The world market is swiftly shifting from Europe to India, China and other Asian countries".

Shipping News

MSC and ZIM announce a New Cooperation on the India Sub-Continent - East Mediterranean Trade
Daily Shipping Times: GENEVA / MUMBAI, Sept 27 Top
MSC and ZIM are pleased to announce a new cooperation, offering a fast and reliable connection between the India Sub-continent and the East Mediterranean Ports.

The new cooperation is due to commence during the second half of October 2018, connecting Indian Ports and major East Mediterranean Ports and will enhance MSC commitment to the Indian trade.

Logistics News

CONCOR to build and run grain silos for Food Corporation
India Seatrade News: Sept 29 Top
The Container Corporation of India Ltd (Concor) has ventured into the silo storage business as it looks to diversify into distribution logistics, from a pure rail hauler of containers.

The state-run transporter, a navratna company, will build such grain storage facilities at Ahmednagar in Punjab, Vernama in Gujarat and Khathuwas in Rajasthan, where it owns land and lease it to the Food Corporation of India for 30 years, besides running the silos for the government-owned food procurement agency.

"Now we are looking beyond transportation into distribution logistics and providing end-to-end solutions and value addition to customers on an all-India basis," said a Concor executive. "Customers don't need to own a warehouse, they can take warehouses on lease from us," he said, asking not to be named because he is not authorised to speak to the media.

Concor is India's top container train operator, running 317 container carrying rakes. It also runs a network of 75 container terminals comprising inland container depots (ICDs), container freight stations (CFSs) and domestic container terminals.

"Concor has already received a letter from the Food Corporation of India to construct a silo at Ahmednagar in Punjab. In the case of Khathuwas and Vernama, we have submitted a proposal to FCI, whose team has visited the sites and submitted an internal report saying that they are feasible locations to construct silos. We are expecting FCI to give us a letter any day to go ahead with the silo construction," he said.

Concor will invest about Rs150 crore (Rs.1.5 billion) to build and run the silos, with capacities ranging from 50,000 tonnes to 200,000 tonnes. Each of these silos will cost about Rs 48 crore (Rs.0.48 billion) to build from scratch, including the land costs.

The official said FCI was looking to dispense with gunny bags for carrying foodgrains over the next two years to reduce wastage of as much as 30 per cent during multiple handling. "So, FCI is looking at having silos in different locations," he said.

Silo storage, a widely accepted global concept, was introduced in India a decade ago and is fast changing perceptions and fortunes of stakeholders across the value chain. Silo structures follow a scientific way of storing grains, with a mechanised system which enables bulk preservation of produce for longer periods.

Silo storage is expected to improve farmers' savings and, more essentially, cut down working hours wasted in foodgrain storage through conventional methods.

According to the World Economic Forum, food production has never been the concern for India. India produced more than 270 million tonnes (mt) of food in 2016-17, higher than the annual requirement of 230 mt to feed its population.

India's forwarders eye more use of barges to reduce logistics costs
India Seatrade News: Sept 26 Top
India's government and logistics operators are looking to barges to bring down the cost and improve the routing of domestic cargo.

Promoting the use of barges was welcomed by the Federation of Freight Forwarders Association in India's Debashis Dutta.

"Inland waterways offer the cheapest form of internal transport, and government is motivating companies to use this over road and rail," Mr Dutta told at FIATA World Congress in Delhi.

"We have a lot of waterways here and we are beginning to see more shipments make use of them, particularly in oil and materials markets."

One of the most prominent use of barges has been by Indian east coast stevedore Ripley & Co, which has used them to reduce load weights allowing ocean-going vessels to dock at Haldia Port.

General Manager Golden Sinha told this operation was made possible by installing two floating cranes at Anchorage Point in the Bay of Bengal in December.

"Haldia has a draught restriction, preventing vessels carrying more than 40,000 tonnes entering," said Mr Sinha. "We use the cranes to partially unload onto barges and then both ship and barges bring the goods into port."

Mr Dutta said that while the use of barges had been increasing, there were still areas that needed to be addressed to take full advantage of the potential offered by the country's river system.

One particular problem is the low draught of many of the waterways, although Mr Sinha said there were also developments in this area.

"Flat-bottomed barges would make the use of the wider network more realistic, with the Ganges for instance having a restriction of 3.5 metres," Mr Sinha added.

"Such vessels are now under construction, and when made available we would look at acquiring some, as they would allow more to be handled."

Indian Port News

Shipping Ministry to make PCS mandatory for all Indian Ports
Daily Shipping Times: Mumbai, Sept 28 Top
The Shipping Ministry is set to issue an order making Port Community System (PCS) mandatory for all Indian seaports.

The move is based on the recommendations of a 11-member panel set up at the behest of the Prime Minister's Office in May to promote Ease of Doing Business.

The panel headed by RK Agarwal, Joint Secretary (Ports), also recommended that a legal framework be explored to make it mandatory to carry out transactions through PCS.

Mandating usage via a legal framework will improve Ease of Doing Business, trade across borders and logistics performance index, the panel wrote in its report submitted on August 17. Portall, a logistics management application, was developed by Mumbai-based logistics conglomerate JM Baxi Group. The group was awarded the contract by the Indian Ports Association, an autonomous body under the Shipping Ministry to roll out a pan-India PCS by December.

Portall PCS will on-board all maritime stakeholders and the Federation of Indian Logistics Association to help end-to-end trade transactions. Necessary technological changes must be made by all ports and stakeholders to enable real-time information exchange with PCS, the report said.

Portall has been asked to include, either through development or as a latch-on, functionalities such as transportation solution/vehicle booking system, marketplace for goods and services to be taken up in association with the planned National Trade Portal, Multi-Modal shipments and single-point for dues collection.

Portall said it is working with global cargo booking systems such as INTTRA for incorporation in the PCS workflow as a latch-on facility. Customs should consider PCS a nodal platform to deal with all maritime stakeholders for exchange of messages with ICEGATE (e-commerce portal of Central Board of Excise and Customs), the committee has recommended. A pilot project will be done at Visakhapatnam Port Trust to test the API-based transactions between PCS and ICEGATE.

The panel also recommended integration of the proposed Single Window Interface for Facilitation of Trade (SWIFT) system of the Customs with PCS "to achieve a true single window".

Ship turnaround time 'reduced by 25% to 64.4 hours in 2017-18': Shipping Ministry
Daily Shipping Times: Chennai, Sept 27
Ports' profits have surged 75% in FY18, says Shipping Ministry official Top
The average turnaround time of ships, a key parameter to measure a port's efficiency, has reduced by 25 per cent to 64.4 hours in 2017-18 from 87.3 hours in 2015-16, said Mr. Kailash Kumar Aggarwal, Joint Secretary, Ministry of Shipping.

The higher efficiency and productivity had translated into the net profit of Major Ports increasing by nearly 75 per cent to Rs. 3,414 crore (Rs.34.14 billion) between financial years 2016-17 and 2017-18, he said.

Also, two Major Ports - Deendayal (formerly known as Kandla Port) and Paradip - achieved the milestone of handling 100 million tonnes of cargo in a year. While Deendayal Port achieved it in 2016-17, the Paradip Port did it in 2017-18, said Mr. Aggarwal.

Sagarmala effect

Aggarwal said that since the start of the Sagarmala programme, capacity at Major Ports had increased by nearly 50 per cent to 1,451 million tonnes per annum (MTPA).

An additional 190 MTPA capacity is expected to be created by 2020, he said at the two-day CII Port Conclave 2018.

Private sector role

On the private sector role in ports, Aggarwal said 16 projects entailing an investment of around Rs. 20,000 crore (Rs.200 billion) and 268 MTPA capacity are under implementation. Based on experience, concession models are being revised to enable further private sector involvement in improving the ports, he said.

A total of 605 projects costing Rs. 8.8 lakh crore (Rs.8.8 trillion) have been identified for execution so far. These projects are being executed in a phased manner keeping in mind the needs of various stakeholders, the requirement of infrastructure at specific locations, viability of the projects and readiness of the ecosystem, including logistics supply chain.

Of the 605 projects, 255, costing Rs. 2.6 lakh crore (Rs.2.6 trillion), have already been awarded, he said.

Pon Radhakrishnan, Union Minister of State for Finance and Shipping, said, "Though we have improved the overall efficiency and reduced the ship turnaround time, we need to rise to global standards. I hope the port modernisation programme under Sagarmala will address this issue."

Logistics cost reduction

Reducing the logistics cost is the key to improving competitiveness. The Centre has taken various initiatives on this front to improve the logistics system in terms of cost, efficiency, sustainability and safety. Poor logistics eventually contributes to higher cost of doing business and higher prices for goods and services in the economy.

The vision of Sagarmala programme is to reduce the logistics cost for both domestic and export-import cargo with optimised infrastructure investment, Radhakrishnan added.

Shipping Ministry considering new strategic Port for Transshipment operations
Daily Shipping Times: New Delhi, Sept 26 Top
With India's economy growing at a robust pace achieving 8.2 GDP growth in April-June quarter, the Shipping Ministry is considering a more-strategic port along the Bay of Bengal coast for transshipment operations.

To help achieve that objective, Indian shipping authorities have reportedly commissioned a study to determine the feasibility of transforming the Meadow Port - a deepwater harbor in the Andaman and Nicobar islands - into a transshipment point. This archipelago includes hundreds of islands and 10 main ports under the Government's Port Management Board.

Authorities argue that with a large basin area, the Meadow Port will be able to simultaneously handle four ships of any size for "ship-to-ship" transshipment operations without a major infrastructure upgrade.

Authorities argue that with a large basin area, the Meadow Port will be able to simultaneously handle four ships of any size for "ship-to-ship" transshipment operations without a major infrastructure upgrade.

The advantages of a mid-sea, ship-to-ship move

The plan also stems from a preliminary view that ship-to-ship transshipment handling offers considerable cost benefits, given that mid-sea operations will not involve port fees associated with berthing and mooring.

Further, with the required infrastructure already in place at the site to kick-start transshipment operations on a small scale, it is expected that stakeholders will essentially examine procedural issues - notably customs and immigration formalities for foreign-flag carriers - under the proposed feasibility exercise.

Fiscal 2017-2018 statistics obtained by JOC show cargo movement to/from the Andaman and Nicobar islands totalled 1.4 million metric tonnes (about 1.5 million tonnes), up 8 percent from 1.3 million metric tonnes in the prior year, whereas container volume (export-import and coastal) increased nearly 12 percent to 51,856 TEU, from 46,404 TEU during 2016-2017. Of that total tonnage, the Meadow Port accounted for 25,000 tonnes, according to collected data.

Transshipment trade represents freight transported between an Indian Port and an international "hub" port, when direct mainline connections are not available.

As noted, the aforementioned mid-sea cargo transfer is an alternative transshipment option and adds to a series of measures that India's authorities have implemented to reduce the share of domestic cargo relayed via foreign hub ports. Those efforts - which include a cabotage law reform enacted May 21 that allows foreign-flag carriers to transport export-import and empty containers between domestic ports - appear to be paying off, although supply chain challenges facing the emerging market economy remain formidable, including its inadequate infrastructure and related inland network inefficiencies.

Cabotage law relaxation to boost trade at Cochin Port
Daily Shipping Times: Cochin, Sept 25 Top
The long-awaited relaxation in the cabotage law, which prohibited foreign-flagged vessels from engaging in Coastal Shipping of the Country, is expected to give a fillip to the trans-shipment volumes handled at Cochin Port.

At present, volumes at International Container Transhipment Terminal (ICTT) stand at 6 per cent out of the over five lakh TEUs container cargo and this is expected to go up by 12 per cent in the current fiscal.

Last fiscal, the Cochin Port Trust, one of the oldest public-sector establishments in the Country, recorded a profit of Rs. 13.5 crore (Rs.135 million) and an annual growth of 10 per cent. Under the Chairmanship of A V Ramana, CPT plans to leverage all the possible opportunities, increase efficiency and cut costs to sustain the growth momentum. "Improving efficiency in spite of the cargo volumes rising, we are in the process of decreasing the turn around time (TAT) for vessels to 31.75 hours while we are expected to handle 32 MMT cargo this fiscal," Ramana said recently.

He added TAT in FY15-16 was 52.24 hours while handling 22.1 MMT, which was systematically brought down to 36.96 hours in FY17-18 even when the cargo volumes rose to 29.14 MMT.

While container volumes are set to hit 662,000 this fiscal from 420,000 in FY15-16.

Banking on the expansion of the BPCL refinery capacity to from 7.5 to 15.5 million metric tonnes per annum (MMTPA), Petronet LNG capacity expansion to 5 MMTPA and the proposed fourth cement terminal, CPT expects to steadily increase its revenues from its captive cargo establishments. At present, three cement terminals - Ambuja, UltraTech and Penna - are in operation and handle 7.83 lakh tonnes of cement annually.

Malabar Cements has proposed to set up the fourth terminal by 2019 with an annual capacity of 5 lakh tonnes. Cement being a high-volume, low-value product, lower-cost sea transport is very important as a game changer in logistics.

"With the GST for bunkering of foreign and coastal vessels being reduced to 5 per cent from 28 per cent, there was a considerable growth in the area, but we are in the process of final discussions with the Union Government to bring it down further to pre-GST levels - 0.5 per cent," said Ramana.