www.thedollarbusiness.com
Vol.3
Issue 09
September 2016
100
$2
EXCLUSIVE INSIDE RICHARD R. VERMA US Ambassador to India ARUN MALHOTRA Managing Director, Nissan Motor India KIRAN V. GM, International Marketing, Bharat Electronics Ltd. KUNWER SACHDEV Founder & MD, Su-Kam Power Systems Ltd. VIKAS ANAND Managing Director, DHL Supply Chain India SANJEEV AGARWAL CEO, Gitanjali Exports Corp Ltd. ...AND MORE!
FOREIGN TRADE . EXPORTS . IMPORTS
IS GST SIMPLY
GOODS & SERVICES TAX (GST)
OVERRATED? While GST has become popular as a 'One Nation-One Tax' formulation, the realities of implementation may be more complicated than political negotiations in the Parliament. Will reorganisation of the complex indirect tax structure of the country augment India's GDP, inspire Make In India and boost exports? The Dollar Business analyses
Bumpers
Time to bump up your profits
They are in for a smooth ride, globally
Dates
Cotton handbag
What makes India its largest importer
Double-digit profits are not a big deal
Writing a mouth-watering script
It's all about style!
Volume: 3 Issue: 09 September 2016 www.thedollarbusiness.com facebook.com/tdbIndia twitter.com/TheDollarBiz in.linkedin.com/in/thedollarbusiness/ President (VMPL) & Editor-in-Chief
: Steven Philip Warner
EDITORIAL & RESEARCH Editor Executive Editor Associate Editor (Print) Associate Editor (Online) Senior Editors (Print) Sr. Assistant Editor (Print) Assistant Editors (Print)
: Manish K. Pandey : Indranil Das : Andres M. Molier : Sheela Mamidenna : Niladri S. Nath, Proyashi Barua : Sisir Kumar Pradhan : Neha Dewan, Ahmad Shariq Khan, Sairaj Iyer Assistant Editors (Online) : N. Sharath Chowdary, Aamir Hussain Kaki Principal Correspondent : Deepak Kumar Correspondents : Pooja Jain, Sania Ashraf EDITORIAL CONSULTING BOARD Founder & Editor : Anil Goyal Publisher : Avnish Goyal Chief Consulting Editor : Dr. A. K. Sengupta Editorial Advisors : Dr. N.K. Goyal (CMAI), Atul Kumar Saxena (IIA) ADVERTISEMENT SALES & MARKETING Vice-President : Aninda Mondal Associate Vice-President : Lalit Seth Manager : Santosh Pandey International Representatives Seoul (South Korea) London (UK)
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ART & PHOTOGRAPHY Art Director Senior Designer Designer Photographer
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THE DOLLAR BUSINESS ONLINE Project Managers : Sridhar Bodla, Omar Larzi SEO Manager : Sangameshwar Soma SEO Specialist : Praveen Kukunarapu Asst. Mgr. (Data & Metrics) : C. Dileep Reddy Associates (Data & Metrics) : Dinesh Reddy, Bhanu Prasad
22 COVER STORY
GOODS & SERVICES TAX (GST)
FINAL PIECE OR A NEW PUZZLE?
FINANCE & LOGISTICS Manager
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82 KUNWER SACHDEV
: Parchuri Jhansi
12
PUBLISHED AT 5-2-198/4, Distillery Road, Ranigunj, Secunderabad, Telangana 500003, IN
© Copyright 2016 No part of this magazine may be reproduced in whole or in part without an expressed permission of the publisher. The information on this magazine is for information purpose only. Manish K. Pandey, Editor, The Dollar Business, is responsible for the selection of news and content under PRB Act. Vimbri Media Pvt. Ltd. assumes no liability or responsibility for any inaccurate, delayed or incomplete information, or for any actions taken in reliance thereon. The information contained about each individual, event or organisation has been provided by such individual, event organisers or organisation without verification by us. All disputes are subject to exclusive jurisdiction of competent courts and forums in Hyderabad, Telangana. Printed and published by Avnish Goyal for Vimbri Media Pvt. Ltd. Published at 5-2-198/4, Distillery Road, Ranigunj, Secunderabad - 500 003, Telangana. Printed at: Kala Jyothi Process Pvt. Ltd., 1-1-60/5, RTC Cross Roads, Musheerabad, Hyderabad - 500 020, Telangana. FOR EDITORIAL/CONTENT Email: editorial@thedollarbusiness.com FOR ADVERTISEMENT Email: ads@thedollarbusiness.com FOR SUBSCRIPTION Email: subscription@thedollarbusiness.com . +91-40-67609999 For queries / comments you can send us an SMS at +91-888-633-1947
8 THE DOLLAR BUSINESS II SEPTEMBER 2016
FOUNDER & MD, SU-KAM POWER SYSTEMS LTD. On how the homegrown company has expanded its footprint across the globe
INBOX
LETTERS TO THE EDITOR
M. RAFEEQUE AHMED
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52
Readers’ feedback, criticism, and appreciation that hit our mailbox in August 2016
PRINTER Kala Jyothi Process Pvt. Ltd., 1-1-60/5, RTC Cross Road, Musheerabad, Hyderabad, Telangana 500020, IN
The Goods & Services Tax (GST) Bill was finally passed in the Upper House of the Parliament in early August. It has been touted by many to be the catalyst that India requires to grow – create a sustainable economy, generate employment, promote ease of doing business and make Indian goods more competitive in global markets, thus providing a boost to exports. The all-important rate though still needs to be decided. But will GST really able to live up to India’s expectations? The Dollar Business analyses
KIRAN V.
US AMBASSADOR TO INDIA Talks about the strengthening relationship between US and India and the need to create consensus on bilateral trade issues
10
20
CHAIRMAN, COUNCIL FOR LEATHER EXPORTS Discusses the issues affecting the Indian leather industry
SPOTLIGHT
UNITED STATES OF AMERICA The economic powerhouse is facing a challenge from China
MONOLOGUE
62
GLOBAL TRADE
India’s changed stance on RCEP, to Goan Feni being granted the heritage tag & more...
BUMPERS
The growing global aftermarket for bumpers promise generous profits for Indian exporters
Hillary Clinton turning her back on TPP, impact of Brexit on Ireland, oil exports from Libya and more...
INDIA TRADE
SECRET INGREDIENT
66
IMPORT’ONOMICS
DATES Zealous Indian importers of this delectable fruit may make some good bucks this season
GM – INTERNATIONAL MARKETING, BHARAT ELECTRONICS LTD. Unravels the opportunities in India’s defence sector
ARUN MALHOTRA
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MANAGING DIRECTOR, NISSAN MOTOR INDIA Talks about the company’s stellar export performance, and his faith in ‘Make in India’
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THE MIDAS TOUCH
78
CASE STUDY
86
DOCKYARD
PEOPLE SPEAK
From Narendra Modi on GST, to Theresa May on life after Brexit, to Barack Obama on TPP& more
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TDB POWER SERIES CONCLAVE 2016-17
Glimpses of the Monsoon Edition of The Dollar Business Power Series Conclave, held at New Delhi, on August 24, 2016
RICHARD R. VERMA
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CIRCULATION, SUBSCRIPTION & DISTRIBUTION General Manager : S. S. Sudesh Manager - Subscription : M. Vinay Kumar Assistant Managers : Sanjeev Jain, Buddhi Sagar Pandey, Rajneesh Laroiya ALLIANCES & COMMUNICATIONS Sr. Manager : Rasanpreet Kaur Deputy Manager : Anupama Polasa Asstt. Manager : Sravya Palakuru
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COTTON BAGS These dainty little bags offer big opportunities to exporters
ORGANIC HARVEST The company is slowly and surely making its presence felt overseas
VISAKHAPATNAM PORT
This port will play a pivotal role in the East Coast in the coming times.
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TDB FORUM
94
DATEBOOK
Questions about foreign trade that hit our mail box in August 2016
Some must visit trade shows
SEPTEMBER 2016 II THE DOLLAR BUSINESS 9
COVER STORY
GOODS & SERVICES TAX (GST)
GOODS AND SERVICES TAX
A PANACEA FOR ALL WOES?
BY TDB INTELLIGENCE UNIT
Prime Minister Narendra Modi was in his element when he congratulated the country on the passage of the much-touted Goods and Services Tax (GST) Bill in the Upper House of the Parliament, claiming that the new tax regime will rid the country of tax-terrorism. The tax regime which was proposed about a decade back as the panacea that would clean up the messy and complex indirect tax structure of the country, is expected to give India's GDP a fillip, apart from boosting exports. "Expected" is the word. While GST has become popular as a 'One Nation-One Tax' formulation, the realities of implementation may be more complicated than political negotiations in the Parliament. Truth is GST, for which the ruling administration has set a go-live date of April 1, 2017, is in no way a one-tax rule. As things stand, the Centre has agreed to subsume excise duty, additional excise duty, service tax, countervailing duty, surcharge and cess, and central sales tax into the waiting arms of GST. The States have agreed to give up VAT (sales tax), entertainment tax, luxury tax, taxes on gambling, octroi and entry taxes, cess and purchase tax. GST will thus replace all of these taxes. The all-important tax rate though remains to be agreed upon. The Dollar Business analyses the impact of GST on the Indian economy and its foreign trade. 22 THE DOLLAR BUSINESS II SEPTEMBER 2016
A
wait of more than a decade came to an end on August 3, 2016, when the 122nd Constitution Amendment Bill, 2014 (popularly known as GST Bill) was passed by the Upper House of the Parliament of India. This is apparently the country's biggest tax reform since Independence. Some achievement therefore for the Indian democracy. The new tax regime, which subsumes all indirect taxes such as sales tax and excise tax, is expected to bring down tax rates in India, while converting the country into a big single market. In short, now, seamless flow of goods and services will occur across 29 states and 7 union territories! Many believe the landmark Goods and Services Tax Bill (GST) passed by the two houses of the Parliament – after years of back and forth by the ruling party and main opposition (both the present ruling and main opposition parties have supported and opposed the Bill depending on whether they were in power or in the opposition) – is a key step that would
catapult India into the big league in global supply chain. The implementation of the Bill is expected to ease India's cumbersome tax system, help goods move seamlessly across state borders, curb tax evasion, improve compliance, increase revenues, spur growth, boost exports, and attract investments by improving ease of doing business in India. In short, GST when implemented, is expected to perform miracles. But, can it really? And considering that the Bill still needs to be ratified by at least 13 more state legislatures (over and above the three states Assam, Bihar and Jharkhand, which had already passed the bill, as on August 22, 2016) before the President of India can notify the GST Council to decide on the new tax rate and other issues with respect to GST, will it be a easy journey for the GST to the finish line? India is by no means the first country to experiment with a unified tax regime. 160 countries already have some form of GST or a value added tax. What makes GST in India special is that as opposed
to a federally administered regime, the Union and state governments will jointly administer India’s dual GST. This means it will be a set of many different taxes – a GST for each of the 29 states and two union territories (SGST), a Central GST (CGST), and an Integrated GST (IGST; which will be a combine of CGST and SGST on inter-state supplies of goods and services). That surely is not as unified as it seems. Interestingly, India will be one of the very few countries with a dual GST regime alongside Canada and Brazil. The all-important rate is yet to be finalised, with the final standard rate possibly lying between 15% to 27%, though 18% is the rate that seems to be gaining a sort of consensus amongst pundits. The problem though is that the pundits won’t decide the rate! GST rate will be decided in the coming months by a GST Council that will prise the Finance Minister with a representative from each state government. As such it will be negotiated amongst SEPTEMBER 2016 II THE DOLLAR BUSINESS 23