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Ashutosh Bajpai

Singapore, 22nd August 2012

Trade & Logistics in India

Agenda

� India’s Trade Performance and Enabling Infrastructure

� DHL in India

� Custom Clearance in India

India’s Trade Performance and Enabling Infrastructure

India’s Trade Performance and Enabling Infrastructure

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India Trade Trend – Lane & Commodities

India’s Exports & YOY Growth India’s Imports & YOY Growth

29%

12%- 3%

41%

35%

20% -4%

28%

32%21%

Page

02006-07 2007-08 2008-09 2009-10 2010-11 2011-12

02006-07 2007-08 2008-09 2009-10 2010-11 2011-12

Top 5 Key Export Lanes Contribution %

UAE 14 %

USA 10 %

China 8 %

Singapore 4 %

Hong Kong 4%

Top 5 Key Import Lanes Contribution %

China 11 %

UAE 8 %

Switzerland 6 %

Saudi Arabia 6 %

USA 5 %

Singapore ranks 4th as an Export Partner for India & 18th in terms of Imports

4

5.5

8.17.5

6.56.7

0

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3

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9

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6.1

7.48.2 7.6

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10

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$b

nIndia Exports to and Imports from Singapore

Export to SIN & YOY Growth Import from SIN & YOY Growth

22%

12%- 8%

40% 48%- 7%

-14%4%

Page

02006-07 2007-08 2008-09 2009-10 2010-11

02006-07 2007-08 2008-09 2009-10 2010-11

Top 5 Key Commodities for Export Contribution %

Petroleum & Crude 54 %

Transport Equipment 15 %

Other commodities 6 %

Machinery 5 %

Gems & Jewellery 4%

Top 5 Key Commodities for Import Contribution %

Petroleum & Crude 35 %

Electronic Goods 18 %

Chemical & Related 16 %

Non-electrical machinery 7 %

Artificial resins & plastic 5 %

5

India Exports to the World 2010-11

Sr. No. Item USD Billion

% of

Total Exports

1 Gems, Precious Metals and Jewelry 44 17

2 Mineral Fuels and Petrochemical Products 43 17

3 Iron and Steel 14 5

4 Apparel 12 5

5 Electrical and Electronics Products 10 4

6 Automobiles and Auto Parts 9 4

7 Organic Chemicals 9 4

Page


8 Machinery and Engineering Products 9 4

9 Cotton 7 3

10 Pharmaceuticals 7 3

11 Ships and Transport Machinery (incl rolling stock) 5 2

Total Value and Share of Top 11 Exports 168 67

6

India Imports 2010-11

Sr. No. Item USD Bn

% of Total

Imports

1 Mineral Fuels and Petrochemicals 116 31

2 Gems, Precious Metals and Jewelry 77 21

3 Machinery and Engineering Products 29 8

4 Electrical and Electronics Products 27 7


6 Iron and Steel 11 3

7 Fertilizers 6 2

Page

7 Fertilizers 6 2

8 Edible Oils 7 2

9 Project Goods (Heavy Machinery) 6 2

10 Plastic and Related Goods 8 2

11 Metal Ores 5 1

Value & Share of Top 11 Import Items 305 82Source: DGCIS, Ministry of Commerce, India

7

Air Cargo Dwell Time: Major Asian Air-hubs Vs Indian Airports

Airport Export Dwell Time (Hrs) Import Dwell Time (Hrs)

SINGAPORE 6 4

INCHEON 3 5

DUBAI 3 4

HONG KONG 4 6

DELHI 36 129

Page

DELHI 36 129

MUMBAI 48 96

BANGALORE 36 48

Source - Working Group Report on Air Cargo Logistics in India, Ministry of Civil Aviation

8

World Economic Forum’s Enabling Trade Index 2008 Vs 2012

Page

World Bank Logistics Performance Index 2012 Ranking

Page

Clearance Turn Around Time in India

Studies on clearance of Export shipments

infer that a lot of time and activities are

required to clear shipments.

Export

clearance

process part 1

Clearance Turn Around Time in India

Good news is that lot of efforts are being

made to reduce unnecessary activities and

turn around time

Export

clearance

process part 2

DHL in India

DHL in India

DHL Group in India

Combined

5000+ employees 7,825+ employees1,480+ employees1,630+ employees

Established in 1997 Established in 1983 Over 30 years of experience in India

Established in 1996Established in 1979

680+ contracted vehicles

400+ vehicles

6,280 vehicles 9300+ vehicles

15,900+ employees

2000+ contracted vehicles

Page

2

33 Locations; 27 cities

Free Trade Zone facility at Tamil Nadu

116 warehouses, 4 MN sq.ft.

25,710+

locations ; 550 cities

36,670+ locations, 1.8 MN+ sq. ft. facility space

Servicing over 36,000 locations,5.85 MN+ sq. ft. warehouse space

Air 262,130 shipments / 122,770 tons. Ocean 84,970 TEU Customs Clearances 123,910 shipments (2011)

Over 9 MN shipments (2011)

Moving 99 MN+ shipments

98.85 MNShipments (2011)

400+ vehicles

29 Air & 32 Ocean Preferred Carrier Partners

3 freighters, 100 CAL flight options

7 freighters & 12 domestic hubs

10 freighters, 100 CAL flight options, 12 domestic hubs

�

No. 1 in India for International & Domestic Express, Ocean Freight & Air Freight, and Supply Chain services

vehicles

Managed 181.3 MN throughput for SPL and CL customers (2011)

14

DHL Express India Factsheet

DHL Factsheet

Start of Operations 1979

Service Centers 25

Gateways 4

Cities – Bluedart 642

Post codes – Bluedart 3548

DHL has the widest network in

India in collaboration with

BlueDart

Post codes – Bluedart 3548

Clearance Experts 281

Shipments handled per day(Documents + Parcels)

30,000

Tonnage/Day 116

Number of Vehicles 405

Number of Freighters 15 freighters per week

DHL Express’ Reach in India

COMPANY KEY FACTS

India Reach ** 547 cities

India Retail

Footprint 458

Number of Domestic

Flights

7 Freighters

with 70 Route

Connections

Page

FlightsConnections

No one knows India better than DHL

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DHL Express India – Best in Class

1st International Air Express Company

First Import Express service in India

Excellent Customer Service

The first International air express company to operate in India in 1979providing air express services

DHL is the first express company to provide 24/7 customer hotline in

India & has the maximum number of CS agents

DHL is the first international express company to start the Import Express Servicein India, gathered almost the entire market at ~90% share

Widest Range of Product Portfolio

First International Express company to have an in-house custom clearance team

Market Leader

Established as the Most Trusted Brand in India

DHL provides the widest range of international express, freight and logistics services to the customers across all industries in India

DHL is the first International Express Company in India to have an in-house custom clearance team at the Air side bettering the clearance time & process

DHL continued to outgrow the market and competitors in 2011

(DHL IN – 43%, FedEx - 16%, TNT - 9%, UPS - 4%)

DHL received many accolades for Branding in 2011 such as Readers Digest Brand Awards, Superbrand, Award for Brand Leadership among many others

DHL Customs Clearance Expertise

� Courier and Cargo clearance capability at Bangalore, Delhi, Chennai,

Kolkata, Mumbai

� Only Company to have Express clearance Custodianship at

Bangalore

� Formal clearances of EOU, Aviation, SEZ, high value shipments

on the express mode providing express TAT

� Trans-shipment capability on courier & cargo mode

� With > 250 clearance staff, DHL ensures a smooth and faster

MORE THAN 80% OF SHIPMENTS ARE CLEARED

BEFORE ARRIVAL

Page

� With > 250 clearance staff, DHL ensures a smooth and faster

clearance experience

� Dedicated clearance support resource to key customers

� Dedicated desk for handling & solving clearance related queries

� In house training programs to enhance the technical as well as process knowledge.

� DHL conducts a training for its clearance staff called “Customs College” in association with University of Canberra, Australia

� Express EDI project being planned and executed as a DHL-Customs partnership initiative

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Customs Clearance in India

Customs Clearance in India

Operation

Advanced IGM

filing / aircraft Receipt of ULD Allotment of

IWR (Inward

Stacking of

cargo at the

Cargo is ready

for access now,

to apply for

Location Slip

Air Import Cargo Process

1 2 3 4 5

Page

Activity

filing / aircraft

arrival &

unloading of

Unit Loading

Device (ULD)

Receipt of ULD

in Receiving

Area &

Depalletisation

IWR (Inward

Receipt #)

Allocation of

shed for storage

cargo at the

earmarked shed

followed by

update of

details in EDL

Location Slip

and to

commence

various process

of Clearance

and Delivery

activities

Handled by

Carriers / Ground

Handling by AAI

AAI or Carriers

Cargo Handling

Agent

AAI – Manual

ProcessAAI AAI

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** AAI – Airport Authority of India

Overview of Inbound Clearance Process

Courier Express Mode Air Freight Mode

IMPORTS

AIR MODE

Custo

ms C

leara

nce M

odes

Formal Informal

SEA FREIGHT MODE

Courier Manual Formal BOE . Courier EDI expected soon

EDI BOE (applicable only for Cargo)

Custo

ms C

leara

nce M

odes

Formal Informal

Form IV Form VConsolidatedor Single BOE

Gifts &

Samples

Value < INR

10 000

(SGD224)

Dutiable,

Commercial

Shpts Value Till

INR 100000

(SGD 2240)

Value > INR 100000

(SGD 2240) Shipment

cleared under special

requirement

Cargo shipments including shipments

cleared under license. Also applicable

for special categories like EOU, SEZ,

SVB, CENVAT, NOC, temporary

import, etc

Criteria for Air Import Clearance Mode in India

Courier Mode Freight (Cargo) Mode

� Weight of each individual package <

70 kgs. Example weight of shipment is

100 kgs. and the weight of each

package is 50 kgs. This shipment can

land on the courier mode.

� Shipment that does not require

� All items other than those which are

prohibited for import into India as per

the import export policy of India

� Shipment that does not require

consignee broker clearances

� Shipment does not consist of Gold,

Silver, Precious/semi-precious stones

or any other precious metals or

jewellery item.

� Shipment that does not require any

special approval or licences

Import Custom Clearance Process for Cargo Mode

Activity

Online Filling of Bill of Entry with

Pre-alert Documents

Custom EDI permits Clearance under RMS

(Risk Management Scheme) or under ACP

(Accredited Client Program) scheme(Similar to Green

Channel)

Bill of Entry Print and ready for Payment of duty

(Assessment & Examination has not

Bill of Entry will be prescribed for assessment

Bill of Entry Assessment

Cargo retrieval & Custom Inspection

Bill of Entry Assessment

For other schemes For first time check

** Documents -

Supplier Invoice &

Packing List, HAWB

Copy with MAWB

details

Import custom clearance generally take 3 to 5 days.

Examination has not been Prescribed)

Payment of duty and obtain Out of Charge

after verification of Marks & number of the selected

packages

Pay AAI charges. Apply for Gate Pass

and take delivery

Loading into trucks & handling over of

transport documents to the vehicle driver

BOE ready / Pay Duty

Cargo retrieval & custom inspection

Custom release payment of AAI dues and apply

gate pass

BOE ready / Pay Duty

Prohibited and Restricted commodities

PROHIBITED

Animals, fish, birds (live)(Including mammals, reptiles, spiders, fish and birds)

Human remains or ashes

Bullion (of any precious metal)(Usually, but not limited to gold or silver in mass e.g. gold bars or ingots)

Cash (current legal tender) (bank notes, currency

RESTRICTED

Antiques and works of art

Banderols / tax stickers (Usually used on cigarettes or alcohol to indicate that duties and/or taxes have been paid)

Cigarettes

Dangerous Goods

Cash (current legal tender) (bank notes, currency notes and coins) Note: Negotiable instruments in bearer form (whether “cash-like” or not) are under the restricted section and require a fully documented business case.

Loose precious stonesComplete firearms, ammunition, explosives / explosive devices

Imitation or replica firearms, ammunition, explosives / explosive devices

Illegal goods

Firearms parts

Furs and ivory

Jewellery, watches, precious metals (other than bullion)

Negotiable instruments in bearer form (whether cash-like or not)

Toy guns, air guns

Customs Duty Calculation - Illustration

Customs Duty Calculation as on 1st April 2012

Sl No Particular Calculation Duty % Value

a Assessable Value

CIF + 1% of CIF or fair value taken by

Customs 100.00

b Basic Customs Duty (BCD) % as per Customs Notification on (a) 10.0% 10.00

c Sub Total (a) + (b) 110.00

d Counter Veiling Duty (CVD) % on (c) 12.0% 13.20

e Aggregate Customs duty (b)+(d) 23.20

f Cess on Aggregate duty % on (e) 2.0% 0.46

f Cess on Aggregate duty % on (e) 2.0% 0.46

g Hcess on Aggregate duty % on (e) 1.0% 0.23

h Sub Total of various duties (e) + (f )+ (g) 23.90

i Total duty before Sp. Additional Duty (a) + (h) 123.90

j Special Additional Duty % on (I) 4.0% 4.96

k Total duty (h)+ (j) 28.85

Effective duty % 28.85

Inco Term / Data point Particulars Units Value in Foreign Currency

FOB price As per invoice 100.00

Freight 20% of FOB or actual whichever is lesser 20% 20.00

Insurance 1.125% of FOB or actual whichever is lesser 1.125% 1.13

CIF Cost Insurance and freight 121.13

Exc Rate Exchange rate declared by Customs 42.10 5099

Landing A percentage on CIF Value 1% 1.21

Assessable Value Assessable Value 5100.57

Fair value Value taken by customs for shipments with no commercial value

Illustration for Calculating Assessable Value

Import Customs Clearance Mandatory Documents

One Time Requirement

Mandatory Documents Informal clearance Formal clearance

AWB � �

Invoice � �

Import Export Code � �

Packing List �

Consignee Authorisation Letter �

GATT & Importer declaration �

For Customs Clearance of each and every shipment

�Pre-alert Documents consists of Commercial Invoice, HAWB,MAWB, Packing List

�HAWB Should have Invoice No’s covered under the said Shipment

�Commercial Invoice Should clearly specify the INCO TERMS

�Applicable Customs Duty Demand Draft

Note: - Paperwork requirement is dependent on a combination of factors like commodity, value, consignee, country of origin, clearance scheme and purpose of import. Various NOCs are required as per the law of the land and above factors

26

Import Paperwork Check-list

27

Export Paperwork Check-list - If no incentive claimed

Garment Shipment

D GSP/ Certificate of Origin

Handicraft Shipments

Software

Electronics/ Engineering Goods/ Automobiles

Pharmaceuticals/ Drugs

Liquids & Chemicals

CO

MM

OD

ITY

CA

TE

GO

RY

Export dutiable commodities

Silk Fabric (Contains 80% or More Silk)

Silk Garments (Contains 70% or More Silk)

Leather Shipment

COMMODITY PAPERWORK

D GSP/ Certificate of Origin

O ARE 1

O SDF Form

O

O/D

D

O

D

O

O

O

O/D

O

O

O

O

MODVAT Declaration

STPI Approval

Non DG Declaration

MSDS

Non-antique certificate

Lab Analysis Report

Softex Form

GR Form

Phytosanitary Certificate (Quarantine)

In duplicate

Drug License

Leather Declaration

TSCA Certificate

CO

MM

OD

ITY

PA

PE

RW

OR

K Negative declaration

Only for US

Export Paperwork Check-list - Under incentive scheme

Exhibition Goods

O ITPO Invitation copy

O GR Waiver

Personal effects

Sec 74 ( Duty Drawback)

DEPB (Duty Entitlement Pass Book)

DFIA (Duty Free Import Authorization)

100% EOU (Export Oriented Unit)

EPCG (Export Promotion Capital Goods)

Repair and Return

FREE TRADE SAMPLE

DRAWBACK

DEEC (Duty Entitlement Export Certificate)

(If invoice value > INR 25K)

SCHEMES PAPERWORK

SC

HE

ME

S

O GR Waiver

O Letter addressed to DC

O

O

O

O

O

O

O

O

O

O

O

O

O

O

O

O

Customs Attested Invoice (Import)

Original Import BOE

Chartered Engineer Certificate

Drawback Declaration

Appendix III and IV

Annexure I and II

DFIA Declaration

DFIA details of Input and Output (in Duplicate)

Annexure C1

Sealed Envelope to ACC from Excise

DEEC Declaration

DEEC License Copy

Declaration for Imported/ Indigenous article

DEPB Declaration (Annexure D)

EPCG declaration

Copy of passport, ticket and departure certificate

SC

HE

ME

PA

PE

RW

OR

K

Triplicate Copy

Import copy

Only for garments

two copies

State the reason for export

No Objection Certificate (NOC) – points to be noted

Shipments may be sent for No Objection (NOC) to the various regulatory bodies also know

as allied acts. Some of key regulatory bodies examples are listed below :-

� NOC from Assistant Drug Controller (ADC) for

� Pharmaceuticals which includes formulations, intermediaries, raw Material, finished

products (prescribed & non-prescribed drugs)

� Cosmetics

� Food supplements

� Tissues, blood samples, etc

� NOC from Food Safety and Standards Authority of India (FSSAI) for food products,

beverages, chocolates, cookies, edible items to be consumed by Humans

� NOC from Wild life regional office (WLRO) for leather, animal products, plants & plant

extracts

� NOC from Textile committee for Textile products like fabric, garments, etc

� Chemicals maybe sent for testing to get information on composition to establish value and

importability into India

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Key NOC / Testing requirements with reference to HS code

HS code 04 Dairy produce; edible products of animal origin {NOC from Food Safety and Standards Authority of India (FSSAI)} [NOC= No objection certification]

HS code 10 Cereals {NOC from Plant Quarantine Organization of India / Food Safety and Standards Authority of India (FSSAI)}

HS code 21 Miscellaneous edible preparations {NOC from Food Safety and Standards Authority of India (FSSAI)}

HS code 22 Beverages, spirits and vinegar. {NOC from Food Safety and Standards Authority of India (FSSAI)}

HS code 28 Inorganic chemicals; organic or inorganic compounds of precious metals, of rare-earth metals, of radioactive elements or of; isotopes {Laboratory testing to understand composition & value AND/OR Assistant Drug Controller (ADC) NOC}

HS code 29 Organic chemicals {Laboratory testing to understand composition & value AND/OR Assistant Drug Controller (ADC) NOC}

HS code 30 Pharmaceutical products { Assistant Drug Controller (ADC) NOC}

HS code 31 Fertilizers {Laboratory testing }

HS code 33 Perfumery, cosmetic or toilet preparations. { Assistant Drug Controller (ADC) NOC}

HS code 34 Soap, organic surface-active agents, washing preparations, lubricating preparations, artificial waxes, prepared waxes, polishing or scouring preparations,

candles and similar articles, modelling pastes, "dental waxes" and dental preparations with a basis of plaster. {Laboratory testing to understand composition & value AND/OR Assistant Drug Controller (ADC) NOC}

HS code 35 Enzymes. {Laboratory testing to understand composition & value AND/OR Assistant Drug Controller (ADC) NOC}

HS code 35 Enzymes. {Laboratory testing to understand composition & value AND/OR Assistant Drug Controller (ADC) NOC}

HS code 38 Miscellaneous chemical products. {Laboratory testing to understand composition & value AND/OR Assistant Drug Controller (ADC) NOC}

HS code 41 Raw hides and skins (other than fur skins) and leather. {Wild Life Regional Office (WLRO) NOC}

HS code 42 Articles of leather; articles of animal gut (other than silk-worm gut) : {Wild Life Regional Office (WLRO) NOC}

HS code 43 Fur skins and artificial fur, {Wild Life Regional Office (WLRO) NOC}

HS code 50 Silk {Wild Life Regional Office (WLRO) / Silk Board NOC }

HS code 51 Wool, fine or coarse animal hair; horse hair yarn and woven fabric {Wild Life Regional Office (WLRO) NOC}

HS code 52 Cotton Fabric {Laboratory testing for hazardous chemicals (AZO dyes) }

HS code 53 Fabrics {Laboratory testing for hazardous chemicals }

HS code 58 Special woven fabrics; tufted textile fabrics; lace; tapestries; trimmings; embroidery. {Laboratory testing for hazardous chemicals }

HS code 59 Impregnated, coated, covered or laminated textile fabrics; textile articles of a kind suitable for industrial use. {Laboratory testing for hazardous chemicals }

HS code 60 Knitted or crocheted fabrics {Laboratory testing for hazardous chemicals }

HS code 61 Articles of apparel and clothing accessories knitted or crocheted. {Laboratory testing for hazardous chemicals }

HS code 62 Articles of apparel and clothing accessories, not knitted or crocheted. {Laboratory testing for hazardous chemicals }

HS code 63 Other made up textile articles; sets; worn clothing and worn textile articles; rags. {Laboratory testing for hazardous chemicals }

HS code 71 Natural or cultured pearls, precious or semi-precious stones, precious metals, metals clad with precious metal and articles thereof; imitation jewellery; coin. {Wild Life Regional Office (WLRO) / Jewellery expert NOC}

31

Thank You

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