Water Storage Tanks In India - Emerging Export Opportunity For Exporters For HSCode (730900)

Date: 07-July-2018, Authored by Sameer Shah
128% More exports to India for HS Code 730900

As per the trade data available on Ekport, there was 128% more exports to India for HS Code 730900 which includes large containers (more than 300 litres), tanks, vats, etc made of iron or steel for storing material (other than compressed or liquified gas) and that are not mechanically fitted and not made of rubber and polymer material. Exports to India for HS Code 730900 was USD 13.5 Million during Year 1 (Mar 2016-Feb 2017) and it increased to USD 31 Million in Year 2 (Mar 2017-Feb 2018)

Graph1: Global exports to India for HS Code 730900 (water storage tanks) in USD Million.

The above chart depicts the year-on year comparison for global exports to India for HS Code 730900 during Year 1 (Mar 2016- Feb 2017) and Year 2 (Mar 2017 Feb 2018).From Graph1 it can be seen that exports to India have increased every month in Year 2 in comparison to Year 1,especially in the montHS of April it increased by 388%, January  by 445% and September by 192%. A major reason for this sustained increase of exports of storage containers particularly water storage tanks is that fundamentally India lacks potable water storage facility. Domestic manufacturing of water tanks that are not large and robust enough to store potable water over a long period does not meet the overall demand for water storage in India. According to Indian census report of 2011, the per capita water availability has progressively falling for years. In 2001 census it was 1820 billion cubic metres which fell to 1545 (BCM) and has been falling since then. Per capita water availability below 1700  billion cubic metres (BCM) is considered a water stressed condition. Excessive demand, growing population could bring per capita levels of water availability in India down to 1340 billion cubic metres (BCM) by 2025. This alarming situation as indicated by Central Water Commision of India has been given a high priority  by Indian Union water resource minister Mr Nitin Gadkari, who has stressed the need for more water storage facility and efficient irrigation techniques.

 

Indian Trade Classification for products under HS Code 730900

As per the International Harmonized System,large containers (more than 300 litres), tanks, vats, etc made of iron or steel for storing material (other than compressed or liquified gas) and that are not mechanically fitted and not made of rubber and polymer material for HS Code 730900 for international trade. For the purpose of local Indian regulation, tax, custom duty and policy enforcement, Indian authority further bifurcates / classifies the products under HS Code 730900 using an 8-digit ITC Code. For example:Galvanized iron tanks (ITC Code 73090 10), Galvanized iron  barrels and drums(ITC Code 730900 20), Pressed steel tanks (ITC Code 730900 30), Pressure vessels (ITC Code 730900 40) and products which are not classified are clubbed as “other” (ITC Code 730900 90). These HS Codes together amounted to USD 31 Million worth of India’s Imports during Year 2 which indicates a strong demand for HS Code 730900 in India.

 

Top 5 Countries doing more exports to India for HS Code 730900

Sustained Water crisis in India has opened  opportunities for many to make their presence felt with more exports to India to solve its water crisis. The top 5 countries that do more exports to India for HS Code 730900 are Germany (USD 5 Million) China (USD 4.8 Million), USA (USD 4.1 Million), UK (USD 2.9 Million) and Turkey (USD 1.8 Million) . The collective amount of exports from the top 5 countries is USD 18.6 Million which is 66% of total exports to India in year 2 alone. Though Australia is not amongst the top 5 exporters for this product, it is increasing its exports to India at one of the fastest rates compared to new exporters to India.  

Australia’s peer group doing more exports to India for HS Code 730900

At Ekport, we have analysed countries like Australia, who have done less than USD 100K exports to India for HS Code 730090 in Year 1, but have significantly increased their exports during Year 2.

Graph2: Exports to India for HS Code 730900 (water storage tanks) by countries with <USD 100K exports during Year1.

Graph2 shows the countries that did less than USD 100K of exports of HS Code 730900 to India during Year 1. It can be observed that all the countries in Graph2 have done more exports to India for HS Code 730900 during Year 2. Sweden, Malaysia, Indonesia  New Zealand, led the list followed by Australia and Canada. Australia’s increase in exports to India for HS Code 730900 was 313%, which was one of the more significant increases in its peer group.

Graph3: Increase in exports to India for HS Code 730900 (water storage tanks) by countries with <USD 100K exports during Year 1.

Graph3 shows that Sweden, Indonesia, Malaysia and New Zealand are top exporting countries to India followed by Australia and Canada. The collective increase in exports to India amounts to USD 1.13 Million for Year 2 in comparison to Year 1. We consider that amongst its peers, Australia is amongst the new exporters who have the potential to become one of the strongest exporters of HS Code 730900 to India. Products offered by countries Sweden, Canada and Malaysia, are in the range of USD 8-15 per kgs whereas products of Australia is priced at USD 31 per kgs and products of Indonesia is priced at USD 47 per kgs. This data shows that Australia and Indonesia are able to tap the segment of Indian market that values higher quality product enough to pay a premium for it. Australian products are renowned for their superior quality all over the world. Australia plays a significant role in exports of water storage tanks to India and has established strong local partnerships in India. The Government of Maharashtra introduced Jalswarajya-II a programme under water supply and sanitation department that would  setup of water storage tanks to avoid water scarcity. A senior official from the hydrology department at Groundwater Survey and Development Agency (GSDA) has said Australian tanks are proven best, as they can preserve water up to three montHS without deterioration in the quality and takes minimum three hours to maximum three days to install. Australian tanks are built using membrane technology and are fire resistant. It can hold material in the range of 26,000- 77,000 litres which are not available in India. These large tanks could be used for drinking  and irrigation purposes in places that lack water storage facility. Steel tanks for industrial uses were available which can store water up to two Million litres.Water storage tanks from Australia will be placed in 102 water stressed villages to avoid water shortage during peak summer montHS which begins from April. Villages that have received least annual rainfall will comer under this experiment and will receive 5,000 litre-tank. Satara and Raigad districts receive moderate-heavy rainfall will have to switch ways to recharge groundwater levels and follow water conservation by stocking water in tanks. Rainwater Harvesting Australia(RHA), a division of Irrigation Australia shall take notice of the initiatives taken by Groundwater Survey and Development Agency in terms of Rainwater Harvesting as this opens up opportunities to network and build strong local partnerships in India to do more exports of HS Code 730900 for Australian exporters. Member companies of Rainwater Harvesting Australia such as Rhino water tanks have a distributor agreement with Tanclean, a Mumbai based company for the sales of its steel lined water tanks whose concentration is on potable water segment. Pioneer water tanks have a local partnership with Mumbai based Mylo Private Limited for its storage units. Members of RHA shall increase their network  and form strong local partnerships that strengthen Australia’s more exports to India. Exports from Australia and around the world of HS Code 730900 arrive primarily on the ports of the western region of India namely  Nhava Sheva Sea port in Mumbai,Mundra port in Gujarat , Visakhapatnam sea in Andhra Pradesh and Chennai Sea in Tamil Nadu.

What are the duties and taxes applicable for products under HS Code 730900

The import customs and duties play a major role for exporters to export their products globally, because at the end, the final price of the product with duties and taxes decide whether the product is affordable for the target audience or not. For HS Code 730900 the Basic Custom Duty (BCD) is 15%. The indirect tax, known as Goods & Services Tax (GST) will be levied in a similar way it is applicable for all other domestic goods in India. Currently the GST rate is 18% of (AV+BCD+SCD) where AV= Assessed Value

For example, if the product’s Assessed Value (AV) is USD 100,000.

Basic Customs Duty (BCD)15% of (AV) = USD 15,000.

Special Customs Duty (SCD) 10% of (BCD) = USD 1500

GST = 18% (AV+BCD+SCD)18% of (100,000 + 15,000 + 1,500) = USD 20,970.

Total Amount after paying customs duty and GST will be USD 137,470 and the total effective duty applicable on products under HS Code 730900 is 37.47%

 

Who is Importing products under HS Code 730900?

Majority of water storage tanks in India are set up across India in villages and urban areas of Maharashtra, Gujarat Chennai which is evident from the initiative taken by government of Maharashtra to implement and educate water stressed villages about rainwater harvesting the main mode of water conservation. As per Ekport lead generator companies that import products under HS Code 730900 are Krish engineering from Gujarat, Shubham Acqualink from Mumbai  have partnership with Rhino Water Tanks, Australia and Mylo Private Limited, a Mumbai based company has partnership with Pioneer Water Tanks, are some of India’s major importers/buyers in India.

Ekport is being used by many importers in India to discover global import opportunities and connect with exporters worldwide.Global exporters can easily and quickly find and connect importers of their products in India by using Ekport Lead Generator accessible to signed up members. Request Special Access to Ekport (here).