Nordic countries building more exports to India for hosepipes and tubes (HSCode 590900)
Norway, Sweden & Denmark New Exporting Countries to India for HS Code 590900
As per the trade data available on Ekport, there was 11% more exports to India for HS Code 590900 which is textile material hose pipe and tube solutions which are made with or without lining armour or other accessories of materials. Exports to India for HS Code 590900 was USD 2.9 Million during Year 1 (Mar 2016-Feb 2017) and it increased to USD 3.3 Million in Year 2 (Mar 2017-Feb 2018)
Graph1: Global exports to India for HS Code 590900 (textile hose piping) in USD Thousands.
The above chart shows the year-on year comparison for global exports to India for HS Code 590900 during Year 1 (Mar 2016- Feb 2017) and Year 2 (Mar 2017 - Feb 2018) Graph1 shows that exports to India have increased steadily in Year 2 in comparison to Year 1 and in the months of November-February it has been increasing over 50%. A major reason for this steady increase of exports for textile-based hose piping is that India fundamentally lacks water transfer and proper irrigation facilities. India is reeling under a sustained water crisis that shows no sign of abating. Erratic rain patterns and increasing drought conditions in parts such as Gujarat, Karnataka and Maharashtra one of the mainstays of agriculture face water shortage. 80% of the Indian economy is dependent on agriculture for its livelihood and uses freshwater to plant water intensive crops like sugarcane, rice banana etc. Large amounts of water runoff in the monsoon season as there is heavy reliance on monsoon rain for its farmland, lack of water storage and irrigation facilities contribute to the sad state of affairs. 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 (BCM) 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. India is a land of Rabi crop, crops are sown beginning of winter season in October- December. There is no monsoon during that time of the year and irrigation methods are not cost effective, lack of government assistance for re-procurement of sprinklers and bureaucracy to avail government loans. This alarming data and situation as indicated by Central Water Commission 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 590900
As per the International Harmonized System, textile-based hose piping and tube solutions are made with or without lining armour or accessories made of other material for HS Code 590900 for International trade. For local Indian regulation, tax, custom duty and policy enforcement, Indian authority further bifurcates / classifies the products under HS Code 590900 using an 8-digit ITC Code. For example: Hose piping made from cotton (ITC Code 590900 10), Hose piping made from man-made fibre (ITC Code 590900 20) and Hose piping made from other textile materials (ITC Code 590900 90). These HS Codes together amounted to USD 3.3 Million worth of India’s Imports during Year 2 which indicates a steady demand for HS Code 590900 in India.
Top 5 Countries doing more exports to India for HS Code 590900
Lack of water storage and inefficient irrigation techniques in India has opened opportunities for many new and existing exporting countries to do more exports to India to solve its water irrigation crisis. The top 5 countries that do more exports to India for HS Code 590900 are China (USD 2.3 Million) Germany (USD 314.6K), UK (USD 243.5K), France (USD 102.5K) and USA (USD 98.9K) The collective amount of exports from the top 5 countries is USD 2.3 Million which is 44% of total exports to India in year 2 alone. Though Norway 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.
Norway’s peer group doing more exports to India for HS Code 590900
At Ekport, we have analysed countries like Norway, who have done less than USD 100K exports to India for HS Code 530900 in Year 1 but have significantly increased their exports during Year 2.
Graph2:Exports to India for HS Code 590900 (textile hose piping) by countries with exports less than USD 100K
Graph2 shows the countries that did less than USD 100K of exports of HS Code 590900 to India during Year 1. It can be observed that all the countries in Graph2 have done more exports to India for HS Code 590900 during Year 2. Norway, Denmark and Thailand are the leading exporters followed by Sweden and Italy. Norway's increase in exports to India for HS Code 590900 was 258%, which was one of the more significant increases followed by Sweden at 146% and Denmark emerged, as a new exporting country in Year 2 for HS Code 590900 to India.
Graph3: Increase in exports to India for HS Code 590900 (textile hose piping) by countries with exports less than USD 100K
Graph3 shows that Norway, Thailand and Denmark are top exporting countries to India followed by Sweden and Italy. The collective increase in exports to India amounts to USD 124.13K for Year 2 in comparison to Year 1. We consider that amongst its peers, Norway is amongst the new exporters who have the potential to become one of the strongest exporters of HS Code 590900 to India. Products offered by Italy, Norway and Thailand are in the range of USD 8-13 per kgs whereas products of Sweden is priced at USD 62 per kgs and products of Denmark is priced at USD 31 per kgs. This data shows that Denmark and Sweden are able to tap the segment of Indian market that values higher quality product enough to pay a premium for it. Norwegian products are renowned for their superior quality all over the world and has played a significant role in exports of HS Code 590900 to India. Polyvinyl Chloride(PVC) pipes are widely used for irrigation as they can handle large volume and water pressure, on the other hand it is an expensive installation process, high maintenance cost and risk of water loss due to of leakages.Textile-based hose pipe are woven by twisted the yarn , a key material for weaving and simultaneously extrude weave inside and outside that gives a strong bonded textile hose which is four times higher abrasion than rubber hose. Hose pipe from Norway are terrain friendly, upto 200 meters in length which are not available in India. High resistance to abrasion and cutting are ISO 9001 certified in accordance with Health, Safety and Environment(HSE) standards. It has high puncture resistance, durable in roughest environments, UV protected and chemical weathering. 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 and irrigation. A senior official from the hydrology department at Groundwater Survey and Development Agency (GSDA) has said that it will help to provide potable water and facilitate irrigation in winter months. Rainwater Harvesting Programme, an initiative by local government will entail demand for water storage and transfer facility for drinking and agriculture production. Prime Minister Narendra Modi’s, Agriculture Irrigation Programme in place for a five-year period from 2015 onwards to enhance physical access of water to farms for irrigation. Government of Punjab is giving away 50% subsidies to farmers who install underground pipes for irrigation to conserve underground water levels. Member nations of European Irrigation Association(EIA) that is to improve products and practises of water management shall take note of the government initiatives that encourage implementation of irrigation methods which presents them with business opportunities. Companies from Norway such as Mandals, Norway Irrigation. Swedish companies including Rosenqvist and Merlett Tecnoplastic and Danish companies like Fremco and Grundfos to network and build strong local partnerships to increase exports of products under HS Code 590900 to India and help sustainable agriculture.
What are the duties and taxes applicable for products under HS Code 590900?
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 590900 the Basic Custom Duty (BCD) is 25%. 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) 25% of (AV) = USD 25,000
Special Customs Duty (SCD) 10% of (BCD) = USD 2,500
GST = 18% (AV+BCD+SCD) 18% of (100,000 + 25,000 + 2,500) = USD 50,450
Total Amount after paying customs duty and GST will be USD 150,450 and the total effective duty applicable on products under HS Code 590900 is 50.45%
Who is importing products under HS Code 590900?
Initiatives taken by Government of India and State agencies to promote irrigation in necessary parts such that access of water for the farmland. Major cities like Mumbai, Bangalore, Chennai and New Delhi are prone to erratic rainfall over the monsoon resulting an increasing demand for textile material hose piping and necessary products that fall under HS Code 590900 .As per Ekport lead generator companies that import products under HS Code 590900 are Varssha Poly Products from Tamil Nadu, Dev Enterprises from Bangalore, Winplast Trades from Bangalore, Vijay Engineering from Mumbai and Vega Flex India from New Delhi are some of India’s major importers/buyers in India.