Ships, Vessels and Other Floating Structures (HSCode 890800) - the next big thing for More Exports to India?
36% More Exports to India for products under HS Code 890800:
As per the latest trade data available on Ekport, there were 36% more exports to India for HS Code 890800 which includes products like Vessels and other floating structures for breaking up. Exports to India for products under HS Code 890800 was USD 647.3 Million during Year 1 (Mar 2016 to Feb 2017) and it increased to USD 881.8 Million during Year 2 (Mar 2017 to Feb 2018).
Graph1: Global Exports to India for HS Code 890800(Vessels and other floating structures for breaking up)
The above graph shows a Year-on-Year comparison for monthly global exports to India for products under the HS Code 890800. It can be seen from the graph that every month the exports for Year 2 are more than the corresponding month of Year 1. This increase is more prominent especially for the last 3 months (Dec, Jan and Feb) and the month of September. This indicates that there has been a noticeable trend towards more exports to India for Vessels and other floating structures for breaking up.
Top 5 Countries Doing More Exports to India for products under HS Code 890800:
The top countries exporting to India for products under HS Code 890800 are South Korea (USD 288.5 Million), Japan (USD 226..9 Million), Germany(USD 58.9 Million), Sweden(USD 34.3 Million) and France(USD 31.7 Million). During Year 2, these top 5 countries accounted for USD 640.3 Million out of a total of USD 881.8 Million exports to India for products under HS Code 890800.
Graph2:Exports to India from top 5 countries for HS Code 890800(Vessels and other floating structures for breaking up)
From Graph 2 above, it can be seen that the exports to India in Year 2 for products under HS Code 890800 has increased from top 5 exporting countries,South Korea and Japan were the leading exporting countries to do More Exports to India for products under HS Code 890800.
Why Korea should focus on doing More exports to India for products under HS Code 890800:
Graph3: Percentage Increase in Exports to India for HS Code 890800(Vessels and other floating structures for breaking up).
From graph3 though the percent increase of Sweden and France is high but the exports under HS Code 890800 in value is less as compared to South Korea. South Korea had exports for products under HS Code 890800 more than USD 250 Million where as the Sweden and France had exports for products under HS Code 890800 less than USD 50 Million, so it may be that percent increase of exports for France and Sweden is higher in Year 2 as compared to South Korea, but South Korea is a leader in exports for products under HS Code 890800 to India.
The reasons for the increase may be because the demand for steel obtained from breaking of Ships may be increased and the supply in the market is not adequate to fulfil the needs.Other factors may be new laws, policies and schemes implemented in the Maritime Industry which lead to more imports of raw materials and parts or the other reason may be that the tariffs and duties are decreased by the government for the better and quality products and introduction of Free Trade Agreement in 2010 to strengthen cooperation on energy, electronics and shipbuilding industries, including setting up of a Joint Working Group for Cooperation on the Shipbuilding sector and another in the field of Electronics Hardware manufacturing.
Republic of Korea(ROK) offered to provide US$10 billion financing (development assistance and concessional credit) to India for infrastructure projects. Recognizing the importance of shipping industry in the bilateral relationship, PM also visited Shipyard of Hyundai Heavy Industries in Ulsan. Leaders of both countries addressed the inaugural session of India-Korea CEOs Forum to promote the bilateral economic cooperation, while PM also met the leadership of the top Korean conglomerates., the Ministry of Shipping has taken various steps during the year 2016 to improve the base of shipping and marine sector in India and various schemes have been implemented for the enhancement and development of the coastline and marine sector. The National Perspective Plan(NPP) was introduced for the same in the Maritime India Summit 2016 on 14 April by the Honorable Prime Minister Mr. Narendra Modi.This act by the Prime Minister will eventually boost the functioning of the Maritime industry and lead to more imports of HS Code 890800(Vessels and Other Floating Structures) in the future as well and encourage Korean exporters to have More Exports to India.
The analysis above states that there have been increase in the imports of commodities under HS Code 890800 (Vessels and Other Floating Structures) and it will continue to increase due to the implementation of policies introduced by the Prime Minister and also Maritime Summit which was held for the first time from April 14th-16th, 2016 the objective of the summit was to create awareness about the potential in the Maritime industry and tap the investment opportunities for the same.Secretary General of International Maritime Organisation, Mr. Kitack Lim and Minister of Oceans and Fisheries, Republic of Korea, Mr. Kim-Young Suk also addressed the gathering during the Inaugural Session. Republic of Korea was the Partner Country for the Summit. A delegation from Republic of Korea led by Minister of Oceans and Fisheries along with two Deputy Ministers, senior Government officials and representatives of over 50 maritime sector companies participated in the Summit. The presence of Korean Government hints that Korea is thinking in a big way to invest in India’s Maritime Industry by having More Exports to India and continue to be a leader of exporting Vessels and Other Floating Structures to India.
What are the custom duties and taxes applicable for the HS Code 890800:
The import customs and duties play a major role for exporters to export their products globally, cause 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. To solve this problem we provide with the custom duties and taxes applicable for products under HS Code 890800.
For products under HS Code 890800 the Basic Custom Duty(BCD), is 2.5% and Social Welfare Surcharge(SWS) is 10% of (BCD). The indirect tax, known as GST(Goods & Services Tax) 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+SWS) where AV= Assessed Value.
For example, if the product’s Assessed Value (AV) is USD 100,000.
Basic Customs Duty (BCD): 2.5% of (100,000) = USD 2500
Social Welfare Surcharge (SWS): 10% of (BCD) = USD 250
GST = 18% (AV+BCD+SCD): 18% of (100,000 + 2500 + 250) = USD 18495
Total Amount after paying customs duty and GST: USD 121245