Risk Tips For Exporting To India

At present, the United States, Brazil and India are among the top three countries with the most serious epidemic situation. India's recent daily growth rate even exceeds that of the United States and Brazil. Under such circumstances, the Indian government is busy taking a series of "blocking" measures against China. Recently, foreign trade enterprises have reported that they have been "hurt".

case

A textile export enterprise in Shaanxi Province shipped a batch of goods to India on June 15. The payment method is LC sight. Due to the discrepancy of the L / C, both parties shall submit the documents to the domestic delivery bank on July 1 after negotiation. On the same day, the bank informed that it could not send the order successfully because all International Express DHL and FedEx had suspended their business to India. The policy was up to July 5, and the recovery time would be further informed.

Knowing the news, the enterprise was burning with anxiety. As the expected arrival date of the goods is approaching, once the arrival documents are not delivered to the buyer, the port detention expenses incurred shall be borne by the exporting enterprise of the negligent party, and the losses caused by the buyer's rejection and non payment are beyond the liability of the SINOSURE insurance policy.

The enterprise hopes to negotiate with the buyer and the issuing bank to complete the obligation of presentation by fax B / L or by sending documents through a third country, Korea. The buyer informed by email that he had been isolated at home for 100 days and could not work normally. The issuing bank was also in a state of closure, and there was no other way.

After knowing the situation, SINOSURE Shaanxi branch actively helped the enterprise to make suggestions. It suggested that export enterprises should actively communicate with the buyer and sign a supplementary agreement to release the bill of lading by telex. SINOSURE should bear the insurance liability within the existing OA limit. Once the buyer cannot clear the customs or resell or refuse to pay the payment after receiving the goods due to the epidemic situation, it can immediately claim compensation from SINOSURE. On July 6, the enterprise finally delivered the documents to the bank, and the delivery Bank successfully sent the original bill of lading and other negotiation documents.

The experience of the above companies tells us that we need to pay special attention to the local economic situation and policy changes when exporting to India in the near future. In particular, India has launched a number of "extreme" policies.

1. India strictly prevents the entry of Chinese commodities into the "curve"

New Delhi on August 3 reported that the Indian government is considering measures to prevent Southeast Asian trading partners from exporting Chinese goods without any added value to India, two government sources said.

India is planning to raise quality standards for imports, impose import volume restrictions, impose strict information disclosure standards, and conduct more frequent inspections of products from multiple Asian countries at commodity ports, government officials said.

The main targets of these initiatives are the import of basic metals, electronic components for laptops and mobile phones, furniture, leather products, toys, rubber, textiles, air conditioning and television products.

The broader restrictions are expected to hurt mainly Malaysia, Thailand, Vietnam and Singapore, all of which are ASEAN members, while India has a free trade agreement with ASEAN, Reuters said. India is also worried about the influx of goods from South Korea.

2. India may impose tariffs on nearly 20 kinds of Chinese products

In the past few months, the Indian government has announced production related incentives to encourage the manufacture of electronic products, medical equipment and pharmaceutical products, while limiting the import of similar products from China.

According to the times of India on August 11, the Indian government is considering increasing tariffs on nearly 20 products, including laptops, cameras, textiles and aluminum products, as well as licensing some steel products. This is seen as India's latest restrictions on Chinese imports. On the other hand, India's imports from China have risen for two consecutive months since June.

3. India has banned the import of 101 weapons, and the local arms dealers are confused

In order to vigorously promote the localization of weapons and equipment of the Indian army, the Ministry of defense of India has recently released an unprecedented list of arms embargoes. In this list, as many as 101 weapons and equipment are prohibited to be imported, including assault rifles, sonar, radar, frigates and transport aircraft, which the Indian army relies heavily on. But at the same time, India's local arms dealers are also confused, because many of India's domestic weapons and equipment are also banned.

Can India get rid of Chinese products?

To what extent can India get rid of Chinese products?

"The logical Indian" news network quoted a report recently released by the research and information system research center of developing countries of India on August 10, saying that for about 4000 kinds of imported products from China, including mobile phones, telecommunications equipment, cameras, solar panels, air conditioning and penicillin, 327 products can be found in alternative source countries or produced in India. The value of these "sensitive imports" accounts for three-quarters of total imports from China, according to the report.

India's restrictions on Chinese products hurt many multinationals. Germany's "Frankfurt report" 11 Daily said that in an interview with Indian media recently, general manager of Volkswagen India bopare criticized India's lack of business convenience, and called on the Indian government not to build a "higher separation wall" against China. "Restricting or delaying the import of key parts from China is a retrogressive measure. Restrictions on imports will damage India's domestic competitiveness and its export prospects.

Zhao Gancheng, a researcher at the Shanghai Institute of international studies, told the global times on the 11th that China's export volume of IT products to India is very large, and its market share is also very high. "Both network products and mobile terminals, including telecommunications equipment, are expected to bear the brunt of this round of India's localization policy." In addition, China's mechanical and electrical products, chemical products, raw materials, etc. may also be killed by India. "But it is doubtful whether India can achieve self-sufficiency through independent production."

Analysts said that regardless of whether the cost-effectiveness of imported goods from other countries is comparable to that of Chinese products, India will not be able to get rid of its absolute dependence on China in three to five years only in the field of API.

Risk tips and suggestions on exporting to India

If India wants to "block" its trade with China by introducing a series of measures, foreign traders need to be alert to the risk of trade friction. India has always been anxious about China's "sweeping in" products after liberalizing market access. Almost ten years ago, India frequently adopted anti-dumping measures to prevent Chinese products from entering India.

In 2019, India's number of anti-dumping investigations against China is second only to the United States, ranking second in the world. Recently, India has started to make frequent attacks against China's export products. The Hindustan Times reported that India believes that at least 100 kinds of Chinese products have been found to be dumping, and India will launch anti-dumping actions against them. It is expected that India's anti-dumping investigations on Chinese goods will be more frequent, further reducing the export space of Chinese products to India.

According to public information, in the past two weeks, China's imports of goods have been blocked at ports including Mumbai and Chennai, India, resulting in the accumulation of many containers at the ports. In addition, due to the recent strict inspection of Chinese goods by Indian customs, the workload of customs staff has increased greatly, which also has a certain impact on the customs clearance of imported goods from other countries.

In view of this, we remind foreign trade enterprises that have trade with India recently, especially those exporting goods to India, to pay attention to the risk control of collection and delivery, and be alert to the problems such as blocked customs clearance at the port of destination, no pick-up at the port of destination, abandoned goods by the buyer, and refusal to pay.

Suggestions:

1. If you have an Indian order in hand. First, negotiate with the buyer to ensure the smooth customs clearance; confirm with the buyer and the shipping company in advance of the cost bearing problems such as detention in port. We should try our best to collect full advance payment or open letter of credit; ensure the normal business of international express; consult and apply for export credit insurance to obtain risk protection.

2. If the business has been shipped, contact the customs clearance forwarder in advance, pay close attention to the customs clearance policy at the port of destination, and adjust the unloading port if necessary.