India is outpacing China in export growth of locally made retail and lifestyle products, according to Damco, the world’s seventhlargest freight forwarder.
An analysis of sourcing data by the transport and logistics arm of Danish shipping conglomerate AP Moller-Maersk Group shows that amid tepid global economic conditions, Indian exports of these products grew at a compound annual growth rate (CAGR) of 10% between 2013 and 2016, while China registered only 5%, though it had a much bigger base.
“Contrary to the bleakness of global trade, the future looks promising for India,” Damco chief executive officer Klaus Rud Sejling said in an interview with ET. “The country is clearly well-poised to shape global trade, as global retailers are constantly looking for suppliers that are nimble enough to be able to adjust with troughs and peaks in the demand cycle, not only from an output point of view, but also when it comes to developing entirely new products and customising existing lines.”
Sejling, who took over as global CEO of Damco in October 2016, was in India for a global leadership meet, the first under his leadership held outside Copenhagen, Denmark.
Global trade is battling on many fronts. Lukewarm demand has pushed container lines like South Korea’s Hanjin to bankruptcy and forced others in the industry to consolidate in order to stay afloat. Apprehensions of a protectionist approach to global trade under Donald Trump’s regime has added to the uncertainty.
“Year 2017 will see some organic growth, but maybe only around 2-3%,” Sejling said
According to Damco’s data for India, exports of bedding and bath products, home decor products and textiles were the key drivers, accounting for 53% of the country’s total retail and lifestyle exports volumes.
Vishal Sharma, Damco’s CEO for India, Sri Lanka and Bangladesh, said: “In the past 24-36 months, we have seen a structural interest in global companies to move sourcing to India as manufacturing in China is becoming expensive. Also, as a way of having contingency and balancing supply chains, they are zeroing in on India.” Sharma was present during the interview which was held last week.
“India-based manufacturers are benefiting significantly from access to quality raw materials that are competitively priced. Their improving agility combined with the efforts of the government is making India an increasingly attractive destination for global brands,” Sharma said.
Source:The Economic Times
President Pranab Mukherjee today said Indian economy was projected to grow by more than 7.5 percent in the current financial year.
The President noted that for 50 years before independence, the economic growth rate of India was 0 to 1 percent.
In the 1950s, the growth rate rose to 1-2 percent, while in the sixties 3-4 percent and in the 90s, with economic reforms it increased by 6 to 7 percent, Mukherjee said, while delivering the sixth K S Rajamony Memorial Lecture here.
Speaking on the topic of India@70, he said in 15 years, Indian economy grew more than 7 percent, making us the fastest growing large economy of the world.
"And as per the indication of the third part of the current year, it is sure to grow more than 7 and a half percent," he added.
Mukherjee said such a performance could be achieved only because of the hardwork of farmers and workers
Source:Money Control News
While Goods and Services Tax (GST) continues to remain in a state where several loose ends still need to be tied up, logistics companies -- both domestic and global -- are not just bullish about the sector but are actively making investment plans for the coming fiscal as well.
"For us, I do not see investments getting hampered if GST gets delayed. GST can only add to our current investment plans. As of now, in a growing logistics market like India, higher investments are much a need of the business to improve earnings and streamline operations," said Abhishek Chakraborty, executive director at DTDC Express.
The Bengaluru-based company has 60-65 per cent of its total revenue coming from the express business where it competes with giants like Blue Dart and Fedex. Apart from that, DTDC is into supply chain and e-commerce as well. "We plan to invest about Rs 20-25 crore through internal accruals of which a part will go into technology, hardware and increasing head count. Also, over the next one-two years, we expect to make more serious efforts to raise capital through either our subsidiaries or internally, and may even go to third parties for funds," said Chakraborty without divulging the amount it plans to raise. The company is expected to close the current financial year with a topline of Rs 1,050 crore.
According to Agility's Emerging Markets Logistics index published last month, India, for the second consecutive year was picked as the country with the most potential to grow as a logistics market. The report, which surveyed more than 800 supply chain and logistics professionals, said GST would be the potential game-changer and companies will have to re-gear themselves to adjust to GST. Surveyed entities also indicated that India was the leading emerging market destination for investment by their companies over the next five years.
Last year, France's FM Logistics acquired Pune-based Spear Logistics, making an entry into the promising India logistics market.
"We see a good growth potential for warehousing segment in the domestic market and would have invested even if GST was not round the corner," Stephane Descarpentries, director-strategic projects and director operations Asia, FM Logistics had said.
FM Logistics aims to invest about Rs 300 crore over next three years in order to strengthen its warehousing base across the country. "With e-commerce segment growing in India, we see the need for better warehousing across country and hence this investment (of acquistion)," explained Descarpentries. In the short-term, the company plans to invest about Rs 30 crore over next 6-8 months on ramping up custom-built warehouses of Spear Logistics.
With its strong presence in eastern part of the country, Inland World Logistics, flagship company of Inland Group is also all set to strengthen its investments in value-added services within the country while foraying to neighbouring regions.
"India is the largest of entire SAARC (South Asian Association for Regional Cooperation) countries but a lot of Indian companies have trade with SAARC countries and hence we have plans to invest Rs 20-25 crore in Sri Lanka and Bangladesh next fiscal to increase our volumes," said Praveen Somani, director at Inland World Logistics.
Inland World Logistics already has a subsidiary in Nepal and Bhutan where it sees growing traction for distribution business from India to the latter. Meanwhile, domestically, Inland World Logistics has increased its third party logistics segment, inventory management and warehouse management as services under value-added platform.
The company is expected to close the current financial year with a topline of Rs 920 crore and has aimed to take its consolidated revenues to Rs 3,000 crore. For 2017-18 (Apr-Mar), the Inland World Logistics has set a target of Rs 1,500 crore topline as it expects foraying into new regions would translate into some contribution to the revenue volumes.
Union Finance Minister Arun Jaitley, who is attending the Nepal Investment Summit 2017 at Kathmandu, has stated that New Delhi is Kathmandu?s largest partner in trade and investment with more than two-third of the country?s trade being with India, accounting for nearly 40 percent of total FDI in Nepal.
?Nepal is well poised to attract further FDI from India by creation of a conducive legal and regulatory framework,? said Jaitley while addressing the Nepal Investment Summit.
While sharing his views on India?s experience in reforming its economy and attracting Foreign Direct Investment (FDI), Jaitley said that India and Nepal have wide ranging engagement in trade and investment.
He further said that New Delhi and Kathmandu share deep-rooted historical, cultural and religious ties, which have enabled extensive cooperation in trade and economic fields between the two countries.
?The two countries have open border, grant national treatment to each other?s citizens and millions of Nepali citizens live and work in India. Nepal has several important sectors such as hydropower, transmission lines, road and rail networks, health, education, tourism, irrigation etc in which it can attract Indian investments. India is ready to invest in the projects of Kathmandu-Nijgadh fast track road, second international airport at Nijgadh, Koshi High Dam etc,? Jaitley said.
Jaitley, who is presently on a two-day visit to Nepal, held meetings with President Bidya Devi Bhandari and Prime Minister Pushpa Kamal Dahal ?Prachanda?.
He also met Deputy Prime Minister and Finance Minister of Nepal Krishna Bahadur Mahara and Industry Minister Nabindra Raj Joshi.
In order to address the issue of high trade deficit, Jaitley suggested that Nepal may expand its export basket by attracting more Indian investments in export-oriented industries.
Further, the early completion of power projects like Upper Karnali and Arun-III, Nepal would be able to export electricity to India.
He urged that the issues of forest land and land acquisition, which have delayed projects, should be resolved at the earliest.
The Nepali leaders thanked Jaitley for India?s development assistance and highly appreciated the country?s assistance for post-earthquake reconstruction of Nepal.
Deputy Prime Minister Mahara in particular thanked the Government of India for facilitating export of nearly 380 MW of electricity throughout this winter which has enabled several regions of Nepal become free of load-shedding.
The two countries now have transmission lines for trade of nearly 500 MW of electricity, which would increase to over 750 MW by mid-2017.
The Finance Minister?s visit highlights the importance India attaches to its relations with Nepal.
After meeting up with the textile manufacturers in Ludhiana and Mumbai, the eight member cotton delegation from Australia came over to Coimbatore in the last leg of their five-day tour.
They left for their home country on Friday after meeting up with the trade community and select mill owners here the previous evening.
During the two-hour presentation, the delegation comprising of cotton shippers, a cotton grower and a research scientist shared the Australian cotton story with special emphasis on zero contamination, quality characteristics of the fibre and their complete package offering.
Later, speaking on the sidelines of the meeting, Matthew Bradd, Chairman of the Australian Cotton Shippers Association told Business Line that they were here to bolster opportunities for exporting high quality Australian cotton to India.
“India has consistently purchased Australian cotton year-on-year, but the last year's monsoon condition and the resultant smaller Indian crop led to an increased demand by the mills here to maintain production.
“In fact, India topped in consumption of Australian cotton at 22 per cent last year,” he said before adding that this was his maiden visit to India.
While conceding that the fibre quality, consistency and strength is superior in many aspects, a member of the Indian cotton trade said that the price is exorbitant and appealed for considering a reduction in the offer price.
Brushing off the comment, Bradd continued about the crop size. “The crop last year peaked to 4.2 million bales from 3.7 million bales during the earlier season. Incidentally, we don't have a domestic market for cotton. The entire volume is exported to global markets. Nearly 80 per cent is exported to countries such as India, China, Indonesia and Bangladesh and the remaining 20 per cent is taken up by Pakistan, Taiwan, Korea, Japan and Turkey.
He admitted that Australia had, until three years ago depended on China for exporting the white fibre. “When China changed its import policy, we were left with a huge inventory. Now, we have strategically decided not to focus on one country for export. When Governments change, policies change as well. So we have to be careful,” he said in response to a query.The cotton industry in Australia invests huge sums in breeding better varieties. Added to this, researchers have developed procedures and tools to assess spinning ability and fibre attributes with a focus on improved spinning and dyeing ability.
“Picking is 100 per cent mechanical, resulting in zero contamination,” he reiterated.
Picking starts in February, offering is made in April and shipped by July – August.
“It has been ideal for Indian spinning mills to source the Australian fibre as at the fag-end of the cotton season here, mills start looking to import quality fibre. And they have understood the relative value of our offering,” Bradd said.