Australias Trade with India

India and Australia have a strong and productive bilateral partnership. Underpinned by trade and investment, the scope of Australias relationship with India has increased in line with Indias rapid economic and strategic growth. Australian exports to India are on the rise, India is now Australias 4th biggest export market underlining the importance of India as a major export and investment destination for Australia. Merchandise exports to India grew from 7.3 $A Billion in 2005-06 to 10.1 $A Billion in 2006-07, registering a 36.8% increase. Australias leading merchandise exports include Coal, Gold, Copper Ore, Wool, Horticulture, etc. This makes India the fastest growing export market for Australia. India accounts for 6% of Australias Merchandise exports in 2006-2007 up from 4.84 % in 2005-2006 Services exports to India have also been growing rapidly with education leading from the front. Australia is now the 2nd biggest overseas education destination for Indian students. Indian tourist arrivals have also been on the rise contributing to Australias services exports to India. Australia offers all the services required to complement Indias economic rise in sectors like education, tourism, financial services and insurance and a host of other professional skills. In the mining sector, Australias exports include the minerals and fuels, energy investment and collaboration on areas of joint significance. In Information and communications technology, India's globally-renowned industry is growing everstronger and there are solid linkages with Australias ICT capabilities. As a young country that enjoys a vibrant lifestyle, Australia features many innovative businesses offering products and services ranging from wines to fashion to consumer electronics to leisure to cater to a young population & discerning consumers. Australian expertise is available in a wide range of sectors that can complement Indian industrys needs & requirments. Australia can be a very significant value added partner for Indian businesses in their growth & expansion paths by providing competitive solutions and expertise both in traditional & emerging sectors for Indian businesses. The Australian Trade Commission has been playing a very significant role in developing Australia India business & commercial relationships. With presence in 10 locations in India and an on-the-ground network of industry specialists, Austrade assisted over 525 Indian companies access Australian technologies, products and expertise as well as seek Australian investments and partnerships The Australian Trade Commission has embarked a very focused sector specific strategy to offer Australian technology, expertise & solutions for Indian businesses in the areas of Resources, Mining & Energy; Infrastructure; Building & Construction; Food & Beverage; Agri Business; ICT; Film, Media & Entertainment; Retail; Financial Services The Australian Trade Commission offers services for Indian businesses in identifying potential Australian

business partners; sourcing Australian technology, products, services & expertise and in identifying Australian joint venture partners & investors.

Australia finally gave a green signal to imports of mangoes from India this year, but the king of fruits didn't make it to the market shelves. The initial 1.267 tonnes of mangoes were found to be rotten or over ripe on arrival in Australia and had to be destroyed, resulting in the two importers incurring losses of nearly A$100,000. New South Wales-based Karma Krop imported 1.3 million tonnes (mt) of mangoes from Bravima Traders Pvt Ltd and Victoria-based Mals Exim Pty Ltd imported 400 kg for sampling from Pujitha Enterprises Imports & Exports, after the successful culmination of the pest risk analysis carried out by the Australian Quarantine and Inspection Service (AQIS). New South Wales-based Karma Krop imported 1.3 million tonnes (mt) of mangoes from Bravima Traders Pvt Ltd and Victoria-based Mals Exim Pty Ltd imported 400 kg for sampling from Pujitha Enterprises Imports & Exports, after the successful culmination of the pest risk analysis carried out by the Australian Quarantine and Inspection Service (AQIS). We finally managed to get the all-clear in July this year from the AQIS, which has one of the most stringent restrictions in the world. The mangoes were given the AQIS-recommended vapour heat treatment (VHT) at the Saharanpur processing facility, but when my first consignment of 1.5 tonnes arrived by air freight in Melbourne, the mangoes had turned into pulp and the skin had black spots. I had to pay the AQIS A$5,600 for getting the consignment destroyed, Mahesh Shukla of Karma Krop told Business Standard . He claimed recurrent power failure and the generator tripping at the facility resulted in the mangoes being treated for a much longer duration. VHT and hot water dipping treatment (HWDT) are not ideal for the Uttar Pradesh mango, which has a thin skin and ripen quickly compared to the Australian mango, said Shukla, who graduated as a chemical engineer from Roorkee Engineering College and migrated to Australia 30 years ago. According to the AQIS, all Indian mangoes must undergo pre-export VHT or HWDT against fruit flies at an approved facility. So being the first time, were there teething problems? In an email reply, the general manager of the Agricultural and Processed Food Products Export Development Authority, R K Boyal, told Business Standard, Everything went according to the plan during the VHT. The mangoes were given VHT at the Saharanpur facility under the joint supervision of the AQIS and the Indian National Plant Protection Organisation (NPPO) inspectors. One consignment had certain problems upon arrival in Australia, though it was sent in good condition after joint inspection and supervision of the AQIS and the NPPO inspectors. According to Boyal, a pre-operation audit of the Saharanpur treatment facility, which has been in use for mango exports to Japan for the last four years, had already been carried out by the AQIS team.India produces 54.2 per cent of the world's mangoes and the country's export of mangoes has increased from Rs 127.42 crore in 2007-08 to Rs 170.71 crore in 2008-09. India is a net exporter of mangoes and around 80,000 tonnes are exported annually. We expect to target at least 100 mt to Australia next year now that all systems for the AQIS requirements are in place, said Boyal. Prior to 1996, India exported fresh mangoes to Australia with a mandatory on-arrival fumigation treatment using ethylene di-bromide (EDB). But imports of fresh mangoes from India were suspended in 1996 as a result of the global phase-out of the use of EDB. I had confirmed orders for 123 tonnes and total estimated orders for 250 tonnes worth A$1 million, said Shukla, who owns Ambikas International, a clothing and accessories company. He decided to import mangoes during a visit to his hometown Lucknow and established Karma Krop, but his Australian partner ended the partnership following the debacle.

I have lost A$70,000 in total and 18 months of my time travelling to and from both countries, said Shukla, who has lodged a complaint with the Indian authorities demanding compensation.For Venkat Raju of Mals Exim Pty Ltd, who imported 400 kg of mangoes on a trial basis, it has been a bitter experience too. He said, I have lost A$25,000 in this failed venture. We had got excellent response for Indian mangoes from one of the largest fruit marketing companies who supply fruits to major supermarkets and other fruit traders here. We had received solid purchase orders on a weekly basis. Unfortunately, when we received the consignment, the mangoes were over-ripe and started rotting quickly. The only option was to destroy them. Besides problems with the processing treatment of mangoes, Venkat Raju told Business Standard that in the end, he didn't get the ordered packaging material, the growers increased their prices manifold, the agents didn't keep to their commitment and it all resulted in losing credibility with the buyers here. If we can get quality product, there is enormous demand for Indian mangoes and we can do business in high volumes. Based on our buyers' promises, we estimated that the business turnover would have been around 300 tonnes had things gone to plan. For the 2012 season, I plan to take especially made packaging boxes that absorb moisture from Australia, said Raju, who migrated to Australia four years ago from Hyderabad and exports olive oil and milk powder to India. Currently, Australia only allows import of mangoes sourced from Uttar Pradesh. Orchards, treatment facilities and packing sheds supplying and handling mangoes for Australia have to be registered with India's Department of Agriculture and Cooperation and approved by the Australian Department of Agriculture, Fisheries and Forestry (DAFF). Both importers feel import of Indian mangoes should not be restricted to UP, but they should be allowed to import Alphonso, Banganapalli and other varieties from other states. The export period for UP mangoes - Langra, Dasehari and Chausa - is about 45 days from mid-June to July-end. This year, the first consignment arrived in Australia on August 2. While initial volumes of mango imports from India were only 1.267 tonnes, the counter -seasonal nature of mango production in India places Indian producers with an ideal opportunity to access the Australian market, said a DAFF spokesperson. The two importers feel the irradiation treatment is better suited to the Indian mango and they should be allowed to import into Western Australia (WA). Currently, Indian mangoes can be imported into WA under irradiation condition established under the Biosecurity Australia 2008 Import Risk Analysis Report. The WA Department of Agriculture and Food is undertaking a review of existing import regulations relating to Mango Seed Weevil (Sternochetus mangiferae) that will enable consideration of other conditions for import of mangoes into the state. Any fresh mango import from India must comply with the AQIS' import conditions, which include importers requiring to have a valid import permit; an original AQIS-endorsed phytosanitary certificate; all consignments treated prior to export having a commercial treatment certificate attached; securely (ie made insect proof) packed in clean, new packaging; and all consignments must be free of live insects, disease symptoms, trash, contaminant seeds, soil and other debris on arrival in Australia.

Australia's 'Final Import Risk Analysis Report for Fresh Mango Fruit from India' has recommended that Indian mangoes be permitted entry subject to quarantine conditions. Australia's approval of an import policy for Indian mangoes has been announced by the acting Australian High Commissioner to India, David Holly.

"This is the final step in Australia's import risk analysis process and paves the way for India to start exporting mangoes during its next export season in 2009", he said. "Australia is pleased to be increasing its agricultural trade with India, especially where increased trade will benefit both countries. "With the two countries in different hemispheres, there is a good potential for counter-seasonal trade. Both Australia and India produce quality fruit but at different times of the year." Mangoes meant for Australia will have to undergo the irradiation treatment. Australia undertook the import risk analysis on fresh mango fruit in response to a proposal from India. Access for Indian mangoes into Australia has been a long-standing issue.

Import Regulations - Australia

Introduction
There is no requirement for companies or individuals to hold an import licence. However, depending on the nature of the commodity, and regardless of value, owners may need to obtain permits to facilitate clearance of goods. For general information about relevant import regulations for Australia, Canadian companies should: consult the web site of the Australian Customs & Border Protection Service or the Customs Procedures for Importing and Exporting.

Documentation and Import Entry Costs

The Australian Documentary Import Declaration Comprehensive Guide is designed to assist importers who wish to clear goods imported by sea, air or international mail (post) from Customs and Border Protection. All such goods with a value that exceeds the import entry threshold of A$1000 must be cleared by submitting a completed import declaration form (N10) and paying duty, goods and services tax (GST) and other taxes and charges that apply.

Cost recovery charges apply for the processing of entries. The cost will depend on whether the entry is an electronic entry or a documentary (manual) entry, as well as shipment method (air, sea or post). Schedule of fees. Should you require further information relating to importing or exporting goods please contact the Customs Information and Support Centre on 1300 363 263 or send an email toinformation@customs.gov.au

Valuation
While there are several methods of valuing goods for Customs purposes, the method most applied (transaction value) is based on the price actually paid (or payable) for the imported goods subject to certain adjustments. A major condition for using the transaction value is that there is no relationship between the buyer and seller which may influence the price.

Rules of Origin
Rules of origin are the rules applied to determine from which country a good originates for international trade purposes. Rules of origin are necessary for both preferential reasons i.e. determining eligibility for benefits such as reduced rates of duty, and nonpreferential reasons such as the imposition of anti-dumping and countervailing duties, country of origin marking, etc. Detailed information on the rules of origin

Duty Rates
Rates of duty payable by an importer are determined by the classification of goods within the Australian Customs Tariff. In some circumstances, anti-dumping or countervailing measures, which result in the imposition of additional rates of duty, may also apply. Duty rates current

Indirect taxes
Imported goods may be subjected to one or more indirect taxes. These indirect taxes comprise the goods and services tax, the wine equalisation tax and the luxury car tax. Conditions surrounding the GST, WET and LCT

Goods and Services Tax (GST)

GST applies to most imported goods. There are few exemptions from the GST, the main ones being certain basic foodstuffs, some medical aids and appliances and imports that qualify for certain customs duty concessions. GST is applied at 10% of the value of the taxable importation. The taxable importation is calculated as the customs value of the imported goods + customs duty (if applicable) + international transport & insurance costs + wine equalisation tax (if applicable).

Wine Equalisation Tax (WET)

WET applies to the following alcoholic beverages: Grape wine, including sparkling wine and fortified wine; Grape wine products such as marsala, vermouth, wine cocktails and creams; Other fruit wines and vegetable wines, including fortified fruit wines and vegetable wines; cider; perry; mead and sake, including fortified mead. WET for imported wine is applied at 29% and is levied at the purchase price at inwards duty free OR for other alcoholic beverages is 29% of the importation cost ie customs value + customs duty + transport/insurance costs.

Luxury Car Tax (LCT)

LCT is a tax of 33% imposed on the GST-inclusive value of luxury cars over the relevant LCT threshold. You must generally pay LCT when you sell or import a luxury car. You must pay LCT as well as any GST payable. The LCT threshold for the 2012-13 financial year is $59,133. A higher threshold applies for fuel-efficient cars for 2012-13 the threshold for these cars is $75,375. A luxury car is a car with a GST-inclusive value above the LCT threshold. Under LCT law, a car is a motor powered road vehicle that is designed to carry a load of less than two tonnes and fewer than nine passengers. For further information on how to calculate the luxury car value: www.customs.gov.au www.ato.gov.au

Commerce Trade Descriptions

Importers are required to ensure that goods entering the commerce of Australia are correctly marked. Trade description markings must: be in English; be in prominent and legible characters; be on a principal label or brand attached to the goods in a prominent position in a manner as permanent as is practicable; specify if a weight or quantity is net or gross if labelling on the goods includes a weight or quantity; and include the name of the country where the product was made or produced, and where specified, a true description of the goods.

Commerce Trade Descriptions Import Regulations and more information on trade descriptions Specific requirements for the trade descriptions of watches, clothing, shoes, surfboards, imported medicines and goods from vulcanite, leather, plastic or their imitations Importers uncertain of any aspect of Customs requirements on labelling/trade description should contact the Customs Information and Support Centre atinformation@customs.gov.au

Animals and animal products, food and plant imports

All animals, animal and plant products and food imported into Australia must comply with quarantine requirements (to address concerns about animal and plant health) and with the Imported Food Program (to address concerns about food safety). Australian legislation ensures that all imports of animals, animal and plant products and of food comply with the quarantine conditions for their import. You can check the import requirements for a commodity by consulting the Department of Agriculture, Fisheries and Forestrys (DAFFs) Import Conditions Database (ICON) and search the ICON database. To satisfy quarantine requirements it may be necessary for importers of certain products to obtain an Import Permit. There may also be other quarantine prerequisites such as requirements to perform particular treatments (for example fumigation) on products. For more information on Australian quarantine requirements, contact your nearest DAFF office. Imported food must also comply with relevant provisions of the Food Standards Code. Food entering Australia is subject to legislation which requires imported food to be inspected and controlled using a risk-based border inspection program called the Imported Food Inspection Scheme, which is administered by DAFF. Under the scheme Food Standards Australia New Zealand (FSANZ) provides risk assessment advice to DAFF on the level of public health risk associated with certain foods. DAFF is responsible for inspecting and sampling imported foods to ensure they comply with the Food Standards Code. To be legally offered for sale in Australia, all imported foods must comply with relevant food regulations of the Food Standards Code. The Code can be consulted on line. For more information on the Food Standards Code, you should contact Food Standards Australia New Zealand.