CANALISATION OF EXPORTCANALISATION OF EXPORTCANALISATION OF IMPORTCANALISATION OF IMPORT

SPICE TRADING SPICE TRADING CORPORATION ltd.CORPORATION ltd.

PRESENTATION BY:PRESENTATION BY:Kirti Patidar.Kirti Patidar.

Ruchi Ajmera.Ruchi Ajmera.Ranu Sharma. Ranu Sharma.

CANALISATIONCANALISATION

State trading is often associated with canalisation. State trading is often associated with canalisation. Canalisation means establishment of state monopoly Canalisation means establishment of state monopoly in foreign trade. In other words, an item that is in foreign trade. In other words, an item that is canalised can be imported or exported, as the case canalised can be imported or exported, as the case may be, only by the designated state trading agency. may be, only by the designated state trading agency. Canalizing agency is the term used by a number of Canalizing agency is the term used by a number of developing countries to describe the STEs they developing countries to describe the STEs they maintain. The term refers to the channeling, or maintain. The term refers to the channeling, or “canalizing”, of imports and/or exports through a “canalizing”, of imports and/or exports through a designated product- specific enterprise. Such STEs designated product- specific enterprise. Such STEs aim to provide some degree ofaim to provide some degree of

price stabilization, particularly for producers, as well as price stabilization, particularly for producers, as well as toto

ensure availability of supplies for domestic consumers.ensure availability of supplies for domestic consumers.

Import Canalisation Import Canalisation

► As an instrument of state intervention in As an instrument of state intervention in international trade that has been used for international trade that has been used for over three decades, channelling or canalizing over three decades, channelling or canalizing imports has played an important role in many imports has played an important role in many countries' economies. Developing countries, countries' economies. Developing countries, in particular, faced with serious problems in particular, faced with serious problems regarding balance of payment, have resorted regarding balance of payment, have resorted to import canalization on a large scale. partial to import canalization on a large scale. partial or voluntary canalization is feasible or voluntary canalization is feasible alternatives to function efficiently alternatives to function efficiently

CANALISING AGENCY :::CANALISING AGENCY :::

These agency are appointed These agency are appointed by the government i.e. by the government i.e.

canalizing of import refer to canalizing of import refer to buying goods from various buying goods from various sources of buy in STC with sources of buy in STC with

various considered behind it various considered behind it

PURPOSE :::::::::PURPOSE :::::::::

►To control import of high value items To control import of high value items and hazardous item .and hazardous item .

►Political reason .Political reason .►Foreign exchange . Foreign exchange . ►Maintain national security . Maintain national security . ►Availability of resources . Availability of resources .

Advantages :::::::Advantages :::::::

BENEFITSBENEFITS

TO THE OVERSEAS BUYER-TO THE OVERSEAS BUYER-► STC act as an expert guide for buyers ,STC act as an expert guide for buyers ,► interested in indian goods for them . STC interested in indian goods for them . STC

finds the best indianfinds the best indian► manufacturer , undertakes negotiations manufacturer , undertakes negotiations

fixes delivery shedules,fixes delivery shedules,► overseas quality control all the way to the overseas quality control all the way to the

final shipment to thefinal shipment to the► entire satisfaction of the buyer.entire satisfaction of the buyer.

TO THE INDIAN INDUSTRY-TO THE INDIAN INDUSTRY-

► The indian manufaturers whose productThe indian manufaturers whose product► sail the seus via STC .benefit a lot from its sail the seus via STC .benefit a lot from its

expertice ,STC helpsexpertice ,STC helps► thousand of indian manufaturer to find thousand of indian manufaturer to find

market for their products .market for their products .► STC assist the manufaturer to use the best STC assist the manufaturer to use the best

raw material , guidesraw material , guides► and helps them manufatuere product that and helps them manufatuere product that

will attract buyerswill attract buyers

abroad .abroad .

IMPORT OF CANALISATION & CURRENTIMPORT OF CANALISATION & CURRENTSTATUSSTATUS

1 Import and distribution in planned & 1 Import and distribution in planned & phasedphased

manner.manner.

2 Long term supply arrangements .2 Long term supply arrangements .

3 Self generation of foreign exchange 3 Self generation of foreign exchange thoughthough

special link arrangement.special link arrangement.

4 Equitable distribution in india through4 Equitable distribution in india through

consortion.consortion.

THE ROLE OF STCTHE ROLE OF STC

1 financial assistance to exporters on easy terms.1 financial assistance to exporters on easy terms.

2 Taking products of small scale manufacturer to international 2 Taking products of small scale manufacturer to international trade fairs & exhibition .trade fairs & exhibition .

3 Import of machinery and raw material for export production .3 Import of machinery and raw material for export production .

4 assistance in the areas of marketing , technical knowlegy , 4 assistance in the areas of marketing , technical knowlegy , quality control packaging.quality control packaging.

5 supply of imported goods in small quantities as per 5 supply of imported goods in small quantities as per convenience of buyers .convenience of buyers .

6 Market intervention on behalf of the government .6 Market intervention on behalf of the government .

List of Items which are Canalised

HS code/Exim Code Item Description Policy Condition Relating to the policy Sub Heading Description

1001100020 Other than seed quality

Canalised Import through Food Corporation of India.

  Wheat and meslin

1201000090 Other Canalised Import through State Trading Corporation and Hindustan Vegetable Oils Corporation

  Soya beans, whether or not broken

31022901 Ammoniumsulphonitrate

Canalised Import through Minerals and Metals Trading Corporation of India Limited.

  Mineral or chemical fertilisers, nitrogenous

38231100110 Palm Stearin excluding crude palm stearin

Canalised Import through State Trading Corporation of India Limited.

  Industrial Monocarboxylic fatty acids; acid oils from refining; industrial fatty alcohols

38231100120 RBD Palm Stearin

Canalised Import through State Trading Corporation of India Limited and Hindustan Vegetable Oil Corporation Limited.

  Industrial Monocarboxylic fatty acids; acid oils from refining; industrial fatty alcohols

Canalization of exportCanalization of export

Canalization of foreign trade means routing of Canalization of foreign trade means routing of import or export of certainimport or export of certain

specified commodities through the designated specified commodities through the designated state trading enterprisesstate trading enterprises

such as;such as;••Tribal cooperative marketing federation of Tribal cooperative marketing federation of

India (TRIFED).India (TRIFED).••National agricultural cooperative marketing National agricultural cooperative marketing

federation or India (NAFED).federation or India (NAFED).••Minerals and metals trading corporation of Minerals and metals trading corporation of

India (MMTC).India (MMTC).

the canalization agencies undertake various the canalization agencies undertake various promotionalpromotional

programmed and provide incentives and programmed and provide incentives and assistance to the supportingassistance to the supporting

manufacturers. however, during the post-manufacturers. however, during the post-liberation era the number ofliberation era the number of

canalized items have been drastically canalized items have been drastically reduced and canalization is confinedreduced and canalization is confined

to certain petroleum products ,fertilizers, to certain petroleum products ,fertilizers, edible oils and few other items edible oils and few other items

Objectives of the canalization of Objectives of the canalization of exportsexports

1. To avoid the problems of under invoicing.1. To avoid the problems of under invoicing.

2. To increase the export volume.2. To increase the export volume.

3. To generate excess profit which can be 3. To generate excess profit which can be used forused for

exports incentives and promotional purposes.exports incentives and promotional purposes.

4. To increase the bargaining power of Indians4. To increase the bargaining power of Indians

exports.exports.

5. To fetch optimum price for exports.5. To fetch optimum price for exports.

6. To safeguard the interest of small exports.6. To safeguard the interest of small exports.

Impact of canalizationImpact of canalization

• • Analyzing the impact of canalization, theAnalyzing the impact of canalization, theministry of commerce remarked: the effect ofministry of commerce remarked: the effect ofcanalization of import through state agenciescanalization of import through state agencieshas resulted in savings in foreign exchange onhas resulted in savings in foreign exchange onimports on account of bulk purchases and alsoimports on account of bulk purchases and alsoon account of bulk shipments and in supply ofon account of bulk shipments and in supply ofrow materials to consumers in the country atrow materials to consumers in the country atreasonable rates.reasonable rates.

The other advantages are stated The other advantages are stated to be:to be:

1. Import and distribution in a planned and1. Import and distribution in a planned andphased manner;phased manner;2. Long term supply arrangements;2. Long term supply arrangements;3. Self generation of foreign exchange through3. Self generation of foreign exchange throughspecial link arrangements;special link arrangements;4.Equitable distribution in India through4.Equitable distribution in India throughassociation or consortia.association or consortia.however, views of the trade andhowever, views of the trade andindustry on canalization are not favorable.industry on canalization are not favorable.

► Canalized Items List: Canalized Items List: 6 entries and 17 sub-entries, export of 6 entries and 17 sub-entries, export of which is permitted through designated which is permitted through designated canalizing agencies, following the canalizing agencies, following the amendments to the EXIM policy announced amendments to the EXIM policy announced on 31st March'95. Prior to this amendment on 31st March'95. Prior to this amendment there were 6 entries and 18 sub-entries in there were 6 entries and 18 sub-entries in this category this category

Canalized Items (Exports)Canalized Items (Exports)Following the amendments to the EXIM Following the amendments to the EXIM policy announced on 31 March 1995, this policy announced on 31 March 1995, this category now consists of six enteries and category now consists of six enteries and 17 sub-eateries 17 sub-eateries

► Petroleum products Petroleum products ► Gum karaya Gum karaya ► Mica waste Mica waste ► Mineral ores , concentrates and compounds thereof Mineral ores , concentrates and compounds thereof

Rare earths (including Yttrium) ores, concentrates and compounds Rare earths (including Yttrium) ores, concentrates and compounds thereof thereof

Other mineral containing the following substances as accesory Other mineral containing the following substances as accesory ingredients including :- ingredients including :-

► Samerskite Samerskite ► Uraniferous allanite Uraniferous allanite

Radium ores and concentrates Radium ores and concentrates Thorium ores and concentrates Thorium ores and concentrates Titanium ores and concentrates (ilemnite, rutile, lou cexene Titanium ores and concentrates (ilemnite, rutile, lou cexene

etc.) etc.) Granular sillimanite produced by Indian Rare Earths Ltd. and Kerala Granular sillimanite produced by Indian Rare Earths Ltd. and Kerala

Minerals and Metals Ltd. Minerals and Metals Ltd. Iron Ore. However export of the following types of iron ore are not Iron Ore. However export of the following types of iron ore are not

canalised canalised ► Iron ore of Goa origin when exported to China, Europe, Japan Iron ore of Goa origin when exported to China, Europe, Japan

South Korea and Taiwan.South Korea and Taiwan. Chrome or lumps with Chromium Oxide not exceeding 38% Chrome or lumps with Chromium Oxide not exceeding 38%

► Low silica friable/fine ore Low silica friable/fine ore All grades of bauxite, All grades of bauxite, Manganese oresManganese ores

► Niger seeds Niger seeds ► Onions Onions

Spices Trading Spices Trading CorporationCorporation

STCL Ltd. was initially established in 1982 as STCL Ltd. was initially established in 1982 as Cardamom Trading Corporation Ltd., a Government of Cardamom Trading Corporation Ltd., a Government of India undertaking under the Ministry of Commerce & India undertaking under the Ministry of Commerce & Industry. Industry.

Realizing the immense market potential, the company Realizing the immense market potential, the company developed from a solely cardamom trading corporation developed from a solely cardamom trading corporation to become Spices Trading Corporation Ltd. in 1987.to become Spices Trading Corporation Ltd. in 1987.

STCL became a wholly owned subsidiary of The State STCL became a wholly owned subsidiary of The State Trading Corporation of India Ltd., A Government of India Trading Corporation of India Ltd., A Government of India Undertaking in 1999. Undertaking in 1999.

Spices Trading Corporation Ltd. was renamed as STCL Spices Trading Corporation Ltd. was renamed as STCL Ltd. Ltd.

STCL is involved in import, export and domestic trading STCL is involved in import, export and domestic trading of a varied range of products, both agricultural as well of a varied range of products, both agricultural as well as Non-Agricultural. as Non-Agricultural.

OBJECTIVEOBJECTIVE► Trading in domestic and international markets of spices and Trading in domestic and international markets of spices and

other agricultural commodities other agricultural commodities ► To process and manufacture spice and agricultural products To process and manufacture spice and agricultural products

of international standards of international standards ► To support, protect, maintain, increase and promote To support, protect, maintain, increase and promote

production of Indian spices and other agricultural production of Indian spices and other agricultural commodities as well as their sale / export commodities as well as their sale / export

► To effectively participate with Government of India as one To effectively participate with Government of India as one of their strategic partners in Agro-based programmes. of their strategic partners in Agro-based programmes.

► To conduct open auctions and sell agricultural commodities To conduct open auctions and sell agricultural commodities as auctioneer as auctioneer

► To undertake and promote Research and Development To undertake and promote Research and Development With the diversified trade outlook, to trade in non-With the diversified trade outlook, to trade in non-

agricultural products like Industrial Goods, Equipments, agricultural products like Industrial Goods, Equipments, Components.Components.

► To carry on domestic and international trade in Iron Ore, To carry on domestic and international trade in Iron Ore, Bullion, Precious Metals, Limestones, Metcoke, Minerals, Bullion, Precious Metals, Limestones, Metcoke, Minerals, polymer, Polyester Yarn, cotton Yarn, PVC Resins, HMS polymer, Polyester Yarn, cotton Yarn, PVC Resins, HMS Scarps and other metal ScrapsScarps and other metal Scraps

LOCATIONLOCATION

►Head Quartered in Bangalore, STCL Head Quartered in Bangalore, STCL Ltd. also has a wide presence across Ltd. also has a wide presence across the country, with branch offices at the country, with branch offices at strategic locations to facilitate strategic locations to facilitate effective trading activities. effective trading activities.

►The branch offices are located in cities The branch offices are located in cities such as Delhi, Kolkata, Chennai, such as Delhi, Kolkata, Chennai, Mumbai, Cochin, Sakleshpur, Madikeri, Mumbai, Cochin, Sakleshpur, Madikeri, Visakhapatinam. Goa, Kumily and Visakhapatinam. Goa, Kumily and Bodinayakanur. Bodinayakanur.

ActivitiesActivities

► STCL Ltd. is involved in a range of activities, right STCL Ltd. is involved in a range of activities, right from sourcing and trading of quality products to from sourcing and trading of quality products to making initiatives in market expansions. Through making initiatives in market expansions. Through strategic associations with other premier strategic associations with other premier organizations, STCL extends a helping hand to the organizations, STCL extends a helping hand to the farmers and growers who are a valuable link in the farmers and growers who are a valuable link in the supply chain. supply chain.

► Some of the activities initiated by STCL are:Some of the activities initiated by STCL are:► Exports Exports ► ImportsImports► Domestic TradeDomestic Trade► Cardamom Auctions Cardamom Auctions ► Canalysing AgencyCanalysing Agency► Online trading Online trading

Quality checksQuality checks

► With open economies, consumers world over are With open economies, consumers world over are becoming more and more quality conscious and becoming more and more quality conscious and quality requirements are becoming more and more quality requirements are becoming more and more stringent. At STCL, commitment to high quality stringent. At STCL, commitment to high quality products is a tradition. The tradition is to maintain products is a tradition. The tradition is to maintain not just the best but legendary quality in its not just the best but legendary quality in its products. products.

► STCL is today renowned world over for being a STCL is today renowned world over for being a premier trading company that adheres to high premier trading company that adheres to high quality standards. All the dispatches are checked quality standards. All the dispatches are checked for quality at the load ports and discharge ports by for quality at the load ports and discharge ports by independent and internationally reputed quality independent and internationally reputed quality audit organizations audit organizations

Market reachMarket reach

► STCL Ltd. offers a varied and diverse range STCL Ltd. offers a varied and diverse range of products for consumers across the globe. of products for consumers across the globe. STCL is reputed in the global market as a STCL is reputed in the global market as a reliable buyer and supplier of quality reliable buyer and supplier of quality products and superior service. products and superior service.

► The company has established a vast portfolio The company has established a vast portfolio of clientele in India as well as other parts of of clientele in India as well as other parts of the globe, including countries like China, the globe, including countries like China, Japan, Europe, USA, Middle East, Singapore, Japan, Europe, USA, Middle East, Singapore, Malaysia, Srilanka and Bangladesh Malaysia, Srilanka and Bangladesh

Corporate visionCorporate vision

► With the diversified trade outlook, the With the diversified trade outlook, the company would grow from strength to company would grow from strength to strength in a sustained manner :strength in a sustained manner :

► To contribute to the overall well being of To contribute to the overall well being of farmers by providing necessary support, farmers by providing necessary support, including better sales realization and low including better sales realization and low cost financial assistance for their produce. cost financial assistance for their produce.

► To provide quality products to consumers by To provide quality products to consumers by meeting the international food safety meeting the international food safety standards. standards.

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THANK YOUTHANK YOU