Global / Country Study and Report

On

“Kuwait Country”

Submitted To

(Indu Management Institute)

IN PARTIAL FULFILLMENT OF THE REQUIREMENT OF THE AWARD FOR

THE DEGREE OF

Master Of Business Administration

Under The Guidance Of

Faculty Guide

Dr. Manish Vyas

Submitted By

Name Enrollment No

Mr. Sanjay Patel 2044

Mr.JigneshPrajapati 2045

Mr.VirbhadrasinhRana 2046

Miss.UrvashiParmar 2047

Miss.Yukti Patel 2048

Mr.BhaveshSuvagiya 2049

[Batch: 2011-2013]

MBA Semester III/ IV

Indu Management Institute

MBA Programme

Affiliated To Gujarat Technological University

Ahmadabad

Students’ Declaration

We Sanjay Patel , JigneshPrajapati, VirbhadrasinhRana, UrvashiParmar, Yukti Patel, BhaveshSuvagiya, hereby declare that the report for Global country study Report entitled “Kuwait oil TankerCompany” in Kuwait is a result of our own and our indebtedness to other work Publication, reference , if and, have been duly acknowledged.

Place: Baroda Date:

Signature

Institute’s Certificate

“Certified that this Global / Country Study And Report Titled “Kuwait country” is the bonafide work of Mr/Miss :-Sanjay Patel ,JigneshPrajapati, VirbhadraRana, UrvashiParmar, Yukti Patel, BhaveshSuvagiya who carried out the research under my supervision. I also certify future, that to the best of my knowledge the work reported herein does not form part of any other project report or dissertation on the basis of which a degree or award was conferred on an earlier occasion on this or any another candidate.

Signature of Director Signature of the Faculty Guide (Dr.Manish Vyas) (Dr. Manish Vyas)

Executive Summary

Each country profile is designed to give a summary of that country, its economy and economic

profile. It provides economic indicators, data and statistics, as well as analyses of its history,

GDP, GDP growth, GDP per capita, prospects, sectors and international trading relations,

imports & exports. We have more in depth sections for the larger economies.

Country population figures are derived from various sources including estimates from national

governments, the World Bank, the IMF, and the CIA.Census figures are therefore

supplemented by data on births, deaths, immigration, emigration, school intakes, tax payers

and any other data sources a government can draw on to estimate its population.

Global Market Directs Kuwait Oil Tanker Refining Operation Assets Summary Report is an

essential source for company data and information. The report examines company Kuwait Oil

Tanker’s key business structure and operations, history and products, and provides summary

analysis of its key revenue lines and strategy. It provides a unique insight into the company’s

major Refineries.

This report covers the global refining market with information on historical and forecast

capacities of refineries by country and leading companies to 2013. The report provides an in-

depth analysis of refinery product types and application, operating environment based on

existing government regulations and future demand trends. The report also provides analysis

of trends, drivers, and challenges to the refining industry in Asia- Pacific, Europe, Middle East

and Africa, North America, South and Central America. The leading players in global refining

and their investment opportunities and challenges are also examined. The company analysis

includes survival strategies and factors that will differentiate leading refining companies from

others to 2013.

Each country evolves a taxation approach to bring in revenues for the government to spend on

public services. Country tax regimes are often complex affairs that include income tax,

corporate tax, property tax, fuel tax, Value Added Tax (VAT) or Goods & Services Tax (GST),

capital gains tax, estate or inheritance tax, and local, regional or state taxes

PREFACE

The Global Country Report is part of the MBA program and it is designed in such a way

that student can give maximum knowledge and can get exposure to the global world in

minimum time.

With the respect and pleasure, we have privilege to submit our report to the kind hands of

eminent examination of the Indu Management Institute. MBA is a professional course, to be

an MBA student is a matter of pride because through MBA each student is prepared to hold the

post of manager very confidently and we are in field which helps us to develop from normal

human being into a disciplined and dedicated professional.

We have heard that famous saying “God helps those who helps them salves“ and

“Experience is the best teacher “the global country report on “KUWAIT” has given us

sufficient knowledge to fill the gap between the theoretical and practical knowledge.

ACKNOWLEDGEMENT

Every work that one completes successfully stands on the constant encouragement, good will

and support of the people around. I, hereby, avail this opportunity to express my heartfelt

gratitude to a number of people who extended their valuable time, full support in developing

this project.

We convey our heartful gratitude to our college “Indu Management Institute” under Gujarat

Technological University for giving us this precious opportunity to work for the real-time

project.

We also forward our special thanks faculty member & project guide Mr. Manish Vyas from

Indu Management Institute for guiding us in this report. The valuable suggestion of the faculty

member during the course of our Project work gives me the inspiration to achieve our goal. The

Shape project has been taken is due to judicious guideline, encouragement & help of our

guide.

We own the success of the project to my Project Guide, Mr. Manish Vyas who was a

tremendous supporter and an eager teacher, for providing excellent guidance for this project.

He is one of the major sources behind the success of the project.

INDEX

SR.

NO.

PARTICULARS PAGE

NO.

SEMESTE

R

1 Demographic Profile of the Kuwait

Economic Overview of the Kuwait

Overview of Business and Trade at International

Level

Overview Different Economic sectors of Kuwait

Present Trade Relations and Business Volume of

different Products with India/ Gujarat

SWOT Analysis

9 to 28

III

2 Introduction of Kuwait Oil Tanker Company and its

role in the economy of Kuwait

Structure, Functions and Business Activates of

Kuwait Oil Tanker Company

29 to 40

IV

3 Comparative Position of Kuwait Oil Tanker products

in Kuwait with India and Gujarat

Present Position and Trend of Business ( import /

export )with India / Gujarat

41 to 64

IV

4 Policies and Norms of Kuwait for oil sector for import/

export including licensing / permission, taxation etc.

Policies and Norms of India for Import/export

including licensing / permission. Taxation etc.

65 to 76

IV

5 Potential for Import / Export in India / Gujarat Market

Business Opportunities in future

Conclusion and suggestions

77 to 87

IV

6 Bibliography 88

List of Tables / Graphs/ Diagrams

SR. NO Tables/Graphs/

Diagrams.

PAGE NOS.

1 Graph-1 26

2 Table-1 43 to 47

3 Table-2 49 to53

4 Graph-2 57

5 Graph-3 58

6 Graph-4 59

7 Graph-5 60

8 Graph-6 61

9 Graph-7 78

10 Graph-8 79

PART – I ECONOMIC

OVERVIEW OF THE

SELECTED

COUNTRY

PART – I ECONOMIC OVERVIEW OF THE SELECTED COUNTRY

Demographics Profile 2012 of Kuwait

Population

2,646,314 (July 2012 est.)

Age structure

0-14 years: 25.8% (male 348,816 female 321,565) 15-64 years: 72.2% (male 1,153,433 female 720,392) 65 years and over: 2% (male 25,443 female 25,979) (2011 est.)

Definition: This entry provides the distribution of the population according to age.

Information is including by sex and age group (0-14 years, 15-64 years,65 years and

over). The age structure of the population affects a nation's key socioeconomic issues.

Median age

Total: 28.5 years male: 29.8 years female: 26.3 years (2011, est.)

Birth rate

20.96 births/1,000 population (2011 est.)

Definition: This entry gives the average annual number of births during a year per

1,000 persons in the population at midyear also known as a crude birth rate. A birth rate

is usually the dominant factor in determining the rate of population growth. It is depends

on both the level of fertility and the age structure of the population.

Death rate

2.13 deaths/1,000 population (July 2011 est.)

Definition: This entry gives the average annual number of deaths during a year per

1,000 populations at midyear also known as crude death rate. A death rate whiles only

a rough indicator of the mortality situation in thecountry. Accurately indicates the current

mortality impact on population growth. This isindicator significantly affected by age

distribution and most countries will eventually show a rise in the overall death rate. In

spite of continue decline in mortality at all ages as declining fertility results in an aging

population.

Net migration rate

0 migrant(s) 1,000 Population (2011 est.)

Urbanization

Urban population: 98% of total population (2010) Rate of urbanization: 2.1% annual rate of change (2010-15 est.)

Major cities - population

KUWAIT (capital) 2.23 million (2009)

Sex ratio

At birth: 1.05 male(s) female under 15 years: 1.08 male(s) female 15-64 years: 1.6 male(s) female 65 years and over: 0.96 male(s) female total population: 1.43 male(s) female (2011est.)

Infant mortality rate

Total: 7.87deaths 1,000 live births (2011 est.)

Male: 7.56 deaths 1,000 live births (2011 est.)

Female: 8.19 deaths 1,000 live births (2011 est.)

Definition: This entry gives the number of deaths of infants under one year old in a

given year per 1,000 live births in a same year included is the total death rate and

deaths by sex male and female. This rate is often toused as an indicator of the level of

health in a country.

Life expectancy at birth

Total: 77.28 years Male: 76.09 years Female: 78.51 years (2011 est.)

Definition: This entry contains the average number of years to be lived by a group of

people born in a same year if mortality at each age remains constant in the future. The

entry includes total populationof male and female components.

Total fertility rate

2.6 children born/woman (2011 est.)

Nationality

Noun: Kuwaiti(s)

Adjective: Kuwaiti

Ethnic groups

Kuwaiti 45%, other Arab 35%, South Asian 9%, Iranian 4%, other 7%

Religions

Muslim (official) 85% other 15%

Definition: This entry is an ordered to listing of religions by adherents starting with the

largest group and sometimes includes the percent of total population.

Languages

Arabic (official), English widely spoken

Definition: This entry provides a rankin ordering of languages starting with the largest

and sometimes includes the percent of total population speaking that language.

Literacy

Total population: 93.3% Male: 94.4% Female: 91% (2005 census)

Definition: This entry includes a definition of literacy and Census Bureau percentages

for the total population males, and females.There is no universal definitions and

standards of literacy. Otherwise specified all rates are based on the most common

definition - the ability to read and write at a specified age.

School life expectancy

Total: 12 years Male: 12 years Female: 13 years (2006)

ECONOMIC OVERVIEW

Establishment:

First settlement: 1703

Independence from U.K. 19 June 1961

GDP:

Agriculture: 0.3%

Industry: 48% Service: 51.8%

Unemployment rate: 2.2%

GDP: Total $176.667 Billion

Currency: Kuwaiti Dinar

Labour force:

2.243 million

Population below poverty line: NA%

Investment: 11.4% of GDP

Taxes & other revenue: 57.4% of GDP

Public dept: 6.8% of GDP

Exports: $94.47 billion

Imports: $22.41 billion

Exports commodities:

Oil & refined product Fertilizers Import commodities:

Vehicles & parts Clothing

OVERVIEW OF BUSINESS AND TRADE AT INTERNATIONAL LEVEL

Kuwait is a small relatively open petroleum based economy with heavy dependence on foreign manpower. It has always offered an open highly competitive and affluent market for capital and consumer goods and for project exports. India-Kuwait relations have always had a pro trade-bias and bilateral trade has raised steadily since1991. India-Kuwait trade was US$ 9.03 billion in 2009-2010 of which non-oil trade accounted for approximately US$ 1.1 billion while petroleum exports from Kuwait to India were approximately US$ 7.9 billion. India has consistently been among the top ten trading partners of Kuwait. As per Indian Government sourcesof the trade during 2006-2010 was follows:

India-Kuwait Bilateral Trade FY 2006-10 in US$ million In Rs. Lakhs

2006-07 2007-08 2008-09 2009-10

Indian Exports to Kuwait

614.81 681.54 797.50 782.45

Indian Imports from Kuwait

5,993.23 7,704.25 9593.74 8,249.49

Total 6,608.04 8,385.79 10,391.24 9,031.94

Source: Department of Commerce, Ministry of Commerce & Industry, Government of India.

The difference in the growth rate in rupee and dollar terms is due to the variation in the exchange rate in corresponding years.

India’s Exports to Kuwait

The exports from India to Kuwait increased by 14.80% in US$ terms from US$ 681.54 million in 2007-08 to US$ 782.45million in 2009-10. In Rupee terms, it increased by 35.17% from Rs. 2,74,490.59 lakhs to Rs. 3,71,035.94 lakhs in the corresponding period. A pie-chart showing the share of top 10 items of exports from India during 2008-09 shows that the major items exported from India were Cereals, Meat and Edible Meat Offal, Articles of Iron or Steel, Electrical Machinery and Equipment and Parts thereof Articles of Apparel and Clothing Accessories, Nuclear Reactors, Boilers, Machinery and Mechanical Appliances, Residues and Waste from the Food Industries, Iron and Steel, Edible Fruit and Nuts, Fish and Crustaceans, Molluscs and other Aquatic Invertebrates.

India’s Imports from Kuwait

India’s imports from Kuwait went up by 7.07% in US$ terms from US$ 7704.25 million in 2007-08 to US$ 8,249.49 million in 2009-10. In Rupee terms the imports rose by 25.93% from Rs. 30, 95,993.03 lakhs to Rs 38, 98,799.19 lakhs in the corresponding period. The major items imported by India were Organic Chemicals, Plastic and Articles thereof, Iron and Steel, Fertilizers, Aluminum and Articles thereof, Salt Sulphur; Earths and Stone, Inorganic Chemicals, Organic or Inorganic Compounds of Precious Metals, Copper and Articles thereof, Nuclear Reactors, Boilers, Machinery and Mechanical Appliances, Miscellaneous goods.

Indian Companies in Kuwait Telecommunications Consultants India Limited (TCIL), Life Insurance Corporation of India (International), Life Insurance Corporation of India (LIC) Housing Finance,

Overview of Different Sector of Kuwait Economy

Main industries

Petroleum, Petrochemicals, Cement, Shipbuilding and repair, Desalination, Food processing, Construction material

Agriculture

Agriculture is limited by the lack of water and land. The government has experimented in growing food through hydroponics and carefully manage farms. However, most of the soil which was suitable for farming in south central Kuwait was destroyed when Iraqi troops set fire to oil wells in the area and created vast "oil lakes". Fish and shrimp are plentiful in territorial water, and large-scale commercial fishing has been undertaken locally and in the Indian Ocean.

Main export partners:

Japan19.9%,

South Korea 17%,

Taiwan11.2%,

Singapore 9.9%,

United States 8.4%,

Netherlands 4.8%,

China 4.4%

Pakistan2.4% (2007)

Main import partners

United States 12.7%,

Japan 8.5%,

Germany 7.3%,

China 6.8%,

South Korea 6.6%,

Saudi Arabia 6.2%,

Italy5.8%,

United Kingdom 4.6% (2007)

Legal Aspects Of Trade in Kuwait Country

The rules of commerce are in general similar to West European practice.

Any Kuwaiti or GCC national over 21 years of age may carry on commerce in Kuwait provided he or she is not affected by a personal legal restriction.

But a foreigner (non-GCC national) may not carry on a trade unless he or she more Kuwaiti partners and the capital owned by the Kuwaiti partners(s) in the joint business are not less than 51 % of the total capital.

A foreign firm may not set up a branch and may not perform any commercial activities in the country except through a Kuwait agent. Foreign individuals and firms do not may not acquire commercial licenses in their own name nor may they own real estate locally.

The main laws regulating business in Kuwait which have been amended several times since they were issued, are

(a) The civil code (Law 67 of 1980),

(b) The commercial code (Law 68 of 1980), and

(c) The commercial companies law (Law 15 of 1960).

Business Licenses

To do business a license is necessary. General trading, contracting, importing and industrial licenses are issued by the Ministry of Commerce & Industry (MCI). For particular commercial activities, specific licenses are required and these are often issued by the ministry that controls that activity.

Business licenses are only issued to Kuwaiti nationals and Kuwait companies and. Insome cases to GCC nationals and companies. Costs are usually KD100 per licenses; all licenses required period renewal, normally even two years.

Kuwait free trade zone

Kuwaitis new privately to managed free trade zone is located Shuwaikh and allows 100% foreign ownership of business within the zone. There are no import duties and foreign corporate income is tax-free,Commercial, Industrial and service licenses are a variety of infrastructural services.

Importing in to kuwait The right to import goods into Kuwait on a commercial basis is restricted to Kuwait individuals and firms who are member of the Kuwait Chamber of Commerce & Industry (KCCI) and who have import licenses issued by the Ministry of Commerce & Industry (MCI).

Import Licenses

General import licenses which must be renewed annually allow any amount of a variety of products from any country to be imported any number of times. But special licenses are needed to bring in regulated products such as arms, ammunition and explosive,ethyl alcohol, drugs, pesticides, jewellery and precious stone , weights and weighing machines, vintage cars, etc; these too must be renewed annually.

Special licenses is also needed to import industrial equipment and spare parts these are issued to industrial firms upon the recommendation of the public Authority for industry and are valid for a single use only. All import as well as locally made items must comply with Kuwaiti standard specifications (GCC) a set of common standards being devised under the GCC’s Unified Economic Agreement apply and if there is no suitable GCC, the product must adhere to international standards.

Import Documentation

To clear goods into Kuwait, a minimum of four documents is needed:

(a) Commercial invoice

(b) Certificate of origin

(c) Official delivery order

(d) Packing list.

Agency & Service Agreement

Only Kuwait individuals or firms may be act as commercial agent in Kuwait while foreign individual or firms,except for GCC nationals, are not allowed to carry on commercial activities in the country except through a commercial agent.

Terms of an Agreement

An agency agreement must be in witting and must be register with MCI. Its terms must cover of the activities to be undertaken the scope of the agent’s authority. His remunerationand the duration of the agency.

Generally speaking, the parties to the agency agreement have full freedom of contract but a few privations of the code override what the parties might wish to agree and any terms which contradict these privations are void.

If an agent is required to create premises then the contract must be for at least five years. The agent is entitled to his remuneration:

(a) On all matters concluded by him.

(b) On transactions which would have been concluded but for some act of his principal and,

(c) On transactions concluded either directly by the principal or by others acting on behalf of the principal in the area of the agent’s operations unless otherwise agreed in writing.

Service Agreement

To open a branch in Kuwait a foreign firm must enter as agency agreement with a Kuwaiti sponsor or service agent.

Under such as arrangement the agent is merely the foreign entity’s legal representative in the country and doses little more than take care of licensing formalities, obtain visas for the principal’s executives and employees, and represent the principal officially.

Present Trade Relation With India

Warm and friendly contacts between India and Kuwait go back several centuries. Geographical proximity, historical trade links cultural affinities and presence of a large number of Indian expatriates continues to sustain and nurture this relationship.

Kuwait’s ruling Al-Sabah family too has longstanding ties with India. India has been a natural trading partner and a destination for higher learning for Kuwait. Until 1961, Indian Rupee was the legal tender in KUWAIT.

Recent High-Level Exchanges:

Minister of External Affairs of India Hon’bleShri S. M. Krishna visited Kuwait in February, 2010 during which he met Mr.Amir the Prime Minister and the Deputy PM, and Foreign Minister of Kuwait.

Kuwaiti Investment in India:

Significant Kuwaiti presence in India includes those by AlghanimGroup ofKuwait, KAPICOgroup, Agility Logistics, Hasibat Holding Co. KGA Group, KCIC, KIPCO, Global Investment House Kuwait Finance House etc, among others.

Indian companies in Kuwait:

Indian PSUs like TCIL,LIC, LIC Housing Finance, New India Assurance Company, Oriental Insurance Company, Bridge and Roof and National Aviation Company.

KEC International Ltd (subsidiary of RPG Group), Shalimar Valves, etc.

Science & Technology and Education:

An Agreement on Scientific and Technological Cooperation between India and Kuwait was signed during the visit to Kuwait of Hon’ble Vice President in April 2009. About 550 Indian doctors and 8,000 nurses are employed in Kuwait hospitals.

An “India Study Centre” at the Faculty of Social Sciences of the Kuwait University was set up in December 2006.

Business volume of different products

Kuwait is a member of the Organization of Petroleum Exporting Countries (OPEC), exporting the fourth largest volume of oil among the group in 2010.

At the same time, Kuwait's economy is one heavily dependent on petroleum export revenues, which account for half of its overall gross domestic product 95 percent of total export earnings and 95 percent of government revenues.

Kuwait has an active sovereign-wealth for fund the Kuwait Investment Authority which oversees all state expenditures and international investments.

1) Oil

Kuwait has the world 6th largest oil reserves and is one of the ten largest exporters of total oil products.

According to Oil & Gas Journalas of January 2011 Kuwait’s territorial boundaries contained an estimated 101.5 billion barrels (bbl) of proven oil reserves, roughly 7 percent of the world total.Additional reserves are held in the Partitioned Neutral Zone which Kuwait shares on a 50-50 basis with Saudi Arabia.

Sector Organization

The government of Kuwait owns and controls all development of the oil sector. The Supreme Petroleum Council (SPC) oversees Kuwait’s oil sector and sets oil policy. The rest of council is made up of six ministers and six representatives from the private sector.

Exploration and Production

In 2010, Kuwait’s total oil production was approximately2.5 million barrels per day including its share of approximately 250000 bbl/d production from the PNZ. Of the country’s 2010 production approximately 2.3 million bbl/d was crude and 200000 bbl/d was non-crude liquids.

Slightly over half of Kuwaiti crude production in 2010 came from the southeast of the country, largely from the Burgan field: production from the north has increased to approximately 800000 bbl/d. As a member of OPEC, Kuwait’s total production is constrained by organization’s production targets.

Exports and Consumption

Kuwait exports of total oil amount to some 1.8 million bbl/d of which 1.7 million bbl/d was crude oil.

The largest proportion is the lighter Burgan crude which is blended with 5 of 12 heavier more source crude from northern fields as well as marginal amounts from Minagish and Umm Gudair. As of the beginning of 2010, the price of Kuwaiti crude oil for American customers was tied to the Argus Source Crude Index a weighted average of various North American medium source crudes. European buyers purchase from a benchmark linked between a Brent weighted-average and Saudi Arab Medium.

Downstream

Oil & Gas Journal puts nameplate refining capacity in Kuwait at 936000 bbl/d. This productions capacity is derived from three refinery complexes: al-Ahmadi, Abdullah, and al-Shuaiba. Petroleum Company (KNPC). Kuwait is a large exporter of refined products as refining capacity is about three times the level of domestic demand for petroleum. 2) Natural Gas

Kuwait has been recently become a net importer of natural gas, leading the country to focus more on natural gas exploration and development for domestic consumption. According to the Oil & Gas Journalas of January 2011, Kuwait had estimated 63 trillion cubics feet (Tcf) of proven natural gas reserves.

Sector Organization

All of the natural gas resources are owned by the Kuwait Petroleum Corporation (KPC). The Kuwaiti constitution prohibits any use of production-sharing agreements (PSAs) that allow for an equity stake by an IOC in development projects.

GRAPH - 1

Exploration and Production In 2010, Kuwait produced 1.17 billion cubic feet per day (Bcf/d) of the natural gas. This volume was an increase of around 8 percent compared with 2009. Kuwait increasingly require supplies of natural gas for the generation of electricity, water desalination, and petrochemicals as well as increased use for enhanced oil recovery (EOR) techniques to boost oil production. Kuwait is shifting its exploration of drive in order to focus on the natural gas discoveries to mitigate imports of liquefied natural gas (LNG)and decrease the proportion of oil used domestically.

Consumption and Imports

In 2010, Kuwait consumed approximately 529 Bcf of natural gas which is equal to 1.45 Bcf/d. Since 2008, Kuwait has consumed more natural gas than it has produced. Which is fueled increasingly by natural gas has outpaced natural gas production during the summer months, resulting in the shutdown of refinery and petrochemical operations to meet the increased demand of electricity. In June 2009, Kuwait signed a deal with Shell to import LNG, receiving the first cargo in August 2009.

3) Electricity

Kuwait’s electric sector has been not expanded despite demand growth of 8 percent per year.

Kuwait has an installed electric generation capacity of 11300 MW which was slightly above peak demand of 10900 MW in the summer of 2010. Kuwait has come to embody the difficulties facing the region’s electricity networks, with rapid demand growth causing rolling blackouts at times of peak energy demand. Formerly having one of largest reserve margins in the region, Kuwait is perpetually in a state of electricity supply shortage.

SWOT Analysis

Strengths:

Strong public finance. Low levels public debt. Solid banking system. Independent Central Bank. Freedom of the press. High country credit rating. A democratic system.

The passage of an anti‐trust law. A new law is to be issued to stress quality standards. Enhancing the public private partnership in education.

Weaknesses:

Inefficient government bureaucracy. Restrictive labor regulations. Inadequate educated workforce. Corruption/bribes. Poor works ethic in national labor forces. Wastefulness of government spending. Business costs of corruption. Burden of government regulation

Opportunities:

Perseverance in developing and improving integration potential. The potential of signing free trade agreement with other countries. The adoption of an open sky policy.

A re‐exporting hub in the Middle East to other parts of the world. A regional financial center.

Threats:

Regional political instability due to a likelihood of the following conflicts: Iraq: The spread of violence and fighting among differents groups.

Lebanon: The political unrest after the Israeli‐Lebanese conflict.

Syria: The long awaited Syrian‐Israeli and Syrian‐American conflicts. Possible increases in business cost due to rising regional terrorism threats. Exposure to imported inflation due to the higher import price.

PART – II INDUSTRY /

SECTOR / COMPANY

SPECIFIC STUDY

PART-2 INDUSTRY / SECTOR / COMPANY SPECIFIC STUDY

Introduction of company

KUWAIT OIL TANKER COMPANY

KOTC was found in April 1957 by a group of Kuwaiti pioneer investors who had a vision of how

important sea borne transportation would be for the development of oil industry and how

essential it becomes to exploit and discover oil in Kuwait.

Oil become the major source of energy and the world demands increased substantially it is

transport in crude, refined and liquefied products forms did indeed develop into an important

part of the marketing activity, Thus in 1976 the government decided to become a partner to

KOTC with a 49 % share capital thereby providing a strong and vital boost to its development.

Three years laters in June 1979 in conformity with plans to bring all its oil operations from the

well to the ultimate consumer under one corporation the government acquired full control of

the Company’s capital When Kuwait Petroleum Corporation (KPC) was established in January

1980 KOTC assumed responsibility for the transportation sector of KPC.

KOTC-an effective and efficient provider of marine transportation:

The Company is mainly involved in the ownership and management of tankers engaged in the

transportation of crude oil and refined petroleum products and liquefied petroleum gases. it is

also operates a Marine Agency Branch acting as sole agent of all tankers calling at Kuwait’s

sea port and a Gas Branch for the filling and distribution of LPG cylinders for local industry and

domestic consumption.

As the transportation arm of KPC it operates on a commercial basis a modern balanced fleet of

Very Large Crude Carriers (VLCCs), petroleum product tankers and LPG carriers to maintain a

strategic coverage of KPC’s oil exports to all corners of the global. In spite of the general

slackness conditions in the tankers industry all over the world during the current years KOTC

managed to keep its profitability above the regular average due to its intensive concern for

reducing the operating expenses and its wise policy of replacing old ships at the appropriate

times.

VISION AND MISSION:

KOTC’s Fleet Groups Vision

To achieve the leading global position in Upstream Oil & Gas an integrated value-driven enterprise by:

Maximizing the strategic value from the oil.

Growing the reserves for a sustainable future.

Realizing value from the technology.

Striving for the excellence in performance and

Contribution to the Enterprise and State.

We are committed to being a leader in the transportation of oil & gas. This commitment is demonstrated by the professionalism, dedication and actions of our people reliability of our processes and our respect for the world’s environmental concerns and the aspirations of our stakeholders.

KOTC’s Fleet Groups Mission

Manufacturing and supplying the oil products and services that satisfy the needs of our customers

We are operate our ships according to the best industry practices to ensure that we fulfill our responsibilities towards our Stakeholders including Business, Safety, Health and Environmental Protection. 1. Commit ourselves to our Vision; 2. Strive to zero HSE incidents and minimize environmental pollution; 3. Maintain a healthy and constructive relationship with our stakeholders in our business; 4. Build trust within our own organization; 5. Maintain a positive working atmosphere thus enabling creativity, innovation and teamwork; 6.Take and demonstrate our responsibilities towards development and maintenance of competence of our employees; 7. Recognize good performance of our employees; 8. Fulfill Company’s expectations as the requirements of our processes; 9. Show visible continual improvement in results.

BOARD OF DIRECTORS IN 2012:

MR. Bader N. Alkhashti

Chairman and Managing Director

SHK. ALI H. AL-SABAH Deputy Chairman

Mr. Motaeb M. Alajmi

Board Member

Mr. Hatem I. Alawadhi Board Member

MR. Jamal E. Alloughani

Board Member

The petroleum industry in Kuwait is the largest industry in the country accounting nearly half

of the country's GDP. Kuwait has the proven crude oil reserves of 104 billion barrels (15 km³),

estimated to be 10% of the world reserves. Kuwait oil reserves are a fourth largest in the world

and the Burgan Field is the second largest oil field and Kuwait is the world's eleventh largest oil

producer and seventh largest exporter. Kuwait oil production accounts for 7% of the world-wide

oil production.

Since the government of Kuwait owns the oil industry. It is controls most of the country's

economy of 75 percent of the GDP. Kuwait oil exports are depending on internal needs –

almost all of Kuwait’s energy is derived from oil – and on international demand and prices

and production quotas fixed by the OPEC of which Kuwait is the member. OPEC’s quotas

however, are difficult to enforce and Kuwait and other countries have been accused of violating

them. In 2005 oil production are 2.418 million bbl/day.

COMPANY’S OTHER ACTIVITIES:

GAS FILLING PLANT:

In 1960, the Company are granted the Franchise for the marketing and distribution of Liquefied gas in the local market as an alternative to the domestic fuel and in January 1962 a plant of a productive capacity of filling 1000000 cylinder of 12 kilogram category annual was built and commissioned.

Due to the increase of population in Kuwait it became necessary for the Company to increase the production capacity of the plant to meet the required consumption. However the size of the plant was difficult to increase the production capacity therefore a new plant for filling gas with a capacity of 15 million (12kg) cylinders annual was built in Mina Abdullah Industrial Area. The plant has been in operation since 1986 and has the production capacity to meet future requirements. All the operations of the plant are fully automatic including a routine task such as safety examinations and pressure tests. The company is to provide this service to the Kuwaiti community with quality and safety guarantee to the consumer.

MARINE AGENCY BRANCH:

The activities of a company spread and its investments expanded in other fields focusing on the core of a Kuwaiti economy which is oil therefore the company was directed to be an agent for the oil tankers calling Kuwait oil ports and became the exclusive agent of the oil tankers with a special concession awarded by the State and it began its activity in this field on 1959.

The marine agency branch provided the oil tankers are in different Kuwaiti oil ports with various types of the services in return of agency fees in addition to the value of the provided services.

The activities of the branch are determined by the number of tankers calling at Kuwait oil ports which is turn dictated by the volume of Kuwait’s export and type of vessels. The marine agency branch dept are the considered one of the profit sources in the company and it is affected by the oil production level in Kuwait and in order to have a clear idea about the extent of development achieved by the marine agency. we can see that number of the tankers serviced by the marine agency during the financial year 1985 – 1986 was more than 1500 tankers, Moreover the statistics shows that the agency branch served 1272 during the financial year 2004-2005 due to the direction of the tankers oil market to build huge tankers.

FLEET DEVELOPMENT:

Two years after it is establish in1959 KOTC took delivery of the first crude oil tanker “KAZIMAH” 49,000 Metric Tons. It is the vanguard of oil tanker flying the Kuwaiti flag and in those days it was considered a super tanker.

By 1975 a fleet had been expanded to transport over one million Metric Ton of crude oil but due to the expansion of refinery capacity in Kuwait product tankers were also acquired along with liquefied petroleum gas (LPG) carriers by 2001 the fleet reached 25 vessels of different sizes.

The fleet is reached its maximum number in 1993 with a total of 38 vessels and the capacity of 4.1 million Metric Tons. In a last decade KOTC modernized and developed it is fleet by building new tankers and scrapping the very old ones.

The company’s mission and strategy is to maintain a high standard fleet to cater for KPC’s requirement the Fleet New Building Projects Group (FNBPG) handles all issues pertaining to fleet renewal projects. .

INDUSTRIAL & SAFETY:

For Quality Services, Safer Operations, Cleaner Environment and Employee Health & Safety

KOTC is a fully committed to comply with international QHSE standards and systems in all the activities and operations. KOTC seeks to adopt the latest technologies & systems are in order to develop the safety and the efficiency of the operations & maintenance activities and to provide maximum attention to employee’s health & safety and environment protection.

KOTC operates the fleet in compliance with the requirements of ISM and ISO 9001 standards. KOTC is the proud to be the first shipping company in the Middle East that complies with the requirement of Green Award ISO 14001 and OHSAS 18001 which demonstrates KOTC’s commitment to environmental protection and occupational health and safety. Our Marine Agency Branch and the LPG Filling Branch comply with the requirement for quality and environment standards ISO 9001, ISO 14001 and OHSAS 18001.

Subsidiary companies of Kuwait oil tanker company

MINISTRY OF OIL

Sheikh Ahmed Al Jaber Al Sabah granted Kuwait Oil Limited Company with the participation of Protol British Company "BP" and American Oil Gulf Company "Gulf Oil" the right of franchise of concessionaire to explore oil in all Kuwait lands and territorial water for 75 year period and this was on 23rd December 1934.

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Kuwait Petroleum Corporation

Kuwait Petroleum Corporation is the state-owned entity responsible for Kuwait''s hydrocarbon interests throughout the world. It is part of the global energy industry and help to supply the world with its vital oil and gas needs by exploring for producing, refining, transporting and marketing these precious natural resources both in our home country and international.

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Kuwait Oil Company

This is the official home page of the Kuwait Oil Company (K.S.C.). KOC is proud to be the only oil producing company in the State of Kuwait contributing to the wealth and prosperity of Kuwait and its people ...

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Kuwait National Petroleum Co.

Kuwait National Petroleum Company has one of the largest oil complexes in the world. There are houses three major oil refineries. KNPC''s refineries are distributed within 15 Kilometers of each other and are located in Mina Abdulla and Mina Al-Ahmadi.

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Petroluem Industries Co.

Since the 1960s an industry for the production of ammonia and nitrogen fertilizers have been existing in Kuwait. It is constantly adapted to the latest developments in technology and uses Kuwait's Natural gas and its feedstock. Kuwait represented by Petrochemical Industries Company (PIC) has not only established a firm footing for itself in ammonia and urea marketing at home.

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Kuwait Foreign Petroleum Exploration Company

Established by the parent company KPC. KUFPEC is an international oil company engaged in exploration, development and production of crude oil and natural gas outside Kuwait active in Africa, Middle East, Asia, and Australia. KUFPEC are participates in joint ventures with similar companies in E&P of Oil and Gas both as an operator and partner.

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Kuwait Gulf Oil Company

In addition to overseeing Exploration and Production in the territorial waters of Kuwait. KGOC is entrusted with the management of Kuwait’s Divided Zone interests. In partnership with our Saudi Arabian counterparts, KGOC will jointly manage Joint Operations to ensure effective and efficient production of Oil and Gas from its reservoirs.

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Kuwait Petroleum International Limited

Kuwait Petroleum International under its distinctive “Q8 sails” logo refines and markets fuel, lubricants and other petroleum derivatives to a diverse customer base across Europe and in Thailand.

PART – 3Comparative

Position of selected

Industry / Sector / Specific

Company / Product with

India and Gujarat

PART – 3Comparative Position of selected Industry / Sector / Specific

Company / Product with India and Gujarat

ECONOMY OF KUWAIT (2012-2013)

Kuwait is a geographically small but wealthy relatively open economy with crude

oil reserves of about 102 billion barrels about 7% of world reserves. The

Petroleum accounts for a nearly half of GDP 95% of export revenues and 95% of

government income.

Kuwaiti officials have committed to increasing oil production to 4 million barrels

per day in 2020. The rise in global oil prices throughout 2011 and 2012 is reviving

government consumption and economic growth. Kuwait has experienced a 20%

increase in government budget revenue which has led to higher budget

expenditures particularly wage hikes for many public sector employees.

Kuwait has done little to diversify its economy in part because of this positive

fiscal situation and in part due to the poor business climate and the historically

acrimonious relationship between the National Assembly and the executive

branch which has stymied most movement on economic reforms. In 2010 Kuwait

is passed an economic development plan that pledges to spend up to $130 billion

over five years to diversify the economy away from oil attract more investment

and boost private sector participation in the economy.

STATISTICS OF KUWAIT

TABLE-1

GDP (purchasing power parity) $165.9 billion (2012 est.)

$156 billion (2011 est.)

$144.3 billion (2010 est.)

GDP (official exchange rate) $174.6 billion (2012 est.)

GDP - real growth rate 6.3% (2012 est.)

8.2% (2011 est.)

2.5% (2010 est.)

GDP - per capita (PPP) $43,800 (2012 est.)

$42,400 (2011 est.)

$40,300 (2010 est.)

GDP - composition by sector agriculture: 0.2%

industry: 42.3%

Services: 57.5% (2012 est.)

Population below poverty line NA%

Labor force 2.304 million (2010 est.)

Labor force - by occupation agriculture: NA%

industry: NA%

services: NA%

Unemployment rate 2.2% (2004 est.)

Household income or consumption

are in percentage share

lowest 10%: NA%

highest 10%: NA%

Investment (gross fixed) 15.3% of GDP (2012 est.)

Budget Revenues: $106.9 billion

Expenditures: $69.18 billion (2012

est.)

Taxes and other revenues 61.2% of GDP (2012 est.)

Budget surplus (+) or deficit (-) 21.6% of GDP (2012 est.)

Public debt 7.1% of GDP (2012 est.)

7.5% of GDP (2011 est.)

Inflation rate (consumer prices) 3.2% (2012 est.)

4.7% (2011 est.)

Central bank discount rate 1.25% (31 December 2010)

3% (31 December 2009)

Commercial bank prime lending rate 5.4% (31 December 2012 est.)

5.2% (31 December 2011 est.)

Stock of narrow money $28.46 billion (31 December 2012

est.)

$23.8 billion (31 December 2011

est.)

Stock of money $16.05 billion (31 December 2012

est.)

$15.31 billion (31 December 2011

est.)

Stock of broad money $109.4 billion (31 December 2012

est.)

$99.89 billion (31 December 2011

est.)

Stock of quasi money $71.79 billion (31 December 2009

est.)

$63.08 billion (31 December 2008

est.)

Stock of domestic credit $93.11 billion (31 December 2012

est.)

$91.48 billion (31 December 2011

est.)

Market value of publicly traded

shares

$100.9 billion (31 December 2011)

$119.6 billion (31 December 2010)

$95.94 billion (31 December 2009)

Industrial production growth rate 8.7% (2011 est.)

Current Account Balance $73.26 billion (2012 est.)

$70.78 billion (2011 est.)

Exports $109.4 billion (2012 est.)

$104.4 billion (2011 est.)

Exports – partners South Korea 17.7%, India 15.3%,

Japan 13.7%, China 9.6%, US 8.4%

(2011)

Imports $24.1 billion (2012 est.)

$21.96 billion (2011 est.)

Imports – partners US 12.4%, China 9.7%, Saudi Arabia

8.4%,South Korea 6.5%,India

6.4%,Japan 6.2%, Germany 5%, UAE

4.3% (2011)

Reserves of foreign exchange and $29.26 billion (31 December 2012

gold est.)

$25.91 billion (31 December 2011

est.)

Debt – external $28.31 billion (31 December 2012

est.)

$29.87 billion (31 December 2011

est.)

Stock of direct foreign investment -

at home

$3.194 billion (31 December 2012

est.)

$2.764 billion (31 December 2011

est.)

Stock of direct foreign investment –

abroad

$57.97 billion (31 December 2012

est.)

$48.39 billion (31 December 2011

est.)

Exchange rates Kuwait dinars (KD) per US dollar -

0.2801 (2012 est.)

0.276 (2011 est.)

0.2866 (2010 est.)

0.2877 (2009 est.)

0.2679 (2008 est.)

ECONOMY OF INDIA (2012-2013)

India is a developing into an open-market economy yet traces of its past autarkic

policies remain Economic liberalization including industrial deregulation

privatization of state-owned enterprises and reduced controls on foreign trade and

investment began in the early 1990s and has served to accelerate the country's

growth which has averaged more than 7% per year since 1997.

India's diverse economy encompasses traditional village farming modern

agriculture handicrafts a wide range of modern industries and a multitude of

services. Slightly more than the half of the work force is in agriculture but services

are the major source of economic growth accounting for nearly two-thirds of

India's output with less than one-third of its labor force.

India has capitalized on its large educated English-speaking population to become

a major exporter of information technology services and software workers. In 2010

an Indian economy rebounded robustly from the global financial crisis - in large

part because of strong domestic demand and growth exceeded 8% year-on-year

in real terms. However India's economic growth is begin slowing in 2011 because

of a tight monetary policy intended to address persistent inflation and a decline in

investment caused by investor pessimism about domestic economic reforms and

about the global situation. High international crude prices are exacerbated the

government's fuel subsidy expenditures contributing to a higher fiscal deficit and a

worsening current account deficit.

In late 2012 the Indian Government announced reforms and deficit reduction measures to reverse India's slowdown. The outlook of India's medium-term growth is positive due to a young population and corresponding low dependency ratio healthy savings and investment rates and increasing integration into the global economy.

India has long-term challenges that it has not yet fully addressed including the poverty, inadequate physical and social infrastructure.

STATISTICS OF INDIA

TABLE-2

GDP (purchasing power parity) $4.735 billion (2012 est.)

$4.492 billion (2011 est.)

$4.205 billion (2010 est.)

GDP (official exchange rate) $1.947 billion (2012 est.)

GDP - real growth rate 5.4% (2012 est.)

6.8% (2011 est.)

10.1% (2010 est.)

GDP - per capita (PPP) $3,900 (2012 est.)

$3,700 (2011 est.)

$3,500 (2010 est.)

GDP - composition by sector agriculture: 17%

industry: 18%

Services: 65% (2012 est.)

Population below poverty line 29.8% (2010 est.)

Labor force 498.4 million (2012 est.)

Labor force - by occupation agriculture: 53%

industry: 19%

services: 28% (2011 est.)

Unemployment rate 9.9% (2012 est.)

9.8% (2011 est.)

Household income or consumption

by percentage share

lowest 10%: 3.6%

highest 10%: 31.1% (2005)

Investment (gross fixed) 30% of GDP (2012 est.)

Budget Revenues: $171.5 billion

Expenditures: $281 billion (2012

est.)

Taxes and other revenues 8.8% of GDP (2012 est.)

Budget surplus (+) or deficit (-) -5.6% of GDP (2012 est.)

Public debt 51.9% of GDP (2012 est.)

50.5% of GDP (2011 est.)

Inflation rate (consumer prices) 9.2% (2012 est.)

8.9% (2011 est.)

Central bank discount rate 5.5% (31 December 2010)

6% (31 December 2009)

Note: the Indian central bank's policy rate

- the repurchase rate - was 8% during

December 2012.

Commercial bank prime lending rate 10.8% (31 December 2012 est.)

10.19% (31 December 2011 est.)

Stock of money $278.8 billion (31 December 2012

est.)

$239.8 billion (31 December 2011

est.)

Stock of narrow money $342.3 billion (31 December 2012

est.)

$305.7 billion (31 December 2011

est.)

Stock of broad money $1.451 billion (31 December 2012

est.)

$1.293 billion (31 December

2011est.)

Stock of quasi money $853.4 billion (31 December 2009

est.)

$687.7 billion (31 December 2008

est.)

Stock of domestic credit $1.402 trillion (31 December 2012

est.)

$1.249 trillion (31 December 2011

est.)

Market value of publicly traded

shares

$1.015 trillion (31 December 2011)

$1.616 trillion (31 December 2010)

$1.179 trillion (31 December 2009)

Industrial production growth rate 4.8% (2011 est.)

Current Account Balance $80.15 billion (2012 est.)

$46.91 billion (2011 est.)

Exports $309.1 billion (2012 est.)

$305 billion (2011 est.)

Exports – partners UAE 12.7%, US 10.8%, China 6.2%,

Singapore 5.3%, Hong Kong 4.1%

(2011)

Imports $500.3 billion (2012 est.)

$490 billion (2011 est.)

Imports – partners China 11.9%, UAE 7.7%, Switzerland

6.8%, Saudi Arabia 6.1%, US 4.9%

(2011)

Reserves of foreign exchange and

gold

$287.2 billion (31 December 2012

est.)

$297.9 billion (31 December 2011

est.)

Debt – external $299.2 billion (31 December 2012

est.)

$287.5 billion (31 December 2011

est.)

Stock of direct foreign investment -

at home

$256.6 billion (31 December 2012

est.)

$232.7 billion (31 December 2011

est.)

Stock of direct foreign investment – $121.3 billion (31 December 2012

abroad est.)

$106.3 billion (31 December 2011

est.)

Exchange rates Indian rupees (INR) per US dollar -

53.17 (2012 est.)

46.671 (2011 est.)

45.726 (2010 est.)

48.405 (2009 est.)

43.319 (2008 est.)

Indian Oil Industry

After the Indian Independence Oil Industry in India was a very small one in size

and Oil was produced mainly from Assam and the total amount of the Oil

production are not more than 250,000 tons per year.

This small amount of production made the oil experts from different countries

predict the future of the oil industry as a dull one and also doubted India's ability

to search for new oil reserves But the Government of India has declared the Oil

industry in India as the core sector industry under the Industrial Policy Resolution

bill in the year 1954 which helped Oil Industry in India vastly.

Oil exploration and production in India is done by companies like NOC or

National Oil Corporation and ONGC or Oil and Natural Gas Corporation and OIL

who are actually the oil companies in India that are owned by the government

under the Industrial Policy Rule.sNational Oil Corporation during the 1970s used

to produce and supply more than 70 percent of the domestic need for the

petroleum but by the end of this amount dropped to near about 35 percent. This

was the demand on the one hand was increasing at a good rate and the

production was declining at a steady rate.

Oil Industry in India during the year 2004-2005 fulfilled most of demand through

importing oil from multiple the oil producing countries. The Oil Industry is in India itself

produced nearly 35 million metric tons of Oil from the year 2001 - 2005. The Import is

done by the Oil Industry in India comes mostly from the Middle East Asia.

The Oil is produced by the Oil Industry in India provides more than 35 percent of the

energy that is primarily consumed by the people of India. This amount is expected to

grow in further with both economic and overall growth in terms of production as well as

percentage. The demand for the oil is predicted to go higher and higher with every

passing decade and is expected to reach an amount of nearly 250 million metric ton by

the year 2024.

After the inception of the Liberalization-Privation-Globalization (L-P-G) policy in the

month of July 1991 the government had started allowing the Indian Petroleum Industry

to go into private as well as government-private joint ventures. The deregulation process

is in the Indian Petroleum Industry got a boost in the year 1997 when it was decided that

the process of liberalization and deregulation would be accelerated in this industry and

all the regulations would go away from the month of April in the year 2002.

Here, Indian Crude Oil Production and Consumption by Year describe since 1980 to

2009 with bellows graph. In this graphs petroleum production increased at year by but

after 1992 its production reduce and stable that’s see in graph. Now consumption of

petroleum product continuously increased 1989 to 2009 that see in graph of the Indian

Crude oil and Consumption.

GRAPH-2

Here, Kuwait Oil Tanker Company does not have any business in India so not possible to

make any comparisons between KOTC and India Company.

So we show the Comparisons of,

Import of Kuwait oil industries and Import of Indian oil industries.

Exports of Kuwait oil industriesand Export of Indian oil industries.

Imports of Kuwait oil industry and Imports of Indian oil Industry.

In Kuwait oil Imports by Kuwait Oil industry:

GRAPH-3

Oil - imports (bbl/day)

Country 2005 2007 2009

Kuwait 8,022 0 0

Here, we see that Kuwait oil industry import 8,022 thousand in the 2005 that is high.

After 2005 it is decrease. This is a good sign for Kuwait.

In Indian oil Import by oil industry:

GRAPH-4

Oil - imports (bbl/day)

Here, we see that the import of Indian oil industry will increase will in 2,159,000

thousand barrels per day in the 2005 and up to increased 3,060,000 in the 2009. It’s a

not a good sign for Indian petroleum industry because it will increase its debt burden

and also foreign exchange burden.

Comparisons:

By comparing the import of Kuwait oil industry and Indian oil industry we can understand that

the Kuwait oil industry’s import system is very good as compare to Indian oil industry. We can

see that the india import increased year by year but Kuwait import continuously decrees year

by year. It’s not a good sign for Indian country because it will increase the foreign exchange

burden and also protect the domestic industry. By increasing in import will have bed effect on

country’s GDP and also will called for increased in debt burden.

Country 2005 2006 2007 2009

India 2,159,000 2,090,000 2,900,000 3,060,000

Exports of Kuwait oil industry and Export of Indian oil industry.

In Kuwait oil Exports by Kuwait Oil industry:

GRAPH-5

Oil - exports (bbl/day)

We can see that Kuwait oil industry’s exports increased upto 2005 and decline

marginally upto 2007 and drastically then after, which not good forKuwait’s economy.

Country 2003 2005 2007 2009

Kuwait 1,970,000 2,356,000 2,349,000 2,127,000

In Indian oil Exports by oil industry:

GRAPH-6

Oil - exports (bbl/day)

Country 2005 2006 2007 2009

India 450,700 350,000 738,600 825,600

By the study of Indian oil industry we can see that export of Indian oil is increased in

450,700 thousand barrels in the 2005 and After 2005 Indian oil industry reduced the

petroleum product’s exports in 2006. Again Indian oil industry export increased till 2009.

For the Indian exports increases and its import also increases so it will increase India

debt deficit and also budget deficit.

Compression:

By comparing the exports of Kuwait oil and Indian oil industry, we can understand that growth

of Kuwait oil export is less than the Indian oil industry. Indian exports are continuously

improved year by year where Kuwait oil industry during 2003 to 2009 improves his exports than

its imports. Increased in exports is good sign for the country, by this country will earn a good

foreign fund and it will help for country’s growth. By comparing the export and import of both

counties, we can see that Indian export is higher than its import so it’s a good sign for the

Indian oil industry.

Present position and Trends of Petroleum in India:

Over the years India Oil Industry has played an influential part in triggering the speedy

expansion of the country's economy by contributing 15% in the total GDP. Further to

this, oil exports gave new dimension to foreign exchange earnings by drawing the US$

23.64 billion in the FY 2008-09.

To assist and acknowledge of expansion of the sector of Cabinet Committee on

Economic Affairs felicitated 44 petroleum research blocks on November 2008 under the

New Exploration Licensing Policy (NELP-VII).

PRESENT POSITION OF INDIA:

The petroleum reserves of India is situated in Gujarat, Bombay High (next to the

seashore of Maharashtra), eastern Assam, and Rajasthan satisfy about 1/4th of the

requirements of the nation.

Till January 2007 the established oil reserves of the country hold the second biggest

volume in the Asia-Pacific territory and India ranks after China in this regard. This is

statistics provided by EIA (Energy Information Administration) which is a statistical

organization of the United States Department of Energy.

The majority of petroleum reserves of the country lie in the western seashores of the

country (including Mumbai High) and also in the northeastern region of India. However

significant the number of unexploited reserves are situated in Rajasthan and close to the

coasts of the Bay of Bengal.

India relies significantly on oil imports for fulfilling the usage requirements of the country.

The blend is increasing oil usage and somewhat firm production volumes is the main

reason behind this.

In the year 2006 the country have a mean production of approximately 846,000 barrels

per day (bbl. /d) of total oil liquids. Out of this 103,000 m3/d (648,000 bbl. /d) or 77%

was petroleum. The approximated amount of oil used in the country during the 2006

418,000 m3/d or 2.63 Mbbl/d.

The Energy Information Administration (EIA) projected that India posted an increase in

oil demand amounting to 16,000 m3/d (100,000 bbl. /d) in 2006.

The petroleum industry in India is controlled by the government organizations. One or

two decades the Government of India took a number of initiatives to lift the regulations

from the hydrocarbons sector and encourage higher international participation.

The biggest oil company in the country is Oil and Natural Gas Corporation (ONGC)

Limited which is an entirely state-held organization. In terms of market capitalization

ONGC also ranks as the biggest organization in India.

The Indian oil and gas sector is of strategic importance and plays a predominantly

pivotal role in influencing decisions in all other spheres of the economy. The annual

growth has commendable and will be accelerate in future consequently encouraging all

round the growth and development. This was the necessitated the need for a wider

intensified search for new fields evolving better methods of extraction, refining and

distribution the constitution of a national price mechanism - keeping in mind the alarming

price fluctuation in the recent past and evolving a spirit of equitable global cooperation.

The growing demand for the crude oil and gas in the country and policy initiative of

Government of India towards increased E&P activity, have given a great impetus to the

Indian E&P industry raising hopes of increased exploration.

Oil and Natural Gas Corporation Limited (ONGC) and Oil India Ltd. (OIL), the two

National Oil Companies (NOCs) and private and joint-venture companies are engaged

in the exploration and production (E&P) of oil and natural gas in the country.

PRESENT POSITION OF GUJARAT:

It is India's only State Government-owned oil and Gas Company with the Government of

Gujarat holding approximately 95% equity stake. The GSPC was incorporated in 1979

as a petrochemical company.

OPPORTUNITIES FOR ENTREPRENEURS:

Gujarat State is the largest on land producer of the oil and gas in country. Following are

the some identified projects of gas and petroleum in Gujarat:

Refining Of Used Engine Oils for the Making Base Oil.

Naphtha Base Solven.

Bitumen Emulsion For Road (cationic Type).

Gas filling of L.P.G. cylinder.

Hydrogen Gas from Methanol Cracking.

PART-4

Policies and Norms of selected

country for selected

Industry/company for import / export

including licensing / permission,

taxation etc.

Policies and Norms of India for

Import or export to the selected

country including licensing /

permission, taxation etc.

PART-4:-Policies and Norms of selected country for selected

Industry/company for import / export including licensing permission,

taxation etc.Policies and Norms of India for Import or export to the

selected country including licensing / permission, taxation etc.

Kuwait Import Policy:

Import duty and taxes are due when importing goods into Kuwait from outside of the

country whether by a private individual or a commercial entity. The import duty of the taxes

payable are calculated on the value of the imported goods plus the cost of importing them

(shipping and insurance).

Duty Rates

The duty rates applied to imports into Kuwait typically range between 0% (e.g. books) and

17%. Some of the products are Laptops, Mobile Phones, Digital cameras and Video Game

consoles are duty free. The Certain goods may be subject to additional duties depending on

the country of manufacture for example Bicycles made in China carry an additional duty of

48.5%.

VAT Rates

The standard VAT rate for importing items into Kuwait is 23% with certain products. For the

example books attracting VAT at the reduced rate of 6.5%. VAT is calculated on the value

of the goods plus the international shipping costs and insurance plus any import duty due.

Minimum thresholds

When importing goods into Kuwait duty is not charged if the total value of the goods (not

including shipping charges or insurance) does not exceed €150. Neither duty nor VAT is

payable if the total value of the goods (not including shipping charges or insurance) does

not exceed €22.

Other taxes and custom fees

Excise duty is payable on tobacco and alcohol.

An Additional custom fees can be charged to cover the expense of performing any required

examinations, verification and or testing of the imported goods.

Import Documentation

Imports to Kuwait from the U.S. require three certified and legalized copies of the commercial Invoice three copies of the bill of lading (air waybill) and a certificate of origin. Be duly certified by a U.S. Chamber of Commerce or the National U.S.-Arab Chamber of Commerce. Legalization is done by the Kuwait Consulate in New York City by the Kuwait Embassy in Washington D.C.

Tariffs

Kuwait does not implement any customs duties on food, agricultural items,essential consumer

good on imports of some machinery most spare parts and all raw materials. The General

Administration of Customs collects a 5 percent general tariff on most imports which is include

the cost, insurance and freight value of the goods. The Ministry of Commerce and Industry may

impose higher protective tariffs up to around 25 percent on imports that compete with goods

manufactured in smaller local industries.

Import Licenses

Importers must obtain an annual import license from the Ministry of Commerce and Industry.

The license authorizes are the import of any amount of goods from any country on a multi-entry

basis during its one-year term is to be obtain this license an importing company must fulfill the

following requirements.

It must be registered in the Commercial Register of the Ministry of Commerce and Industry

with the Kuwait Chamber of Commerce and Industry.

The Kuwait shareholding in the capital of the company must be at least 51%.

A special import license is to be required to import certain kinds of goods such as firearms,

explosives, drugs, and wild animals.

Export Controls

Only a few items being exported from Kuwait require export licenses and generally there are

no export restrictions on Kuwaiti products. No duties are levied on the goods exported from

Kuwait. Foreign contractors however, need a letter of clearance from the Director of Income

Taxes and Ministry of Finance to be able to export equipment from Kuwait for use outside

Kuwait.

Export Subsidies Policies

Kuwait does not directly subsidize any of the exports which consist almost exclusively of the

crude oil, petroleum products and fertilizer.

Kuwait imports almost 98 percent of the country's food products. Some of local vegetables are

grown by farmers and are subsidized by the government some of these vegetables are sold to

nearby countries.

However the amounts grown and sold are not significant enough to have any real impact on

local or foreign agricultural markets.

Indian Import Policy:

The economic needs of the country the effective use of foreign exchange and industrial as well

as consumer requirements are the basic factors which influence India's import policy On the

import side the policy has three objectives:

1) to make necessary imported the goods more easily available including essential

capital goods for modernizing and upgrading technology.

2) to simplify and streamline procedures for the import licensing.

3) to promote the efficient import substitution and self-reliance.

There are no quantitative restrictions on imports of capital goods and intermediates. Import of

the second-hand capital goods is permitted provided they have a minimum residual life of 5

years. There is the Export Promotion Capital Goods (EPCG) Scheme under which exporters

are allowed to import capital goods (including computer systems) at concessionary customs

duty subject to fulfillment of specified export obligations.

Service industries enjoy the facility of zero import duty under the EPCG Scheme. hospitals, air

cargo, hotels and other tourism-related industries. The Software units can use data

communication network to export their products.

Current Scenario of Imports in India

There are few goods which cannot be imported namely allow fat animal rennet, wild animals

etc. Most of the restrictions are on the ground of the security, health, environment protection

etc. Imports are allowed free of duty for the export production. The Input output norms have

been the specified for more than 4200 items. The norms tell about the amount of duty free

import of inputs allowed for the specified products.

There are no restrictions on imports of the capital goods. Import of the second hand capital

goods whose minimum residual life is of five years is permitted. Export Promotion Capital

Goods (EPCG) scheme provides exporters to import capital goods at a concessionary custom

rates. In the past 30 years of theIndian imports have risen quite dramatically. At present

imports accounts for 17% of the GDP.Capital goods have been continued to be imported and

in the last three years, their share has fallen from 25% to 22%.

Major Indian Imports

There are facilities available for the service industries to enjoy the facility of zero import duty

under EPCG scheme. Some of the major imports of the India are edible oil, newsprint,

petroleum, crude products, crude rubber, fabrics and electronic goods etc.

Problems due to Large Import of Products

The recent trend of imports is of some concern. The regular imports of the oil reflect upon the

fact that India is not able to produce the quantity of oil required in the India. Moreover the

increase in the imports of products also highlights the fact that the Indian domestic industries

need to be developed. High cost of the imports also put pressure on the foreign exchange

reserves.

The basic laws that governs the import sector of Indian economy:-

No import of the diamonds shall be permitted unless the shipment parcel is

accompanied by Kimberley Process Certificate required under the procedure specified

by the Gem & Jewelry Export Promotion Council.

Duty credit allowed for import of the capital goods, spare parts, office equipment, office

furniture and the consumables that are importable under ITC (HS). Such imports covers

all items of the service sector.

Tariff rates, excise duties, regulatory duties are the revised in each annual budget of

India.

Total duties on imports now consist of basic duty which ranges from zero to 65% plus

additional or countervailing duties.

On manufactured "luxury" items total import taxes may amount to whooping 150%.

Import duties are the product specific and can be revised in mid-year.

Every importer shall comply with the provisions of the Foreign Trade (Development

and Regulation) Act1992,the Rules and Orders made hereunder the provisions of this

Policy and the terms and conditions of any license / certificate / permission granted to

him as well as provisions of any other law for the time being in force.

The Customs Act of the India governs the process of levying of tariffs on imports and

frames the rules and it also specifies the tariffs rates and provides for the imposition

of anti-dumping and compensation charges.

Imports shall be the free except in cases where they are regulated by the provisions

of this Policy or any other law for the time being in force.

The item wise import policy shall be specified in published and notified by Director

General of Foreign Trade as amended from time to time.

Licensing, Quotas and Prohibitions

Import approval is based on compliance with procedures whereby specific items may be

imported by certain types of importers under certain types of licences. Importers are divided

into two categories for the purpose of import licensing:

1) actual users;

An actual user applies for the receives a license to import any item or an

allotment of an imported item as required for his own use, not for business or

trade in that item.

2) registered exporters;

defined as those who have valid registration certificate issued by an export

promotion council, commodity board and other registered authority designated

by the Government for purposes of export-promotion.

The two types of actual user licence are:

General currency area licences which are valid for imports from all countries except those

countries from which the imports are prohibited:

Specific licences which are valid for the imports from a specific country or countries. Aside

from the types of licences listed the Open General License is perhaps the \most liberalized

type of license available for certain items and certain types of importers.

Licences are valid for 24 months for capital goods and 18 months for raw materials

components, consumable and spares with the license term renewable. Import licences may

be obtained from the director general of foreign trade.

The growth factors of the oil sector of Indian economy:

The oil and gas industry is amongst the six core industries in India. This industry is the major

factor for the growth being witnessed in the Indian economy today. The natural gas and the

petroleum sector which is inclusive of refining, transportation and marketing of these products

contributes about 15% to India's GDP.

Economic Affairs Committee gave 44 oil and gas blocks for exploration under the New

Licensing Policy. These allocations will bring investments worth US$ 1.5 billion in this

sector.

Investment Opportunities

Refining: India is rising as a potential refining hub because the capital costs are lowered by

2550% here in comparison to other Asian countries. India has got ranks fifth in the category of

refining. Its share is 3% of the capacity worldwide and is going to improve further by 45% over

the next 5 years. This is an accordance with a report compiled by Deutsche Bank.

Retail: A surge in the automobile market has led to investments for extending the petroleum

sector. According to the Keystone a US consultancy the automobile industry is poised to grow

20 million by 2030. This is make India the 3rd-largest market for automobiles worldwide. Thus

the need for more petroleum and petroleum-based products is going to rise further.

Gas: The power and fertilizer sectors in India drive the demand for gas in the country. They

use 66% of the total gas produced. The demand for the gas is set to grow. Thus the natural

gas share in the overall mix is projected to rise from 8% to 20% by 2025.

The investments by public sector oil companies is going to be US$ 11.33 billion to the

expand supplies and build new networks for transportation of oil and gas.

The policies of the government are further boost to foreign investment in this industry.

These are government initiatives:

1) 100% FDI is allowed in private refineries via the automatic route and up to 26% in

government-owned ones.

2) 100% FDI is also granted in cases of petroleum products, gas pipelines, exploration,

and marketing or retail via the automatic route.

3) It has also abolished the administrated pricing policy.

4) With NELP (New Exploration Licensing Policy) it has helped encourage further

explorations for oil and gas reserves in India.

Growth Prospects

India's energy sector will be instrumental in providing revenues worth US$ 120 billion to 150

billion over the coming 5 years. As per an Investment Commission the opportunities are in the

oil and gas sector are projected to reach US$ 3540 billion by 2012.

Another reason that investments in this sector can be useful is that crude oil coming from the

Middle East region can easily to be transported to the India. Also India offers cost-effective

refining technologies.

As the energy sector is never going to be slow down or lose its sheen the growth prospects are

enormous in this industry.

The future trends of the oil sector of Indian economy:

Future trends relating to energy prices and the oil price per barrel. The Impact on global

economic growth of rising the oil prices.The Balance between oil production and oil

consumption.

Peak oil and proven global oil reserves why they are rising. Oil from coal -- future trends

in coal industry. The Petroleum based products and petrochemical industry growing

demand for the all kinds of commodities including steel, copper, oil, coal, gas are the

part of the growth of emerging economies such as China, India, Indonesia, Brazil,

Malaysia, South Korea, Singapore and so on. Impact on utility companies. Deep sea

drilling, oilfields, engineering and environmental challenges including global warming /

climate change. The Impact of rising fuel costs on transport and transportation industry,

aviation, rail travel, shipping, vehicle sales, car use, heating and air conditioning

systems, building design and manufacturing.

OPEC production quotas and their impact on the global economic growth. Instability and

revolution impact of the popular protests across Middle East oil producing nations. The

Government policy changes in Tunisia, Egypt, Libya, Yemen, Oman, Qatar, Kuwait,

UAE, Saudi Arabia. Link between the oil wealth and local unemployment. An inequalities

of wealth and wealth distribution in future by governments keen to maintain political

power.

The Impact of alternative energy production on oil consumption. Predictions for future

energy costs. Video by conference keynote speaker Patrick Dixon, author of

Sustainability and Future wise.

PART-5

Potential for import / export

in India /

Gujarat Market

Business Opportunities in

future

Conclusion and Suggestions

PART-5 :-Potential for import / export in India /Gujarat Market

Business Opportunities in future Conclusion and Suggestions

Potential for Import in India

With close to 70% of its oil requirements imported from more than 8 countries India is a net

importer of oil. The rest 30% is provided by the domestic oil production.

India’s oil consumption has increased and the production almost remained the same. This did

not take into the account of recent findings of the Reliance in KG basin. Even if they did find

some other reserves the graph is not likely to be changed in the future.

Starting in 1996 India’s import’s exceeded its production. The India’s production has been fairly

consistent.

GRAPH-7

Oil is the second largest fuel after coal. Nuclear and renewable account to a mere 2 %. The

figures should be slightly different for 2009 but not radically different. Even coal usage is a little

alarming but we have some reserves. Not the same case with oil. From the graph above the

production is constant.

GRAPH-8

India imports more than 70% of its oil needs from several different countries with Saudi

Arabia and Iran topping the list.

These 3 pictures give a holistic view of energy consumption in India its oil usage and imports.

One trend is clear. The oil production is not increasing but the oil usage is increasing. And oil is

a major factor in India’s energy equation.

If Indian consumers has to realize what they are consuming then they should realize how much

they should pay for it. Right now they are not and that is a problem.

Indian consumers are shielded from the global shocks thanks to the oil subsidies. This is not

an incentive enough to bring in a behavioral change which is what we need to reduce our oil

usage.

India is likely to import less oil from Iran this fiscal year ending in March, compared with

2010/11. Iran is India's second largest crude oil supplier meeting about 11 percent of the South

Asian country's imports. Tehran is facing Western sanctions over its nuclear plans that many

say is aimed at making a bomb. Iran says it wants to produce power.

The sanctions make it tough for importers to pay for Iran's oil. Indian purchases have been

fraught with payment problems in the past 13 months after a clearing mechanism was

scrapped. Indian refiners have since sought alternative supplies. “Iran constitutes a declining

but a significant part of our energy imports," the government source said.

"We will continue to buy crude from Iran to the extent possible. But Indian companies have to

make their own decision taking into account the factors in the market. “India’s oil imports from

Iran have declined from 21.8 million tons, or 16.43 percent of total imports, to 18.5 million tons

or about 11 percent, in 2010/11.

World's top oil exporter Saudi Arabia has offered extra oil to India, potentially to replace Iranian

barrels. New Delhi has come up with elaborate trade and barter arrangements to pay for oil

supplies.

Potential for Export in India

Kuwait Oil Tanker (KOTC) is major leading industry in Oil sector of Kuwait.KOTC mostly

doing import business in the Kuwait. In India KOTC not any relation or business related

to Oil sector because KOTC mostly importing Oil in Kuwait so not possible to export to

India in petroleum products sector so no any potential business in India such as import

and export by KOTC so KOTC not any co-relation or potential to Indian or Gujarat

petroleum market.

In India ONGC is one of the major leading petroleum industry Indian markets. ONGC

also government petroleum industry in India so it never establish the any other

petroleum industry in Indian markets. Kuwait never start up business in India so not any

potential business such as import and export to India or Gujarat markets in Oil sector

industry.

Business Opportunities in future

SWOT ANALYSIS

Strengths

Developing economy: Historically, demand for petroleum products has traced the economic

growth of the country. With GDP expected to grow at near 7% in the long-term the energy

sector would benefit from the same, going forward.

To put things in perspective, the diesel sales grew by nearly 12% (which constitutes 40% of

the entire petro-products basket), petrol sales by 9% and a double-digit growth in LPG

(liquefied petroleum gas) in 1QFY05. While this rate is not likely to sustain, we expect the

industry to witness a 4% growth in the entire product basket in FY05 and beyond.

Government decisions: The recent price increases and also the decision to allow oil

companies to increase prices within a band of 10% augur well for the industry.

This step is likely to reduce government interference and provide some autonomy to oil

companies when it comes to increasing petrol and diesel prices in order to protect margins.

Further the duty cuts are also likely to result in reduced under-recoveries by way of subsidies

on LPG and kerosene.

Weakness:

Crude prices: Nearly 70% of India’s crude requirements are fulfilled by imports and this figure

is likely to increase going forward. The Crude prices have breached the $45 barrier again and

are likely to remain at around $40 per barrel range.

As per IEA, India is one of the most inefficient countries among developing nations as far as

energy usage is concerned. Such high crude prices are likely to impact margins of oil

marketing companies. Given the political implications of the retail prices may continue to lag

the rise in input cost.

Lack of freedom: Although the government has decided to provide autonomy to oil companies

to increase petrol and diesel prices within a 10% band. other products such as LPG and

kerosene continue to remain under the government controlled price mechanism.

As per the current estimates the subsidies on LPG amount to Rs 90 per cylinder after factoring

in duty cuts and that on kerosene is over Rs. 6 per litter.

While the government has to managed to reduce its share in subsidies, select oil companies

are being forced to absorb the losses.

Opportunities:

Equity Oil: Major oil marketing companies are now venturing into upstream exploration and

production activities so as to secure crude supply.

To put things in perspective, IOC and OIL India are likely to jointly bid for oil fields aboard. At

the same time ONGC’s wholly owned subsidiary ONGC Vides (OVL) has acquired stakes in

over 9 countries in its quest to attain the 20 MMT (million metric tons) by 2020. This backward

integration is an opportunity for IOC to secure at least 25% of its crude oil requirements for the

refineries.

Natural Gas: Natural gas has the potential to be the fuel of the future with demand outpacing

supply by more than two times. Such the high scarcity of the natural gas provides a big

opportunity for the oil companies. The below mentioned table indicates the allocation to the

various core sectors and the shortage faced by them giving an idea of the potential for growth.

Although Petrol net LNG has now started importing natural gas the future holds promise as the

Reliance Industries' Krishna Godavari Basin goes into commercial production in FY06 and

Shell commences its terminal at Hazira. More exploration the activities are in the pipeline and

this could reduce the country's dependence on crude in the long term.

Threats:

Competition: Until Oil-marketing companies had complete control over the downstream

marketing business while private sector players were restricted to only refining.

However, with entry of private players such as the Reliance, Essar Oil and Shell the sector is

likely to witness increased competition going forward. The oil of PSUs had hitherto developed a

fortnightly pricing mechanism which is likely to discontinue.

The price of petrol and diesel is artificially kept high so as to cross-subsidize LPG and

kerosene. Since the private players will not be bound to provide for these subsidies PSU

marketing players are likely to suffer from lower throughput per outlet.

Continuing government interference: During the first six months of the current fiscal year the

oil marketing companies were refrained from increasing product prices due to political reasons.

This affected margins of downstream players. Going forward if the government interference

continues oil-marketing companies will be at a disadvantage.

Although we believe the industry is likely to the witness increased competition the initial retail

rush by private sector players has slowed down. PSU marketing companies have already

stepped up their expansion plans and to that extent have created significant entry barriers for

private players.

Although throughput per outlet (sales per outlet) is likely to decline in the future and we believe

that any substantial entry of the private players would indirectly benefit the PSUs as the

government's pricing policy will not hold much water and the market forces would determine

pricing.

Suggestions and conclusion:

Conclusion:

Kuwait is a small relatively open petroleum based economy with heavy dependence on

foreign manpower. It is always offered an open highly competitive and affluent market

for capital and consumer goods and for project exports.

From the demographic profile of the company population of Kuwait is mainly cover age

structure of 15-64 years.

The main industries of Kuwait are tourism, chemicals, petrochemicals, food and

beverages, etc from service sector contribute highest in its GDP.

Agriculture is limited by the lack of water and land. The government has experimented in

growing food through hydroponics and carefully manage farms. However, most of the

soil which was suitable for farming in south central Kuwait was destroyed when Iraqi

troops set fire to oil wells in the area and created vast "oil lakes".

Major export and import partners of Kuwait are Germany, Italy, Pakistan, Japan, United

Kingdom, china, Taiwan, Netherlands etc.

Kuwait is a member of the Organization of Petroleum Exporting Countries (OPEC), exporting the fourth largest volume of oil among the group in 2010.

There is no business linked between India and Kuwait, and also there is much oil

Industry in India so there is no potential for oil business in India for Kuwait.

A foreign firm may not set up a branch in Kuwait and may not perform any commercial

activities in the country except through a Kuwait agent.

Kuwait's economy is one heavily dependent on petroleum export revenues, which

account for half of its overall gross domestic product 95 percent of total export earnings

and 95 percent of government revenues.

Suggestion:

Due to the increase of the population in Kuwait it became necessary for the Company to

increase the production capacity of the plant to meet the required consumption.

The general slackness the conditions in the tankers industry all over the world during the

current years, KOTC managed to keep its profitability above the regular average due to

its intensive concern for reducing the operating expenses and its wise policy of replacing

old ships at the appropriate times.

"Kuwait has the greatest advantage is its human capital — a highly educated

workforce which is not being utilized and is idle and is being wasted,”.

Economic liberalization including the industrial deregulation, privatization of state-owned

enterprises, and reduced controls on foreign trade and investment, began in the early

1990s and has served to accelerate the country's growth, which has averaged more

than 7% per year since 1997.

Kuwait has done little to the diversify its economy, in part, because of this positive fiscal

situation, and, in part, due to the poor business climate and the historically acrimonious

relationship between the National Assembly and the executive branch.

Bibliography

http://www.indexmundi.com/kuwait/economy_profile.html

http://www.fundinguniverse.com/company-histories/kotc-Petroleum-SA-Company-

History.html

http://www.indexmundi.com/energy.aspx?country=gr&product=oil&graph=production-

growth-rate

http://www.indexmundi.com/energy.aspx?country=in&product=oil&graph=consumption

http://www.petroleumbazaar.com/

http://en.wikipedia.org/wiki/Economy_of_Kuwait

http://en.wikipedia.org/wiki/Economic_Survey_of_India_2011

http://business.mapsofindia.com/india-petroleum-industry/future-of-indian-

petroleum.html

http://www.slideshare.net/MuzahidKhan/petroleum-products-import-export-indian-option

http://www.Kuwaitimportexport.com/

http://www.indiainfoline.com/Economy/Economic-Survey/Economic-Survey-2010-

11/552167

http://www.answers.com/topic/oil-and-natural-gas-corporation-ltd

A

GLOBAL / COUNTRY STUDY AND REPORT

ON

“REPORT ON KUWAIT”

Submitted to

INDU MANEGMENT INSTITUTE, BARODA

IN PARTIAL FULFILLMENT OF THE

REQUIREMENT OF THE AWARD FOR THE DEGREE OF

MASTER OF BUSINESS ADMINISTRATION

In

Gujarat Technological University

UNDER THE GUIDANCE OF

Faculty Guide

Mrs. Pooja Bhatt

Submitted by

Batch: 2011-13

[Hardik Patel (2052), Ashok Makwana (2050),

Kalpesh Vasani (2055),

Mital Gohil (2053), Jay Dave (2054)]

MBA SEMESTER III/IV

INDU MANEGMENT INSTITUTE, BARODA

MBA PROGRAMME

Affiliated to Gujarat Technological University

Ahmadabad

2011-2013

Institute Certificate

“Certified that this Global / Country Study And Report Titled “Al Sanea

Chemical Products ” is the bonafide work of : ASHOK MAKWANA, HARDIK PATEL,

MITAL GOHIL , JAY DAVE, KALPESH VASANI, who carried out the research under my

supervision. I also certify future, that to the best of my knowledge the work reported

herein does not form part of any other project report or dissertation on the basis of which

a degree or award was conferred on an earlier occasion on this or any another candidate.

Signature of Director Signature of the Faculty Guide

(Dr. Manish Vyas) (Miss. Pooja Bhatt)

Student‟s Declaration

We, Ashok, Hardik, Mital, Jay, Kalpesh, hereby declare that the report for Global Country

Study Report entitled “AL-Sanea Chemical Products” in Kuwait is a result of our own and our

indebtedness to other work publications, references, if any, have been duly acknowledged.

Place: ……………………..

Date: ………………………

Signature

PREFACE

The Global Country Report is an integral part of the MBA program and it is designed in such a

way that student can give maximum knowledge and can get exposure to the global world in minimum

time.

With the respect and pleasure, we have privilege to submit our report to the kind hands of

eminent examination of the Indu Management Institute. MBA is a professional course, to be a MBA

student is a matter of pride because through MBA each student is prepared to hold the post of manager

very confidently and we are in field which helps us to develop from normal human being into a

disciplined and dedicated professional.

We have heard that famous saying “God helps those who helps them salves“ and “Experience

is the best teacher “the global country report on “KUWAIT” has given us sufficient knowledge to fill

the gap between the theoretical and practical knowledge.

ACKNOWLEDGEMENT

Every work that one completes successfully stands on the constant encouragement, good will and

support of the people around. I, hereby, avail this opportunity to express my heartfelt gratitude to a

number of people who extended their valuable time, full support in developing this project.

We convey our heartfelt gratitude to our college “Indu Management Institute” under Gujarat

Technological University for giving us this precious opportunity to work for the real-time project.

We also forward our special thanks faculty member & project guide Mrs. Pooja Bhatt from

Indu Management Institute for guiding us in this report. The valuable suggestion of the faculty

member during the course of our Project work gives me the inspiration to achieve our goal. The shape

that project has been taken is due to judicious guideline, encouragement & help of our guide.

We own the success of the project to my Project Guide, Mrs.Pooja Bhatt who was a tremendous

supporter and an eager teacher, for providing excellent guidance for this project. He is one of the major

sources behind the success of the project.

.COUNTRY – KUWAIT

Nationality - Kuwaiti

INDEX

Sr. No. Particulars Page No.

1

PART-1

Demographic Profile

9

2 General Economic & Industries overviews 13

3 General overview of Trade and Commerce 16

4 Overview Different economic sectors of

Kuwait

18

5 Overview of business and trade at international 20

6 Present Trade Relations of India / Gujarat with

Kuwait

21

7 Business Volume of different products 23

8 Investment in Kuwait 25

9 PESTEL Analysis 26

1

PART-2

Introduction

30

2 Product portfolio 35

3 Structure and Business activities of Al

Sanea Chemical Products

39

4 Comparative position of Al Sanea Chemical

Products

41

6 Present relationship with Indian trade and

commerce

51

7 Policies and norms of Kuwait for Al Sanea

Chemical Products

56

8 Policies and norms of Indian for Import-

Export to Kuwait

59

9 Present trade barriers for Import-Export of

Chemicals

61

10

PART-3

Business opportunities in Kuwait

66

11 Suggestions 68

12 Conclusion 69

13 Bibliography 70

1. Demographics of Kuwait

Kuwait including Population Density, Ethnicity, Education Level, Health of the Population,

Economic Status , Religious affiliation and other aspects of the population .

Approximately 96% of Kuwait‟s Population is urbanized while 4% are nomadic or semi-

nomadic. Kuwait‟s Current population is estimated at roughly 3-3.5 million people; counting both locals

and foreigners. Roughly 1 million of Kuwait‟s Population is local, with 2-2.5 million residents

registered as foreigners/non-locals.

In 2009, more the 580,000 Indian nationals lived in Kuwait making them the single largest

expatriate community there. The rest of the foreign population mainly consists of Egyptians,

Bangladeshi, Pakistani, and Sri Lanka residents. Other foreigners consist of European, North American

and Northeast Asian Communities – but these are negligible.

Kuwaiti‟s are mostly Muslim and there are few Christian. 85% of the population is Muslim and

the rest belong to other religion. Other region like Hindu, Parsi, Christian.

Kuwait‟s official language is Arabic, though only roughly half the country speaks the language

primarily. Most foreigners speak Hindi, Urdu, Filipino or Bengali. Most Kuwaitis are also bilingual in

that they speak more than one language. E.g. English, Persian.

Historical Population:

Years Population

1950 152,000

1960 264,000

1970 753,000

1980 1,377,000

1990 2,088,000

2000 1,941,000

2010 2,737,000

CIA World Fact book Demographic Statistics

The Following Demographic statistics are from the CIA world Fact book unless otherwise

indicated.

Age Structure:

0-14 Years : 25.8% (Male 348,816 ; Female 321,565)

15-64 Years : 72.2% (Male 1,153,433; Female 720,392)

65 Years and over: 2% (Male 25,443; Female 25,979) (2011 Est.)

Birth Rate:

2.11 Deaths/1,000 Population (2011 Est.)

Death Rate:

2.13 Deaths /1000 Population (2011 Est.)

Net Migration Rate:

0.65 Migrant (s)/1,000 Population (2011 Est.)

Gender ratio

At birth: 1.047 male(s)/female

Under 15 years: 1.04 male(s)/female

15–64 years: 1.79 male(s)/female

65 years and over: 1.65 male(s)/female

Total population: 1.54 male(s)/female (2011 est.)

Infant numbers of mortality rate:

8.07 deaths/1,000 live births (2011 est.)

Life expectancy at birth:

total population: 77.09 years

male: 75.95 years

Female: 78.3 years (2011 est.)

Nationality:

noun: Kuwaiti(s)

adjective: Kuwaiti

Ethnic groups (by nationality):

Kuwaiti 45%

Other Arab nationals 35%

South Asian 9%

Iranian 4%

Other 7%

Total fertility rate:

2.64 children born/woman (2011 est.)

Population Growth Rate:

1.986 % (2011 est.)

Religions

Muslim 85% (Sunni 70%, Shia 30%) other 15%

Languages

Arabic (official)

English widely spoken

Balochi

Hindi-Urdu

Bengali

Malayalam

Pashto

Other languages are spoken by the large South Asian expatriate population.

2. ECONOMIC OVERVIEW OF THE KUWAIT

Kuwait is a rich country with a high per capita income of about 30,000 USD. Its GDP has

experienced a growth rate of more than 20% during the past five years. The country has 9% of

the world oil reserves. Kuwait is trying to position itself as the entrance gate for investment in

the area.

Kuwait has a geographically small, but wealthy, relatively open economy with crude oil reserves

of about 104 billion barrels and about the worid reserve is 7%. Petroleum accounts for nearly half

of GDP, 95% of export revenues, and 95% of government income. Kuwaiti officials have

committed to increasing oil production to 4 million barrels per day by 2020.

The rise in global oil prices throughout 2011 is reviving government consumption and economic

growth. Kuwait has experienced a 20% increase in government budget revenue, which has led to

higher budget expenditures, particularly wage hikes for many public sector employees.

In 2010, Kuwait has passed an economic development plan that pledges to spend up to $130

billion over five years to diversify the economy away from oil, attract more investment, and

boost private sector participation in the economy.

GDP (purchasing power parity)

$149.8 billion (2011 est.)

$141.7 billion (2010 est.)

$137 billion (2009 est.)

note: data are in 2011 US dollars

GDP - real growth rate

5.7% (2011 est.)

3.4% (2010 est.)

-5.2% (2009 est.)

GDP - per capita (PPP)

$40,700 (2011 est.)

$39,600 (2010 est.)

$39,300 (2009 est.)

note: data are in 2011 US dollars

GDP - composition by sector

Agriculture: 0.3%

industry: 47.4%

services: 52.3% (2011 est.)

Unemployment rate

2.2% (2004 est.)

Investment (gross fixed)

26.1% of GDP (2011 est.)

Budget

Revenues: $108.3 billion

expenditures: $58.06 billion (2011 est.)

Taxes and other revenues

57.4% of GDP (2011 est.)

Budget surplus (+) or deficit (-)

20.5% of GDP (2011 est.)

Inflation rate (consumer prices)

5.6% (2011 est.)

4% (2010 est.)

Central bank discount rate

1.25% (31 December 2010 est.)

3% (31 December 2009 est.)

Agriculture - products

Fish

Industries

Petroleum, petrochemicals, cement, shipbuilding and repair, water desalination, food processing,

construction materials

Industrial production growth rate

8.7% (2011 est.)

Oil - production

2.45 million bbl/day (2010 est.)

Oil - consumption

354,000 bbl/day (2010 est.)

Oil - exports

2.127 million bbl/day (2009 est.)

3. OVERVIEW OF INDUSTRIES TRADE AND COMMERCE

Kuwait trade: export & import

Export commodities:

Oil & refined products

Fertilizers

Major export partners:

Japan : 15.5%

India : 15.3%

South Korea : 13.5%

China : 10.1%

India- Kuwait trade was $ 9.03 dollar in 2009-10 of which non trade accounted for $ 101

billion while petroleum export of Kuwait to India were approximately $ 7.9 billion. In 2011

Kuwait exports $ 94.47 billion.

15.50%

15.30%

13.50%

10.10%

Major export partners

Japan

Indian

South Korea

China

Major import partners:

Import commodities:

Food & construction material

Vehicle & parts

Clothing.

Major import partner:

Us : 14.2%

China : 9.5%

Saudi Arabia : 7.3%

Japan : 7.2%

Germany : 6.1%

Italy : 4.7%

India : 4.4% (2010 est.)

India „s import of Kuwait went up to $ 7.07% in US terms, form US $ 7704.25 million 2007-08 to US $

8249.49 million in 2009-10.

14.20%

9.50% 7.30% 7.20% 6.10%

4.70% 4.40%

0.00%

2.00%

4.00%

6.00%

8.00%

10.00%

12.00%

14.00%

16.00%

Major Import Partners

4. Overview of economic sectors

Private sectors:-

Kuwait‟s private sectors contribution to economic activity continues to decline, making

privatization ever more urgent, says the NBK.

In its latest economic brief on private sectors GDP, national bank of Kuwait reports on recently

published figures from the ministry of planning that show, private sector GDP growing by 4.4% in 2000

to KD 3.1 billion.

A regulatory step to enhance and diversify the economic activity is likely to provide a solid base

for sustained economic growth.

The conducive macroeconomic environment and increased govt. and private sectors spending are likely

to give a further fillip to bolster economic growth.

Agriculture sector

Agriculture is limited by the lack of water and arable land. The government has experimented in

growing food through hydroponics and carefully managed farms. Fish and shrimp are plentiful in

territorial waters, and large scale commercial fishing has been undertaken locally and in the Indian

Ocean.

Financial sector

The finance sector is one of the most affected sectors by the crisis. However, banks have focused

on cleaning up their balance sheets to reduce their risk exposure. A number of banks have registered

high provisions to cover bad loans. The capital adequacy ratio of local banks was more than 17%, which

is higher than the 12% minimum ratio required by the central bank and the 8% ratio recommended by

the Basel committee.

Investment sector

Most investment companies in Kuwait are financed by large amounts of debt. The crisis resulted

in a number of issues related to liquidity and insolvency. The aggregate balance sheet of local

investment companies dropped by almost 10.7% in the financial year 2009/10 to KWD 14,778 mn (100

companies), against KWD 16,468 mn in 2008/09 (101 companies).

Oil & Gas Sector:

Oil & Gas are the main income sources in the GCC region. With the fall of oil prices, countries

in the GCC – Oil Exporters incurred significant declines in revenue. Oil prices in 2010 are still lower

than the average price of 2008, ranging from USD 70 to USD 85 per barrel. On the other hand, gas

prices were stable during the period, but also resulted in a lower average than 2008. The OPEC oil

production incurred the largest decline in 2009 of 7.3%, according to BP‟s statistics.

5. OVERVIEW OF BUSINESS AND TRADE AT INTERNATIONAL

Since the era of oil began after World War II, the priceless mineral has been Kuwait's main

export product. To the huge revenue from oil sales, the government accumulated surplus money and

invested abroad.

Kuwait is the country to open foreign investment and with the introduction of new laws in recent

years, the country is even more open to foreign capital and expertise. In early 2003, a new law for FDI

came into force. It allows 100% foreign ownership in a number of sectors. This law also makes available

a number of tax breaks and other benefits which can attract new investors.

The current policy to promote FDI focuses on a number of sectors which can benefit most from

foreign investment and expertise. These include infrastructure investment such as water, waste-water

treatment, power, and communications. Kuwait also tries to promote investment in the banking and

financial sectors: investment aid, insurance, information technology and software development.

Kuwait is highly dependent on foreign trade, which represents nearly 95% of the GDP. Kuwait's

imports total 16 billion USD. The country depends especially heavily on imports of foodstuffs, consumer

goods (40% of total) and semi-finished products (38% of total), which ranks it among countries with the

highest per capita import rate.

Kuwait‟s imports from other Gulf countries have increased since the introduction of the GCC

(Gulf Cooperation Council). The main products imported are cars, agricultural and food products, as

well as mechanical industrial products, electric.

6. PRESENT TRADE RELATION AND BUSINESS VOLUME

`Kuwait is the 3rd

largest trading partners of India in Arab world (2010-11): the value of trade

between the two countries in 2010-11 exceeds $ 12 million. Kuwait is source of $ 2.78% of global

import.

Kuwait is a small, relatively open, petroleum based economy with heavy dependence on foreign

manpower. It has always offered an open, highly competitive and affluent market for capital and

consumer goods and for project exports.

Kuwait has a geographically small, but wealthy, relatively open economy with crude oil reserves

of about 104 billion barrels about 7% of world reserves. Petroleum accounts for nearly half of GDP,

95% of export revenues, and 95% of government income.

Kuwaiti officials have committed to increasing oil production to 4 million barrels per day by

2010. Kuwait has experienced a 20% increase in government budget revenue, which has led to higher

budget expenditures, particularly wage hikes for many public sector employees.

India-Kuwait Bilateral Trade:

(Bilateral Trade in US $ Million)

Sr.

No

Particular 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12

1. Export 614.81 681.54 797.50 782.45 1959.48 588.26

2. Import 5993.23 7704.25 9593.74 8249.49 10313.64 6580.43

3. Total trade 6608.04 8385.09 10391.24 9031.94 12273.13 7168.69

Major items of Exports from India:

India shows that the major items exported from India were Cereals, Meat and Edible Meat Offal,

Articles of Iron or Steel, Electrical Machinery and Equipment and Parts thereof; Articles of Apparel and

Clothing Accessories, Nuclear Reactors, Boilers, Machinery and Mechanical Appliances, Residues and

Waste from the Food Industries, Iron and Steel, Edible Fruit and Nuts, Fish.

Major items of import by India:

The major items imported by India were Organic Chemicals, Plastic and Articles thereof, Iron

and Steel, Fertilizers, Aluminum and Articles thereof, Salt; Sulphur; Earths and Stone, Inorganic

Chemicals; Organic or Inorganic Compounds of Precious Metals, Copper and Articles thereof, Nuclear

Reactors, Boilers, Machinery and Mechanical Appliances, Miscellaneous goods

Bilateral Agreements between India and Kuwait in Economic Field

1. Agreement on the Avoidance of Double Taxation and Prevention of Fiscal Evasion of Taxes on

Income entered into force from October 17, 2007 on incomes in India and Kuwait and has come

into effect for incomes derived after April 1, 2008.

2. Memorandum of Understanding (MoU) on Labour, Employment and Manpower Development

signed on April 10, 2007 has been ratified by both sides.

3. Agreement on Drug Demand Reduction and Prevention of Illicit Trafficking in Narcotic Drugs,

Psychotropic Substances and Precursor Chemicals and Related Matters signed on June 15, 2006

is awaiting ratification.

4. Agreement on Juridical and Judicial Cooperation in Civil and Commercial Matters signed on

August 16, 2005 is awaiting ratification;

5. Agreement for Encouragement and Reciprocal Protection of Investment signed on November 27,

2001 and ratified on June 28, 2003.

7. Business Volume of different products

Agriculture

Only 1% of the total land area is utilized for the cultivation of crops; permanent pasture land

amounts to 7.6% of total land area. Despite the absence of rivers and streams and the paucity of rain, the

development of agriculture has been actively pursued. Government apportions arable land at nominal

prices on a long-term basis among farmers to stimulate production of vegetables and other crops. It also

provides farmers with long-term loans and low-cost irrigation. The state has supplied extension services

and demonstration centers for new farming techniques in an attempt to increase agricultural production.

Energy and Power

The Persian Gulf is geologically unique. Kuwait's known petroleum deposits are among the

world‟s largest. As of 1 January 2005, Kuwait's proven oil reserves came to an estimated 99 billion

barrels. However, another 2.5 billion barrels are held in the Saudi–Kuwaiti neutral zone or "divided

zone," thus putting Kuwait's proven oil reserves at 101.5 billion barrels. The neutral zone covers an area

of 6,200 sq mi and holds an estimated 5 billion barrels of oil and 1 trillion cu ft of natural gas. Kuwait

possesses about 8% of the known global resources of petroleum.

Travel and Tourism

The inbound travel market in Kuwait is small, with only 554,000 arrivals in 2010, the majority

of which were for business travel. Visitors hence tend to spend short periods of time in the country, and,

while they may spend more on accommodation and travel, they do not spend much on leisure and

entertainment. Projects have been slow to take off despite a 2010 vision for tourism being developed in

2004. The onset of the downturn caused many hotel developments and other tourism projects to be

delayed or cancelled until the recent elaboration of a 5 year plan for tourism.

This may help activate a number of “dormant” projects and bring new supply to the travel

accommodation market, in addition to adding more tourist attractions. Kuwait‟s outbound travel market

is significant. It is characterized by a 1.4 million expatriate population, 1.3 million of wealthy Kuwaitis

and a growing youth segment.

Petroleum

The petroleum industry is involved in the global processes of exploration, extraction, refining,

transporting (often with oil tankers and pipelines), and marketing petroleum products. The largest

volume products of the industry are fuel oil and petrol. Petroleum is also the raw material for many

chemical products, including pharmaceuticals, solvents, fertilizers, pesticides, and plastics. The industry

is usually divided into three major components: upstream, midstream and downstream. Midstream

operations are usually included in the downstream category.

8. INVESTMENT IN KUWAIT

Investment:

Kuwait Investment is a private investment company located in a region that contains 75% of the

world's oil reserves, Kuwait may be small in size but it has best petroleum wealth.

Kuwait invest direct mostly in established Petroleum Corporation and Oil Companies in Kuwait

and also established a Business Angle Network.

Kuwait using 40% of our online investor resources and 60% of our own capital.

Kuwait offer 3 short investment plans suitable for investors worldwide with a principal security

fund.

Kuwait Investment introduces this unique blend financial and investment products and serves via

specialist work teams of high-caliber professionals in the various disciplines.

This work teams are organized under departments of which the work is coordinated achieve best

operating results for the Company‟s shareholders and customers.

Investment opportunities in Kuwait

Agriculture, and Fishing

Banking and Finance

Construction of Infrastructure and Real Estate

Import/Export, Wholesale and Retail Trade

Insurance

Manufacturing

Mining and Quarrying

Oil and Gas Extraction

Real Estate Purchase, Rental and Leasing

Telecommunications, Fishing, cotton textiles, tourism etc.

9. PESTEL Analysis

PESTEL analysis, "political, economic, social, technological, environmental and legal

analysis" is used. When a part of the external analysis or market research and strategic analysis of macro

- overview of the environmental factors that the company take Kuwait. The market growth or decline,

business position, potential and direction for Kuwait industries is useful for understanding.

(1) Political analysis

Political analysis, especially tax policy, labor law, environmental law, trade restrictions, tariffs,

and include areas such as political stability. Kuwait Petroleum Exporting Countries Organization

of many political forces in the industry.

The stability and structure of a country‟s government gives a basis for interpreting future changes

in the region‟s political environment. Policy at the local or federal level can differ dramatically.

Learn the decision makers that are relevant to your venture, subsidies available in your industry,

and time lines necessary for processing requests.

(2) Economic analysis

Kuwait has a small, wealthy, and relatively open economy, which is experiencing nearly constant

growth since the gulf war. The source of Kuwaiti income is crude Oil, which composes about

95% of the country export and government income. That fact imposes high risk of economy

vulnerability in a case of low oil prices, but the trend is seen great extent stable since main

Kuwaiti oil importers are booming economies of China, South Korea, and India.

Geographically small country of Kuwait has 9% of total world oil deposits and holds the 5th

place

in Organization for petrol exporting countries (OPEC) in amount of oil production after Saudi

Arabia, Iran, and UAE. Kuwaiti GDP for 2010 was over $200bn, and with adjustment to

purchasing power parity (PPP) around 166bn of international dollars. Kuwait is highly depended

on the international trade

(3) Social Analyses

Employment

Native Kuwaitis make up less than half of the country‟s population, and some estimates place the

number of expatriates in the workforce at 80%. At the same time, a burgeoning young population and

lack of skilled young men and women to replace foreign labour creates an unemployment problem for

which there are no easily available and transparent statistics. These are the major issues the Kuwaiti

government is currently tackling.

Policy of Kuwaitisation

The policy of Kuwaitisation is therefore seen as essential for the country‟s development. However, it is a

huge challenge to find employment for school leavers and university graduates. The government sector

is over-manned by 45%, and young graduates awaiting postings in government departments either sit at

home or take English and IT courses in the city‟s growing number of private training institutes.

Education

The general educational system extends over 12 years and is divided into three stages - primary,

intermediate and secondary – each lasting four years. The primary stage may be preceded by two years

of kindergarten schooling.

Overseas education

An education overseas is affordable for many, and a considerable number of families have opted to send

their children abroad in the hope that a foreign degree will ease their entrance into a prestigious post.

Several government agencies fund foreign scholarships for Kuwaiti nationals, and Australia, Japan and

USA offer scholarships to Kuwaitis.

(4) Technological Analysis

The level of technological advancement in a region can positively or negatively affect the

opportunities available for a business. The proliferation of mobile technology, wireless internet,

access to electricity, internet access and transportation networks all influence the ease of doing

business.

(5) Environmental analysis

Kuwait has large area climate famous for its dryness and hotness distinguish four seasons in

the country. Summer is Extremely hot –Temperature exceeds 50 degrees. The first part of

summer season lasting from the beginning of June till Middle of August is Extremely hot and

dusty and the second part lasting from middle of August till middle of September has very high

levels of humidity –over 90% but a bit lower temperature above 40.

Autumn-A Synoptic find two months in a year to be an autumn season –October and November

Temperature is around 30 degrees and there are often thunder cloud, which made the air cooler.

Winter- winter in Kuwait is relatively cool- average temperature range from 10 to 20 degrees

but sometimes can fall till 0 During night. Sky is often cloudy and there 320mm rainfall in

average. Also fogs are usual thing for winter.

Spring- Temperature range from 20 to 30 degrees and thunderstorms are quite common during

that time Weather changes pretty fast-in the morning it can be hot and sunny and in the evening

there is heavy rain with cool winds.

(6) Legal Analysis

Labor Legislative-Statistically, 85% of Kuwaiti employees are actually non-Kuwaiti, however,

they are discriminated by labor laws.

Taxation in Kuwait- Kuwait has extremely warm tax environment for doing business. Corporate

income tax is applied only on foreign entities carrying on a trade or business. Tax rate of 15% is

applied on the following incomes – net profit (revenue less allowable expenses) earned from

making business in Kuwait, Royalties, License, Patent, Trademark and Copyright fees would be

received by foreign entities from Kuwait.

Problem Resolutions - Kuwait recognizes and accepts jurisdiction of International Center for the

Settlement of Investment Disputes (Washington Convention) and 1958 New York Convention

on the Recognition and Enforcement of Foreign Arbitral Awards. it is a member of WTO since

January 1995.

Import tariffs - Kuwait has a duty free condition for some food stuffs, medicine, medical

equipment, while applies 100% tariff on the tobacco products. These duties are to be paid in

Kuwaiti Dinar (1 KWD ~ 2,8EUR).

PART – II INDUSTRY

/SECTOR / COMPANY

SPECIFIC STUDY

PART – II INDUSTRY / SECTOR / COMPANY / PRODUCT/ SERVICE/ NEW

VENTURE SPECIFIC STUDY

AL SANEA CHEMICAL PRODUCT

Company: Al Sanea Chemical Products

Type: Manufacturer, Trading Company, Distributor / Wholesaler

Number of Employees: 103 -1000 people

Main export markets: Bangladesh, Indonesia, India, Korea, Malaysia, Pakistan,

Singapore, Sri Lanka

Address: 103 Sabhan Industrial Area, Block No. -8(Kuwait, PO Box

5629, Safat 13)

Zip: 13057

Company Tel.: 00965-2-4736740

Company Fax: 00965-2-4760678

Website: www.alsanea.com

1. Introduction of Al Sanea Chemical Products

Kuwait is a rich country. During the past five years, the GDP growth rate of more than

20% experienced. 9% of the world's oil reserves. As a gateway to the area in Kuwait is trying to position

itself. The public sector dominates the economy, and three-quarters of the country's wealth concentrated.

Represents three-fourths of GDP. The government is currently in the public sector for the private sector

to work for the government, 95% of Kuwaitis are trying to transfer. In February 2010, the infrastructure

development plan for 2010-2015 for the private sector in particular with the aim of opening the country's

economy, worth USD 100 billion, has been signed.

Kuwait was affected by the financial crisis of 2008, oil revenues in the previous quarter,

the central bank was experiencing a shortage of Kuwait, one of the major banks were to provide help to a

51% reduction was with it. It was also hurt by the crisis in the country. However, the country is coming

out of the present crisis, thanks to the increase in oil production, and in 2010 recorded a growth of 3% to

4% in 2011, hoping to reach. In addition, every year in the country in 2010 reached USD 29 billion,

which is 20 to 10% of the budget surplus, shows.

Al Sanea Chemical Products is one of the most diversified and highly regarded business

houses. Al-Sanea boasts of its past and confident of its business partners and the services to maintain and

enhance the looks to the future with renewed commitment.

Al Sanea Chemical Products, primarily in West Germany for the first time in the Gulf,

along with Dien CHEMIE chlorinated isocyanurates production in the year 1977, Kuwait - Set.

Today, more than one hundred of our product range in the country, mainly in the

industrial purification formulations and specially designed to meet the needs of almost every industry

covers a wide range of pesticides.

1000 Million Tons per year and for a variety of applications installed capacity of special

thinners category with White Spirit, a patented technology for the commercial production of a major

growth area with a solvent, is only a part of our diversification.

Al Sanea and the Kuwaiti company supplies chemical products business, the production

of the chemical is ISO 9001-2008 certified. We specialized in almost every industry in the world, is

designed to meet the requirements.

Al Sanea Chemical Products was established in 1977. Almost every industry in the world,

especially in our product range designed to meet the needs of more than one hundred mainly industrial

cleaning formulations and covers a wide range of pesticides.

Al Sanea Chemical Products, Kuwait is one of the most diversified and highly regarded

business houses. AL SANEA chemical products in the past, take pride and confidence, and its business

partners to maintain and improve the service looks to the future with renewed commitment.

Mission

Al Sanea Chemical Products mission to deliver a variety of products and services and an

efficient, professional and friendly manner to meet the needs of each individual client.

Quality

Al Sanea Chemical Products, products conform to international standards of Unmatched

Quality, during the various stages of our production, we employ a strict quality control is ensured

through. Current and dependability customers save time and reduce maintenance cost, easy to work with,

in our products and their performance to ensure exacting quality control.

Service

Even the most experienced supervisor to complete their jobs in manufacturing, process

and resources are required for the latest information. With a team of qualified technical personnel

attached AL SANEA chemical products on the job training, laboratory services, etc. always offer

technical performance are available to assist customers in their difficulties ..

Values

Al Sanea Chemical Products commitment to successfully repeat business and long-term

relationships with many customers has been allowed to develop. We look to the future market

diversification, international expansion through strategic alliance and wish to expand our boundaries.

Vision

Kuwait serious impact on people's quality of life is one of the leading global chemical

company.

Opportunities

Provide more opportunities to develop a range of competencies needed by AL SANEA

CHEMICALS PRODUCTS programs is not limited to persons, including:

• Participation in a variety of technical and vocational training programs.

• Professional and technical institutions, continuing education and skill development activities are

planned.

• Peer group is working on interactive programs.

• The main function of manager coaching activities.

• A combination of both local and foreign counterpart Chemicals industry partnership programs.

Employee career management program, individual career interests and corporate needs, reviews and

links in order to achieve the primary objectives of the company are offered an opportunity to grow the

company.

The company re-appropriates curriculum development and national development in previous

collaborative efforts with university faculty provides the ability to create local pool are required to fulfill

the aspirations of future geoscientists.

Career

Others recognize that a well-motivated, well-trained and productive workforce, drawn

from a variety of key disciplines including Engineering, Geosciences, social sciences, law, finance and

trade, in order to maintain its competitive edge in the industry corporation. Its leaders are committed to

growing within the company.

International markets

Al Sanea Chemical Products experience in export business since 1977 more than 32

countries within us, Al Sanea Chemical Products customers / market needs has allowed to obtain a full

understanding. With Al Sanea Chemical Products current facilities, handle many orders and the time

required to export can prepare all the relevant documentations. Al Sanea Chemical Products also request

our customers to any destination, shipping rates offered.

Europe - Italy, Germany, France,

Middle East - Bahrain, Saudi Arabia, Dubai, UAE, Lebanon, Turkey Muscat

Asia - Nepal, India, Pakistan, Sri Lanka,

Australia

Africa - Egypt,

2. Products portfolio of AI Sanea Chemical Products:

1. White spirit, solvents & thinners

Al Sanea Chemical Products know-how, technology extensively with local U.S. Patent

and alkyd resin paints are used as diluents for the white SPIRIT solvent, production, small-scale

production in 1982 lead to the development of plant development. Later, the Gulf to meet market

demand, our production plant with a capacity of 35 M.Tons expansion project completed per day. Offer

excellent quality and road tankers using Al Sanea Chemical Products own fleet and facilities supported

with mass distribution, today our customer network cover the entire bay.

Controlled flow characteristics and excellent gloss finish with a thin high gloss acrylic

paint thinners range of applications, including the requirements of today's high-tech finishes are

available. Also, certain dislodging solvent systems and storage tanks for cleaning crude oil Piping is

available.

2. Household chemicals

Each kitchen unpleasant odor problem, and rapid bacterial growth alarmingly dangerous

to health. To effectively combat this problem, we detergents, wool wash cold water, washing liquid,

cloth and fabric softners liquid to cover the local laundry products, pesticides, household cleansers a full

range of carpet shampoos to wash dishes offered. These products all around the kitchen and cleaning

work is designed to meet the requirement.

1. Chlorasan

Liquid Chlorine Disinfectant

2. Sana Ceramic Cleaner

Suitable for ceramic bath room, Chinas, porclain surface hard surface cleaner, restaurant

floors, kitchen and toilet

3. Industrial Cleansers & Degreasers

Manufacturing Machinery breakdown - loss of downs, and increase efficiency and

conserve energy by reducing annual maintenance costs to fall, says the machine for maintenance. Each

maintenance work to meet the needs of the development of the industrial purification factories,

workshops, oil arises! Time period fields, etc.. From the chemical bath, safety solvents, dispersants and

oil field drilling foams marine oil pollution from the products, fire safety products to name just a few.

All maintenance work is sometimes different approaches, different product mix cleanser with its own

specific demands. Related problem, our objective is to give you the actual result is to supply you with

the products.

1. Sana Ceramic Cleaner

Pink-colored acidic hard surface cleaner - medium water scale deposits, bathroom tiles,

ceramic, etc. can not be used on marble floors and other delicate foam for acid cleaning.

2. Sana Clean Off Liquid

Highly alkaline, low foaming liquid degreaser suitable for steam cleaning and highly

contaminated workshop floors maintenance work etc

3. Sana Kitchen Degreaser

Oven cleaner cum kitchen degreaser

4. Sana Liquid Soap Hands

Antibacterial liquid hand soap with lemon and rose perfume.

4. Janitorial/Disinfectants For Health Care

Effective and the right choice of cleaning, disinfecting agent to maintain a high standard

and there is a need to reduce the risk of bacterial contamination. Disinfection by chemical agents is

formed on the basis of the modern sanitary policy. The public health problem, with a view to compacts,

Al Sanea Chemical Products for use in all walks of life with a wide range of bacterial activity of

insecticides developed. The food industry products, poultries, dairies, meat and fish processing units,

catering and kitchen, hospitals, schools, sanitation is essential that there is a high degree find widespread

applications.

1. Sanittol

Personal hygiene, antiseptic disinfectant for laundry and household applications.

2. Sana Quat

Quaternary ammonium-based low temperature for both gram positive and gram negative

bacteria, effectively sterilizing agent. Butcher shops, dairies, food industries, laundries, etc.

excellent for poultry.

3. Universal Disinfection Cleaner

Cleaning and sanitizing of surfaces cleaner for action at an ideal disinfectant. Quat and

contains non-ionic detergents.

5. Automobile Maintenance Chemicals

Today more than ever in maintaining clean vehicles makes sense. Through the normal

operation of the vehicle, such as weather-related impacts, eg As such are subject to a number of

problems. No rust and corrosion, exhaust deposites, atmospheric pollutants and harsh weather, etc. due

to oil, overall soiling, such as the right to proper cleaning and maintenance chemical products for

automobiles, are also factors to consider as a result of traffic film, the type of machine maintenance, and

each person or company to cut costs A large image is a reflection of that cleaner vehicles and cleaner

cleaning project, frequency is used, we have developed a series of products as well.

ENGINE COOLING our product range, particularly when used with local Gulf waters

with a view to reducing corrosion, including the development of a full radiator coolant. Kuwait Institute

for Scientific Research of the product tested and approved by the corrosion inhibitors are based on MEG

with a superior mix. Required under the rising cost of proper maintenance of vehicles, especially

vehicles that are important vehicles to ensure a long life.

1. Mahar

Ammonium window cleaner for automobiles.

2. Sana Car Shampoo

Concentrated liquid shampoo to automobiles exterior cleaning.

3. Sana Liquid Off Clean

Heavy duty alkaline cleaner

.

4. Battery Water

Deionizer water for topping up batteries and car radiators to have no dissolved solids.

6. Floor Care / General Maintenance And Cleaning Chemicals

By far, the largest part of your cleaning budget is an expensive and labor intensive

business, the floor is likely to be spent on maintenance. A Minimum effective way to get the best results,

we almost all types of floor covering products and a full range of floor care, carpet shampoo in all

aspects of the polishes. Products in this category are the most useful for management companies and

cleaning contractors.

1. Mahar

Ammonium window cleaner for glass surfaces.

2. Marmar

Excellent for cleaning and sanitizing with chlorine scrubbing powder. Bottle easy to pack in

distribution. Suitable for all surfaces.

7. Water Treatment Chemicals

Corrosion control is left to the inadequate treatment, the high energy costs, decreased

efficiency, often expensive, time-consuming repairs and replacement of equipment, and cooling water

scale accumulation by the aggressive attacks of all results, corrosion, scaling, fouling of the main

problems of the entire system may cause a water cooling systems. The primary purpose of cooling water

treatment and destruction of corrosion protection to the plant cooling system is to maintain good heat

transfer efficiency.

Gulf water treatment system is particularly suitable to the idea of developing the scientific

and cost-effective manner, in order to serve customers around, Kuwait Institute for Scientific Research

and AL SANEA chemical products through joint work is completed.

1. Sana 25

Multi-component corrosion inhibitor based on molybdate. And anoidic catholic corrosion

control. Especially in the Middle East for the development of water systems and cooling

water opern Chilling units, air conditioning units, etc. ideal.

2. Sana 50

Chromate corrosion inhibitor system is a closed system. A product that prevents corrosion of

metals by treatment. Specially developed for the Middle East Waters.

8. Industrial Products Laundry

A busy industrial laundry, separate clothes when you meet the requirements for cost-

effective and specific needs washing powder category. These examples are of no use at local Doth

washing powder.

Synthetic ones, and a wide range of soils from dirt, grease, blood, saliva, protein-based

stains, food waste, etc., and all the right bacteria and infectious disease virus infection requires treatment

with chemical vegetable fibers, in a program.

Al Sanea Chemical Products can put in operation in the production of technically trained

staffs that supported the laundry with a team of commercial, institutional or hospital ones to suit the

needs of a full range of products.

1. Ribla Laundry Soft

With bacteriostatic agents appropriate for all fibers with excellent antistatic properties of an

ideal fabric softner. Hospital laundry, ideal for industrial and home laundry.

2. Sana Bleach

16-17% active chlorine containing perfectly safe, exceptionally stable laundry bleach. Due

to the slow and controlled release of chlorine, chlorine base isocyanurates

3. Structure and Business Activities of Al Sanea Chemical Products

Structure

Global outlook series on Chemicals industry in particular, is someone something, Market

Briefs, and a brief summary of research findings on the statistical collection provide. A quantitative

analysis of essential research, global estimates of the global chemicals industry provides the reader with

a statistical overview. The research paper also provides industry segmentation is a basic overview of,

and competition, and industry structure 142 data-rich tables of test sales, R & D expenses, and capital

spending by companies in the profile. Sectoral review of the tables containing 48 numerically sales, use,

and these agrochemicals, petrochemicals, carbon black, titanium dioxide, and soda ash production

capacity as the market has. But all recent mergers, acquisitions, and strategic corporate development,

integration provided. Reader a macro level understanding of the scenario prevalent in regional markets is

used to.

Activities

1. Chemical activities

Al Sanea Chemical Product main standard in the chemical industry is maintaining a

consistent level of high quality stability and to meet the new technological demands. This was

maintained through the state of the art in-house Research & Development laboratory.

2. Environmental activities

Al Sanea Chemical Product deeply understand its responsibility, commitment and the

necessity of the preservation of the environment as well as the safety of its staff. As a manufacturer of

wide range of products Al Sanea Chemical Product is committed to edify the people the concept of pride

and preservation of the same.

3. Construction activities

Al Sanea Chemical Product wealth of experience throughout the constructions works &

continuous improvement strategy implemented in all department has resulted in high quality services.

4. Manufacturing activities

Al Sanea Chemical Product has been recognized throughout the industry for its products

and manufacturing process as well as for its ability to adopt any new manufacturing lines.

5. Staff activities

Al Sanea Chemical Product has been able to build and maintain a healthy relationship

with its precious customer due to its staff who: Understand their customer desires. Have a strong

commitment towards quality and services. Are motivated to work within a continuous improvement of

framework.

6. Concrete activities

Al Sanea Chemical Product utilizes its power to provide the region with highest class of

services in the concrete industry starting with gradients and finishing with wide variety of products.

4. Comparative Position of Al Sanea chemical products with India:

INDIAN CHEMICAL INDUSTRY SCENARIO

Chemical Industry is an important constituent of the Indian economy. Its size is estimated at

around US$ 35 billion approx., which is equivalent to about 3% of India's GDP. The total

investment in Indian Chemical Sector is approx. US$ 60 billion and total employment

generated is about 1 million. The Indian Chemical sector accounts for 13-14% of total

exports and 8-9% of total imports of the country. In terms of volume, it is 12th largest in the

world and 3rd largest in Asia. Currently, per capita consumption of products of chemical

industry in India is about 1/10th of the world average. Over the last decade, the Indian

Chemical industry has evolved from being a basic chemical producer to becoming an

innovative industry. With investments in R&D, the industry is registering significant growth

in the knowledge sector comprising of specialty chemicals, fine chemicals and

pharmaceuticals. The Indian Chemical Market Segment wise is as under: -

Segment Market Value (billion US $)

Basic Chemicals 20

Specialty Chemicals 9

High End / Knowledge Segment 6

Total 35

On the eve of 11th plan our economy is in a much stronger position than it was a few years ago.

After recording an average growth rate of about 5.5% in the 9th plan period (1997-98 to 2001-2002), it

has accelerated significantly in recent years. The average growth rate in the last four years of 10th Plan

period (2003-2004 to 2006-2007) is likely to be a little over 8%, making the growth rate for the entire

10th Plan period 7.2%. This is below the 10th Plan target of 8%, but it is the highest growth rate

achieved in any plan period.

The 11th Plan will aim at putting the economy on a sustainable growth trajectory with a growth

rate of approximately 10% by the end of its period. It will create productive employment at a pace faster

than before, and also target robust agriculture growth at 4% per year.

GLOBAL SCENARIO

The global chemical` industry, estimated at US$ 2.4 trillion, is one of the fastest growing sectors of the

manufacturing industry. Despite the challenges of escalating crude oil prices and demanding

international environmental protection standards now adopted globally, the chemicals industry has

grown at a rate higher than the overall-manufacturing segment.

According to industry reports the pharmaceutical segment contributes approximately 26% of the total

industry output and approx. 35-40% is dominated by the petrochemical segment.

Commodity chemicals is the largest segment in the chemicals market with an approx. size of $ 750

billion while the specialty and fine chemicals segment accounts for $ 500 billion.

Some of the major markets for chemicals are North America, Western Europe, Japan and emerging

economies in Asia and Latin America. The US consumes approximately one-fifth of the global chemical

consumption whereas Europe is the largest consumer with approx. half the consumption. The US is the

largest consumer of commodity chemicals whereas Asia Pacific is the largest consumer of

agrochemicals and fertilizers.

Market Trends

• The global chemicals industry is estimated to have grown by about 5% from 2005.

• The US continues to be largest consumer of chemicals globally.

• Increasing demand from emerging economies in Asia and Brazil

• Commodity chemicals continues to be the largest segment followed by specialty and fine

chemicals and agrochemicals

• Major trends observed in the industry are consolidation and outsourcing.

Globally the Chemical industry is moving towards globalization, consolidation, cost reduction,

increased use of information technology(IT),focusing on research and development and increased

environment consciousness.

Globalization has resulted in the location of manufacturing bases close to raw materials, cheaper

energy sources and lower tax regimes. Consolidation has necessarily emerged to seek economies of scale

in manufacturing, logistics and R&D. The impact of consolidation has often been improvement in

geographical reach and entry into new markets. The two main components in cost reduction have been

aggressive identification of improved operating norms and financial restructuring to cut interest costs. In

R&D, there has been focus in knowledge areas designed to secure future revenues. There has been

increased emphasis on application development especially in specialty chemicals along-with greater

customer interaction. The trend of companies investing in process R&D especially in genetic knowledge

has also been witnessed on a large scale.

Information Technology is increasingly used for equipment design and process simulation as well as in

R&D for collaborative research to reduce product development time. E-commerce initiatives are being

used to improve operational efficiencies. Environmental consciousness has been a matter of increasing

concern for the industry as well as the global community. Environment issues are forcing the industry to

modernize and innovate. Effluent disposal issues have driven research into areas such as co-generation

and up-gradation of technology. These measures have resulted in a healthy impact on costs and

profitability.

Al Sanea Chemical Products Profitability:

Years Percentage (%)

2007-08 17.06

2008-09 24.09

2009-10 31.86

2010-11 35.60

Interpretation:

Profitability increase in every year but actual depression the growth of the company is slow

down in the year 2009-10. But it increase in the year 2010-11. i.e. 35.60%.

Financial Statements for Al Sanea Chemical Products:

Year over year, al sanea chemical products has been able to grow revenues from 735.46 to

$849.42m. Most impressively, the company has been able to reduce the percentage of sales devoted to

cost of goods sold from 65.69% to 75.15%.

Currency In million of

Kuwaiti dinar (kd)

2007- 08 2008- 09 2009-10 2011-12

Revenue 735.46 849.42 712.55 975.46

Total revenue 735.46 849.42 712.55 975.46

Cost of goods sold 460.52 501.42 423.46 552.85

Gross profit 247.94 348.11 289.09 422.64

Selling general &admi.expense 152.27 170.12 123.12 201.56

Depreciation &amortization 4.9 3.1 3.1 3.1

0

5

10

15

20

25

30

35

40

2007-08 2008-09 2009-10 2010-11

Profiability

Other operating expense 2.1 2.75 1.86 3.01

Other operating expense total 159.27 175.97 128.08 207.67

Operating income 8.9 30.5 61.1 126.2

Interest expense -1.4 -1.9 -2.1 -2.4

Interest & investment income 2.0 3.4 6.1 6.5

Net interest expense 0.6 1.5 4.0 4.1

Currency exchange gains (loss) - - - 1.0

Other non operating income (exp.) 0.3 0.5 0.9 0.3

Net income 125.47 204.64 227.01 347.24

India-Kuwait Bilateral Trade:

(Bilateral Trade in US $ Million)

India-Kuwait bilateral trade for the last five years:

Value in US$ Million

Sr.

no Year Export

% of

Export

Growth

Import

% of

Import

Growth

Total

Trade

% of

Total

Trade

Growth

Trade

Balance

1 2007-

08 681.54 10.81 7704.25 28.55

8385.09 26.90 (7022.71)

2 2008-

09 797.50 17.01 9593.74 24.53 10391.24 23.91 (8796.24)

3 2009-

10

782.45 -1.89 8249.49 -14.01 9031.94 -13.08 (7467.04)

4 2010-

11 1959.48 50.43

10313.64 25.02 12273.13 35.89 (8354.16)

[Table3.2: India-Kuwait Import/Export data last five years]

[INDIA-KUWAIT Export]

Interpretation:

Export:- India to Kuwait export increase from the $681.54 in 2007-08 to $ 797.50 but it reduces in the

782.45 due to the depression in the international market but it gradually increase in 2010 -11 i.e.

$1954.48.

0

500

1000

1500

2000

2500

2008-09 2009-10 2010-11

Export

[INDIA-KUWAIT % of Export Growth]

Interpretation:

% of Export Growth: - In 2008-09 growth % is 10.81 which is increase upto 17.01% in 2008-09 but

due international depression it reduces to the -1.89 but it gradually increase to the 50.43% in 2010-11.

-10

0

10

20

30

40

50

60

2007-08 2008-09 2009-10 2010-11

% OF Export Growth

% OF Export Growth

0

2000

4000

6000

8000

10000

12000

2007-08 2008-09 2009-10 2010-11

Import

Import

[INDIA-KUWAIT Import]

INTERPRETATION:

Import:-As the Kuwait is oil surplus country so import of the India is more from the Kuwait .So import

every year is increase expect in the 2009-10 due to international depression.

[INDIA-KUWAIT % of IMPORT Growth]

INTERPRETATION:

% of import Growth:- As the % of the import is reduce in 2008-09 and 2009-10but it increase in the year

2010- 11.

0

5

10

15

20

25

30

2007-08 2008-09 2009-10 2010-11

% of import

% of import

5. Present relationship with Indian trade and commerce

India and Kuwait enjoy traditionally friendly relations. This is based on history and across

time has been tested. Geographical proximity, historical trade links, cultural affinity and the presence of

a large number of Indian origin, preserve the long-standing relationship and continue to nurture. India is

a natural trading partner and is a place for higher education. India and Kuwait are old business partners.

Our trade relations date back ten centuries.

Constant interaction and regular exchange of business delegations, including through co-

operation, today, and bilateral trade relations are constantly spending and further strengthened. In

addition to being among the main trading partners of India to invest in important economic partner for

the joint venture, technology transfer projects and joint projects in third countries looks as Kuwait,

Kuwait India relationship is always a pro-business bias, and the complementary nature of the two

economies. Regular exchange of high-level dialogue on trade matters and delegation on several

occasions for a constructive, mutually beneficial relationship has been established to support sound.

Heavy dependence on foreign manpower with the small amounts of Kuwait Open, is a

petroleum-based economy. It is always open for capital and consumer goods and project exports

extremely competitive and prosperous market offered. Kuwait India relations were always pro-business

bias, and bilateral trade, there has been a steady increase since 1991.

The total bilateral trade between India and Kuwait in terms of U.S. Dollars $ 12,273.13

million in 2010-11, $ 8,385.79 million in 2007-08 has increased by 46.35%. In rupee terms, it has

increased by 65.82%. In the financial year 2007-08 to Rs 33, 70,483.61 laths. 55, 89,120.52 lakh in

financial year 2010-11. The growth rate of the rupee and dollar terms, the difference is due to changes in

the exchange rate corresponding year.

Kuwait India bilateral trade, commercial and cultural relations are rooted in the ancient

time. In the Kuwait Oil Resources Research, wood, rope, rice, tiles, fabrics and spices before the

commodities traded between countries. Until 1961, the Indian rupee in Kuwait were legal tender.

Consecutive trading partners, including India, Kuwait has been a top. Bilateral trade has

been growing steadily in recent years. Kuwait two-way trade in India in the year 2009-10 has now

reached $ 9031 million, of which $ 975 million during 2005-06. Steep export growth during the period

from $ 514 million to $ 782 million to $ 462 million from the $ 8249 million of which are imported. In

2008-2009, of which about $ 9.2 billion from Kuwait export crude oil and non-oil trade was $ 1.2

billion. Kuwait's crude oil imported annually to meet 10-12% of India's quest for energy security is an

important partner. Kuwait, the top Indian export of grain, meat, iron / steel products, tea / coffee, fruits

and vegetables, engineering goods and machinery, vehicles, etc. Kuwait is a major non-oil imports of

Indian salt, sulfur, stone, plastic materials, including cement , organic chemicals, iron and steel,

fertilizers, aluminum, copper, etc.

Trade

Kuwait Arab world's 3rd largest trading partner (2011-12) has. In 2011-12, two-way trade

between the two countries have a value of approximately $ 15.6 billion, while exports from Kuwait,

Bharat Petroleum nonoil trade of about $ 1.8 billion, which accounted for $ 17 billion, exceeded. Kuwait

India's global imports (2011-12), 3.34% of the source. For the Kuwait, India's global exports (2011)

accounted for more than 15%, with the largest 2ND its export market. In items imported from Kuwait,

India and Kuwait 5 ranked total imports (2011) is the source of around 6.4%.

Among the top ten trading partners of India in Kuwait has been a constant. Our trade with

Kuwait on the detailed trade statistics exist in this market is to provide an idea of the scope .. In fact, it is

more than $ 8385.79 million in 2011-12 to 2007-08, $ 17556.78 million during the last five years has

doubled. Kuwait's exports of about $ 681.54 million in 2011-12 to $ 1181.41 million in 2007-08 was

approximately 75%. During the years 2011-12, India's exports to Kuwait reached $ 16375.37 million in

2007-08, an increase of $ 7704.25 million registered twice. India's exports are increasing, however, the

trade balance, in favor of Kuwait's happening. Total non-oil bilateral trade between India and Kuwait in

2011-12, $ 2,397.84 million, $ 1,882.92 million in 2010-11, a decline of 21.5%.

2007-08 2008-09 2009-10 2010-11 2011-12

Exports $ 681.54

million

$ 797.50

million

$ 782.45

million

$1,856.01

million

$ 1,181.41

million

Imports $ 7,704.25

million

$ 9,593.74

million

$ 8,249.49

million

$ 10,313.64

million

$ 16,375.37

million

Total Trade $ 8,385.79

million

$ 10,391.24

million

$ 9,031

million

$ 12,169.65

million

$ 17,556.78

million

India and Kuwait to strengthen the bilateral economic and trade relations and renewal

efforts are tough. The relationship between the two countries has evolved into a significant participation

in the economic and commercial field. At the same time, an important export destination for goods

manufactured in Kuwait Indians in Kuwait emerged as important investors, and in India.

681.54 797.5 782.45

1856.01 1181.41

7704.25

9593.74

8249.49

10313.64

16375.37

0

2000

4000

6000

8000

10000

12000

14000

16000

18000

2007-08 2008-09 2009-10 2010-11 2011-12

Export

Import

India‟s Exports to Kuwait

Kuwait's exports of about $ 681.54 million in 2011-12 to $ 1181.41 million in 2007-08

was approximately 75%.

During the year 2011-12, India exported chart bellow shows the top 5 things to share

food, iron and steel, pressure vessels, reactors, columns or towers and industrial chemicals storage tanks,

valves, electrical machinery and equipment, sound recorders, and of articles, television image and meat,

and edible meat offal.

Major items exported from India to Kuwait during 2011-12

Electronical machinery & Equipment sound records and reproducers, television image

and parts

10%

.Pressure vessels reactors, columns or towers or chemical storage tanks and industrial

valves

15%

Articles of Iron &Steel 20%

Cereals 46%

Meat &edible meat offal 9%

10%

15%

20% 46%

9%

Major items exported from India to Kuwait during 2011-12

Electronical Machinery &Equipments, sound recordsetc.

Pressure vessels reactors,columns/towers etc.

Articles of Iron & Steel

Cereals

India‟s imports from Kuwait

Kuwait's imports of U.S. $ 16375.37 million in 2011-12 to U.S. $ 7704.25 million in

2007-08, more than two times in the last 5 years the increase has been registered. Kuwait's imports

(excluding Dressed Pol) in 2011-12 was U.S. $ 708.26 million.

During 2011-12, imports from Kuwait, the top 5 things (except for petroleum and its products) are given

below - organic chemicals, iron and steel, salt, sulfur, earths and stone; plastering materials, and lime

and cement, plastic and its articles and Aluminum and its articles.

Major items imported from Kuwait to India during 2011-12

Aluminum and its articles 7%

Iron and articles 13%

Plastic and articles 9%

Organic chemicals 62%

plastering materials, lime and cement 9%

Kuwait is the largest supplier of crude oil to India from the Gulf region after Saudi

Arabia. India imported US$ 7.9 billion worth of Petroleum, Oil & Lubricants (POL) from Kuwait in the

year 2009-10.

7% 13%

9%

62%

Major items imported from Kuwait to India during 2011-12

Aluminum and itsarticles

Iron and articles

Plastic and articles

Organic chemicals

6. Policies and Norms of Kuwait for Al Sanea Chemicals Products for Import-

Exports

Tariffs

Kuwait Food, Agricultural Products, or on essential consumer goods or some machinery,

most spare parts, and all customs duties on imports of raw materials does not in any implementation.

General Administration of Customs of cost, insurance and freight value of the goods which contains 4

per cent general tariff on most imports, collects. Ministry of Commerce and Industry of small local

businesses that compete with manufactured goods to 25 percent on imports, high protective tariffs may

impose.

Standards

U.S. exports to Kuwait Marketing hinder the highly restrictive standards, maintain. For

example, the shelf life of the food requirements of a foreign country in order to maintain freshness in

Kuwait is much lower than required. These products are so sensitive to longer shelf life requirements,

products from suppliers like Kuwait is close to local merchants. The competitiveness of U.S. products

impedes.

Export Subsidies Policies

Kuwait crude oil almost completely straight, petroleum products, and includes fertilizer,

which it does not export any compensation. Approximately 98 percent of Kuwait's imports of food

products. Some local vegetables are grown by farmers, and are subsidized by the government, the

vegetables are sold in some nearby countries. However, the amount grown and sold on the domestic or

foreign markets, agriculture is not significant enough to have any real impact.

Customs Valuation

Air, land, or by sea, arriving for perishable goods, customs clearance is prompt and takes

about three hours. To complete clearance, the importer on the import license and test certificate (see

below) are presented. Customs duty on imported goods' assessment is generally based on the value on

the commercial invoice. Customs officials do not declare the actual value, however, they can assess their

own.

Import Licenses

Annual import license from the Ministry of Commerce and Industry importers must

obtain. During his one-year license term, multi-entry based on any amount of goods imported from any

country are authorized. To obtain this license, import company must meet the following requirements:

- The Ministry of Commerce and Industry registered in the Commercial Register, and with the Kuwait

Chamber of Commerce and Industry must.

- Kuwaiti holding company's share capital must be at least 51%.

A special import license certain types of goods, such as firearms, explosives, drugs, and wild animals are

required to be imported.

Export Controls

Only a few items were exported from Kuwait export license is required, and no export

restrictions on products are generally Kuwait. No duties are levied on goods exported to Kuwait. Foreign

contractors, however, need a letter of approval from the Directorate of Income Tax, Ministry of Finance,

Kuwait, from Kuwait to use out of the equipment be able to export.

Import / Export Documentation

U.S. imports from Kuwait three certified and legalized copy of the commercial invoice,

port (air waybill) three copies of the bill, and a certificate of origin is required. Original certificate must

be:

- The right of the U.S. Chamber of Commerce or the National US-Arab Chamber of Commerce has

certified. Legalization in Washington, DC In New York City by the Kuwaiti Consulate or Embassy in

Kuwait is done by

- The full name of the producer and manufacturing plant or freight forwarder has a full name.

- Means of transport shows.

- Indicate the country of origin.

Labeling and marking requirements

Kuwait imports of all goods must be clearly marked with the country of origin. All

foodstuffs, the manufacturer's name, brand name food product, food product name, its composition

(ingredients and additives), net and gross weight in metric units, native country should carry a label

stating the Arabic language and its production and expiration dates. All fats and oils used as ingredients

must be specifically identified on the label.

Restricted imports

Kuwait alcoholic drinks, gambling machines, and pornographic materials containing

pork, pork products, alcoholic beverages, products banned from import.

Additional Information

Import and Kuwait, and other types of statistical information on exports, the country's

economy in the profile section of the interview, or in the external trade statistics of the department visit.

Valuable guidance and foreign investments, or resources related to Kuwait in order to

complete business guides, business directory, or visit the links section below the review guides.

7. Policies and Norms of India for Import or export to the Kuwait

Indian import policy

Import Export is the antonym. Economic terms, the import of any commodity from one

country to another country legally. Economic needs of the country, the foreign currency impact on the

effective use of the country's import policy which are fundamental factors. Indian import policy is

mainly the 3 basic purposes:

• To make goods readily available.

• To simplify the import license.

• To promote the efficient import substitution.

Current Scenario of Imports in India

Most of the restrictions are on the ground or tallow fat, animal rennet, wild animals,

unprocessed ivory, etc., can not be imported, which is a material safety, health, environmental

protection, etc. are provided free of import duty for export production. Input output norms have been

specified for more than 4200 items. These standards specify the products duty free import of inputs

allowed to ask about the amount. There are no restrictions on the import of capital goods. The Minimum

residual life of five years, on the other hand is allowed to import capital goods. Export Promotion

Capital Goods (EPCG) scheme for exporters to import capital goods at a concessionary custom provides.

Indian imports have increased quite dramatically over the last 30 years. At present, imports account for

17% of GDP. Capital goods imports continued to have been the last three years, their share has fallen

from 25% to 22%.

Major Indian imports

Zero import duty under the EPCG scheme, the facility has facilities available to enjoy the

service industries. India is a major importer of edible oil, newsprint, petroleum and oil products, crude

rubber, textiles, electronic goods etc.

Problems due to large imports of products

Import recent trend has some concerns. Regular oil imports in India are able to produce

the required quantity of oil on the fact that it affects. In addition, the increase in imports of products in

the Indian domestic industry needs to develop a fact. The high cost of imports and pressure on foreign

exchange reserves.

Import policy

Economic needs of the country, foreign exchange and effective use of industrial and

consumer needs of India's import policy on the performance of the basic factors. On the import side, the

policy has three objectives: to improve the technology required for modernization and capital goods,

including imported goods necessary to make it more easily available; import licensing procedures for the

smooth and efficient; efficient import of a substitute for, self-reliance accelerate.

Only 4 of contraband: tallow fat, animal rennet, wild animals and unprocessed ivory.. But

imports of consumer goods is limited to the policy change.

Progressive policy action five ASEAN tariff levels on a range of common areas, has

received the Indian government is clearly laid out. Basic customs tariff rate of 0 to 40% plus 2%

additional duty now for the poor, the average rate is 30%.

Under duty exemption scheme, duty free imports for export production is given. Input -

output norms have been specified for more than 4200 items. These standards allow for certain products

to be exported duty-free import of inputs, specify the amount.

No quantitative restrictions on imports of capital goods and intermediates are. Second-

hand capital goods imported from the rest of life Minimum of 5 years provided they have permission.

Subject to the fulfillment of the export obligation specified exporters, concessionary customs duty on

capital goods (including computer systems) are allowed to be imported, under the Export Promotion

Capital Goods (EPCG) scheme. Service industries, zero import duty under the EPCG scheme will enjoy

the facility. Likewise, hospitals, air cargo, hotels and other tourism-related industries. Software units can

use their products exported data communications network.

Export policy

The main focus of India's trade policy and a thrust area is exports involving higher value

additions. Most items can be freely exported from India. A few things, to avoid shortage in the domestic

market for the national resource conservation and environmental protection are subject to export control.

Export profits are exempt from income tax. 8% compared to 5% on domestic sales (net

tax) to pay higher royalties on export sales are permitted. Exports up to 10% commission is acceptable.

For the import of inputs required for export production are exempted from basic customs

duty. Oriented Units (EOUs) and Export Processing Zones (EPZs) as the export product for the purpose

of duty free import of capital goods and raw materials as enjoy special export incentives.

8. Present Trade barriers for import / Export of Chemicals

Tariff barriers

A tariff is a tax on imported or exported goods.

A tariff may also refer to:

• tariffs, product or service to sell or rent a list of prices British criminal law

• Tariff (criminal law), a Minimum jail sentence

• tariffs, Ohio, United States

Non-tariff barriers to trade

The most common form of non-tariff barriers to trade import tariff is not restricted, but is

that trade barriers. Some common examples of NTB called non-tariff barriers, however, once they are

made of is the effect that the anti-dumping measures and the equalization of duties.

WTO rules tariff significantly decreased after the use has increased sharply. The health,

safety, sanitation, or to protect depletable natural resources deemed necessary, while some non-tariff

barriers to trade are clearly in very limited circumstances. Other forms, such as the World Trade

Organization (WTO), the European Union (EU), or to restrict the use of the North American Free Trade

Agreement (NAFTA) as a means to avoid it like the free trade rules have been criticized.

Some are directly related to non-tariff barriers to foreign economic conditions, but still

foreign economic activity and countries do not have a significant impact on foreign trade.

Trade between countries producing goods, services and factors referred to in the trade.

Non-tariff barriers to trade, import quotas, special licenses, unreasonable standards for quality goods,

bureaucratic delays at customs, export controls, state trading, limit equalization duties, export subsidies,

trade, technical barriers, including Sanitary and Phyto - sanitary measures, rules of origin, etc. The

macroeconomic impact of trade measures included in this list.

Types of non-tariff barriers to trade

1. Certain restrictions on trade:

2. Customs and administrative entry procedures:

3. Standards:

4. Government business partnership:

5. On import charges:

Several different variants of non-tariff barriers that divide. Some scholars internal taxes,

administrative barriers, health and hygiene rules and government procurement policies are shared

between. Others, such as trade, customs and administrative entry procedures, standards, trade, public

participation, on import costs, and other categories on the specific terms of the allocation of non-tariff

barriers are more categories.

Import licensing and quota allocation, and equalization Antidumping duties, import

deposits, the so-called voluntary export restraints, equalization duties Minimum import price system: the

first series of direct implications for national industry specific regional security mechanisms are to be

imported and directly under the second category limited depending on foreign trade, and whose actions

are more related to administrative bureaucracy that does not follow procedures, however, for example,

restrict trade: customs procedures, technical standards and standards, sanitary and veterinary standards,

labeling and packaging requirements, BOTTLING, etc. Third series directly import or export promotion

is not limited to, the effect often lead to this result, which has methods.

The non-tariff barriers, including trade bans. Here are some examples of popular NTBs.

License

Direct import regulation (and sometimes export) license and quota are the most common

instruments. Almost all industrialized countries, non-tariff methods. License System (FIPS state

specifically authorized by the office) issues a license merchandises list of imported and exported

commodities, foreign trade transactions that are required to allow. Product licensing procedure in many

forms and can. The main types of license for a period of time involved in the import or export of goods

allows unrestricted license that is normal, and a time-specific product importer (exporter) license (or

export) to be imported. License a one-time amount of material, its cost, its country of origin (or

destination), and goods import (or export) should be carried out, which in some cases also indicate the

customs point. Foreign trade as a tool to regulate the use of licensing systems are based on

internationally recognized standards of the contract. Specifically, this Agreement and the General

Agreement on Tariffs and Trade GATT (GATT) import licensing operations concluded under the

agreement, including some provisions.

Quota

The import and export of certain goods on the licensing of foreign trade is closely related

to quantitative restrictions. A quota value for a period of time or imposed on certain goods imported and

exported physically, has a limit. This category in particular, seasonal quotas, and "voluntary" export

restraints, called the context of the global quota. Quantitative restrictions on foreign trade transactions

carried out by a one-time license.

Quantitative restrictions on the import and export of foreign trade, government regulation

is a form of direct administration. Licenses and quotas for certain commodities, import and export of

goods allowed to enter into the transaction and will be regulated by a series of countries, limited range,

to enter foreign markets with regard to the independence of enterprises is limited. However, import and

export licensing and quota system, in many cases, some material gain control over foreign trade, foreign

trade firm regulated financial instruments are proving to be more flexible and effective. The vast

majority of world trade regulation, licensing and quota systems are an important tool, which can be

explained by the fact.

The trade barrier as a result of the increase in their costs, because the high price of

imported materials employed in the manufacturing process as well as a limited selection of goods as

customers' loss is reflected. Import quota can be unilaterally, without negotiations with the exporting

country imposed by the country, and bilateral or multilateral, negotiations with the exporting country and

the agreement is imposed. You can leave the country export quotas that restrict the amount of luggage.

Local market, manipulation of prices on the international level is the shortage in the supply of the

products can be guaranteed by the country.

Standards

Standards among non-tariff barriers is a special place. In general, to be able to sell local

products, labeling and testing of products, impose standards on the classification, but has blocked the

sale of foreign manufactured products. Sometimes the standards of local population under the guise of

safety and health protection is filed.

Administrative and bureaucratic delays at the entrance

Increase in uncertainty among non-tariff regulation system and the cost of maintaining

inventory of administrative and bureaucratic delays should be mentioned.

Import deposits

Another example is the import deposits in foreign trade regulations. Ther importers

import all or part of the cost of imported goods of the same time (non-interest bearing deposits) must pay

the bank for a certain period of time which is a form of deposit.

National level, the administrative regulation of capital movements are primarily defined

legal regime, including investment and investors in the process, the bilateral agreement, the structure is

made. The condition (reasonable and fair, the National, the most favored nation), and the return of

nationalized, transfer and repatriation of profits and capital is determined by resolution of the dispute.

Foreign exchange restrictions and foreign exchange control

Foreign exchange restrictions and foreign exchange controls, foreign economic activity

between non-tariff regulatory instruments occupy a special place. Foreign exchange restrictions,

residents and nonresidents with currency and other currency transactions are regulated by the board.

Foreign economic activity, an important part of the control system of the national currency against

foreign currency is established.

The transition from tariffs to non-tariff barriers

NTBs have moved from industrialized countries, the rate of the reasons why the

developed countries, the rate of income sources other than the fact. Historically, the formation of nation

states, governments fund idea. By every submission they receive it. The most developed countries, their

costs are still financially dependent on the rate that is explained by the fact. NTBs as a potential way to

regulate international trade in developed countries, developing at the same time, depending on the rate

can not afford not to. Another reason for the decline in the rate of transition to NTBs by the negative

impact of the weak industries or industry compensation, can be used to support. The third reason for the

popularity of NTBs in the absence of opportunities for the government to support the ability of interest

groups to influence the process.

Non-tariff barriers today

With the exception of export subsidies and quotas, NTBs rate is the same. Production of

goods for tariff negotiations in the WTO General Agreement and tariffs and trade (GATT), on was

falling in the round of eight. After the rate of lowering, the principle of protection, such as a technical

barrier to trade the introduction of new NTBs demanding. Trade and Development (UNCTAD, 2005)

According to statements made at the United Nations Conference on, and control the amount of the price

level is based on the use of NTBs, 1994 from 15% in 2004 to 45% significantly decreased, while the use

of other NTBs 2004 to 1994 increased from 85% to 55%.

Safe and environmentally friendly products and increasing consumer demand for their

impact on the growing popularity of TBT. Many NTBs Uruguay Round) Origin of the World Trade

Organization agreements, and is governed by GATT articles. Services sector has become as important as

NTBs common trade area.

Such as consumers and producers of goods between the outer and information

asymmetries in the market as most of the problems are related to the NTB, except that protective

measures can be defined as. This is an example of the safety standards and labeling requirements.

Industry and trade sanctions available to governments in industrialized countries, forcing

them to resort to the use of NTB global economic growth and international trade and import a wide

range of serious obstacles to be sensitive to the need for protection. Thus, NTBs cover the replacement

of the old form of protection that can be referred to as a new.

10. Business Opportunities in Kuwait

1. An Indian exporter because of its high per capita income is that there is a lot to the Kuwaiti

market. Is performed for the proper marketing research.

2. Retail and mall culture, Indian products have a good chance. Indian products are cost-effective in

developed countries against their competitors. Super markets or hyper - Merchandisers markets

generally, the price advantage of similar needs and customers prefer to buy Indian products. Lulu

hyper market in Kuwait and the Middle Eastern countries has a great presence. Formerly known

as Landmark Max India, Indian products are sold in retail outlets in more than 20 countries in the

Middle East. Retail sector has been a major part of the discussion.

3. Indian exporters Western exporters to the edge in terms of price, but they have disadvantages in

terms of variety. Kuwait's production value and quality of products in the western Indian

products so that they both have a comparative advantage is to maintain a better quality.

4. Opened in India and X-cite such a possibility, and Jumbo Electronics is ahead of many

international retail outlets.

5. Indian exporters have benefited from their western sae Five-US location and development of the

south-south co-operation would help.

6. India's experience in economic development and its achievements on some specific areas of

bilateral cooperation between the two countries can support sound. It will be beneficial to both of

them in Kuwait Kuwait Indo support its economic development in some other areas yet to be a

major oil exporting country that is a hard reality. India's new economic policy for the Indian

economy has given a new push. NRI free trade, foreign investment and contribute to the Indian

economy has a lot to contribute.

7. Indo-Kuwait oil field development by the government of both countries will help increase trade,

which is under process. The oil is expected to give a lot of business from both sides.

8. Business conditions, and the model is changing rapidly in recent years. Respective field of

education and training in the areas of trade, but also requires a fair amount. Education and

training cooperation extends from India long back. According to the changing situation, the two

countries' business and technical attributes of both academic knowledge and professional talents,

mutual understanding and promote cooperation through the sharing process can be.

9. Information and Communication Technology (ICT) development in the region has been growing

rapidly. India is already in the advance stages of the software development in the ICT

components have been moved. ICT, as well as the demand is likely to increase in the future. The

high price is also probably one of the leading service transactions. Kuwait well educated and

trained manpower in this field can be. An Information Technology Park also facilitate and

encourage such activities are to be installed. The couple already have a joint venture sector has

emerged. Relatively cheap labor and a growing demand for information technology point of

view, private sector investment in the service business opportunity to get better. To serve the

common interests of the field go hand in hand for a great offer.

10. Investment and ownership pattern of joint venture projects in India is growing as a result of this

policy change. In this context, it is more important incentives for foreign direct investment in a

large, free access to the Indian market that is recorded. Trade pact with India by virtue of its

proximity, the close economic ties between the two countries, Kuwait's investment and joint

ventures in India themselves through, inter alia, has manifested.

11. Financial Services Centre (ESEC) Non-banking services are provided, and the package of

industrial enterprises in the country to help interested parties. The center provides assistance in

carrying out techno-economic feasibility study. It also conducts management training programs

11. Suggestions

1. Kuwait needs of agricultural products and technical know how and where India needs oil. The

export and import policy and a mutual understanding of the sittings can solve many problems.

2. Mutual goodwill and friendly relations between the two countries, keeping in view both of the

countries of the world under the light of the new economic reforms in the context of the new

economic order is needed to identify specific areas of mutual cooperation.

3. Mechanism trade associations, financial institutions and corporations, such as shipping, official

and non-governmental agencies should be set up involving a multilevel

4. Kuwait to promote traditional goods exports to India have limited space, India involving modern

technology and expertise will explore avenues to promote the export of manufactured goods.

5. Indian stock market and vice versa Kuwait to promote effective management of the various

categories of need. By the Kuwaiti people and the nature and quality of the goods manufactured

in India have very little information.

6. The current system is not only inadequ

7. ate, but high freight rates and are responsible for a delayed delivery schedule.

8. India's policy measures to promote export of commodity-wise. They are according to commodity

prices as well as the country, this will be more effective. Countries to intensify export promotion

should be classified into different groups.

9. Kuwait, especially in the field of industrial development, trade with the most affordable means to

promote industrial development in the implementation of industrial projects, technical

cooperation and joint participation in the coordinated action.

10. Industrial development, trade and technology imports to the maximum extent possible in relation

to the framework for reducing dependence on the developed countries.

12. Conclusion

1. Kuwait food, strong domestic demand and currency depreciation was pressured by higher costs

that will tighten monetary policy to reduce inflation.

2. Insurance companies are working in partnership with the government of Kuwait to work and

methods to farmers to take care of the risk involved in the business of insurance is that it can see.

3. Kuwait to diversify its economy and economic transformation billion money it will use the

money.

4. Al Sanea Chemical Manufacturing Chemicals resources should be increased in search activity.

5. Exports and imports has increased substantially during the last two decades and in the future

there exists a greater potentialities.

6. Both of them will be beneficial to the economy of Kuwait, Kuwait, India and some other areas of

development co-operation is yet to be a major oil exporting country.

7. Industrial sector dominated by developed countries, free of rising population and better

employment opportunities for self-sufficiency can provide.

13. Bibliography

1. http://www.alsanea.com (14th

September 2012)

2. http://www.ijccr.com (14th

September 2012)

3. http://www.oxfordbusinessgroup.com/ (15th

September 2012)

4. http://www.state.gov/r/pa/ei/bgn/35876.htm. (20th

September 2012)

5. http://www.espionageinfo.com/Ke-Lo/Kuwait-Oil-Fires-Persian-Gulf-War.html.

(29th

September 2012)

6. http://afp.google.com/article/ALeqM5hb3ISwr0QiNj-lErPVrAAiHKphAg

(5th

October 2012)

.

http://www.globalsecurity.org/military/library/news/2004/01/mil-040115-usia03.htm. (5th

October 2012)

7. www.businessmonitor.com (23rd

October 2012)

8. www.pai.gov.kw (1st November 2012)

9. www.mof.gov.kw/offset (29th

November 2012)

10. http:/www.encyclodiea.com/topic/Kuwaitaps (15th

January 2013)

11. http:/globaledge.msu.edu/countries/Kuwait/economy/ (15th

January 2013)

12. http://www.globaltrade.net/m/c/kuwait.html (4th

February 2013)

13. http://www.kuwait-investment.com/index.html (26th

February 2013)

14. http://en.wikipedia.org/wiki/economy_of_kuwait (3rd

March 2013)

15. http:/en.wikipedia.org/wiki/Kuwait_people (25th

March 2013)

16. http://www.indianetzone.com/indian_trade.html (2nd

April 2013)

A

GLOBAL COUNTRY STUDY REPORT

ON

KUWAIT AT AGILITY LOGISTIC PVT. LTD.

SUBMITED TO

GUJARAT TECHNOLOGICAL UNIVERSITY

IN PARTIAL FULFILLMENT OF THE

REQUIREMENT OF THE AWARDS FOR THE DEGREE OF

MASTER OF BUSINESS ADMINISTRATION

UNDER THE GUIDENCE OF

MISS. PINAL CHOKSI

Submitted by

SHAH VIRAL J. (117190592056)

JADAV JAGRUTI K. (117190592057)

PATEL BHAVESH C. (117190592058)

VALAND CHIRAG R. (117190592059)

NAGARBANDHARA KRUTIKA M. (117190592060)

SHAH KRUPA S. (117190592061)

MBA SEMESTER III

Batch :( 2011-13)

INDU MANAGEMENT INSTITUTE

MBA PROGRAMME

Affiliated to Gujarat Technological University

Ahmedabad.

Institute Certificate

“Certified that this Global / Country Study And Report Titled “KUWAIT

AGILITY LOGISTIC PVT.LTD.” is the bonafide work of Mr./Miss :Shah Viral,

(117190592056) Jadav Jagruti, (117190592057) Patel Bhavesh, (117190592058) Valand Chirag,

(117190592059) Nagarbandhara krutika, (117190592060) Shah Krupa (117190592061) who

carried out the research under my supervision. We also certify future, that to the best of

our knowledge the work reported herein does not form part of any other project report

or dissertation on the basis of which a degree or award was conferred on an earlier

occasion on this or any another candidate.

Signature of Director Signature of the Faculty Guide

(Dr. Manish Vyas) (Pinal Choksi)

Student‟s Declaration

We, Viral(117190592056), Jagruti(117190592057), Bhavesh(117190592058),

Chirag(117190592059), Krutika(117190592060), and Krupa(117190592061) hereby declare that the

report for Global Country Study Report entitled “Kuwait” is a result of our own and our indebtedness to

other work publications, references, if any, have been duly acknowledged.

Place: Vadodara

Date: ………………………

PREFACE

The Global Country Report is an integral part of the MBA program and it is designed in such a

way that student can give maximum knowledge and can get exposure to the global world in minimum

time.

With the respect and pleasure, we have privilege to submit our report to the kind hands of

eminent examination of the Indu Management Institute. MBA is a professional course, to be an MBA

student is a matter of pride because through MBA each student is prepared to hold the post of manager

very confidently and we are in field which helps us to develop from normal human being into a

disciplined and dedicated professional.

We have heard that famous saying “God helps those who helps them salves“ and “Experience

is the best teacher “the global country report on “KUWAIT” has given us sufficient knowledge to fill

the gap between the theoretical and practical knowledge.

ACKNOWLEDGEMENT

Every work that one completes successfully stands on the constant encouragement, good will and

support of the people around. I, hereby, avail this opportunity to express my heartfelt gratitude to a

number of people who extended their valuable time, full support in developing this project.

We convey our heartfelt gratitude to our college “Indu Management Institute” under Gujarat

Technological University for giving us this precious opportunity to work for the real-time project.

We also forward our special thanks faculty member & project guide Miss. Pinal Choksi from

Indu Management Institute for guiding us in this report. The valuable suggestion of the faculty

member during the course of our Project work gives me the inspiration to achieve our goal. The shape

that project has been taken is due to judicious guideline, encouragement & help of our guide.

We own the success of the project to my Project Guide, Miss. Pinal Choksi who was a

tremendous supporter and an eager teacher, for providing excellent guidance for this project. She is one

of the major sources behind the success of the project.

INDEX

Sr.No. PARTICULARS

Total

No. of

Pages.

Semester

TITLE PAGE OF REPORT

(1) PART – I ECONOMIC OVERVIEW OF

THE SELECTED COUNTRY

III

1 1. Demographic Profile of the Country

2. Economic Overview of the Country

3. Overview of Industries Trade and Commerce

4. Overview Different economic sectors of selected

country

5. Overviews of Business and Trade at International

Level

6. Present Trade Relations and Business Volume of

different products with India / Gujarat

7. PESTEL Analysis OR SWOT Analysis

7 III

(2) PART – II INDUSTRY / SECTOR /

COMPANY SPECIFIC STUDY

IV

1 1. Introduction of agility logistic

2. Functions and business activities of agility logistic

27 IV

2 1. Comparative position in INDIA and GUJARAT

2. Business with GUJARAT

3. Policy and Norms of Kuwait for Logistic Industries

4. Policy and Norms for Logistic Industries India

5. Present Trade Barriers

33 IV

3 1. Potential for Import/Export in India

2.Business Opportunity

3.Conclusion

4. Suggestions

5.Bibliography

56 IV

PART- I

ECONOMIC OVERVIEW OF THE SELECTED COUNTRY

1. DEMOGRAPHIS PROFILE

Demographic of the Population of Kuwait including Population Density, Ethnicity, Education Level, and

Health of the Populace, Economic Status, Religious affiliation and other aspects of the population.

Approximately 96% of Kuwait‟s Population is urbanized while 4% are nomadic or semi nomadic. The

state of Kuwait Current population is estimated at roughly 3-3.5 million people counting both locals and

foreigners. Roughly 1 million of Kuwait‟s Population is local, with 3-2.5 million residents registered as

foreigners and non-locals. It is estimated that one in every 3-4 people in Kuwait are of Kuwaiti

citizenship.

In 2009 more the 580,000 Indian nationals lived in Kuwait making them the single largest expatriate

community. Foreign population mainly consists that Egyptians, Palestinians, Bangladeshi, Pakistani,

Filipino and Ski Lankan residents. Foreigners consist of European, North American and Northeast Asian

Communities but those are negligible.

Kuwaitis are Predominantly Muslim through there is a few Christians of atheists. 85% of Kuwait‟s

populations is Muslim and the rest belong to other religions.

Kuwait has a geographically small but wealthy relatively open economy of crude oil reserves of about

104 billion barrels – about 7% of world reserves. Petroleum accounts for nearly half of GDP are 95% of

export revenues and 95% of government income. Kuwait officials have committed to increasing oil

production to 4 million barrels per day by 2020. The rise of global oil prices through 2011 is reviving

government consumption and economic growth. Kuwait has experienced a 20% increase in government

budget revenue which has led to higher budget expenditures particularly wage hikes for many public

sector employees. Kuwait has done little its economy because of this positive fiscal situation due to the

poor business climate and the acrimonious relationship between the National Assembly and the

executive branch which as stymied most movement on economic reforms. At2010 Kuwait passes

economic development plan that pledges to spend up to $130 billion over five years to diversify the

economy from oil attract more investment and private sector participation in the economy.

Here are small number of Kuwaiti Christians and Jews. The 93% literacy rate, one of the Arab worlds

highest is due to extensive government support for the education system. Public school education

including Kuwait University but access is restricted for foreign residents. The Government gives

qualified students abroad for degrees not offered at Kuwait University.

Kuwait‟s official language is Arabic though only roughly half the country speaks the language primarily.

Mostly foreigners speak Hindi, Urdu, Filipino, Bengali. Most Kuwaitis are also bilingual in that they

speak more than one language.

Kuwait‟s standard of living increased; many have flocked to the country. Most people are Arabs and

count up to 100,000 People. Most obtain nationality by marrying Kuwait women. 30-35% of stateless

men in adulthood have married Kuwaiti women, and this number is rising.

April 22, 1975 and April 21, 1980 Censuses

Religion Men 1975 (1980) Women 1975 (1980) Total 1975 (1980)

Christians 22,711 (51,354) 22,007 (35,728) 44,718 (87,082)

Muslims 517,808 (702,992) 426,973 (539,716) 944,781 (1,242,708)

Other 3,249 (22,293) 2,089 (5,869) 5,338 (28,162)

Total 543,768 (776,639) 451,069 (581,313) 994,837 (1,357,952)

demographic Statistics

The Demographic statistics from the CIA world fact book unless otherwise indicated.

Age Structure

0-14 Years: 25.8% (Male

348,816 ; Female 321.565)

15-64 Years : 72.2% (Male

1,153,433; Female : 720,392)

65 Years and over; 2% (Male

25,443; Female 25,979) (2011

Est.)

Gender ratio

at birth: 1.047 male(s)female

under 15 years 1.04 male(s)

female

15-64 years: 1.79 male(s) female

Total population: 1.54 male(s_

female (2011 est,)

Population Growth Rate

1.986 % (2011 EST)

Birth Rate

2.11 Deaths/1,000 Population

(2011 EST)

Death Rate

2.11 Deaths / 1000 Population

(2011 EST)

Net Migration Rate

0.65 Migrant (s)/1,000 Population

(2011 EST)

Infant mortality rate

8.07 deaths/1,000 live births

(2011 EST.)

Life expectancy at birth

total population : 77,09 years

Male: 75.95 years

Female: 78.3 years (2011 EST.)

Total fertility rate

2,64 children born/woman (2011

est.)

Nationality

noun: Kuwaiti(s)

adjective: Kuwaiti

Ethnic groups (by nationality)

Kuwaiti 45%

Other Arab nationals 35%

South Asian 9%

Iranian 4%

Other 7%

Religions

Muslim 85% (Sunni 70%, Shia 30%)

other 15%

Literacy

Definition: Age 15 and over can

read and write

Total population: 93.3%

Capital : Kuwait

Area: 18 km2

Total Population : 2.795

Annual growth rate: 2.00%

Density: 157.00/km2

Urban population:98%

2. ECONOMIC OVERVIEW OF THE COUNTRY

Kuwait has a geographically small but wealthy relatively open economy with crude oil reserves of about

104 billion barrels about 7% of world reserve. Petroleum accounts are nearly half of GDP 95% of export

revenues and 95% of government income. Kuwait officials have committed to increasing oil production

to 4 million barrels per day. The rise in global oil prices throughout 2011 is reviving government

consumption and economics growth. Kuwait has experienced a 20% increase in government budge

revenue which has led to higher budget expenditures particularly wage hikes for many public sector

employees. Kuwait is done little to diversify its economy because of this positive fiscal situation and due

to the poor business climate and the acrimonious relationship between the National Assembly and the

executive branch which has stymied most movement on economic reforms. In 2010, Kuwait passes an

economic development plan that pledges to spend up to $130 billion over five years to diversify the

economy away from oil attract more investment and private section participation in the economy.

1. Economy in greater depth 2. Macro-economic trend

3. Oil 4. Social benefits

5. Diversification 6. Agriculture

7. Shipping 8. External trade and finance

9. Others statistics

1. Economy in greater Depth

Kuwait is one of the rich countries in the Muslim World. Current GDP per capita reached astonish peak

growth of 439% in the 1970. But this proved unsustainable and contracted by 58% in the 1980. However

rising global oil demand helped register growth of 91% in the 1990. Diversification is a long-term issue

for this over exposed economy.

2. Macro-Economic trend

The chart of trend of gross domestic product of Kuwait at market prices estimated by the International

Monetary fund with figures in millions of Kuwaiti Dinars.

Year Gross Domestic Product

US Dollar Exchange Inflation Index (2000=100)

Per Capita Income (as % of USA)

1980 7,764 0.27 Kuwaiti Dinars 55 171.08

1985 6,450 0.29 Kuwaiti Dinars 68 71.58

1990 5,328 0.29 Kuwaiti Dinars 80 37.00

1995 8,114 0.29 Kuwaiti Dinars 92 62.14

2000 11,570 0.30 Kuwaiti Dinars 100 48.92

2005 21,783 0.29 Kuwaiti Dinars 108 64.35

3. Oil

In 1934, the ruler of Kuwait granted an oil concession to the Kuwait Oil Co. jointly owned by the Anglo-

Persian Oil Company and Gulf Oil Corporation in 1976, the Kuwaiti Government nationalized

KOC.Kuwait took over onshore production in the Divided Zone between Kuwait and Saudi Arabia.

KOC produce jointly with Texaco.

4. Social Benefits

Kuwait has a fairly open economy with a lot of multinational companies operating in the oil rich nation.

Burger King Restaurant situated at the Kuwait International Airport.

5. Diversification

In 2007, hydrocarbon industries accounted for over 95% of the Kuwaiti. Diversification of the economy

in manufacturing industries remains a long-term issue.

6. Agriculture

Agriculture is limited by the lack of water and land. The government has experimented in growing food

through hydroponics and carefully managed farms. However most of the soil which are suitable for

farming in south central Kuwait was destroyed when Iraqi troops set fire to oil wells in the area and

created oil lakes. Fish and shrimp are lots of in territorial waters and large scale commercial fishing has

been undertaken locally and in the Indian Ocean.

7. Shipping

The Kuwait Oil Tankers Co has 35 crude oil and refined product caries and is the larges tanker company

in an OPEC country. Kuwait also member of the United Arab Shipping Company.

8. External Trade and Finance

The Kuwait dinar is a strong currency pegged to a basket of currencies in which the U.S. dollar has the

weight. Kuwait ordinarily runs a balance of payments surplus.

Government revenues are dependent on oil revenues. Kuwait‟s fiscal surplus in 2000 is some 15% of

GDP while it reversed to a deficit of more than 2% of GDP in 2001 on sliding oil prices.

9. Other Statistics

Investment 6.6% of GDP (2005)

Household income: Lowest and Highest 10% NA

3. OVERVIEW OF INDUSTRIES TRADEAND COMMERCE

Foreign trade has played a crucial role in Indian economy growth. The composition and direction of

India‟s foreign trade has undergone substantial changes particularly after the liberalization process which

began in the early 1990s. Out major exports now includes manufacturing goods such as Engineering

Goods, Petroleum Products, Chemical & Related Products, Gems & Jewelers, Textile, Electronic Goods.

which constitute over 80 per cent of there export basket. On the other way major import items constitute

capital goods and intermediates which not only support the manufacturing sector but also supply raw-

materials for the export oriented units. Over the years India‟s trade with countries of Asia & ASEAN and

Africa has gone up substantially. Apart from that India is now a major player in global trading system

and all the major sectors of Indian economy are linked to world outside either directly or indirectly

through international trade.

Trade Scenario

India‟s total external trade (exports plus imports including re-exports) in the year 1990-91 stood at

Rs.91, 893 crore. Since then this has witnessed continuous increase with occasional downturns. During

2008-2009 the value of India‟s external trade reaches Rs.20, 72,438 crore. A statement indicating India‟s

export, import, total value of foreign trade and balance of trade from the year 1991-92 to 2008-09, in

rupee terms, is given in table above.

(P) Provisional Figures

Region Exports (April-Feb) Imports (April-Feb)

2007-08 2008-09(P) 2007-08(P) 2008-09(P)

1. Europe 1,33,151 1,65,925 1,75,335 2,23,813

1.1 EU countries 27 1,23,219 1,55,266 1,27,315 1,61,593

1.2 Other WE countries 9,553 10,123 47,881 62,115

1.3 East Europe 379 536 138 106

2. Africa 38,062 44,922 51,519 60,151

2.1 Southern Africa 13,058 12,393 17,868 29,377

2.2 West Africa 12,851 13,204 35,614 48,514

2.3 Central Africa 934 1,372 189 632

2.4 East Africa 15,126 18,687 1,158 1,158

3. America 98,900 1,14,966 79,780 1,21,381

3.1 North America 79,880 89,476 56,281 80,825

3.2 Latin America 10,019 45,490 23,498 40,556

4. Asia and Asean 2,96,287 3,57,982 5,43,551 7,39,622

4.1 East Asia 5,070 6,719 30,783 40,230

4.2 ASEAN 56,663 75,357 82,289 1,06,418

4.3 WANA 1,08,920 1,44,039 2,58,645 3,56,716

4.4 NE Asia 92,974 96,846 1,64,030 2,28,746

4.5 South Asia 32,659 35,020 7,805 7,513

5. CIS & Baltics 6,101 7,623 14,238 28,793

5.1 CARs Countries 826 1,047 419 1,157

5.2 Other CIS Countries 5,275 6,577 13,818 27,636

6. Unspecified Region 1,482 4,346 2,666 4,710

Total 5,77,889 6,96,498 8,70,399 11,98,360

4. OVERVIEW OF DIFFERENT ECONOMIC SECTORS

Kuwait‟s national budget relies 95%on oil revenues but the public and private sectors join forces to push

for more diversification

With oil prices trading above 90 U.S. dollars (U.S. crude) for more than half a year financial issues are

not a big deal in Kuwait. The International Monetary Fund (IMF) estimates that Kuwait total

government gross debt will be 5.5% in 2012, the second lowest rate among all MENA oil exporters

(behind Oman with 3.2%).

According to a report by Global Investment House As expected oil continued to dominate total exports

of Kuwait in 2011, as it did with total government revenues. Average oil exports have accounted 94% of

total exports from 2005 to 2011. Since 2003 oil prices have witnessed rapid growth which enabled

Kuwait to reach high level of exports during that time.

The average man on the street in Greece is more than confused as to why even Kuwaitis demonstrate

against the state, where citizens neither pay for a doctor‟s visit nor make a domestic phone call.

The country‟s blessing with oil is its power and its vulnerability at the same time. When the more then

Gulf state celebrated the 50th

year anniversary of its independence in 2011 critical voices about the one

sided economy and its complex constitutional system overshadowed the happiness.

In an exclusive interview with Marco polis Kuwait‟s former Minister of Finance Bader A1 Humaidhi

makes no secret of his pessimism. Although Kuwait is flourishing with higher prices of oil we are not

very optimistic about the country‟s future. There is mainly because we have not yet diversified our

sources of income besides the oil industry.

A1 Humaidhi adds we have not yet implemented the five-year development plan as we were supposed to

do.

2010 the Kuwait Parliament unanimously approved 104 billion U.S. dollars to the five year development

plan. Plan has one mission to diversify the economy away from hydrocarbons.

But Kuwait is far from become a second Dubai which has built up 20 free zones for various industry

sectors since the beginning of the new millennium.

Al Humaidhi explains what goes wrong in his country. Kuwait budget for this year is at approximately

$92 billion but the price of oil is at $107 or $108 per barrel. The government has been able collect only

KD 18.7 billion to date. May be in the next three months which is the remainder of the financial year we

might reach KD 23 or KD 24 billion.

While Kuwait will have no financing problems with investment grade rating the problem A1 Humaidhi

identified is less about a lack of funds and more about the skewed allocation of current funds.

Four-fifths of the budget goes to pay for salaries and wages, this expenditure were unproductive. Only

around 13% of the budges goes to investment and capital project. All truth it is a bleak future.

These particular imbalances have triggered the public outrage in the wake of the Tahrir revolt. Motivated

from revolutions in Tunisia and Egypt thousands of frustrated demonstrators fill the streets of Kuwait

City in spring 2011 demanding political reforms from the ruling A1-Sabah family.

Don‟t put all your eggs in one basket an old trader‟s saying states. Michel Accad, CEO Gulf Bank, there

is more than one basket called oil industry in the northern Gulf state.

There are plenty of sectors, from the retail sector to the contracting sector to trade & finance Kuwait is

still a large importing country. Gulf Arab states, Kuwait has to import nine tenths of its food needs. The

dry hot desert climate does not allow cultivation or extensive agriculture like in Algeria, Sudan, and

Lebanon.

Accad thought of pushing tourism in Kuwait as well trade, logistics, media and education. Kuwait is

currently building a container port on Boubyan Island in the Gulf. The port can serve not only the

Arabian Peninsula but also neighboring Iraq with its 30.3 million inhabiting.

There are a lot of opportunities outside traditional areas. The problem is there wasn‟t much activity

within these other areas right now.

Humaidhi said we have a free press and a free media as well as a parliament. We are democracy. If we

take the examples of such countries such as Egypt, Libya, and Syria they do not have the benefits.

But there are missing gaps as Humaidhi added Kuwaiti investments are mostly in the US T-bills EU

government bonds.

Dr. Nasser Saidi, Chief Economist at the Dubai International Financial Center Authority, has been

lobbying for many years for a local bond market. Dr. Saidi who was considered among the 50 most

influential Arabs by The Middle East Magazine in 2009 and 2010, say in a conference on MENA

infrastructure on March 27 2011, Gulf Arab economics are in urgent need to develop a local currency

bond market to attract local institutional and retail capital for infrastructure and housing finance.

So far the local Gulf Arab debt market has an insignificant share of total project financing as the bulk of

financing is done through direct loans from the banks. A vibrant debt local market is key to raise local

funds and increasing infrastructure spending to create jobs for the overall young and fast growing

population in the Gult, and for attracting foreign direct investments.

5. OVERVIEW OF BUSINESS AND TRADE AT INTEERNATIONAL LEVEL

Kuwait has a small relatively open petroleum based economy with heavy dependence on foreign

manpower. It has always offered an open highly competitive and affluent market for capital and

consumer goods and for project exports. India Kuwait relations have always has a pro trade-bias and

bilateral trade has risen steadily since 1991.

India-Kuwait trade was US$ 9.03 billion in 2009-2010, of which non-oil trade accounted for

approximately US$ 1.1. Billion while petroleum exports from Kuwait to India was approximately US$

7.9 billion. India is consistently been among the top ten trading partners of Kuwait. As per Indian

Government sources, the trade during 2006-2010 were as follows:

India-Kuwait Bilateral Trade FY 2006-10

2006-07 2007-08 2008-09 2009-10

Indian Exports to Kuwait 614.81 681.54 797.50 782.45

Indian Imports from Kuwait 5,993.23 7,704.25 9593.74 8,249.49

Total 6,608.04 8,385.79 10,391.24 9,031.94

India‟s Exports to Kuwait

The exports from India to Kuwait increased by 14.80% in US$ terms from US$ 681.54 million in 2007-

08 to US$ 782.45 million in 2009-10. In Rupees terms, it increased by 35.17% from Rs. 2,74,490.59

lakhs to Rs. 3,71,035.94 lakhs in the corresponding period.

India‟s Imports from Kuwait

India‟s imports from Kuwait went up by 7.07% in US$ terms from US$ 7704.25 million in 2007-08 to

US$ 8, 249, 49 million in 2009-10. In Rupee terms, the imports rose by 25.93% from Rs. 30, 95, 993, 03

laks to Rs. 38, 98,799.19 lakhs in the corresponding period. India‟s imports from Kuwait US$ 339.69

million in 2009-10.

Kuwait is the largest supplier of crude oil to India from the Gulf region after Saudi Arabia. India

imported Rs. 37, 39,130.13 lakhs (US$ 7.9 billion) worth of petroleum from Kuwait in the year 2009-10.

Non Oil Bilateral Trade

Total non-oil bilateral trade between India and Kuwait grew by 2.77 % from US$ 1,089.72 million 8in

n2007-08 to US$ 1,119.92 million in 2009-10. In Rupee terms, it rose from Rs. 4, 38,727.88 lakhs to Rs.

5, 29,656.48 lakhs.

BILATERAL INVESTMENTS

According to the figures released by the Department of Industrial Promotion & Policy‟s Secretariat for

Industrial Assistance, Kuwait investment in India has been modest to the tune of USD 15.28 million

from January 2000 to March, 2011.

Much of the Kuwaiti investments have gone into India though portfolio management Kuwaiti FDI has

also gone into India through international investment companies or through countries providing tax

breaks. This scenario can change with the implementation of the Double Taxation Avoidance Agreement

between the two countries which came into effect on April 1 2008.

India-Kuwait Trade:

Sr.

No

Particular 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12

1. Export 614.81 681.54 797.50 782.45 1959.48 588.26

2. % Growth 10.81 17.01 -1.89 150.43

3. Import 5993.23 7704.25 9593.74 8249.49 10313.64 6580.43

4. % Growth 28.55 24.53 -14.01 25.02

5. Total trade 6608.04 8385.09 10391.24 9031.94 12273.13 7168.69

6. % Growth 26.90 23.91 -13.08 35.89

Bilateral Agreements between India and Kuwait in Economic Field

1. Agreement on the Avoidance of Double Taxation and Prevention of Fiscal Evasion of Taxes on

Income entered into force from October 17, 2007 on incomes in India and Kuwait and is come

into effect for incomes derived after April 1, 2008.

2. Memorandum of Understanding on Labor, Employment and Manpower Development signed on

April 10, 2007 has been ratified by both sides.

3. Agreement on Drug Demand Reduction and Prevention of Illicit Trafficking in Narcotic Drugs,

Psychotropic Substances and Precursor Chemicals and Related Matters signed on June 15, 2006

is awaiting ratification.

4. Agreement on Juridical and Judicial Cooperation in Civil and Commercial Matters signed on

August 16, 2005 is awaiting ratification;

5. Agreement for Encouragement and Reciprocal Protection of Investment signed on November 27,

2001 and ratified on June 28, 2003.

6. Memorandum of Understanding on Civil Aviation authorities, latest one signed in June 2007.

7. Agreement on Scientific and Technological cooperation signed in April 2009.

8. MoU between the Public, Authority for Industry of Kuwait and Indian Importers Association

based in New Delhi in May 2006 wherein IIA will promote the export, re-export and sales of

Kuwaiti manufactured non-oil industrial products in its appointed territory for the Kuwaiti

manufactures introduced to it by PAI.

9. The Kuwait Chamber of Commerce & Industry signed and MoU with the Associated Chambers

of Commerce & Industry during the State Visit to India from June 14-19, 2006 by HH Sheikh

Sabah A1-Ahmad A1-Jaber A1-Sabah, the Amir of the State of Kuwait. The MoU foresees

promotion of trade, investment, scientific and technical cooperation between the India and

Kuwait.

6. PRESENT TRADE RELATION AND BUSINESS VOLUME

Kuwait has a geographically small but wealth relatively open economy with crude oil reserves of about

104 billion barrels about 7% of world reserves. Petroleum account for nearly half of GDP 95% of export

revenues, and 95% of government income.

Kuwaiti officials have committed to increasing oil production to 4 million barrels per day 2020. The rise

in global oil prices throughout 2011 is reviving government consumption and economic growth.

Kuwait is experienced a 20% increase in government budget revenue, which has led to higher budget

expenditures, particularly wage hikes for many public sector employees.

Kuwait is done little to diversify its because of this positive fiscal situation and due to the poor business

climate and the acrimonious relationship between the National Assembly and the executive branch,

which is stymied most movement on economic reforms. In 2010, Kuwait passed on economic

development plan that pledges to spend up to $130 billion over five years to diversify the economy away

from oil attract more investment and boost private sector participation in the economy.

INDIA-KUWAIT BILLATERAL TRADE

Kuwait is 3rd

largest trading partner of India in the Arab World (2010-11) the value of the two-way trade

between the two countries in 2010-11 exceeded US$ 12 billion. Kuwait is the source 2.78% of India‟s

global imports (2010-11). For Kuwait, India is the 2nd

largest market for its exports, accounting for more

than 15% of its global exports (2010). In terms of imports by Kuwait, India ranks 7th

and is source of

around 4.4% of Kuwait‟s total imports (2010).

Major items of Exports from India: Cereals, Meat and Edible Meat Offal, Articles of Iron or Steel,

Electrical Machinery and Equipment and Parts thereof; Articles of Apparel and Clothing Accessories,

Nuclear Reactors, Boilers, Machinery, Mechanical Appliances, Residues and Waste from the Food

Industries, Iron and Steel, Edible Fruit and Nuts, Fish and Crustaceans, Molluscs and other Aquatic

Invertebrates.

Major items of Imports by India Organic Chemicals, Plastic and Articles thereof, Iron and Steel,

Fertilizers, Aluminum and Articles thereof, Salt; Sulphur; Earths and Stone, Inorganic Chemicals

Organic or Inorganic Compounds of Precious Metals, Copper and Articles thereof, Nuclear Reactors,

Boilers, Machinery and Mechanical Appliances, Miscellaneous goods.

OIL

January 2011, Kuwait‟s territorial boundaries contained an estimated 101.5 billion barrels (bbl) of

proven oil reserves roughly 7 percent of the world total. Additional reserves held in the Partitioned

Neutral Zone, which Kuwait shares on a 50-50 basis with sauida ariba. The Neutral Zone holds an

additional 5 billion barrels of proven reserves bringing Kuwait‟s total oil reserves to 104 billion barrels.

These reserve estimates has been openly questioned by some analysts and a number of Kuwaiti

parliamentarians with some putting reserves as low as 48 billion barrels.

NATURAL GAS

Kuwait had an estimated 63 trillion cubic feet of proven natural gas reserves Kuwait‟s reserves are not

significant and this has spurred an extensive drive in natural gas exploration. Full of discoveries of non

associated gas in the north of the country attracted interest from international oil companies however

unattractive.

Contract structures and political uncertainty remain principal impediments to any rapid expansion of

both reserves and production. Additionally new discoveries are geologically more complex being mainly

tight and sour gas deposits which require more sophisticated a costly development.

ELECTRICITY

Kuwait has an installed electric generation capacity of 11,300 MW which was slightly above peak

demand of 10,900 MW in the summer of 2010. Electric generation comes from Kuwait‟s five existing

power plants Doha East, Doha West, Shuaiba North, al-Subiya, and al-Zour South. In 2009, Kuwait had

overall electric generation of 49.8 terawatt hours. Kuwait has come to embody the difficulties facing the

region‟s electricity networks with rapid demand growth causing rolling blackouts at times of peak

energy demand. Slow implementation of developments plans as well as a lack of feedstock has served to

create shortages in electricity supply during the hot summer months. Formerly having one of the largest

reserve margins in the region Kuwait is perpetually in a state of electricity supply shortage. In the past

decade the development of Kuwait‟s electric sector has stalled due to political factors despite consistent

annual demand growth of 8 percent. Only one power plant was commissioned during that time, bringing

a comfortable reserve margin to a shortage beginning in 2006.

7. PESTEL ANALYSIS

PESTEL analysis is Political, Economic, Social, Technological, Environment and Legal Analysis.

Political Analysis

In goods and service which the government wants to provide or be provided and those that the

government does not want to provided. Furthermore, governments have great influence on the health

education and infrastructure of a nation. Specifically political analysis includes area are tax policy, labor

law, environmental law, trade restrictions, tariffs and political stability. Kuwait also many political

factors conducted to the Organization of Petroleum Exporting Countries in industry.

Economic Analysis

Economic growth, interest rates, exchange rates and the inflation rate. Kuwait is one of the richest

countries in the Muslim world. GDP per capita reached astonishing peak growth of 439% in the 1970.

But this proved unsustainable and contracted by 58% in the 1990. Diversification is a long-term issue for

this over-exposed economy. This is a chart of trend of gross domestic product of Kuwait at market prices

estimated by the International Monetary Fund with figures in millions of Kuwaiti Dinars.

Social Analysis

In the cultural aspects and health consciousness, population growth rate, age distribution carrier attitudes

and emphasis on safety. Trends of social factors affect the demand for a company‟s product and how that

company operates. The attitudes toward achievement motivation among Kuwaiti social workers. A

number of factors are explored including attitudes toward collaboration and its relationship to

achievement. No studies have been conduct in Kuwait regarding factors of motivation and collaboration

among social workers in different organizations or its relation to their achievement. A participant was a

convenience sample of 313 social workers from various institutions in Kuwait. Results of the study

indicate that years of experience, age and number of children correlated positively with the social

workers motivation towards achievement. Additionally attitude toward collaboration number of children

and income were significant predictors of social worker achievement motivation. Suggestions are future

research were discussed.

Technological Analysis

Ecological and environmental aspects such as research and development activity, automation,

technology incentives, and the rate of technological change. Most of Kuwait technological factors are

very important in industrial environment. They can determine barriers to entry minimum efficient

production level and influence outsourcing decisions. Furthermore technological shifts can affect costs,

quality and lead to innovation. So, technological analysis is must be determine to the Kuwait industries.

Environmental Analysis

Weather climate and climate change which may especially affect industries such as tourism, farming and

insurance. A favorable investment policy augmenting the influx of pollution control equipment and a

spur in Government projects directed at ground water cleanup, environmental awareness are expected to

boost the Kuwaiti environmental industry. Planned technology advanced coupled with international co-

operation is likely to drive renewable energies, wastewater sector, desalination capacity and solid waste

treatment. It provides insights into socio economic, legal, political and technological factors in Kuwait

and their likely implications on and opportunities for the environmental sector.

Legal Analysis

Discrimination law, consumer law, antitrust law, health and safety law. These factors can affect how a

company operates its costs and the demand for its products. Kuwait follows the civil lay system. Islamic

Sharia forms a major source of law although it is not the exclusive source laws do not have to conform to

Sharia in order to become part of the constitution. There are three tiers to the court system; the Court of

First Instance is the first step in the process followed by the Court of Appeal and the Court of Cassation.

Court proceedings are conducted in Arabic. Kuwait is a democracy and the constitution guarantees

fundamental rights and freedoms a number of which are governed by law.

8. SWOT ANALYSIS

Appraising a company‟s resource strengths and weaknesses and its external opportunities and

threat, commonly known as SWOT analysis, provides a good overview of weather its overall situation is

fundamentally healthy or unhealthy.

Strength

Kuwait has tremendous financial resources available.

Strong entrepreneurial spirit and capability are there.

Solid, state-of-the-art IT and infrastructure and telecom hardware.

New ambitious select government figures eager to keep Kuwait cool and current.

Large value financial hub would benefit from e-commerce.

Government provided e-services would eliminate procrastination of some civil servants and foul

play or incompetence.

Kuwaitis are quick learners.

Weakness

Lack of physical, human, organizational and intangible assets that are critical to the firm‟s

survival and success in that particular industry.

Lack of domestic technological educated citizens or workforce.

Political undertones and religious influences causing more stringent control and undue

bureaucracy.

Restriction or regulations and international trade deterring significant incoming entry by

interested international business.

Government not realizing business value of e-commerce and information technology on national

level.

Remnants of the gulf war and baggage.

Opportunities

Emergence of new customer segments in the market operating up of new markets for the

company.

Change in the customer habits and preferences and their buying behavior.

Change in the Kuwait‟s technological, regulatory, social or economic environment of the

industry.

Kuwait is always impact on the product market scope of the firm or help it cut costs and

improve productivity.

Threat

Emergence of customer segments in the market up of new markets for the company, which the

company is not currently geared to serve.

Increasing intensity of competition among industry rivals may squeeze profit margins in Kuwait.

Kuwait is impact on the product market scope of the firm, increase costs and decrease

productivity.

Entry of new competitors of market with new business models better technologies, and superior

products and services.

Kuwait always shift in buyer needs and tastes away from the industry‟s products.

PART-II

INDUSTRY / SECTOR / COMPANY SPECIFIC STUDY

(1.) 1. Introduction of the AGILITY LOGISTIC

From roots in emerging markets, Agility brings efficiency to supply chains in some of the world's most

challenging environments offering unmatched personal service a global footprint and customized

capabilities in developed countries and emerging economies. Agility is a one of the world‟s leading

providers of integrated logistics with the more than 22,000 employees in over all 500 offices and 100

countries.

Vision: Agility is a new type of logistics leader meeting the challenges of global trade

Mission: Agility is facilitate trade through innovative supply chain solutions

Values: its give Integrity, Personal ownership & Teamwork and Excellence

Service:

Agility Logistic thrive on challenges and consistently go above and beyond for our customers. company

can count on Agility employees around the world to tackle today‟s uncertainties with the confidence that

stems from their deep knowledge of local markets and their logistics expertise & unmatched personal

service sets us apart. Each of one at Agility assumes a high degree of personal responsibility for your

job; and we will not rest until that job is done to employee satisfaction. We anticipate instead of react &

we follow through.

Behind every contract supply chain solution & phone call and shipment are a personal relationship with

our customer. Whether we are managing entire supply chain or offering a specialized service our ability

to listen and learn before taking action is what makes our employees your partners and our solutions

more effective.

Core strengths

Agility Logistic concentrate our capabilities on areas that are critical to modern supply chains

Expertise in emerging markets

Deep knowledge of local markets & culture

Far reaching network

Personal service

Appetite of complex assignments in challenging conditions

Global network of international freight forward

Logistics capabilities of warehousing & distribution worldwide

Services for specialty industries like project logistic chemicals fairs and events and fuel.

Scalable solutions

Commitment to social responsibility & a sustainable environment

A New Logistics Leader

Agility is a global logistics leader of two main lines of business.

Agility Global Integrated Logistics

Agility‟s core commercial business, Global Integrated Logistics (GIL), provides supply chain solutions

to meet traditional and complex customer needs & these includes

Freight forwarding products: air sea air and road freight forwarding

Logistics capabilities warehousing & distribution systems and technology

Specialty services like fairs and events logistics chemicals logistics project logistics & fuel

logistics

Agility Infrastructure

Agility‟s Infrastructure group of companies manages industrial real estate and offers logistics-related

services including e-government customs optimization and consulting & waste management and

recycling aviation and ground-handling services & defense and government services and remote

infrastructure and life support & agility Infrastructure companies include

Real Estate

Inspection & Control Services

National Aviation Services

Global Clearinghouse Systems

Metal Recycling Company

GCC Services

Defense & Government Services

2. Fuctions And Business Activities of AGILITY LOGISTIC

The 2013 Index

The 45 emerging markets featured in the 2013 Agility Emerging Markets Logistics Index grew at an

average of 4.4%. In contrast, the U.S. economy grew at 2.2% while the EU contracted 0.2%.

Trade and logistics professionals are overwhelmingly optimistic about prospects for healthy economic

growth in emerging markets in 2013.

China India Brazil & to a lesser extent Russia (the so-called BRIC countries) remain the favorites of

investors, exporters, producers and logistics providers, but all have underlying weaknesses that could

hurt performance and dim attractiveness.

A second-tier of attractive emerging markets – Saudi Arabia Indonesia UAE Malaysia Mexico and

Turkey – is poised to gain possibly at the expense of the BRIC countries.

The dynamics of locating production are changing. Trade & logistics professionals see more

manufacturers looking for alternatives to China and view cheap labor as a less critical factor in

determining where to locate production.

Ongoing political unrest has done grave damage to the “Arab Spring” countries of Egypt Bahrain and

Tunisia leaving them less competitive and less attractive as markets and destinations of investment.

Egypt dropped the most of any country on the Index plummeting nine spots.

The big winners in the Index country rankings were Kazakhstan Morocco Ukraine and Argentina all of

which climbed into the top 20 of the rankings for the first time.

Overall air volumes fell by 2.4% in 2012, while ocean volumes grew by 1.7%, suggesting a shift to

cheaper ocean freight.

product and Service

Freight Forwarding

Agility provide a convenient menu of standard freight management products to balance urgency & cost

effectiveness for day-to-day shipments.

Air Freight

Ocean Freight

Sea/Air Freight

Road Freight

Logistics

When supply chain demands a greater depth of knowledge and higher level of customization Agility's

experts can help.

Logistics Solutions

Warehousing & Distribution

Systems & Technologies

Specialized Services

For businesses to logistics needs that demand specific capabilities resources & specialized knowledge

agility offers a wealth of experience.

Fairs & Events

Chemicals

Project Logistics

(2) 1. Comparative position in INDIA and GUJARAT

Agility is one of the leading logistics providers with more than 1,500 employees and over 24 office and

3,000,000 sq. feet of warehouse space in 72 locations across 44 cities since 1998 we have focused on

offering customers truly personal service and flexible supply chain solutions tailored to meet their

individual business needs. Company‟s customers span a range of industries such as Automotive & Hi

Tech & Retail Life & Sciences Engineering and Specialty Chemicals.

Freight Forwarding

Air Freight

Our Air Freight service in India allows you to choose an optimal balance between time & space

frequency and cost it is partners with premier air carriers. Company‟s long standing relationships and

commitments help us deliver the space allocation ontime service performance and flexibility customer

demand. Our major Air Freight hubs are Mumbai & New Delhi Bangalore Chennai and Hyderabad.

Sea Freight

As one of the leading Sea Freight forwarders in India agility concentrates on a portfolio of major global

carriers to ensure the space sailings and transit times that customer require. Company offer a global LCL

product as well as reliable and attractive FCL connections & their main gateways are Mumbai and

Chennai with inland locations in New Delhi Bangalore Pune and Ahmadabad and we also utilize the

ports of Mundra and Kandla.

Road Freight

With our own fleet of more than 150 trucks and carefully selected providers we have the expertise and

resources to deliver prompt and regular service. Agility India can provide In-City distribution within 24

hours.

Logistics

Agility India offers customer-driven solutions dedicated to meeting customer complex logistics needs &

Whether across the globe or within India agility quickly deploys a solution matched to your supply chain

needs. agility logistics centers are strategically located to cater to centers of mass consumption within

India.

Specialties

Project Logistics

Company‟s Project Logistics business has earned a reputation as one of the world‟s preeminent groups

for turnkey transportation, project management and services for large-scale, logistically complex

initiatives.

Chemicals

Agility‟s specialist chemicals business offer intelligent logistics to the chemicals and associate industry

sectors also This approach combines supply chain solution development leveraged freight procurement

and operational experience with stringent chemicals industry HSSE requirements.

2. Business with GUJARAT

Ahmedabad

Agility GIL

(Legal Name is Agility Logistics Private Limited)

3rd Floor, Sun City House Near Pantaloon

Mithakhali Six Roads, Ellis Bridge,

Ahmedabad 6 Gujarat

380 006

Tel +91.79.3989.1818

Fax +91.79.3091.4646

Baroda

Agility GIL

(Legal Name is Agility Logistics Private Limited)

201-202 Rubelite Hub, Ajit Nagar Society Plot No.32

near Urmi Char Rasta

Vadodara, Gujarat, India

390 005

Tel +91.2653025.800

Fax +91.265.2332.000

TRADE and INVESTMENT

Export and Import

Service provider of air import & air export sea import & sea export & custom clearance, project

handling, fair, exhibition, warehousing, distribution.

INVESTMENT

India saw improvements in all three criteria and an increase in its overall score. However, its high

ranking stems from its market size & growth potential only & the country‟s compatibility and

connectedness scores remain below average.

When assess against these criteria the Index returns a “room for improvement” verdict on India in the

following areas: service sector, urbanization of population, distribution of wealth, FDI, market

accessibility, security, shipping connections, airport infrastructure, transport infrastructure, customs and

border controls.

Major players of the Logistics Industry in India

Among the key players of the Indian logistics industry there are certain international names along with

national companies that are not only world leaders in the field but are also part of the Indian industry for

a long time now.

DHL – a very commonly known name in the Indian logistics industry DHL has been part of the

industry for a long time now also Established in San Francisco in the 1969 DHL has grown

across 220 countries with over 300,000 employees & It has built a reputation over the years as a

responsible logistics support air & ocean & express freight and overland transport & contract

logistics solutions.

TNT – this is an international brand that has been a part of the Indian market also. Established at

Netherland TNT is a reliable name in the arena of international transportation and distribution

business also spread across 200 countries it has an estimated revenue turnover of $ 3,500 billion

US dollars.

AFL – It is one of well known international players in the logistics industry of India The main

areas of service by the company are in the area of logistics and warehousing along with Courier

Company and custom consultant.

BLUE DART – this is one of the premier companies in the field of logistics & the company has

a huge network linked with the most advanced communication systems & Blue Dart handles

large and oversized packages and stands for an overnight delivery of such goods.

GATI – one of the pioneering companies in the field of logistics & this is one the companies that

have taken several initiatives to implement modernization in the area of logistics & also With a

turnover of ` 576 crores this company believes in setting new standards of customer service.

DTDC – this company spreads over 3700 locations within India and 240 international places &

The company is a leading name in low cost shipments along with timely delivery.

ASHOK LEYLAND – this is an established name in the manufacture of trailer trucks and heavy

vehicles in India & also It has come up with a new venture in Ashley Transport Services Ltd in

the area of information exchanges and the business of freight contractors along with integrated

logistics services.

FIRST FLIGHT – this is an Indian company that has domestic & international and many other

programs of multi tracking technologies.

AGARWAL PACKERS AND MOVERS – this is a popular name in the field of logistics

companies of India also Services like shifting then transport of cars and all other forms of quality

packing & transportation this is a name that has over the years become synonymous with quality

and assurance.

3. Policy and Norms of Kuwait for Logistic Industries

License Law

The Foreign Investment Law (No. 8/2001) proposes to regulate foreign investments in Kuwait & under

the new law it is intended to allow foreign investors to own up to 100% equity in Kuwaiti companies or

ventures for special projects as determined by the Council of Ministers & It is expected that this

significant change proposed by the government will throw open the Kuwaiti markets to multinational

corporations giving them a free hand in doing business in Kuwait.

Until currently prior to the enactment of this law foreign investors were subject to a ceiling of 49%

(maximum) stipulated under the Law of Commerce number 68 of 1980 & the Commercial Companies

Law number 15 of 1960 also the law proposes to do away with such restrictions imposed upon foreign

investors.

Significant steps have recently been taken to implement this law & These steps include the setting up of

the Kuwait Foreign Investment Bureau (KFIB) which facilitates filing of applications and the Foreign

Capital Investment Committee headed by the Minister of Commerce & Industry to process applications

for grant of licenses.

Ministerial Resolution number 23 of 2003 issued by the Minister of Commerce & Industry contains the

Executive Regulations & The Regulations provide the mechanism for the implementation of the law.

The Council of Ministers has under resolution number 1006/1 for the year 2003 issued a list of business

activities for which a Foreign Investment License may be granted & These business activities include the

following

1. Industries except for enterprises related to Oil or Gas exploration or production.

2. Construction, operation and management of Infrastructure enterprises in the fields of water power

drainage and communications.

3. Banks, Investment Corporations and Foreign Exchange Companies which the Central bank of Kuwait

may agree to incorporate.

4. Insurance companies which the Ministry of Commerce & Industry agrees to incorporate.

5. Information Technologies and Software Development.

6. Hospital and Medicines manufacturing.

7. Land & sea and air transport.

8. Tourism hotels and entertainment.

9. Culture information and marketing except for issuance of newspapers and magazines and opening of

publishing houses.

10. Integrated housing projects and zone development except for real estate speculation.

11. Real estate investment through foreign investor subscription to the Kuwaiti shareholding companies

as per the provisions of law number 20/2002.

TAXATION

The general rule is that individuals (Kuwaiti or foreign nationals) and Kuwaiti companies are not subject

to taxes on income also however a foreign corporate body engaged in commercial activities in Kuwait is

subject to income tax.

The tax rates applicable under the Income Tax Law number 3 for the year 1955 prior to its recent

amendment were ranging from 5% to 55%. These rates were applied progressively to income brackets &

as per a recent amendment issued to the Income Tax Law (Law number 2 for the year 2008) a flat rate of

15% will be applied as income tax on the net taxable income & this amendment was passed by the

National Assembly on December 26, 2007 and signed by the Amir as Law number 2 for the year 2008

on February 8, 2008 also by virtue of this amendment the current rigorous tax regime has been replaced

with a more liberal one aimed at market liberalization and attracting foreign investments & in addition to

lowering the income tax rates the profits earned by foreign entities or individuals through trading in

shares on the Kuwait Stock Exchange are not taxable under the recent amendment.

Zakat Law

A new law14

has been pass by the National Assembly levying Zakat (tax according to Islamic Sharia

principles) on all Kuwaiti shareholding companies & according to this law one percent of the profits of

the company are required to be paid to the government as Zakat.

National Labor Support Law

Law number 19 for the year 2000 was enacted in respect of supporting and encouraging national

manpower to work in the non-governmental sector & in addition to granting a social and children

allowance to nationals and a cash allowance for every unemployed Kuwaiti who is unable to find a job

the law also obligates the government to share the costs of training the national manpower in the non-

governmental sector.

Import Regulation by Kuwait custom

Free import :

• 500 cigarettes or

• 2 pounds of tobacco products

• Reasonable amount of perfume

• Essential medicines

• Industrial farm products of other GCC states

• Industrial farm products of other GCC states

Prohibited:

• Illegal or unlicensed drugs

• Guns, explosives and ammunition

• Knives and deadly weapons

• Alcoholic products

• Plant and plant products

• Pork, Meat and meat products

• Pets – unless authorized to do so

• Birds – unless from certain countries

• Unsealed milk products & mineral water

• Fresh vegetables

• Food prepared abroad

• Animals from Iraq

• All goods from Israel

• Politically subversive material

• Counterfeit money and goods

• Pornographic material

Restricted:

• A special permit from the Kuwait Ministry of the Interior will be needed in order to legally import any

weapons or ammunition into the country.

• All alcoholic beverages & associated materials for the construction of alcoholic drinks are denied entry

into the country.

• All beef & pigs & pork and pigskin products (such as handbags, wallets and shoes) are banned from

entering the country from England and The Republic of Ireland.

• Jewels precious stones & metals may only be imported subject to approval by the Ministry of

Commerce and Industry

• Authority must be obtained from ministry of Health for drugs and medicines

• Cats & dogs and other animals being imported into the country will require a Veterinarian health

certificate and permission from the General Directorate for Agricultural and Sea Wealth & all species of

birds are banned from entry unless originating from Albania & Italy

Jordan & Malaysia & Myanmar & Palestine Thailand & Ukraine and Zimbabwe & no animals from Iraq

are permitted entry into the country Export regulations.

Export Regulation by Kuwait custom

Free export of cigarettes and tobacco products without restrictions.

Pets:

Pets may be brought into the Kuwait either as hold baggage or as cargo providing passenger obtained

prior approval of General Directorate for Agricultural and Sea Wealth and is carrying Veterinarian Good

Health Certificate issued at point of origin & form of statement and declaration and animal/bird

description form will have to be filled in by the customer.

All imported pets into Kuwait International Airport are subject to quarantine (located at the Air Cargo

Terminal area) & four percent of the value of pets in Bill of Lading should be collected as Customs Tax

(Account to the General Administration of Customs Circular number 41/99).

Prohibited

1. all live animals from Iraq

2. all live birds from all countries & exempt are imports of falcons and pet birds (pigeons) incubating

eggs and one day old chicks from Albania & Italy & Jordan & Malaysia & Myanmar & Palestine &

Thailand & Ukraine and Zimbabwe provided adhering to the rules of veterinary quarantine and

regulations.

Baggage Clearance regulations:

Baggage is cleared in Kuwait International Airport.

Exempt: checked baggage of transit passengers with an onward connection to a third country.

Airport Embarkation Tax

No airport tax was levied on passengers upon embarkation at the airport.

Currency rules:

Currency Import regulations:

Import of local currency (Kuwait DinarKWD) and foreign currencies up to a maximum of KWD 3000 or

equivalent, in currencies or gold bullion.

Currency Export regulations:

Export of local currency (Kuwait Dinar-KWD) and foreign currencies without restrictions & gold

bullion on the condition that Customs Authorities are advised.

4. Policy and Norms for Logistic Industries India

A growth prospects of logistics industry are linked to the macro-economic indicators of the country such

as GDP & domestic consumption & exports and imports & also the Indian economy aiming to achieve a

GDP growth rate of 9 per cent which in turn would augment the growth of its international trade the

logistics industry in the country will grow further in importance.

In 2007–08, the GDP at factor cost and current prices was at Rs 4320 thousand crore registering a

growth of 14.3 per cent over the previous year. The GDP growth since 1997 has averaged about 11.8 per

cent per annum. The advance estimate of GDP for 2008–09 released by the Central Statistical

Organization (CSO) placed the GDP at factor cost and current prices at Rs 4933 thousand crore with a

growth rate estimated at 14.2 per cent over the previous period (National Accounts Statistics-CSO).

There has been substantial growth in imports and exports too in the past decade & from 1995 exports (in

US$ terms) have increased on an average by 17.5 per cent per annum in terms of value and by 18.4 per

cent per annum in terms of volume.

Similarly imports (in US$ terms) have registered a growth of 19.8 per cent in value terms and 8.5 per

cent in volume terms annually. Exports at current prices were at US dollar 162,904 million and imports

at current prices were at US dollar 251,439 million in 2007 to 08 growing over the previous year at

28.91 per cent and 35.36 per cent, respectively. The provisional figures for 2008–09 for exports were

US$ 168,704 million and for imports were US$ 287,759 million, registering a rate of growth of 3.56 per

cent and 14.4 per cent, respectively, over the previous period. During the current decade

India has had a higher growth rate in exports than any other developing country, except China.

Procedure

International practice goods imported into or exported out of the country by sea air land or rail routes are

governed by the provisions of the Customs and other laws of the country related to entry into exit from

the country.

Customs ensures that the import and export of goods are in compliance with the Indian Customs Act

1962 and other laws in force & accordingly Customs authorities are expected to provide clear and

predictable procedures by which the goods can enter the country and get cleared on payment of

applicable import duties & fulfilling the requirements of the law of the land.

To regulate and to exercise effective control over import and export activities goods are allowed for

import/export at notified places under Section 7 of the Indian Customs Act, 1962. Custodians are

appointed under Section 45 of the Indian Customs Act, 1962 for safe storage of goods until they are

cleared for home consumption or warehoused & Clearance of goods involves classification &

assessment & examination and payment of customs duty on imported cargo on the basis of the Bill of

Entry presented by the importer or his authorized agent of Central Board of Excise and Customs (CBEC)

have prescribed the procedures through notifications, rules, regulations and circulars that are

implemented by field formations & these are updated and modified from time to time in the light of

experience in order to improve the efficiency of the system.

Acquire more sophisticated and modern equipments to enhance efficiency in cargo handling as per the

list drawn up in the Working Group‟s Report for the Eleventh Five Year Plan.

Synchronies landside operations with seaside operations by efficient management of traffic flow for this

purpose acquire more dumpers and pay loaders as necessary. Draw up and adhere to proper maintenance

schedule of cargo handling equipment to ensure zero breakdown of equipment during operations.

The government has taken a bold step in allowing the widespread usage of electronic documentation for

transactional purposes. However, for a number of reasons the EDI usage is low and manual interface is

still widespread in both ports and airports. The Working Group recommends that a single window

environment should be provided to enable the user to access all the statutory bodies. The user should

need to file a single document online and the same should be communicated to various statutory bodies

for approval online.

The system would provide a one-stop-shop solution for traders, enabling them to fulfill all export and

import and transit related regulatory requirements at a single portal. This would imply a replication of

the single window environment adopted in Singapore which has been recommended by the IMG on

reducing the dwell time for clearance of seaborne cargo. To make a single window feasible and the EDI

operational for all stakeholders, the forms would need to be standardized and IT framework

strengthened.

Exim policy:

The Government of India advises the Exim Policy of India for a phase of five years (1997-2002) under

Section 5 of the Foreign Trade (Development and Regulation Act) 1992 & the current Export- Import

Policy of India covers the period 2009-20014 also the Exim Policy is renewed every year on the 31st of

March and the revisions improvements and new proposals and designs become effective from 1st April

of every year.

All forms of updating or modifications associated to the Indian Exim Policy is normally proclaimed by

the Union Minister of Commerce and Industry who synchronizes with the Ministry of Finance the

Directorate General of Foreign Trade and network of Daft Regional Offices & however the central

government reserves the right to alter any of the sections of this new export-import policy of India in

public interest & Some of the focus proposals of the policy are: To have a larger share in the global trade

and produce more employment prospects a number of focus initiatives that have been identified for

diverse sectors are: agriculture & handloom & handicraft & gems and jewelers etc.

Taxation policy

In India the authorities has been of the view that tax policy is a powerful tool by which the economy can

be effectively regulated and by which effective economic incentives and disincentives can be created.

The system has make extremely complicated with rapidly changing provisions and rates & frequently

these provisions have been contradictory to each other and self-defeating in nature.

The system laced with a plethora of exemptions & rebates & concessions & penalties and other

provisions & in addition there are notifications clarifications procedural details and the like all this has

made the system a highly complex one and according to one opinion counterproductive.

The authority has always recognized the need to simplify the tax system but steps taken to this effect

have only added to its complexities.

The tax-base of our country is a narrow one & taxpayers are practicing large-scale tax evasion and

avoidance they are helped in this task by highly complicated tax provisions and procedures as also by the

vast discretionary powers enjoyed by the tax officials.

Frequent voluntary disclosure schemes are under which tax evaders are provided an opportunity to pay

tax (often on concessional basis) on concealed income and wealth etc has also contributed to the

phenomenon of tax evasion.

Indirect taxes levies a major portion of our tax revenue to compared with direct taxes they feed

inflationary forces & they are more burdensome and cause widespread distortions in the allocation of

resources & they are also known to be highly regressive in their nature selective exemption of items

from indirect taxes has not been able to reduce their regressive nature because of widespread evasion.

The authorities has used on a systematic and selective basis tax holidays and other concessions for

promoting certain industries considered essential for the overall balanced growth of the economy.

Critics claim that the tax provisions relating to depreciation are based upon the cost of acquiring assets

and not the cost of their replacement & this therefore discourages capital formation. Over the years, the

government has made a systematic effort to reform indirect taxes by converting the base of excise duties

from specific to value added and by replacing excise duties with value added tax.

Efforts are also being made to bring about a uniformity of indirect tax system throughout the country in

the form of a unified value added tax. Meanwhile various intermediate steps are being taken so as to

eventually achieve this goal.

The existence of octroi duty is consider a great hurdle in the development of the domestic market & it is

known to cause delays in transport of goods and increase cost of production and some States have taken

steps towards abolishing octroi or replacing it with some other form of indirect taxation but on the whole

not much has been achieve the problem is that local governments are starved of funds and the States are

not in position to give them addition loans the Centre also finds it difficult to come to their help because

funding of local governments comes under the purview of the States.

It is a common complain that the States do not exploit their revenue potential to the full & in this context

we should remember that there is a widespread difference of opinion regarding the taxation of

agriculture While one section of thinkers believes that there is a case for taxing agriculture (such as in

the form of tax on agricultural incomes and land revenue) more heavily others hold the view that

agriculture is already being taxed to the extent it can bear its burden.

The States are in a particular situation in so far as taxing alcohol for human consumption is concern &

the States levy excise duty on this item and it is one of their major sources of revenue & at the same time

the Constitution directs the States to pursue a policy of prohibition & however prohibition policy is

highly resource expensive for the State concerned since it not only loses revenue from this item it has

also to incur additional expenditure in enforcing the prohibition.

The government at the Centre and States has not been able to check the rapid growth in its expenditure

though over time tax revenue of the government has increased very rapidly public expenditure has

increased faster moreover public sector undertakings which should have been a source of additional non-

tax revenue have turned out to be a net drain & consequently government budgets of our country are

characterized by hefty deficits and cumulative increase in public debt & this phenomenon in turn has led

to the following results:

The States enjoy a poor financial health than the Centre & they are heavily dependent upon transfer of

resources from the latter a part of which takes place in the form of loans Consequently their

indebtedness to the Centre has grown rapidly.

Licensingpolicy

For setting up a unit for the manufacture of any other items or any substantial expansion in its

manufacture ( provided its manufacture is permissible for the category to which the entrepreneur

belongs) the entrepreneur has to submit a "Industrial Entrepreneurs Memorandum' in the prescribed form

in requisite number of copies along with a fee of Rs 1000 only in the form of a crossed Demand Draft

payable at State Bank of India Nirman Bhavan, New Delhi-110001 in favor of The Pay & Accounts

Officer Department of Industrial Development Ministry of Industry Government of India New Delhi to

The Secretariat for Industrial Approval Department of Industrial Development Ministry of Industry

UdyogBhavanNewDelhi110001.

A similar "Industrial Entrepreneur Memorandum' in the prescribed form in requisite number of copies

without any fee has to be submitted again to The Secretariat for Industrial Approvals department of

Industrial Development Ministry of Industry Udyog Bhavan New Delhi - 110001 when the unit is

commissioned and commercial production starts.

The Government requires this information basically for records and statistical purposes in the application

for industrial license or for submitting the 'Industrial Entrepreneurs Memorandum' to the SIA the

entrepreneur is required to quote the ITC (HS Classification) Code number of the article he intends to

manufacture and also a fuller description of the item.

The Government permits existing & new units to manufacture new products other than those for which

are licensed or have submitted 'Industrial Entrepreneurs Memorandum' without any permission from the

government or submitting a fresh or new 'Industrial Entrepreneurs Memorandum' to the Government

provided no additional investment (in capital goods) is made or is required to be made for the

manufacture of the new product and the new product is not included in the list of industries requiring

compulsory industrial licensing or reserved for the small scale sector or the public sector.

The Government permits all units to expand substantially (expand their capacity by more than 25%)

provided the item of manufacture for which substantial expansion is planned is neither reserved for the

public sector nor for the small scale sector. In case the item is included in Schedule II the unit may apply

for a substantial expansion and if the item is not listed in Schedule I the unit may submit 'Industrial

Entrepreneurs Memorandum' to the SIA for that as in the case of new units.

All existing units other than small scale units however which are located in areas other than those

conforming to the location policy of the Government of India have to apply for an Industrial license for

undertaking substantial expansion.

5. Present Trade Barriers

The transport and logistics sector in India witnessed significant growth in the post liberalization period

since 1991 India‟s international trade has increased almost nine-fold creating a huge demand for

transport & this growth was further propelled by the development of India as a manufacturing hub and

the growth of services sectors like retail.

At present, the transport sector contributes significantly to India‟s Gross Domestic Product (GDP)

(around 6.4 % in 2007 & 08) employment (about 40 million people in 2007-08) The logistics industry is

valued at approximately $90 billion employing 45 million people and growing at the rate of 30-40 per

cent per annum & it is expected that the demand for transport and logistics will continue to grow as the

Indian economy is on a high growth trajectory the domestic market is unsaturated and the country needs

investment in transport infrastructure & the overall logistics market is estimated to reach a size of over

125 billion by the end of 2010

Adapt or die

Foreign players like APL Logistics Panalpina & Maersk Logistics has been operating in India for some

time a number of Indian players who until recently provided minimum logistics services are also

planning to broaden their areas of operation.

India is fast emergence in the bio technology sector has inspired leading international logistics firms

(TNT Express DHL FedEx and UPS) to offer medical and clinical sample transportation services to

India transporting human organs tissues and specimens despite the huge risks it is fast becoming a multi-

billion-dollar business.

The survey by the Transport Corporation of India & the Management Development Institute (MDI)

shows that e-logistics is a growing segment & More than 47% of the 130 companies surveyed felt that

integrating IT systems with traditional logistics services was important also about 57% of the companies

plan to outsource reverse logistics within the next five years while 54% plan to outsource inventory

management and 53% order processing.

As companies realize the need to be more competitive and cut cost the vehicle tracking system or e-

logistics market in the country is set to boom & the numbers may not look impressive at present – only

an estimated 30000 commercial vehicles have tracking systems – various industry estimates put growth

in the range of 50-100% for the next five years & already a who‟s who of the auto telecom and software

industry are scrabbling for a slice of the potential 1.6 million vehicles a year market.

Bharti and Taco MobiApps and Patni Computers & Reliance etc are all focusing on telematics – a

technology based on telecommunications plus computing – which is being increasingly adopted by the

automotive industry worldwide & many have begun pilot projects in this area instance for the Karnataka

State Road Transport Corporation has implemented a fleet management system (on a limited basis) to

track the operational parameters of its fleet to improve on-time performance and track schedules.

Pitfalls and challenges

An Indian logistic industry suffers to the inadequate infrastructure complex tax laws and insufficient

technological aids.

In India atlix 65per cent of goods are transported by road & in respect of the road transport sector

vehicle ownership is firmly in the hands of individual truck owners 67% of whom have fleets of less

than five vehicles.

A fragmented market increases paperwork costs & efforts required to channel resources & the poor

condition of roads translates directly to higher vehicle turnover which increases operating costs and

reduces efficiency & these inefficiencies are passed on to the logistics industry with transportation costs

accounting for nearly 40% of logistics costs.

As the average fleet size is small so individual truck owners are unable to contract their vehicles directly

to companies and thus freight consolidators and brokers take a commission to provide truck owners with

consignments of truck owners lack the bargaining power necessary for negotiating prices and provide

transportation services at minimum profit also Increasing costs and dwindling profits affect truck

owners‟ ability to upgrade and expand their fleets.

Jakob Sorensen MD of Maersk Logistics (India) Ltd says that “The Indian logistics market is not

sophisticated from an infrastructural and procedural point of view & We don‟t see the Indian market

conditions as limitations but as opportunities should „can do‟ attitude we inspire our Indian clients to be

winners and work on eliminating given constraints company‟s services in the Indian environment are in

fact allowing the Indian clients to compete on international terms.”

Inventory carrying costs account is approx 24 per cent of logistics costs and order processing and In

India logistics cost is still higher than those in developed markets – it is estimated to be around 13% of

the GDP compared with 8% in the US Transportation costs account for nearly 40% of production costs.

Administrative costs for a significant 10% & Stock filing and warehouse management is in many cases

done manually which increases administrative costs and adds an element of inefficiency.

The three major dangers face by India logistics industry are insufficient knowledge and under-exposure

of logistics solution provider inadequate infrastructure and ineffective usage of information technology.

Lack of an integrate transport policy is hamper growth of the logistics sector in India & the major

problem is the road transport sector which despite being a major link in the system does not enjoy

industry status & Consequently road transport operators do not have access to low-interest funds.

India is also invest in railways it is environmentally friendly and the most cost effective system & Inland

waterways neglected over the years are to be developed as well pointed out MP M Menon former Indian

ambassador to Brazil.

A characteristic function of the industry structure in India particularly in the express and logistics

segments is the many players offering homogenous services are consequently there is near-

commoditization of services especially in the express document business where demand is price-

sensitive & the top end of the market is controlled by a handful of multi-nationals and large domestic

players also Industry consolidation is however starting to occur.

DHL is acquire local express major Blue Dart Express and in the port terminal business like Maersk and

P&O Ports have consolidated their position by acquiring controlling stakes in private container terminals

in Gujarat & the pace of mergers and acquisitions will most certainly develop in the years to come as the

market is progressively liberalized.

(3) 1. Potential for Import/Export in India

The growing potential of foreign trade encourage many businesses to consider expanding their trade to

overseas locations & the demand for the best import exports consultant services is therefore on a rise

& the importance of an import export consultant services is indisputable in modern businesses also they

are professionals who help businesses grow in overseas markets & the import export consultants are

trained in international business liaison and can help businesses with market research & finding

franchises & establishing distribution channels and designing advertising campaigns.

The import export consultants are train the cultures in international trade consultants are equipped with

the knowledge of international business norms & legal aspects and import-export regulations & they can

also help businesses in understanding the cultural difference between the countries.

The culture and traditions arround the nations even within a nation may vary differently the success of a

business in a foreign land depends largely on its acclimatization with the culture of that country the

businesses failing to absorb into the culture of their offshore locations are likely to experience setbacks

also an import export consultant can help you eliminate such cultural hurdles and win customers they

have firsthand knowledge of different cultures to help you design the perfect advertisement campaign.

The international laws vary differently and so are the laws between the countries the businesses trying to

establish themselves on foreign lands therefore are required to be aware of the trade laws including

custom laws of the country they may also need to deal with the foreign banks & Import export

consultants can help businesses dealing with such legalities.

The India is being tout as the land of opportunity for logistics service providers all over the world.

The demand for logistics services has been largely driven by the remarkable growth of the Indian

economy which was 7.3per cent in 2004 & 05 and is predicted to grow between 6% and 7% in 2005-06.

The Indian logistics market value at around US dollar 14 billion in 2004 is expected to grow at a

compounded annual growth rate of around 7%.

This growth is continue as European companies continue to set up manufacturing operations in India and

large retailers such as Shoppers Stop & RPG and Big Bazaar expand to smaller cities.

Logistics management in India is become complex with about ten million retail outlets to cater to the

needs of one billion people of Indian entrepreneurs are forming new companies and taking advantage of

government policies designed to promote greater efficiencies in a sector where large global businesses

have yet to make their mark.

Indian players are realize the potential in the outsource logistics market and are expanding their range of

activities to include added-value services and customized supply chain management solutions.

The Indian government plan to execute all most of its infrastructure projects through public-private

partnership initiatives to relieve pressure on public finances & it is also removing obstacles to foreign

direct investment (FDI) and focusing on free trade agreements with other countries & these actions will

promote a more efficient and competitive domestic logistics services market and offer investment

opportunities for smart global companies.

Exporters to India

Country 2012-2013 (Apr- Sep) %Share (2012 to 2013) (Apr- Sep)

KUWAIT 8134.73 3.46

Importers to India

Country 2012-2013 (Apr- Sep) %Share (2012-2013 (Apr- Sep)

USA 19704.05 13.87

UAE 18601.71 13.09

SINGAPORE 6652.77 4.68

CHINA 6417.32 4.52

HONG KONG 6137.9 4.32

SAUDI ARAB 4636.29 3.26

NETHERLANDS 4458.24 3.14

U K 4112.26 2.89

GERMANY 3491.77 2.46

BRAZIL 3042.64 2.14

2.Business Opportunity

Examining in more detail the markets in which companies were intending to invest in the next five years

Brazil topped the rankings & it was followed by China and India & this of course demonstrates the

importance of Brazil as an emerging market buoyed by the global demand for its natural resources it also

shows that in terms of investment companies‟ focus is shifting away slightly from China and India.

Russia the fourth „BRIC‟ market makes up the top four followed by Vietnam Mexico and Turkey all

high profile emerging markets of particular note is the prominence of two of the final three markets

making up the top 10: South Africa and Argentina this both lesser markets could be exciting prospects

for logistics investment.

Comparing this and last year‟s survey there are a number of points of note amongst the highest climbers

and fallers in the rankings of markets for future expansion & morocco and Algeria two North African

markets exposed to the Arab Spring did very well showing that logistics companies believe there are

good opportunities available.

Venezuela also do well perhaps anticipating the exit of its present president and as a result of its

rebounding economy as did fellow South American economy Chile Slovakia dropped significantly down

the rankings in terms of a market for future expansion possibly because in such a small market logistics

companies have expanded sufficiently to exploit its full potential & Tanzania and Pakistan have also

dropped significantly.

CONCLUSION

Under British protector ship since 1899 Kuwait became fully independent in June 1961 &

Strategic cooperation between the United States and Kuwait increased in 1987 with the

implementation of a maritime protection regime that ensured the freedom of navigation through

the Gulf for 11 Kuwaiti tankers that were reflagged with US marking.

The U.S.-Kuwaiti strategic partnership intensified dramatically again after Iraq's August 2/1990

invasion of Kuwait.

Agility brings efficiency of supply chains in some of the world's most challenging environments

offering unmatched personal service a global footprint and customized capabilities in developed

countries and emerging economies.

Agility Logistics‟ product and service are Freight forwarding Logistic and Specialized service.

Its relation with India Air Freight hubs are Mumbai & New Delhi & Bangalore & Chennai and

Hyderabad.

Sea Freight gateway are Mumbai and Chennai with inland locations in New Delhi & Bangalore

& Pune and Ahmedabad and we also utilize the ports of Mundra and Kandla. Agility India can

provide In-City distribution within 24 hours.

Agility India give customer drive solutions dedicate to meeting your complex logistics needs &

Gujarat has to location Ahmedabad and Vadodara.

Major players in Logistic Industries in India are DHL, TNT, AFL, BLUE DART, GATI, DTDC,

ASHOK LEYLAND, FIRST FLIGHT, AGARWAL PACKERS and MOVERS.

Under the new law it is states to allow foreign investors to own up to 100% equity in Kuwaiti

companies or ventures for special projects as determined by the Council of Ministers.

The general rule is that individuals (Kuwaiti or foreign nationals) and Kuwaiti companies are not

subject to taxes on income.

The growths of the logistics industry are linked to the macro-economic indicators of the country

such as GDP, domestic consumption, exports, and imports.

International practice, goods imported into or exported out of the country by sea, air, land, or rail

routes are governed by the provisions of the Customs and other laws of the country related to

entry into exit from the country.

The growing potential of foreign trade has encouraged many businesses to consider expanding

their trade to overseas locations. Examining in more detail the markets in which companies were

intending to invest in the next five years Brazil topped the rankings. It was followed by China

and India.

SUGGESTIONS

Kuwait has a small relatively open petroleum based economy with heavy dependence on foreign

manpower & it has always offered an open highly competitive and affluent market for capital and

consumer goods and for project exports.

India Kuwait relations have always a pro trade-bias and bilateral trade has risen steadily since 1991.

Agility Logistic thrive on challenges and consistently go above and beyond for our customers.

The developing world is also set to be the global growth driver and unsurprisingly for many

companies looking to invest emerging markets continue to attract ever-increasing attention.

India which retained second place also saw improvements in all of the sub-indices resulting in an

increase in its overall score although growth occurred at a lower rate than China.

The market continues to be held back by its compatibility and connectedness scores which remain

below average.

Near future also expand in India to their logistic business because day by day trend and

Technological development is there. Agility has also scope or expands their business with the Indian

companies.

Significant change proposed by the government will throw open the Kuwaiti markets to

multinational corporations giving them a free hand in doing business in Kuwait.

Benefit of business in Kuwait there are not subject to taxes on income. The transport and logistics

sector in India witnessed significant growth in the post liberalization period.

India as a manufacturing hub & the growth of services sectors like retail the import export

consultants are trained in international business liaison and can help businesses with market research

& finding franchises establishing distribution channels and designing advertising campaigns.

Examining in more detail the markets in were companies intending to invest in the next five years

brazil topped the rankings & it was followed by China and India.

Agility logistic are giant player in Logistic business in Kuwait so for India number of chances of

increasing a import export investment and maintain good relationship between countries & for the

Kuwait new expansion and globalization of their business.

BIBLIOGRAPHY

www.google.com

www.kuwait.com

http://www.google.co.in/search?q=kuwaits+different+economic+sectors&ie=utf8&oeutf-

8&aqt&rlsorg mozilla:en-US:official&clientfirefox a

http://www.google.co.in/search?q=kuwaiti+general+overview+of+trade+and+commerce&hl=en

&client=firefox-a&hs=zmE&tbo=d&rls=org.mozilla:en-

US:official&source=lnms&tbm=isch&sa=X&ei=Nv69UJbJLIzorQeviIGwAQ&ved=0CAcQ_A

UoAA&biw=1366&bih=627

http://www.search27.com/web.php?l=en&p=1&q=overview+of+business+and+trade+at+internat

ional+level

www.agilitylogistic.com

www.agilitylogisticprivatelimited.com

http://www.tradeindia.com/Seller-262775-AGILITY-LOGISTICS-PVT-LTD-/

http://importexport.about.com/od/Logistics/a/Eleven-Questions-A-Logistics-Specialist-Will-

Ask.htm

http://indiawarehousingshow.com/ITLS/

www.agilitylogistics.com/emergingmarkets.

http://articles.timesofindia.indiatimes.com/2013-02-23/kuwait/37257192_1_kuwait-and-india-

bilateral-trade-electrical-machinery-and-equipment

A

GLOBAL / COUNTRY STUDY AND REPORT

ON

“KUWAIT NATIONAL PETROLEUM COMAPANY”

Submitted to

(INDU MANAGEMENT INSTITUTE)

IN PARTIAL FULFILMENT OF THE REQUIREMENT OF

THE AWARD FOR THE DEGREE OF

MASTER OF BUSINESS ADMINISTRATION

UNDER THE GUIDANCE OF

MR. DIVYESH PATEL

Submitted by

Name Enrollment No

MOHIN VASAVA 117190592062

BINATA PARMAR 117190592063

JULASAN AASHWIN 117190592065

ANJALI SINDHA 117190592066

TRUSHNA PATEL 117190592067

[Batch: 2012-13]

MBA PROGRAMME MBA SEMESTER III / IV

Afiliated to Gujarat Technological University,Ahmadabad

Institute’s certificate

“Certified that this Global / Country Study And Report Titled “Mohin Vasava- 2062 Binata Parmar –

2063, Ashvin julasana- 2065, Anjali Sindha – 2066, and Trushna Patel - 2067” is the bonafide work of

who carried out the research under my supervision. We also certify future, that to the best of my

knowledge the work reported herein does not form part of any other project report or dissertation on

the basis of which a degree or award was conferred on an earlier occasion on this or any another

candidate.

Signature of the Faculty Guide

____________________________

Certificate is to be countersigned by the Director/HOD

Students’ Declaration

We, Mohin Vasava-2062, Binata Parmar-2063, Ashvin julasana-2065, Anjali Sindha-2066 and Trushna

Patel-2067 hereby declare that the report for Global country study report entitled “KUWAIT NATIONAL

PETROLEUM COMAPANY” in Kuwait is a result of our own and our indebtedness to other work

publication ,reference, if any, have been duty acknowledged.

Place: Baroda

Signature of students

PREFACE

The Global Country Report is integral part of the MBA program and it is designed in such a way

that student can give maximum knowledge and can get exposure to the global world in minimum time.

With the respect and pleasure, we have privilege to submit our report to the kind hands of

eminent examination of the Indu Management Institute. MBA is a professional course, to be an MBA

student is a matter of pride because through MBA each student is prepared to hold the post of

manager very confidently and we are in field which helps us to develop from normal human being into

a disciplined and dedicated professional.

We have heard that famous saying “God helps those who helps them salves“ and “Experience

is the best teacher “the global country report on “KUWAIT” has given us sufficient knowledge to fill

the gap between the theoretical and practical knowledge

ACKNOWLEDGEMENT

Every work that one completes successfully stands on the constant encouragement, good will

and support of the people around. I, hereby, avail this opportunity to express my heartfelt gratitude to

a number of people who extended their valuable time, full support in developing this project.

We conver our heartfelt gratitude to our college “Indu Management Institute” under Gujarat

Technological University for giving us this precious opportunity to work for the real-time project.

We also forward our special thanks faculty member & project guide Mr. Divyesh Patel from

Indu Management Institute for guiding us in this report. The valuable suggestion of the faculty

member during the course of our Project work gives me the inspiration to achieve our goal and the

shape that project has been taken is due to judicious guideline, encouragement & help of our guide.

We own the success of the project to my Project Guide, Mr. Divyesh Patel who was a

tremendous supporter and an eager teacher, for providing excellent guidance for this project. He is one

of the major sources behind the success of the project.

LIST OF CHAPTER

PART I = ECONOMIC OVERVIEW OF KUWAIT

Sr No Chapter Particular Topics Page No

1 1 Demographic Profile of the country 8

2 2 Economic Overview of the country 11

3 3 Overview of industries Trade and Commerce 13

4 4 Overview Different Economic sectors of selected

country

15

5 5 Overview of Business and Trade at international Level 18

6 6 Present Trade Relations and Business Volume of

different products with India /Gujarat

20

7 7 PESTEL Analysis OR SWOT Analysis 24

8 8 PESTEL Analysis 25

PART II = INDUSTRY / SECTOR / COMPANY SPECIFIC STUDY

Equate Petrochemical Company

Sr No Chapter Particular Topics Page

No

9 2 Introduction of Equate Petrochemical company

Type of Product

29

Mission and Vision , Values , Board of Director

Fact sheet , Achievements , Approach

Sector and its Role in the economy of Kuwait country

Equate Petrochemical Function

10 3 3.1 -Comparision Between Kuwait and India / Gujarat in

petrochemical industry

41

3.2- Present Position and trend of Business (import/export)

with India/ Gujarat during last (3 to 5 year)

47

11 4 4.1 – Policies and Norms of Kuwait for Import/Export

including licensing/ Permission , Taxation

67

4.2 – Policies and Norms of India for Import / Export to the

Selected country Including licensing / Permission ,

Taxation

74

4.3 - Present Trade Barriers for Import/ Export 86

12 5 Potential For Import/ Export in India/ Gujarat Market 83

13 6 Business Opportunities in Future Equate Petrochemical

company

90

14 7 Conclusions and Suggestions

7.1 Conclusions 94

7.2 Suggestions 95

15 I Bibliography

PART-I

CH-1 DEMOGRAPHIC PROFILE OF KUWAIT

Historical Population:

Approximately 96% of kuwait’s population is urbanised 4% are nomadic. The State of Kuwait's current

population is estimated roughly 3-4million people; counting both locals and foreigners. Roughly 1

million of Kuwait's population is local, with 2-3million residents registered as foreigners and non-locals.

It is estimated that one in every 3–4 people in Kuwait are of Kuwaiti citizenship.

Age structure: - 2011-12

Years Male Female Percentage

0-14 348,815 321,565 25.5%

15-64 1,153,433 720,392 72.0 %

65 Years + 25,443 25,979 %

Historical population

Year Pop. ±%

1950 152,000 —

1960 264,000 +73.7%

1970 753,000 +185.2%

1980 1,377,000 +82.9%

1990 2,088,000 +51.6%

2000 1,941,000 −7.0%

2010 2,737,000 +41.0%

Population growth rate

2% (2011 est.)

Birth rate

21.31 births/1,000 population (2011 est.)

Death rate

2deaths/1,000 population (2011 est.)

Net migration rate

0.65 migrant(s)/1,000 population (2011 est.)

Gender ratio

At birth: 1.047 male(s)/female

Under 15 years: 1.04 male(s)/female

15–64 years: 1.79 male(s)/female

65 years and over: 1.65 male(s)/female

Total population: 1.54 male(s)/female (2011 est.)

Infant mortality rate

9 deaths/1,000 live births (2011 est.)

Life expectancy at birth

Total population: 78years

Male: 76 years

Female: 78.3 years (2011 est.)

Total fertility rate

3children born/woman (2011 est.)

Nationality

Kuwaiti

Ethnic groups (by nationality)

Kuwaiti 45%

Other Arab nationals 35%

South Asian 9%

Iranian 4% and Other 7%

Religions

Muslim 85% (Sunni 70%, Shia 30%) other 15%

Languages

Arabic (official)

English widely spoken

Balochi

Hindi-Urdu

Bengali

Malayalam

Pashto

Literacy

Age 15 and over can read and write

Total population: 93.3

CH-2 ECONOMIC OVERVIEW OF THE KUWAIT

Kuwait is a rich country with a high per capita income of about 30,000 USD. Kuwait’s GDP has

experienced growth rate of more than 20% during the after 5years. The country has 9% of the world oil

reserves. It is trying to position itself as the entrance gate for investment area. The public sector

dominates the economy and concentrates 3quarters of the country's wealth. It represents 3-4 of GDP.

The government is currently trying to transfer the 95% of Kuwaitis who work for the government from

the public sector to the private sector in February 2010-2015 plan to develop infrastructure has been

signed, worth US 100$ billion

with the special aim of opening the country's economy to the private sector.

Kuwait was affected by the financial crisis of 2008 (in the 4th quarter of 2008, revenues from oil

decreased by 51% compared to the previous quarter) and the central bank had to provide help to one of

the main banks of Kuwait which was experience cash short tage. The countries poorest were hurt by the

crisis too. The country is currently coming out of crisis and namely thanks to the increase in the

production of oil, and recorded 3% growth in 2010, hoping to reach 4% in 2011. In addition this, every

year the country shows a surplus budget of between 10 to 20%, which in 2010 reached USD 29 billion.

The income from the country's oil allows fueling a particularly generous welfare system.

General economic indicators: Table 1

YEAR 2009 2010 2011 2012 2013

GDP (billions USD) 109 131 173 185 191

GDP (annual % change, constant prices) -5 2 5 5 4

GDP per capita 30.96 36.41 46.97 49.44 49.85

General government balance - - - - -

Inflation rate 4 4 6 3 3

Current account (billions USD) 29 43 48 59

Current account (annual % change) 26 32 33 38

Main economic indicators: Table 2

2006 2007 2008 2009 2010 2011

Real GDP Growth Rate

5.1% 2.5% 6.4% (4.8%) 2.3% 4.4%

GDP (KD Min) 29470 32581 39991 31500 36855 39425

GDP (USD Min) 103144 114032 139967 110250 128993 137987

Nominal GDP Growth %

29.9% 10.6% 22.7% (21.2%) 17.0% 7.0%

Per Capita GDP (KD)

9259 9584 11619 9039 10334 11054

Per Capita GDP (USD)

32405 33542 40667 31637 36169 38690

Crude Oil Production (mb/d)

2.493 2.426 2.550 2.258 2.320 2.395

Avg Crude Export (USD/b)

59.34 66.41 91.56 60.28 75.00 78.00

CH-3 OVERVIEW OF INDUSTRIES TRADE AND COMMERCE

The member of the world trade organization since 1996, the Kuwait has successfully established

itself as an influential player in the international trading system. This result of its focus on diversifying

its economy through enhancing trade relationship with non-oil products with the countries worldwide

and adopting an open economy with an attractive business environment that promises continuous

economic growth.

As per central intelligence agency the Kuwait today is a major trading partner with world’s

countries including the US.

The Kuwait’s top 5 import partners are:

1

U.S 14.2%

Primary products: Machinery, computer, transport equipment,

and electronic products, primary metal manufacturing and

chemicals.

2

China 9.5%

Primary products:, Clothes, light industrial products, Textile

products handicrafts, silver, copper iron and steel.

3

Saudi Arabia 7.3%

Primary products: Petroleum gas, aluminum, and copper.

4

Japan 7.2%

Primary products: transport equipment, machinery, foodstuff, raw

material, mineral fuels.

5

India 4.4%

Cereals, Meat and Edible Meat Offal, Articles of Iron or Steel,

Articles of Apparel and Clothing Accessories,

Nuclear Reactors, Boilers, Machinery and Mechanical Appliances,

Residues and Waste from the Food

Industries, Iron and Steel, Edible Fruit and Nuts, Fish and

Crustaceans, Molluscs and other Aquatic, Invertebrates.

The Kuwait’s top 5 export partners are:

1 Japan 15.5% Primary products: crude oil and aluminum.

2

India 15.3 %

Organic Chemicals, Plastic, Iron and Steel,

Fertilizers, Aluminum and Articles thereof, Salt; Sulfur; Earths and

Stone, Inorganic Chemicals; Organic

or Inorganic Compounds of Precious Metals, Copper and Articles

thereof, Nuclear Reactors and Boilers,

Machinery and Mechanical Appliances, Miscellaneous goods.

3

South koria13.5 %

Crude oil, petroleum products, like petroleum gas, aluminum and

copper.

4 China 10.1% Crude oil, petroleum products

5 U.S 8.4% Crude oil, petroleum products, sulfur and unroasted iron pyrites

The Kuwait’s main export products are oil, natural gas, dried fish, dates and re-export products.

The Kuwait’s main import commodities are machinery, transport equipments, chemicals and foods

products

CH-4 OVERVIEW OF DIFFERENT ECONOMIC SECTORS OF KUWAIT

The Real Estate Sector

The real estate sector in Kuwait contracted significantly as a result of the global markets crisis. Prices

were extremely inflated prior to the crash which caused a real estate “bubble”. It is worth mentioning

that the real estate sector is positively correlated with the banking sector in Kuwait. The huge amounts

of debt impacted the sector negatively. According to the IMF the real estate contributed 26% of the

bank loans portfolio in 2009.

The real estate index continued to decline where it closed at 2368 in November 2010, against 2748 in

November 2009. Trading volume of the real estate sector also dropped. There is a large amount of risks

associated with real estate sector. The real estate sector market in Kuwait which is very unstable. The

external events are affecting the sector too. According to Bloomberg, Dubai property prices may

continue to fall during the next two years. As a result, real estate companies in Kuwait that have

investments in Dubai will suffer from associated losses.

Shipping Sector

The Kuwait oil com has 35 crude oil and refined product carriers the biggest tanker company in an

OPEC country. it is a member of the united Arab shipping company.

Agriculture sector

Agriculture is limited by the lack of water and arable land. Most of the soil which was suitable for

farming in south central Kuwait was detriment when Iraqi troops set fire to oil wells in the area and

created vast “oil lakes”.

Financial sector

The finance sector is one of the most affected sectors by the crisis. Every bank has focused on cleaning

up their balance sheets to reduce their risk exposure. A number of banks have registered high

provisions to cover poor loans. The aggregate balance sheet of local banks increased by almost 2.7% in

the financial year 2009-10 amounting to KWD 40,584.7 million from KWD 39,518.1 million in 2008-09.

The capital ratio of local banks was more than 17%, which is higher than the 12% minimum ratio

required by the central bank and the 8% ratio recommended by the Basel committee.

The sector’s index has been on an increasing trend in 2010 closing at 11,647 the end of November

2010, against 8307 in November 2009.

Personal facilities loans represent 33% out of the total loan portfolio in 2009, followed by real estate and trade &

industry. The percentage of non-performing loans increased from 5.3% in 2008 to 9.7% in 2009, which is the

highest among the GCC countries. According to the IMF, this affected the banking sector negatively; as many

companies, in addition to individuals, were not able to pay back their outstanding loans. On the other hand, the

government has initiated a “Defaulters Fund” to assist residents with financial difficulties.

Investment sector

Most investment companies in Kuwait are financed by large amounts of debt. The crisis resulted in a

number of issues related to liquidity and insolvency. Number of companies failed in paying back their

debts to local banks, thus they started shifting to foreign financial institutions for more funding. The

aggregate balance sheet of local investment companies dropped by almost 10.7% in the financial year

2009-10 to KWD 14,778 million (100 companies), against KWD 16,468 million in 2008-09 (101

companies).

The investment sector index fluctuated throughout 2010, where it witnessed a sharp decline in

2Q2010. The index closed at 5634 points in November 2009 and 4906 in November 2010. The sector

recorded losses amounting to KWD 105 million during the 1H 2010, which represents almost a 46%

decline. However, the amount of losses in 2009 was KWD 200 million. The central bank imposed new

regulations on the investment companies in June 2010.

Oil & Gas Sector

Oil & Gas are the main income sources of the GCC region. The fall of oil prices, countries in the GCC –

Oil Exporters – incurred significant decrease in revenue. Oil prices in 2010 were still lower than the

average price of 2008, ranging from USD 70 to USD 85 per barrel. The gas prices were stable during the

period, but also resulted in a lower average than 2008. The huge unfetter in the market played an

important role in this drop as well as the crisis in Europe and USA. The OPEC oil production incurred the

highest decrease in 2009 of 7.3%, according to BP’s statistics.

Accordingly, oil prices increased and they’re expected to further rise in the future. Other energy

resources have witnessed a rapid growth worldwide. A Government of many countries helps adapting

other forms of change energy.

INFRASTRUCTURES:-

1. ROADS NETWORK

Kuwait gives special attention to road infrastructure. Kuwait has advance motorway system, consisting

of seven ring roads interested by further series of roads radiating from the heart of Kuwait city. As

matter of fact, the road network plays a quasi-exclusive role in the field of good transports between

the main cities of the country: Kuwait and Zahra.

2. AIR TRANSPORT

As concerns air transport is the part of air traffic is ensured by Kuwait International airport.

3. MARITIME TRANSPORTS

In the area of marine transport, Kuwait provides with 3 large trading ports which play an important role

in foreign trade operation, such as: Shuwaikh, Shuaiba and Doha.

Kuwait also provides with a relatively important merchant fleet: 88 ships, 50 of national.

4. TELECOMMUNICATIONS

Kuwait is provided a performing and modern communications network: automatic telephone, telex,

mobile telecommunications etc… At international level Kuwait has direct links with its trading partners

of Europe, Africa, Asia and America.

CH-5 OVERVIEW OF BUSINESS AND TRADE AT INTERNATIONAL LEVEL

Ever since the era of oil began after World War II, the cheapest price mineral has been Kuwait’s main

export product. Due to the huge revenue of oil sales, the government accumulated surplus money and

invested abroad. Many of these investments were cashed in during the Iraqi occupation and the

liberation period to meet the expenses of Kuwait and the allied coalition.

By the mid-1990s the value of exports exceeded the costs of imports by US$4 billion. Trade

surplus become low in 1998, due to declining oil prices but it rises again in 1999. Figures show value of

exports increases from US$2.7 billion to US$ 13.5 billion. Increase to US$13.5 billion. And a US$1 billion

drop in imports, which increases US$8.1 billion as compared to 1998. By 2000, the World Fact

book estimated.

Kuwait has always been a country open to foreign investment and with the introduction of new laws in

recent years; the country is even more open to foreign capital. In early 2003, new laws for FDI are

introduced; it allows 100% foreign ownership in a number of sectors. This law also helps available a

number of tax breaks and other benefits which can attract new investors who in return must guarantee

a set of quotas regarding the employment of Kuwaiti nationals.

The current policy to promote FDI focuses on a number of sectors which can benefit most from foreign

investment. These include infrastructure investment in water, waste-water treatment, power, and

communications. Kuwait tries to promote investment in the banking sectors, financial sectors,

insurance, information technology and software development, hospitals and pharmaceuticals.

Authorities are also trying to attract foreign capital into other sectors such as land and sea freight,

tourism, real estate and urban development. A financing plan of USD 100 billion has in fact been

approved by the Parliament in 2010. This project aims to develop infrastructure (highways, railways,

subway) and should leave more space for the private sector.

With the financial crisis of 2008-2009 the influx of foreign capital halved, decreasing from USD 121

million in 2007 to USD 57 million in 2008.

Kuwait is highly dependent on foreign trade, which represents nearly 95% of the GDP. Kuwait's imports

total 16 billion USD. The country depends more on imports of foodstuffs, consumer goods (40% of

total) and semi-finished products (38% of total), which ranks it among countries with the highest per

capita import rate. The imports have been increases quickly due to the country’s undertaking of large

projects and a high private consumption demand.

Kuwait’s largest suppliers are Germany, United State, Japan and Saudi Arabia. Kuwait imports from

other Gulf countries have increased since the introduction of GCC (Gulf Cooperation Council). The main

imported products are cars, agriculture, food products, mechanical industrial products, electronic

products. Kuwait’s exports quadrupled between 2002 and 2008 (USD 87 billion in 2008) Exports of

crude oil and refined products account for 95% of total. The remaining amount consists of exports,

mainly of machinery and transportation equipment.

Kuwait’s main clients are the Asian countries, especially Japan (17.5%), South Korea (13.9%), Taiwan

(9.3%), as well as Singapore & India and China the United States (8.2%) and some of the European

countries.

CH-6 PRESENT TRADE RELATION AND BUSINESS VOLUME OF DIFFERENT PRODUCTS OF

KUWAIT WITH INDIA

INDIA – KUWAIT BILATERAL TRADE

Kuwait is 3rd largest trading partner of India in the Arab World (2010-11): The value of two-way trade

between the two countries in 2010-11 exceeded US$ 12 billion. Kuwait is the source of 2.78% of India’s

global imports (2010-11). For Kuwait India is the 2nd largest market of its exports accounting for more

than 15% of its global exports (2010). In terms of imports by Kuwait, India ranks 7th and is source of

around 4.4% of Kuwait’s total imports (2010).

Bilateral In US $ Million

Sr. No Particulars 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12

(Apr-Sep)

1 EXPORT 614.81 681.54 797.50 782.45 1959.48 588.29

2 % GROWTH 10.85 17.01 -1.89 150.43

3 IMPORT 5993.23 7704.25 9593.74 8249.49 10313.64 6580.43

4 % GROWTH 28.55 24.53 -14.01 25.02

5 TOTAL TRADE 6608.04 8385.79 10391.24 9031.94 12273.13 7168.69

6 % GROWTH 26.90 23.91 -13.08 35.89

Major Items of Exports from India

Cereals, Meat and Edible Meat Offal, Article of irons or steel, Electrical machinery and parts thereof;

articles clothing accessories, nuclear reactors, boilers, machinery and mechanical appliances, Residues

and waste from the food industries, iron and steel, Edible fruits and nuts, Fish and crustaceans,

Molluscs and other aquatic invertebrates.

Major Items of Imports by India

Organic, chemicals, plastic and articles thereof, Iron and steel, Fertilizers, Aluminum and articles

thereof, Earths and Stones, Inorganic chemicals, Organic or Inorganic compounds of precious metals,

Coppers and articles thereof, Nuclear reactors, Boilers, Machinery and mechanical appliances and

miscellaneous goods.

Stability and Strength

The growing India- Kuwait economic and commercial relations contributed to the stability and strength

of a rapidly diversifying and bilateral relationship between the two countries.

India and Kuwait have shared trade links throughout the centuries. Between India and Kuwait the trade

was dominated by traditional items such as dates and fishes underwent a sharp change after the

recovery of oil in the Kuwait

India’s Exports to Kuwait

The exports from India to Kuwait increased by 14.80% in US$ terms from US$ 681.54 million in 2007-

08 to US$ 782.45million in 2009-10. In Rupee terms, it increased by 35.17% from Rs 2,74,490.59

lakhs to Rs 3,71,035.94 lakhs in the corresponding period.

Followinf pie-chart shows the share of top 10 items of exports from India during 2008-09 shows that

the major items exported from India were Cereals, Meat and Edible Meat Offal, Articles of Iron or

Steel, Electrical Machinery and Equipment and Parts thereof; Articles of Appeals and Clothing

Accessories, Nuclear Reactors, Boilers, Machinery and Mechanical Appliances, Residues and Waste

from the Food Industries, Iron and Steel, Edible Fruit and Nuts, Fish and Crustaceans, Molluscs and

other Aquatic Invertebrates.

Cereals 39%

Meat and Edible Meat Offal

15%

Articles of Iron or Steel 9%

Electrical Machinery and

Equipment 8%

Nuclear Reactors, Boilers, Machinery

6%

Residues and Waste from the Food Industries

5%

Edible Fruit and Nuts

4%

Fish and Crustaceans

3%

Iron and Steel 4%

Articles of Apparel and Clothing Accessories

7%

India‟s Exports to Kuwait

India-Kuwait Non-Oil Trade FYs 2007-10

In US$ million

2007-08 2008-09 2009-2010

Indian Exports to

Kuwait

674.98 755.88 780.23

Indian Imports from

Kuwait

414.74 399.96 339.69

Total 1,089.72 1,155.76 1119.92

In Rs. Lakhs

2007-08 2008-09 2009-2010

Indian Exports to Kuwait 2,71,864.46 3,43,414.60 3,69,987.42

Indian Imports from

Kuwait

1,66,863.42 1,79,725.29 1,59,669.06

Total 4,38,727.88 5,23,139.89 5,29,656.48

CH-7 SWOT ANALYSIS OR PESTEL ANALYSIS

The GCC secretariat official website indicates the following when it comes to the reasons behind them

and interaction among them and created homogeneous values and features.

This editorial will attempt to analyze forming of the council and its objectives as the following: “the

deepening and strengthening of relations, links and areas of co-operation among their citizens.”

All these factors, improve to quality by one geographical entity extending from sea to desert have

facilitated contacts the merit of the given claims in a SWOT analysis manner:

STRENGTHS

Huge pool of labor force.

„Export‟ ability of primarily two prime sources like oil and gas.

Diversified nature of the economy

Extensive higher education system.

WEAKNESSES

Very high % of workforce involved in manufacturing.

Around the quarter of a population below the poverty line.

Low level of mechanization Red tapes, bureaucracy.

Low literacy rates not equal distribution of the wealth.

OPPORTUNITIES

Scope for entry of private firms in different sectors for business.

Hugest foreign exchange earning prospect in IT and ITES sector.

Huge agricultural resources and fishing plantation crops and livestock.

Huge domestic market of Infrastructure area: Opportunity for MNCs for sales.

THREATS

Global economy recession/slowdown.

Threat of government change in some states.

Agriculture excessively the dependent on monsoons.

Population explosion and rate of growth of population still high.

PESTEL ANALYSIS

PESTEL Analysis is part of the external analysis when conducting a strategic analysis or doing market

research and it gives an overview of about the different macro-environmental factors that the company

has to take in Kuwait.

Political Analysis

They involved goods and service the government wants to provide and those that the government

does not want to provided.

Governments have great influence in health, education and infrastructure of a nation.

Political analysis consists areas such as tax policies & labour laws & environmental laws & trade

restrictions & tariffs and political stability.

Kuwait also many political factors conducted to the Organization of Petroleum Exporting

Countries in industry.

Economic Analysis

They include economic growth, interest rates, exchange rates and the inflation rate. Kuwait is

one of the richest countries in the Muslim world.

Current GDP per capita reached astonishing peak growth of 43% in the 1970. But this proved

unsustainable and contracted by 58% in the1980. However rising global oil demand helped

register growth of 91% in the 1990. Diversification is a long-term issue for this over-exposed

economy.

Kuwait is a small country with massive oil reserves. And economy of Kuwait has been

traditionally dominated by the state and its oil industries. During the 1970, Kuwait gained from

the rise in oil prices. Which Kuwait has actively promoted through its membership in the

Organization of Petroleum Exporting Countries.

The economy suffered from the triple shock of the 1982 Souk Al-Manakh stock market crash, in

the mid-1980 drop in oil prices and in the 1990 Iraqi invasion and occupation.

The Kuwaiti Government-in-exile depended upon its $100 billion in overseas investments during

the Iraqi occupation in order to help pay for the reconstruction. The wealth of Kuwait is based

on primarily oil and capital reserves and the Iraqi occupation severely damaged both.

Social Analysis

It includes the cultural aspects and health consciousness & population growth rate & age

distribution & career attitudes and emphasis on safety.

A trend in social factors affects the demand for a company’s product and how that company

operates.

A number of factors are explored including attitudes toward collaboration and its relationship

to achievement. Studies not have been conducted in Kuwait related factors of motivation and

collaboration among social workers in different organizations or its relation to their

achievement. Participants were convenience sample of 313 social workers from various

institutions in Kuwait.

Results of the study indicated that years of experience & age and number of children correlated

positively with the social worker motivation towards achievement. Additional attitude toward

collaboration & number of children and income were significant predictors of social worker

achievement motivation.

Technological Analysis

They include ecological and environmental aspects such as research and development activity &

automation & technology incentives and the rate of technological change. Most of Kuwait

technological factors are very important in industrial environment.

They can determine barriers to entry & minimum efficient production level and influence

outsourcing decisions. Technological shifts can affect costs & quality and lead to innovation. So

technological analysis is must be determine to the Kuwait industries.

Environmental Analysis

They include climate and climate change & which may especially affect industries likes tourism

& farming and insurance.

A favorable investment policy augmenting the influx of pollution control equipment and a spur

in Government projects directed at ground water cleanup, environmental awareness are

expected to boost the Kuwait environmental industry. Planne technology advances coupled

with international co-operation are likely to drive changeable energies & wastewater sector &

desalination capacity and solid waste treatment.

This study provides insights into socio-economic & legal & political and technological factors in

Kuwait and their likely implications on and opportunities for the environmental sector.

Legal Analysis

It involves the consumer law & the discrimination law & the antitrust law and the health and

safety law. These factors affect how company operates and its costs and the demand for its

products.

Kuwait follows the civil law system. Kuwait is a democracy and the constitution guarantees

fundamental rights and freedoms a number of which are governed by law.

It is unusual to hear of a violent crime being committed.

Kuwait has extremely strict laws regarding drugs and they are actively enforced.

Anyone found importing narcotics will be liable to the prosecution and anyone caught and

convicted from trafficking drugs will be subject to the penalty of death. Severe punishments and

including the penalty of death are dealt with those convicted of committing murder and rape.

Car accidents are common in Kuwait. It is the criminal offence to flee the scene of an accident

and doing so will result in jail term, fine, and ultimately deportation. From the time to time

drivers are caught for driving under the influence of alcohol and resulting in custodial sentence

and deportation. An area in which you may find yourself in need of a lawyer is in a labor

dispute.

PART-II PART – II INDUSTRY / SECTOR / COMPANY SPECIFIC STUDY

CH-2 INTRODUCTION OF KUWAIT NATIONAL PETROLEUM

COMPANY

Kuwait National Petroleum Company was established in October 1960 as a joint venture

between the government and private sector. When it was established in 1960 KNPC was only and first

national in a region where hydrocarbon resources were managed and exploited by foreign companies.

The owners’ vision was stimulating development and provided an exemplary experience in handling

national resources. To undertake management and exploitation of the oil resources this started to

develop into colossal source of income capable of sustaining the society welfare and financing its

overall development. In 1975 the state acquired full ownership of KNPC and compensated the private

shareholders for their stock. KNPC’s operation were highly integrated mainly relying upon its oil

refinery in shuabia and the marketing of petroleum products from Al Ahmadi Refinery, run at the time

by Kuwait Oil Company in both Local and international markets.

As a matter of fact KNPC at that time was maintaining an efficient presence in Europe the Far East and

United States of America to handle the marketing of petroleum products from the Kuwait refineries.

In 1980 Kuwait Petroleum Corporation (KPC) was established as the state owned asset

and all other oil companies in Kuwait including KNPC became KPC subsidiaries.

KNPC became responsible for the oil refining and gas liquefaction industry in addition to the marketing

of petroleum products in Kuwait through a chain of filling stations which reached its peak 2005-2007

with 119 operating filling stations. In the collaboration with KPC the company embarked on studies and

plans to modernize refining industry in Kuwait with a multibillion dollar projects to revamp Mina Al-

Ahmadi and Mina Abdullah Refineries.

By the year 1984 Mina Al-Ahmadi Refinery Modernization Project (RMP) completed.

KNPC was then supplemented by the Further Upgrading Project (FUP) in 1986. It is the two projects

practically created a modern new refinery with optimal configuration and advanced technology and

significantly increased the overall capacity of the plant. The two years later Mina Abdullah Refinery

modernization project (MAB) was completed turning the old refinery into a state of the art plant with a

sizable capacity increase. MAA & RMP and MAB & RMP led not only to capacity increase but also to

products quality improvement.

On the domestic scene KNPC continued to build new filling stations in order to add more

outlets for products marketing and to respond to the growing demand for gasoline and fuels. However

KPC & KNPC put into effect the trend towards privatization and started in 2004 to transfer its Local

Marketing assets such as the lube oil plant and the petrol stations to private companies.

In 2004 the Lube Oil Blending Plant in Shuaiba was sold to a private firm and in early

2005 the privatization process of 119 filling stations commenced with transferring the ownership of 40

filling stations to a shareholding private company. In the early 2006 another batch of 40 filling stations

was turned over to another shareholding company. The privatization wheel still roll on until the last

filling station owned by KNPC passed to the private sector.

In the meantime the company gave special attention to its human resource by

implementing a policy of steady growth of the national manpower and providing the company sites

with highly qualified human resources. The year 2009 the percentage of Kuwait is in the total

manpower was around 79.5% from the company labor force which totaled 5235 employees.

MISSION, VISSION & VALUES OF COMPANY

KPC Downstream Sector Mission, Vision & Values (MVV) is linked to KPC’s Vision

signified by “Integration and Excellence is our path to Globalizes”. The Mission, vision and values has

been integrated across the Downstream Sector for the 1st time. KNPC is part of the KPC Downstream

Sector that includes other three KPC subsidiaries KPI and PIC and KAFCO. The Downstream Sector KNPC

is responsible for Domestic Refining and Gas Processing. An unprecedented growth in the worldwide

demand for energy presents us with the opportunity to transform our business into a lead global force.

We will they do it by aligning our performance our people and our practice to this changed

environment.

HEALTH, SAFETY & ENVIRONMENT POLICY

SAFETY:-

Health, Safety and Environment department continued to support other

company refinery to achieve safe operation of their facilities. This support aimed at maintaining the

highest standards of safety for assets and personnel alike.

Health, Safety and Environment was also intended to protect the environment and combat

pollution its source. The Company insists on upgrading safety standards and protecting the employees

as well as the contractor workers occupational health and environment.

The company realized was remarkable achievements in the three areas reflected in the awards

and certificates which the company earned International awards for example:

KNPC was awarded with the praise of the Royal Association for the prevention of accidents for

performance in the Safety, Health & Environment.

KNPC also won prize of the British Safety Council. The British council has been awarding the

company with his safety award for several years in acknowledgement of

its remarkable performance in Health, Safety & Environment fields.

Training courses and sessions at the Safety Training Center is also available not only to the

company employees but also to the contractor workers. The number of employees who

received training at the center reached 11991 trainees who were recruited in 990 courses. The

meantime the company continued sending a number of its employees especially firemen for

training in the other countries. The emphasis on training especially in the areas of Health, Safety

& Environment was reflected the company interest in boosting its employee skills and

capabilities.

HEALTH:-

The company organized a number of health awareness campaigns this year through the medical

division in Health, Safety and Environment department .The Company also joined campaigns sponsored

by other agencies. Among the campaigns organized by the company this year were the following:

Check BP for your safety, during which the employees Blood Pressure was checked and lectures

were delivered by renowned specialists to enlighten the attendees on blood pressure impact

and how to minimize it.

The Medical Division also organized in the collaboration with KPC a lecture of health meals

during the holy month of Ramadan.

In keeping with its habit the company also organized this year special campaigns for blood

donation at the Head Office and the company refineries. The number of donors from

KNPC showed the high sense of responsibility on the part of the company employees and their

concern for supplying the Blood Bank with this life saving liquid. It was also evidence to the

employees’ keenness to engage in voluntary work.

ENVIRONMENT:-

Kuwait National Petroleum Company is committed to the protection of the Environment. This

commitment is being translate into hard work and determination to combat pollution at its very

sources, especially air and sea pollution. Concrete measures were taken in this perspective to improve

the standards of Environment protection including a number of costly projects designed mainly to

serve this purpose.

Kuwait National Petroleum Company has implemented Environment Management System

conforming to ISO 14001:2004 standards. The key aspect of ISO 14001 system is to achieve continual

improvement by addressing non conformances and by setting new targets to achieve. Hence audit

becomes one of the essential tools to achieve this. All the sites of KNPC. Auditor expressed satisfaction

on the progress made towards implementation of Environment Management System (EMS) and the

recommendations of audit are being implemented. In addition to this, internal (EMS) audit was also

carried out for all the sites during the year.

The certification of ISO -14001 was recognition of KNPC commitment to the local and world

environment.

In recognition of KNPC’s effort to maintain clean environment within its neighborhood, it was

awarded On December 2008 the prize of the first position by the Council of Arab Environment

Ministers for Clean Product Projects.

.

FUNCTIONS & BUSINESS ACIVITIES

Filling Station

The Company still owns and runs 39 filling stations after the privatization of its 80 filling

stations which were acquired by Oula and Alsoor local marketing private companies. Privatization also

covered the company carwash facilities of which the company still retains only one station.

Privatization of the remaining KNPC filling facilities is still under consideration in order to arrive at the

most appropriate formula for the transfer of their ownership to another party.

In the meantime the company started the second phase of Vapor Recovery Project at the filling stations

after it proved its success in the first phase in which it was introduced in the local marketing depots and

the second phase will cover all filling stations.

Control and supervision

The supervisory division in the Local marketing department monitors the quality of service at

the filling stations owned by the two private companies Oula and Alsoor. This supervision is a kind of

auditing need to guarantee that the qualities of service as well as the safety standards do meet the

standards laid down by KNPC and which are in fact identical to international standards & regulations.

KNPC is recently coordinated with certain consultant to define concrete criteria for auditing the quality

of services provided by those stations as well as the safety standards being implemented in them.

Oil Refining

Crude oil processed at the company three refineries this year exceeded the feed to the three

refineries in the last financial year by ten million barrels .Crude oil throughput to the three refineries

amounted to 325.7 million barrels in 2010/2011 compared to 314.7 million barrels in the past year. The

increase was mainly due to the improvement of safety standards and the elaborate concentration on

those standards in the operations beside the successful maintenance programs which boosted the

refineries reliability. Total crude throughput during this year reached 862.2 thousand barrels per

day showing 3.5% increase over the average daily rate of last year KNPC was selected as the Oil

Refining Company for the year 2011 by HART publishing firm in the USA which usually gives its award to

only big companies.

Gas Liquefaction LPG

Feedstock to the LPG plant at Mina Alahmadi Refinery reached in the fiscal year

2010/20111205.9 million cubic feet per day against 1099.9 million cubic feet per day in the previous

fiscal year. With an increase of 9%.This amount represents available gas supplies from KOC fields as

well as from KNPC refineries.

Propane exports from the LPG plant amounted to 2083.7 metric tons while Butane export

reached around 1695 metric tons Compare to their level in the previous fiscal year exports from the

LPG plant reveal 29% increase as they were around 2929 thousand metric tons.

Training at Safety Center

Training courses and sessions at the Safety Training Center in Mina Alahmadi were

available not only to the company employees but also to the contractor workers. The number of

employees who received training at the center reached 11991 trainees who were recruited in the 985

courses. The meantime the company continued sending a number of its employees especially firemen

for training in countries. This emphasis on training. Especially in the areas of Health Safety &

Environment reflected the company interest in boosting its employee skills and capabilities.

Awareness Campaigns

Several campaigns had been conducted to increase the employees as well as the public

awareness of the environmental hazards and the means to minimize the industry environmental

footprints. One of the campaigns was concentrated on effluent treatment methods and how water

generated from effluent treatment units can be utilized.

Another campaign about environmental incidents and their impact was also organized

during the fiscal year and drew over 935 employees and contractors. The one week campaign was

basically designed to confront environmental incidents and educate attendees on the best ways to

handle those incidents and minimize their impact on our environment.

The HSE department also launched in July2010 a special program on Process Safety

Management in compliance with the Process Safety Program of Kuwait Petroleum Corporation.

Corporate Social Responsibility

KNPC was always keen on fulfillment of its social commitment and obligation to the community.

This commitment is directed into three main channels, economic, environmental and social. In the

economic area the company continued its success in augmenting the added value of the country

hydrocarbon resources. The effort is reflected in the substantial increase of the company sale

revenues during the year which increased from KD 8.5 in the previous fiscal year to KD 11 billion in

the financial year 2010/2011 showing an increase of the over KD 2.5 billion and which generated net

profit of around KD 462 million As regarding the environment protection endeavors KNPC is commit

ted to bringing down gas emissions as a part of the fight against global warming. This can be reflected

by the various projects implemented or launched in the three refineries such as the Flare Gas

Recovery project the Oil Sludge Treatment unit remediation of contaminated soil project the Acid Gas

Removal units and the Effluent Treatment Facilities Project etc..

But the best example for the company efforts to improve environmental conditions on a

national scale is its two mega projects are the Clean Fuels Project (CFP) and the New Refinery Project

(NRP). The company entertains hope that both projects will get necessary approval soon. In the social

area KNPC has always been playing a leading role in interacting with civil service groups and

organizations, and giving priority to the contribution to the educational, cultural humanitarian and

sport activities of those organizations.

Performance Enhancement Initiatives Activities

KNPC Project Methodology:

The CTO department in the Company laid down a new methodology for projects management

.It is virtually a practical framework to the planning and management of projects which renders them

more coherent and firmly interconnected. In other words it makes project management more effective

by introducing clear and general criteria for the management of each project.

Automatic System for the Budget Preparation

A system being An Automatic System has been worked out for the preparation of the operation

expenses budget. The system connects the operation expenses budget with the present used in The

Financial Accounts and the Human Resources. The system also allows for completing of manpower

forecast at the short term., making their calculations and then linking their figures to the company

operation expenses.

Energy Management System in the Refinery

The company will embark on a new system for energy consumption and conservation in the

three refineries according to requirements specified by Kuwait Petroleum Corporation. Under this

system the current utilization of power will be evaluated with a view to bringing it downs low as

possible and to explore the chances to optimize the power consumption in the refiners .A teaming

which the three refineries are represented has been formed to work out this mission.

Supply Chain Optimization Project

SCO is described as one of the major strategic projects in the framework of the KNPC vision. It is

main objective is to upgrade the company core system and business processes in short and mid terms

planning & production accounting and operational performance management. It is a new business

initiative intended to create customer focused organization that delivers on spec products on schedule

with minimum giveaway while maximizing the refinery utilization and overall profitability. It is the

system is in functioning now and helps the management in the decision making process so the urgent

decision can be taken in due time.

Training and Development Activities

The company continued implementation of its training and development strategy by

intensifying the employees training and upgrading their skills and capabilities. The target has been set

by the company management which necessitated providing every employee with a minimum of 30

hours of training year. The company conducted or participated in a large number of training courses

and workshops or seminars in collaboration with internal and external firms and institutions. The

number of the training courses conducted locally totaled 124 courses and seminars or lectures

attended by the 1055 employees. The external training courses total 644 joined by 1323 employees.

The Petroleum Training Center of KPC continued to implement its extensive career development

program the year. KNPC 3859 employees attended those programs which covered wide range of the

subjects. The meantime eight employees from KNPC continued their studies outside Kuwait in the

framework of the unified scholarships and study leaves scheme of KPC and its subsidiaries.

CH-3 INTRODUCTION OF THE INDIAN OIL CORPORATION LIMITED

It is beginning in 1959 as Indian Oil Corporation Ltd was formed in 1964 with merger of Indian

Refineries Ltd in 1958.

A India flagship national oil company Indian oil account for 48% petroleum products markets

share 34% national refining capacity and 71% downstream pipeline throughout capacity.

To maintain strategic edge in the place, Indian Oil has planned investments to the tone of Rs.43,

400 (US $ 10.8 billion) corers during the 10th plan period (2007-12) mainly in refinery and pipeline

capacity expansion product quality up gradation retail operations and diversification projects. The

corporation is marketing investments in E & P and import/ marketing ventures for oil and gas in India

and abroad and is implementing a master plan to business with petrochemical activities.

The corporation has launches eleven joint partnership with some of the most respected

corporate from India and abroad- Lubrizol, Nyco SA, Elf, PETRONAS, and Oil tanking Gnbh, Marubeni to

name a few SERVO lubricants are being exported to Dubai, Nepal, Bhutan, Kuwait, Malaysia, Bahrain,

Indonesia, Sri Lanka, etc.

Indian Oil’s world class R & D centre has won recognition for its pioneering work in lubricants

formulation, refinery processes, pipeline transportations of SERVO brand lubricants and grease for

virtually all conceivable applications, railroad, industrial and marine meeting stringent international

standards and bearing the stumps of approval of all original equipment manufacturers. The centre has

to it is credit over 90 national and international patents. The centre has recently incorporated a

subsidiary company for commercializing its innovations and technologies.

Indian Oil has a concerted social responsibility program to partner communities for health &

family welfare & education & environment protection & providing potable water & sanitation and

empowerment of women and other marginalized groups. Indian Oil has always been at the forefront in

times of the national emergency. Indian Oil People time and again rallied to help victims of natural

calamities maintaining uninterrupted supply of petroleum products and contributing to relief and

rehabilitation measures. Indian Oil has successfully combined it corporate social responsibility agenda

with its business offerings & meeting the energy needs of millions of people every day & across the

length and breadth of the country.

MAJOR UNITS

1) GAUWAHATY (Assam)

2) GUJARAT (Vadodara)

3) MATHURA (Near Delhi)

4) DIGBOI (Upper Assam)

5) HALDIA (West Bengal)

6) PANIPAT (Near Delhi)

7) BARAUNI (Bihar)

IOCL

PIPELINE MARKETING REFINERY IBP R & D

VISSION

A major diversified transnational & integrate Energy Company with national leadership and

strong environment on science playing a national role in oil security and public distribution.

MISSION

To achieve international standards of the excellence in the all aspects of energy and diversified

business with focus on customer delight through value of products and services and cost reduction.

To attain leadership in the developing & adopting and assimilating state of the art technology for

competitive advantage.

To maximize creation of the wealth & value and satisfaction for the stockholders.

To provide the technology and services through sustained Research and Development.

To foster culture of the participation and innovation for employee growth and contribution.

To help enrich the quality of life of the community and preserve ecological balance.

VALUES

Care- stands for

Concern

Empathy

Understanding

Cooperation

Empowerment

INNOVATION- stands for

Creativity

Ability to learn

Flexibility

Change

PASSION- stands for

Commitment

Dedication

Pride

Inspiration

Ownership

TRUST- stands for

Reliability

Delivered Promises

Integrity

3.1 Comparative Position of Oil & Gas Industries with India

1. Crude oil Production and Consumption of India

The Indian oil and gas sector is one of the core industries in the India and has very significant forward

linkages with entire economy. An Indian economy has been growing steadily and the momentum is

likely to continue in the years to the come. These would translate into India energy needs growing

many times going forward. This is an emphasized need for wider and more intensive exploration for

new finds more efficient and effective recovery a more rational and optimally balanced global price

regime.

With soaring GDP, Indian primary energy consumption has grown at a yearly rate of over 6.5% over the

past decade, against the global growth rate of around 2.5%. India is the fourth largest in terms of

primary energy consumption in the world after US & China and Russia. The securing supply is expected

to remain on top of India energy agenda for the foreseeable future.

The country’s crude oil consumption has grown at an average rate of 18.25% between 2007 and 2011.

Growth in domestic demand of petroleum products has been at the rate of 3.7 % during this period

driven mostly by industrial and transportation sector growth. The additional growth in the crude oil

consumption has been driven by significant additions to domestic refining capacities which have been

utilized to enhance product exports. The supply side domestic production of crude oil has practically

remained at in the recent years. Requirement of the imported crude oil has grown in excess of 7%

between 2001 and 2010 to bridge the widening domestic demand & supply gap. India imported 1.7

million tons of crude oil in 2011 (the world’s fifth largest net importer).

YEARS 2007 2008 2009 2010 2011

Crude Oil 697.53 693.71 680.43 751.30 782.34

Production

Crude Oil

Consumption

2800.75 2864.00 3112.74 3255.39 3426.00

Above diagram and numerical data indicates the crude oil production and consumption in India. We

can see that production of crude oil increases over the years but the data shows that it’s not enough

0

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Crude Oil Production & Consumption

PRODUCTION

CONSUMPTION

because the consumption of crude oil is very huge and the consumption is increases with large amount

over the years. So, India has always needed to import large amount of crude oil from abroad.

Crude Oil Import By India

YEARS 2007 2008 2009 2010 2011

Crude Oil

Import

2156.00 2412.27 2556.69 3185.18 3271.88

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Crude Oil Import

Crude Oil Import

Above diagram indicates the import of the crude oil of India for five years. Import of crude oil increases

over the five years because of large amount of consumption of crude oil in India. In 2008 import

increases 10.62% as compare to 2007, in 2009 import increases 5.65% as compare to 2008, in 2010

import increases 19.73% as compare to 2009 and in 2011 import increases 2.65%.

2. Crude Oil Production and Consumption By Kuwait

YEARS 2007 2008 2009 2010 2011

Crude Oil

Production

2464.10 2585.75 2350.00 2300.41 2530.14

Crude Oil

Consumption

321.61 325.32 372.14 383.38 339.00

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Crude Oil Production & Consumption

Production

Consumption

Above diagram indicates the production and consumption of crude oil for five years. The production

data and graph indicates very high production of crude oil. So, due to huge difference in production

and consumption Kuwait is able to export crude oil with large amount.

Export of Crude Oil By Kuwait

YEARS 2007 2008 2009 2010 2011

Crude Oil

Export

1759.52 1645.49 1785.38 1495.17 1395.03

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Crude Oil Export

Export

Above diagram indicates the crude oil export by Kuwait for five years. Kuwait exports crude oil with

large content because of huge difference between crude oil production and consumption. Production

of crude oil of Kuwait is very high as compare to consumption of crude oil.

3. Production of Natural Gas Liquid By India and Kuwait

Years 2007 2008 2009 2010 2011

Kuwait 125.00 123.75 130.00 130.00 130.00

India 115.00 122.00 128.31 130.00 125.07

105

110

115

120

125

130

135

2007 2008 2009 2010 2011

Th

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Production of Natural Gas Liquid by Kuwait & India

Kuwait

India

Above diagram indicates the production of natural gas liquid by India and Kuwait for five years. The

production of natural gas liquid of Kuwait is high as compare to India over the years. The production of

India increase during the year 2007 to 2010.

4. Production and Consumption of Distillate Fuel Oil by India

Years 2007 2008 2009 2010 2011

Production 1081.60 1206.52 1297.73 1507.47 1607.90

Consumption 862.36 974.01 1054.48 1181.91 1200.69

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Distillate Fuel Oil Production & Consumption by India

Production

Consumption

Above numerical data and graph indicates the production and consumption of Distillate Fuel Oil by

India. Production of Distillate Fuel Oil very high as compare to consumption. So, India has to

opportunity to export Distillate Fuel Oil or to reserve it. The growth of production is very good over the

years.

Import and Export of Distillate Fuel Oil by India

Years 2007 2008 2009 2010 2011

Import 60.71 59.93 56.98 51.73 40.79

Export 238.00 292.43 300.24 377.29 415.61

Above diagram indicates import and export of Distillate by India. The export of Distillate Fuel Oil

increases over the years which good for India. The Import of Distillate Oil considerably reduces over the

years which are better for India.

5. Production and Consumption of Distillate Fuel Oil by Kuwait

Years 2007 2008 2009 2010 2011

Production 219.65 227.30 242.15 217.62 215.82

Consumption 34.15 33.29 51.91 64.78 63.98

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Distillate Fuel Oil Import & Export by India

Import

Export

Above diagram and numerical data indicates production and consumption of Distillate Fuel Oil by

Kuwait. It indicates that production of Distillate Fuel Oil is very high as compare to the consumption so,

Kuwait exports Distillate Fuel Oil with large quantity.

Export of Distillate Fuel Oil by Kuwait

Years 2007 2008 2009 2010 2011

Export 44.86 48.23 43.02 37.56 37.64

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Distillate Fuel Oil Production & Consumption by Kuwait

Production

Consumption

Above diagram indicates the exports Distillate Fuel Oil by Kuwait. According to data and diagram the

export growth rate of Distillate Fuel Oil decreases. It happens because of consumption increases of

Distillate Fuel Oil as we have seen in previous diagram.

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60

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Distillate Fuel Oil Export by India

Export

6. Petroleum Products Consumption & Production of India

YEARS 2006 2007 2008 2009 2010

Production 560.85 711.80 659.86 825.62 953.10

Consumption 696.01 719.34 651.52 722.88 712.81

Above diagram indicates the production and consumption of petroleum products of India for five years.

Comparatively production of petroleum products increased and consumption is also increased. But the

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Production & Consumption of Petroleum Products

Production

Consumption

production of petroleum products increased as compare to the consumption of petroleum products;

which proven good for India.

Petroleum Products Import & Export by India

Years 2007 2008 2009 2010 2011

Import 222.71 248.77 179.51 141.25 108.82

Export 195.96 241.22 187.85 284.67 287.96

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Petroleum Products Import & Export by India

Export

Import

Above diagram indicates the import and export of petroleum products by India. It explains that export

of petroleum product considerably increases and import decrease during five years. It suggests the

growth rate of export increases.

7. Petroleum Products Production and Consumption by Kuwait

Years 2007 2008 2009 2010 2011

Production 230.51 262.28 207.09 242.15 249.93

Consumption 53.19 81.56 31.47 52.71 54.14

Above diagram indicates production and consumption of petroleum products by Kuwait. Production of

petroleum products is very high as compare to consumption of petroleum products. So, Kuwait has

good opportunity to export petroleum products.

Petroleum Products Export by Kuwait

Years 2007 2008 2009 2010 2011

Export 202.53 213.65 201.84 195.39 220.45

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Petroleum Products Production & Consumption by Kuwait

Production

Consumption

Above diagram indicates export of petroleum products by Kuwait. It indicates that export of petroleum

products in 2011 is highest. During the year 2008 to 2009 export reduces of petroleum products.

180

185

190

195

200

205

210

215

220

225

2007 2008 2009 2010 2011

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Petroleum Products Export by Kuwait

Export

Crude Oil Throughput by Kuwait National Petroleum Company

(1000 bpd)

Years 2006/2007 2007/2008 2008/2009 2009/2010 2010/2011

Crude oil

Throughput

877.9 896.7 906.3 862.2 892.2

Above diagram indicates throughput of crude oil by Kuwait National Petroleum Company. The growth

of crude oil throughput increases 2.09% in 2007-08 as compare to 2006-07, in 2008-09 increases 1.05%

as compared to previous years, in 2009-10 decreases 4.86% and in 2010-11 increases 3.50% as

840

850

860

870

880

890

900

910

2006-07 2007-08 2008-09 2009-10 2010-11

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Crude Oil Throughput by KNPC

Crude Oil Throughput

compare to 2009-10. KNPC was selected as the best Oil Refining Company for the year 2011 by HART

publishing firm in the USA which usually gives its award to only big companies.

Fuel Sales by Kuwait National Petroleum Company

(Million Liters)

Product 2006/2007 2007/2008 2008/2009 2009/2010 2010/2011

Euro 4

(Gasoline)

------ ------ ------ 0.092 0.082

Super

Premium

gasoline

1949.8 2076.6 2191.9 2333.0 2479.3

Premium

gasoline

1064.5 1046.4 992.8 956.8 891

Ultra

super

gasoline

22.8 26.4 35.9 46.7 53.5

Total

gasoline

sales

3037.1 3149.4 3220.6 3336.5 3423.9

Kerosene 37.0 45.3 50.0 45 49.1

Gas oil

(LM)

1118.8 1136.7 1286.5 1400.4 1389.7

Total Fuel

oil sales

4192.8 4331.4 4557.2 4781.9 4862.7

Gas oil

(ME & W)

810.4 740.9 1230.4 1937.0 1518.2

Heavy 7906.0 7278.7 8464.0 6688.0 6724.8

fuel sales

Total sale

(ME & W)

8716.4 8019.6 9695.0 8625 8243

Total fuel

sales

12909.3 12351.0 14252.2 13406.9 13105.5

Total Fuel Sales by Kuwait National Petroleum Company

Above diagram indicates total fuel sales by Kuwait National Petroleum Company for five years. The

highest fuel sales of KNPC recorded in the year of 2009-10 is 14252.2 million liters then sales of fuel

sales reduce in the year 2009-10 and 2010-11.

Total Fuel Sales by Indian Oil Corporation Limited

11000

11500

12000

12500

13000

13500

14000

14500

2006-07 2007-08 2008-09 2009-10 2010-11

Mill

ion

Lit

ers

Years

Total Fuel sales by KNPC

Total Fuel sales by KNPC

(Million Tones)

Product 2006/2007 2007/2008 2008/2009 2009/2010 2010/2011

Petroleum

products

53.363 57.548 60.887 60.030 65.314

Gas 1.482 1.737 1.666 1.683 1.638

Petrochemicals 0.305 0.528 0.540 0.652 0.909

Explosive 0.048 0.042 0.051 0.058 0.071

Total domestic 55.198 59.855 63.144 65.423 67.932

Export 3.131 3.331 3.613 4.497 4.988

Total Sales 58.329 68.186 66.757 69.920 72.920

Total Fuel Oil Sales by Indian Oil Corporation Limited

Above diagram indicates total fuel sales by IOCL for five years. Above diagram and data indicates that

total fuel sales considerably increase over the years; it’s good for the organizations. So, export is also

increases.

Total Export by Indian Oil Corporation Limited

0

10

20

30

40

50

60

70

80

2006-07 2007-08 2008-09 2009-10 2010-11

Mill

ion

Ton

es

Years

Total Fuel Sales by IOCL

Total Fuel Sales by IOCL

(Million Tones)

Above diagram and data indicates the total fuel export by IOCL for five years. The export of fuel oil

indicates; there is increase in export of fuel sales by IOCL. And it’s good for the organization.

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1

2

3

4

5

6

2006-07 2007-08 2008-09 2009-10 2010-11

Mill

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Export

Export

Import & Export Policies of Kuwait

The Public Authority of for Industry of state of the Kuwait (PAI) implemented specific guidelines

to verify the conformity of all ‘Regulated products’ that are exported to the Kuwait. These guidelines

are diligently enforced and form the Kuwait Conformity Assurance Scheme (KUCAS). Export to Kuwait

these products require Technical Evaluation Report (TER) and a Technical Inspection Report (TIR) to

clear customs.

The scheme in brief:

All consignments of imported goods that contain regulated products must be accompanied by

a Technical Inspection Report (TIR) and a Technical Evaluation Report (TER).

The Technical Inspection Report and Technical Evaluation Report are required to ensure smooth

custom clearance of shipments in Kuwait.

The Technical Inspection Report confirms that the products comply with the relevant Kuwait

technical regulations and approved international / regional/ national standards. The Technical

Evaluation Report confirms that the goods company Kuwaiti importation regulations.

The authorities in Kuwait may be take random samples from imported consignment to verify

compliance.

The KUCAS programs since it is inspection and our staff are experts on Kuwaiti standards and

requirements and understand the needs of exporters and importers.

One of the world largest networks of the laboratories authorized to test Kuwait requirements.

The Technical Inspection Report (TIR) is recognized and trusted by Public Authority for Industry

(PAI) and by Kuwait customer.

Major export items by Kuwait

Oil And Refined Products

Fertilizers

Hydrocarbons (90% of total exports)

Major imports items by Kuwait

Food

Construction Materials

Vehicles And Parts

Clothing

Tariffs Policy

Kuwait does not implement any customs duties on food & agricultural items or essential consumer

goods or on imports of some machinery & most spare parts and all raw materials. The General

Administration of Customs collects a 5 percent general tariff on most imports & which includes the cost

& insurance and freight value of the goods. The Ministry of Commerce and Industry may impose higher

protective tariffs up to around 25 percent on imports that compete with goods manufactured in

smaller local industries.

Standards

Kuwait maintains high restrictive standards which hinder the marketing of the U.S. exports. For

example her lf life requirements for processed foods are far lower than necessary to preserve freshness

in Kuwait than these are abroad. There local merchants tend to prefer products from suppliers closer

to Kuwait as these products are susceptible to longer her lf life requirement.

Export subsidies Policies

Kuwait does not directly subsidize any of its exports, which consist almost exclusively of crude oil,

petroleum products, and fertilizer. Kuwait imports almost 98 percent of the country's food products.

Some local vegetables are grown by farmers, and are subsidized by the government; some of these

vegetables are sold to nearby countries. However, the amounts grown and sold are not significant

enough to have any real impact on local or foreign agricultural markets.

Custom Evaluation

For perishable items arriving via air and land or sea customs clearance is prompt and takes about 3hrs.

The complete clearance the importer presents its import license and quality test certificate Customs

evaluation of duty on the imported goods is usually based on the value on the commercial invoice the

customs officials believe the declared value is not realistic they may make their own assessment.

Import Licenses Policies in Kuwait

Importers must obtain an annual import license from the Ministry of Commerce and Industry. The

license authorize is the import of any amount of goods from any country on a multi-entry basic during

it is one year. To obtain the license an importing company must fulfill the following requirements:

It must register in the Commercial Register in the Ministry of Commerce and Industry and with the Kuwait Chamber of Commerce and Industry.

The Kuwait share holding in capital of the company must be at least 51%.

A special import license is the required to import certain kinds of goods such as firearms, explosives,

drugs and wild animals.

Import Documentation

For Imports to Kuwait require three certified and legalized copies of the commercial invoice three

copies of the bill of lading and certificate of origin.

The certificate of origin should

The certificate of origin should be duly certified by a U.S. Chamber of Commerce or the Nation

U.S.-Arab Chamber of Commerce. Legalization is done by the Kuwait Consulate in New York City

or by the Kuwait Embassy in Washington and D.C.

Contain of the full name of the manufacturing plant or producer as well as the full name of the

freight forwarder.

Show the means of transportation.

Indicate the country of origin.

Invoices and documents are available to the importer before the arrival of goods in Kuwait as

goods cannot be cleared through customs without these documents.

Export Documentation

Detailed description of the goods

Unit as well as total prices

Net and gross weight (metric)

Type of packing

Full name and address of manufacturer and exporter

Trademarks and numbers of the goods in the manifest

Means of transportation, the shipper's port and country of origin

Certification of the invoices by authorized organization

Import Duty

On April 1, 2003, the National Assembly approved adoption of the GCC Unified Customs Law

(UCL). The UCL imposes a five percent ad valorem duty on all food products imported from non GCC

country. The law will be implemented effective with publication in the Kuwait government Official

Gazette expected to occur before year end. Until then no of the customs duty is imposed on food or

beverage products. Tobacco products are assessed a 100 percent customs duty.

All other imports are subject to 5% general tariff. The flat rate is applied to the cost & insurance and

freight (c.i.f.) value of imported goods. In cases where imports compete with goods that are locally

manufactured by infant industries the Ministry of Commerce and Industry may impose protective

tariffs of up to 15%. In such cases tariff reviews and determinations are conducted on a case by case

basis.

July 1, 1997, the Council of Ministers increased the customs duty on cigarettes and tobacco from 70

percent to 100. An Amiri Decree (2/2002) was issued recently to set taxes on all imported cigarettes

and tobacco products by 100 percent or to impose US $26 customs on every 1000 cigarettes.

Ministerial order was issued on June 11 2002 and directed to the Director General of customs to

implement this law. Gulf Cooperation Council (GCC) countries are pondering another increase of

cigarette and tobacco tariff.

Standards

Department of Standards and Meteorology at the Public Authority for Industry has developed some

300 Kuwait standards these are currently in force. These have been based on combination of American

& British & German and other national standards modified to suit Kuwait.

In addition Kuwait has adopted a number of import regulations that conform to Gulf Cooperation

Council (GCC) standards.

Most importantly

1.) Instruction manuals for imported durable goods must be translated into Arabic; and

2.) Consumer durable goods including but not restricted to large appliances must be able to operate

without a transformer on Kuwait's 240 volt and 50 hertz power transmission system.

Taxation

Kuwait there is personal income taxes & property & gift or inheritance taxes. The only tax paid by the

Kuwait shareholding companies is a 20% levy for the Kuwait Fund for the Advancement of Science.

Corporate income tax is levied on the net income of foreign firms.

The Liability to Corporate Income Tax Corporate income tax is governed by Law # 3 of 1955 as

supplemented by directives issued by the Director of Income Taxes i.e. the Minister of the Finance from

time to time. The fill of the tax declaration and accounts the assessment of liabilities and the payment

of taxes are administered by the Tax Department in the Ministry of Finance. All tax declaration,

supporting, schedule, financial statement and correspondence must be in Arabic.

All foreign corporate bodies carrying on a trade or business in Kuwait are liable to income tax with the

exception of companies incorporated in the GCC that are wholly owned by the GCC citizens. The

foreign corporate bodies mean any business entity formed under the laws of any state which has legal

existence separate from that of it is owners. The terms include foreign partnerships. Where foreign

firm operates through local service agent it is taxed on it is share of the company profits.

Taxable income includes net profit whether distributed or not and amounts receivable on account of

interest & royalties & technical services and management fees. Whether actually paid or not. Where

the foreign firm is a shareholder in a local company the foreign entity bears the tax and the Kuwait

Company has not liability. That is not withholding tax on dividend interest payment and royaltie. Net

taxable income is computed on the basis of the net profit disclosed in audited financial statements as

adjusted for tax purposes. Where the taxpayer is a shareholder in local company the foreign element in

total adjusted profits is isolated.

Tax Payment

Tax must be paid in Kuwait Dinar by certified chequre in four equal installments on the 15th day of the

4th, 6th, 9th and 12th, months.

Following are the end of the tax period.

The tax is payable in single lump sum where payments are delayed and also where an

extension of 75 days has been allowed for the filling of the audited accounts. The penalty for

the tardiness in the filling declarations or paying by the due date is a fine of 1% of the tax

payable for every 30 days of delay.

Tax clearance Certificate

The final payment due to a foreign contractor which must not be less than 5% of the total contract

value must be retained by all ministries public authorities and private companies operating locally until

the contractors has produced tax clearance certificate from the Ministry of Finance confirming that all

tax liabilities have been settled.

All ministries public authorities and private companies with whom they are doing business as

contractors subcontractors or in any other form together with a copy of the contracts to the Tax

Department. When assessing liability tax the Director of Taxes may disallow payments to

subcontractors which have not been reported.

Import and Export Policy of India

Import Policy

The liberalization of the Indian economy started with the external sector. The Rupees was devalued in

two stages in July1991. This was immediately followed by abolition of direct export subsidies. Import

licensing was abolished for many items including capital goods. The new type of the import license

called Exim Scrip was introduced. An exim Scrip was available against export of the goods and it was

freely transferable in the market. The license was valid for import of broad range of goods. So

importers wanted Exim Scrib but only exporters could earn them. The premium on sale of Exim Scrip

was an incentive for the exporters.

The liberalization process called for abolition of controls. The 1992-1997 Export and Import Policy

historic changes. It was the 1st five year Policy. It was coterminous with the 8th Five Year Plan. The

Policy recognized that trade can flourish only in regime of substantial freedom. It reinforced the

direction set by the trade policy reforms initiated in July 1991. The Policy complemented the changes in

industrial and fiscal policies.

The fundamental feature of the new Policy was substantially eliminated licensing quantitative

restrictions and other regulatory and discretionary controls. All goods were restricted for imports

unless specifically permitted for imports. The new Policy ordained that all goods could be freely

imported unless specifically restricted through a Negative List of Imports.

List of Restricted Items for Import

Prohibited Items by Kuwait

Illegal or Unlicensed drugs

Guns, explosive and ammunition

Plant and plant products

Pork, meat and meat products

Pets – unless to authorized to do so

Birds – unless from certain countries

Fresh vegetables

Pornographic material

The Policy, however, did not allow import of second hand goods, except machinery for select

sectors. The machinery had to be not more than 7 years old and have a residual life of at least

five years. Some other sundry restrictions and relaxations of no significant impact were also

maintained.

The Policy announced that certain categories of exports and exporters would be eligible to

receive Special Import Licenses (SIL). These included deemed exports, Export Houses, Star

Trading Houses and manufacturers who acquire ISO 9000 (series)or BIS 14000 (series)

certification of quality.

The Special Import Licenses were valid for import of specified items in the Negative List of

Imports i.e. items that could not be imported freely. These licenses were freely transferable.

So, the exporters who earned these licenses could earn a premium by selling the licenses to

those who wanted to import the items that could not be otherwise imported without a license.

The Export & Import Items contain the detailed item wise in the following

format

Exim Code

(1)

Item Description

(2)

Policy

(3)

Conditions relating

to the Policy

(4)

050710.10 Ivory Prohibited Not permitted for

Import 100190.20 Wheat (not seed)

for human consumption

State

Trading

Import allowed through Food

Corporation of India subject to Part 2.11 of Exim Policy

152110.01 Edible wax for waxing Fresh

fruits and

vegetables

Free

251511.00 Marble and travertine

Crude or roughly trimmed

Restricted

261210.00 Uranium ores and

Concentrates

Free Import subject to Section 14 (1)(ii) of Atomic Energy Act 1962 and Rules

made thereunder

380810.13 Calcium Cyanide Free If registered and not prohibited for import under

Insecticides Act,

85291009.20 Antenna for communication jamming static/ mobile/ non portable

Restricted Department of Central govern- ment may be

permitted to

import without a license hhoe licence.However, import by any other category of importers

is prohibited

The ITC (HS) has certain General Notes at the beginning. These Notes cover imports that do not

involve any foreign exchange import of free gifts and imports of beef edible oils and processed

food products & packaged products & goods subject to quality standards & meat and poultry

products & primary agricultural products & textile and textile articles. Imports of the items are

subject to certain additional conditions.

Export Policy

The Govt. Policy, essentially, has been to allow the export of manufactured products quite freely but

restrict export of goods of plant origin & animal origin and mineral origin. The restrictions are essential

in public interest. For example, free exports of agricultural produce might create scarcity within the

country something no Govt wants.

There are other restrictions too which, because of international commitments under multilateral and

bilateral treaties, are to be respected. For example, export of textiles to developed countries was

restricted through quotas under the erstwhile Multi Fiber Agreement (MFA) which no longer exists.

Export of ozone depleting substances is restricted under the Montreal Protocol. Exports of hazardous

substances are subject to restrictions under the Basel Convention.

Just like the Policy for imports the 1992-97 Exim Policy freely permitted exports of all goods except

those covered by the Negative List of Exports.

The Negative List of Exports covered by Chapter XVI of the Policy consisted of six Parts as under:

Para

No.

Part

No.

Title

Types of Goods –

Illustrative No. of

Entrie

s

158 I Prohibited

Goods

Wild life, exotic birds, wild flora, beef, human

skeletons, tallow, fat, oils of animal origin etc., wood and wood products etc.,

6

159 II Exports Permitted subject to

licensing

Cattle, Camel, Coconut and copra, chloroquin phosphate,

fur of domestic

animals, hides and

skins, industrial

leathers, uranium,

plutonium etc., radium

ores etc., milk, pulses,

rice bran, raw silk,

military stores etc.,

seeds, vegetable oils,

sea weeds, silk worms

etc.

51

160 III Exports permitted

subject to quantitative ceilings

Natural rubber, handicrafts made of

peacock tail feathers, iodised salt, wheat straw, brown sea weeds, sunflower seeds etc.

11

161 IV Exports permitted

through Canalising Agencies

Petroleum Products, Mineral ores and

concentrates, mica waste, niger seeds, onions, powder milk etc.

10

Table A specifies the Restriction

Code

Item Description

Policy Nature of

Restrictio n

0001 All forms of wild animals including their parts and products

Prohibited Not permitted

to be

0002 Exports of certain textile products of cotton, wool and man-made fibres and blends, which are subject to MOUs

/Agreement between India or Canada or EEC or Norway or USA as the case may be

Free Subject to conditions notified by the Governme nt from time to time

0005 Special Chemicals, Organisms, Materials, Equipments and Technologies as specified in Schedule-2 to Appendix – 3 of this book

Prohibited/ Restricted

/Free

Exports governed as per the conditions indicated

In

Appendix -

3 0008 Any other item whose exports are

regulated by a Public Notice issued by the DGFT

Restricted Exports permitted under a license

Table B specifies the Restriction

Code Item

Description

Policy Nature of the Restriction

0102 Camel Restricted Exports permitted under a

license

0301 Marine

Products

Free Subject to pre-shipment

quality inspection as may be

specified by the

Government through a

notification

27091 Crude Oil State Trading

Enterprises Exports through MMTC Ltd.

License Policy of India for Import and Export

The major of the goods are freely importable the Exim Policy (2007) of India prohibits import of certain

categories of the products as well as conditional import of the certain items. In such situation it is

become important for the importer to have an import license issued by the issuing authorities of

Government of India.

Importer Exporter Code (IEC) Number is essential for exporter or importer. Certain categories like

imports for personal use border imports up to specific threshold level and those by Central or State

Government departments are exempted from obtaining IEC Number.

IEC the number is allotted by the licensing authority that has jurisdiction over the importer or exporter

depending on where his Head Office or Registered Office is located. The importer has to be giving in his

application details of all the branches/divisions/factories in India or abroad and also the details of all

the directors/partners/proprietor. Only one IEC number is allotted one legal entity.

Import License Issuing Authority

In India Import License is issued by the Director General of the Foreign Trade. The DGFT Delhi office is

situated in Udyog Bhawan New Delhi 110011.

Validity of Import License

Import Licenses are valid for 24 months for the capital goods and 18 months for raw materials

components & consumable and spares with the license term renewable.

Sample of Import license

The typical sample of the import license consists of two copies.

1. Foreign Exchange Control Copy: To be utilized for effecting remittance to foreign seller

or for opening letter of credit.

2. Customs Copy: To be utilized for presenting to Customs authority enabling them to clear

goods. The absence of custom copy import will be declared as an unauthorized import

liable for confiscation and penalty.

Taxation Policy in India

TAXATION is a compulsory contribution imposed by a public authority. It is the main source of income

for public authorities.

Objective of Tax Policy:

Objective of Tax Policy Tax policy was designed to perform two basic functions: Revenue Functions and

Regulatory Functions Reducing disparities in income and wealth distribution and Restraining consumer

demand with a view to containing inflation Promoting savings and investment Shifting investment from

non essential non priority to priority sectors. Pursuance of the goals progressive tax rates was imposed

excise duties were enhanced more on called luxury goods Tax holidays were granted for new

investment especially in backward areas.

The Indian government introduced liberal economic policy from 1991 which brought about a massive

change in the Tax System in India like: The rationalization of the tax rate Simplification of the tax laws &

Easy tax payment & Reduction in customs and excise duties lowering corporate tax & Widening of the

tax base and Modulating the tax administration.

Tax System in India is 3 tier system

Tax System in India is a 3 tier system NATIONAL TAXES Collected by the central government like

(income, wealth, corporate tax, custom duties).

STATE TAXES On goods and services manufactured and produces in the state on land and real estate

transactions (stamp duties).

LOCAL TAXES by ULB/ Municipalities / Municipal Corporate/Development Authorities (vacant land

taxes/ Sanitation/ Water and Property Tax).

The main taxes levied by Central Government

The union government levies certain taxes as per the rules of the Indian constitution.

They are Direct Taxes on Corporate Income Capital Gains Tax Personal Income Tax Indirect Taxes Excise

Duty Customs Duty Service Tax Securities Transaction Tax.

The main taxes levied by state governments

The principal taxes levied by State Governments as per the rules of the Indian constitution are:

Sales Tax on intra State sale of the goods or Value Added Tax Stamp Duty on transfer of assets State

Excise duty on manufacture of alcohol Agriculture income tax Duty on Entertainment Tax on

Professions.

The taxes levied by local bodies

Tax on property tax on market Octroi Utility tax Octroi is a tax levied on the entry of goods into a

municipality or any other specified jurisdiction for use consumption or sales. Octroi is a levied the time

when the goods enter the municipal limits where the goods are to be ultimately sold & used or

consumed.

The following taxes are levied by Union Government:

Income taxes - agricultural earnings are not included in this.

Terminal taxes applicable for the passengers and goods that are carried by trains & airplanes and

cars.

Customs duties such as export duties.

Taxes on railway freight and fares.

Excise duties on tobacco and other goods produced made in India. Alcohol used for the human

consumption and narcotic products such as Indian hemp and opium are exempted from this group.

Taxes on buying and selling of the newspapers as well as the advertisements that appears on

them.

Corporation tax.

Taxes on purchase and sale of the goods with the exception of the newspapers. These transactions

have taken place during interstate commerce or trade.

Taxes on capital value of the various assets. This does not include agricultural land.

Taxes on goods are consignments being transferred during interstate commerce or trade.

Estate duty. However agricultural land is not part of this.

Duty for the succession of property. Agricultural land is not included in this.

The state governments are responsible for the collecting the taxes mentioned

below

Land revenue - this includes the collection and assessment of revenue survey for purposes related

to revenue and rights records & maintaining land records and alienating the revenues.

Taxes on advertisements - ads appearing on newspapers & television and radio are not included on

this.

Taxes on agricultural earnings.

Taxes on vehicles that can use on roads.

Duties on succession of the agricultural income.

Taxes on boats and animals.

Estate duty on agricultural earnings.

Toll taxes.

Building and land taxes.

Professional, calling, trade and employment taxes

Mineral rights taxes.

Capitation taxes.

Excise duties on alcohol for the human consumption and narcotic products such as Indian hemp

and opium.

Luxury taxes such as entertainment & betting & amusement and gambling taxes.

Taxes on the goods that are being entered in local areas for purposes of consumption & sale and

use.

Stamp duties.

Taxes on sale and consumption of the electricity.

Taxes are passengers and goods that are carried on inland waterways or roads.

Taxes are purchase and sale of the goods with the exception of newspapers.

CH- 4 TRADE BARRIERS OF KUWAIT AND INDIA

4.1 Trade barriers of Kuwait

All goods imported into Kuwait must be clearly marked with the country of origin. It is

foodstuffs should carry an Arabic language label stating the name of the manufacturer & the

brand name of the food product & the name of the food product & it is composition

(ingredients and additives) & net and gross weight in metric units & country of origin and its

production and expiration dates. All fats and oils used as ingredients must be specifically

identified on the label.

More import and export documentation.

Products imported into Kuwait that does not comply with established standards and regulations

may be allowed a three-month temporary entry against storage fees. The exporter fails to

correct the fault the goods will either be exported at the exporter's expense or will be

auctioned.

Goods coming into Kuwait for transshipment may be allowed temporary entry. The goods being

imported for trade shows or exhibitions can be entered via temporary import bond. Temporary

import bonds can be very expensive to secure and many exhibitors have found it less costly to

simply pay the five percent tariff even for the goods that will be exported.

Kuwait does not directly the subsidize any of it is exports which consist almost exclusively of

crude oil & petroleum products and fertilizer.

Foreign contractors need a letter of clearance from the Director of Income Taxes Ministry of

Finance to be able to export equipment from Kuwait for use outside Kuwait.

Kuwait prohibits the importation of alcohol and pork products and requires a special import

license for firearms. Used medical equipment and automobiles over 5 years old cannot be

imported. Also prohibited are any books & periodicals or movies that insult religion and public

morals and all materials that promote political ideology.

4.2 Trade barriers of India

An important constraint in the Indo-Kuwaiti trade and economic relation is the lack of the

adequate publicity of nature and quality of Indian goods in respect of highly sophisticated

machinery and mechanical appliances. India is in a position to supply textile machinery & sugar

plants & agricultural appliances & automobiles parts and a host of other goods involving

modern technology. These Kuwait buyers are generally ignorant about the progress and

achievements of India in the field of technological developments.

The Kuwaiti market is a highly competitive market. India will have to achieve a major

breakthrough in respect of the quality of its manufactured goods to enable it to compete with

the developed countries in the Kuwaiti market. It would be wrong to assume that India does not

possess the necessary potentials to do so.

It has been observed that timely supply of imports orders from Kuwaiti importers is not

implemented as per schedule. Very often it leads to unpleasant complaints from Kuwaiti

importers, who insist on timely delivery of the goods ordered by them. The main reason for the

delay is lack of the adequate shipping facility. These were not adequate transport facilities and

Indian exporters find difficult to maintain their delivery schedule in the Kuwaiti market.

India has been long time under the influence of socialist pattern of the economy. Due to the

pattern the negative impacts have been falling on the standard of products and services. The

quality and standard are the major hurdles in enhancing the export to Kuwait. China, Korea,

Japan and Singapore are now offering low priced and standard goods to Gulf Countries. For

India these Gulf countries have a very competitive market.

Late delivery of goods is also another drawback of Indian exports to Kuwait. Qualities as well as

services are now need special attention in the modern world market scenario. Not only Kuwait

but in other countries also the late delivery of goods have been major problem for the India.

Setting up pricing is an also not up to the international mark. The prices set by India exporters

are not competitive. They are too high as compared to the prices set by other exporters for the

same products. Small scale Industries covers about40% of the total production but the quality

and design of the products of these industries are not up to the mark.

Lack of marketing approach in Kuwait is another drawback of India’s exporters. The importers of

Kuwait are not well aware about the products of India.

CH-5 Potential for Import and export with India

Indo-Kuwait relations have always an important trade dimension. The overall trend of the our trade

with the Kuwait has been positive. India & Kuwait trade was US$ 17.56 billion in 2011-12 of which non-

oil trade accounted for approximately US$ 1.9 billion (approx) while petroleum exports from Kuwait to

India were approximately US$ 15.67 billion. The exports to Kuwait during 2010-11 and 2011-12 were

over US$ 1 billion which in the past had been in the range of $ 700-800. India has consistently been

among the top 10 trading partners of the Kuwait. The bilateral trade during 2007-08 to 2011-12 was as

follows:

India – Kuwait Trade between 2007-08 and 2011-12

(In US$ Million)

2007/08 2008/09 2009/10 2010/11 2011/12

Indian Exports to Kuwait 681.54 797.50 782.45 1856.01* 1,181.41

Indian Imports from

Kuwait 7,704.25 9593.74 8,249.49 10,313.64 16,375.37

Total 8,385.79 10,391.24 9,031.94 12,169.65 17,556.78

(In Crorers)

2007/08 2008/09 2009/10 2010/11 2011/12

(April – Sept)

Indian Exports

to Kuwait 2,744.90 3,628.40 3,710.37 8,915.17 2,658.78

Indian Imports

from Kuwait 30,959.93 43,199.44 38,987.99 46,976.02 28,414.00

Total 33,704.83 46,827.85 42,698.36 55,891.20 31,072.78

CH-6 Business Opportunity in Future

There are many sectors in which Indo-Kuwait trade offer many opportunities and better

Prospects. Following are the major prospects of this study:

Indian exporters feel that there is a lot to offer to Kuwaiti market because of it is higher per

capita income. For the proper marketing research has to be performed.

Kuwait has population of 3.6 million comprising of 1.12 million Kuwait and 2.48million non-

Kuwait. The Indian population in Kuwait which is an approximately 0.72 million is the highest

among non-Kuwaitis population. Therefore there is a vast demand of Indian products by Indian

people in Kuwait and that market has to be explored properly. In Kuwait there is a high demand

of Indian products. There are many regional products which were not easily available in India

(obsolete) but were retailed in the Kuwait market. Noorani oil and Pyrohhea-maar manjan were

selling in Bakala.

There are also better prospects of Indian products in Retail and Mall Culture. As Indian products

are cost-effective against their Competitors from developed countries. Merchandisers from

Super-markets or Hyper-markets generally prefer buying Indian products due to its cost

advantage and similar needs of consumers. Lulu Hyper-market has a great presence in Kuwait

and middle- Eastern countries. Max India formerly known as Landmark has more than 20 retail

outlets in Middle East countries selling Indian product. The major portion of the Retail sector

has been discussed.

Indian exporters have an edge over Western exporters in terms of price but they have

disadvantage in terms of the quality. The have been to maintain better quality so that Indian

products will have a comparative advantage of both cost and quality over western products in

Kuwaiti products.

These are many international retail outlets which are opened in India and have better prospects

like X-cite & Next and Jumbo electronics.

The Indian exporters are location advantage over their western counterparts and this will be

helpful in developing South-South Cooperation.

India’s experience achievements in some specific fields of economic development can provide a

sound basis for bilateral cooperation between the two country. It is hard reality the Kuwait will

be a major oil exporting country yet in the development of some other sectors of its economy

Indo-Kuwait cooperation will be beneficial to both of them. It is a long term process and the

ultimate goal should be sustained economic growth, especially in the industrial sector to

provide better employment opportunities for the growing population and self-reliance free

from the dominance of developed countries. India new economic policy has given new push to

Indian economy. The free trade foreign investment and participation of NRI’s are contributing a

lot to Indian economy.

Developments in the areas of information and communication technology (ICT) are growing

rapid. India has been already moved in the advance stage in the ICT components particularly in

the software development. The demand for ICT is likely to increase in the future as well. These

have been one of the prominent service trades having potential of high value addition. Kuwait

has well educated and trained manpower in this sector. It is an Information Technology Park

could also be established to facilitate and promote such activities. The couple of joint venture in

this sector has already been emerged. In view of the comparative cheap labor and the growing

demand for information technology the private sector also obtains a good opportunity to invest

in this service trade.

The number of joint ventures is increasing in India as a consequence of the policy change in the

pattern of investment and ownership of the project. In this respect it has been remarkably

noted that one of the important incentives for foreign direct investment is free access to the

large Indian market. By virtue of its proximity and the Trade Treaty with India close economic

linkages between the two countries have manifested themselves & inter-alia through Kuwaiti

investment and joint ventures in India.

The Economic Services Centre (ESEC) provides a package of non-banking services and helps

interested parties to invest in industrial ventures in the country. The centre provides assistance

in carrying out techno-economic feasibility studies. It also conducts management training

programs.

Indian Exporters are great prospects in the field of Agricultural products, Food products, Oil

Sector, Telecom Sector, Aviation Sector, Retail Sector, Pharmaceutical Sector, Agricultural

Sector, Investment Sector, Banking Sector, Insurance Sector, Shipping sector, Technology and

Engineering Sector, Software Sector, Apparel Sector, Gems and Jewellery Sector, Infrastructure

Development Sector and Healthcare Products Sector.

CH -7 Conclusion and Suggestion

7.1 Suggestions

India need to take the following measures improve it is bilateral ties with Kuwait and

overcome the constraints to it is trade relations with Kuwait

The need of Kuwait is Agricultural products and technical knowhow and the need of India oil.

The proper export and import policy and mutual understanding can solve many problems in the single

sitting. Keeping in view the mutual goodwill and friendly relations between the two countries there is

need to identify the specific areas of mutual cooperation in the context of new economic order of the

world under light of new economic reforms of both the countries.

Since there are many similarities and dissimilarities in the respective economies of India and

Kuwait the nature and extent of trade and economic cooperation should be based on the long term

strategy as to achieve the desired objectives in conformity with the national interests of the two

countries. It is a well planned long-term strategy there is need for reorientation of the existing policy

formulations and sound mechanism to implement them. The mechanism should be multistage set up

involving the official and non-official agencies like trade organizations financial institutions and

shipping corporations.

The scope for promotion of exports of the traditional goods from India to Kuwait being limited

India should explore avenues of export promotion of manufactured goods are involving modern

technology and skill. The India also has the capability to reap the advantage of economies of scale in

the manufacture of capital-intensive manufactures which have sufficient export potentials to Kuwait.

There is a need of effective arrangements for publicity of various categories of Indian goods in

the Kuwait market and vice versa. The Kuwait people and large have very little knowledge of the nature

and quality of goods produced in India. This applies not only to the consumers but also to those

involved in import business. Besides regular visits of trade delegation trade fairs should be organized

on a reciprocal basis.

Another aspect that needs special attention is the quality of Indian goods in the highly

competitive Kuwait market. It is a major oil exporting country the Kuwait market is open to countries

like USA & Japan & Germany & France & South Korea and East European countries which offer tough

competition to India in respect of the quality and price of the products. The India needs innovation in

the quality and price structure of some specific commodities like Engineering goods & Electrical

Appliances and Machinery equipments. The policy measures adopted by India in this regard have not

proved so much effective in promoting its exports to Kuwait.

So far the policy measures of India to promote exports are commodity wise. These will be more

effective if they are commodity wise as well as country wise. Countries should be categorized into

different groups for intensive exports promotion.

In the field of industrial development in the Kuwait the most viable means to promote industrial

growth along with trade lies in coordinated measures for technical cooperation and joint collaboration

in the implementation of the industrial projects. This calls for a long-term framework to implement

projects of mutual benefit especially in Kuwait. These joint ventures can boost and intensify the export

promotion strategy of India through the supply of plant and machinery technical knowhow for several

industrial projects to set up in Kuwait to make its economy self-reliant.

7.2 Conclusion

The concept of the South cooperation and new economic order has assumed new dimensions not only

in the field of trade but in other sectors like transport and communication or industry and agricultural

development which can be shared by the developing countries particularly India and Kuwait.

India’s experience and achievement sin some specific fields of economic development can

provide a sound basis for bilateral cooperation between two countries. It is hard reality that

Kuwait will be major oil exporting country yet in the development of some other sectors of it is

economy Indo-Kuwait cooperation will be beneficial to both of them.

The ultimate goal should be sustained economic growth in the industrial sector to provide

better employment opportunities for the growing population and self-reliance free from the

dominance of developed countries. India new economic policy has given new push to Indian

economy. The free trade & foreign investment and participation of NRI’s are contributing a lot

to the Indian economy.

As regards to the nature and the extent of Indo-Kuwait trade after economic reforms in India it

has achieved new dimensions irrespective of the fact that it constitutes only small percentage

of their respective total exports and imports. Still it is significant that the volume of the Indo-

Kuwait trade. exports and imports have increased substantially during the last two decades and

there exist greater potentialities for it in future.

Kuwait has achieved good track record of economic performance and has been able to create

underlying conditions of human development & governance and institutions favorable for the

unlocking economic diversification and growth. It is a diversification of the economy towards non-oil

and gas industries is a challenging task that would require cluster based collaborated and liberalized

approach for development between government & industries and foreign investors

Over the last 40 years Kuwait has managed to develop an efficient logistics, financial,

educational and telecommunication infrastructure that supported the evolution of the petrochemical

cluster.

Kuwait is relatively a liberal market supported by progressive government policies, and the

petrochemical cluster is specifically supported by the oil and gas industry which is the main driver for

Kuwaiti economy.

Kuwait is growing up by exporting their Oil and non-Oil and Petrochemical product. Utilizing

their natural resources and they are providing apparels and cloths to others and helping to develop or

to grow their country economy.

Bibliography

EQUATE:

www.equate.com

Petrochemical Industries Company:

http://www.pic.com.kw

Qurain Petrochemical IndustriesCompany:

http://www.qpic-kw.com

Responsible Care®:

www.responsiblecare.org

Country profile: Kuwait. BBC News. 16 December 2009.

Economic Times, New Delhi, 15 August 2005

Economic Times, New Delhi, 15 August 2005/ Saudi, Kuwait want India to give S pore

treatment By HEMA RAMAKRISHNAN

Economic Survey 2008-09

Economic Survey 2009-10

Emerging Markets Economic Briefings. Oxfordbusinessgroup.com.

http://www.oxfordbusinessgroup.com/

Farrokh, Kaveh. Shadows in the desert: Ancient Persia at war. Osprey Publishing, 2007.

Human Development Report 2009: Kuwait. The United Nations

Karayil Sajitha Beevi (2007) Does Migration Matter in Trade? A Study of India’s

Exports to the GCC Countries and South Asia Economic Journal, Vol. 8, No. 1, pp. 1-20.

Kuwait Oil and Gas Report 2010

Kuwait (06/07). State.gov. 4 May 2010. http://www.state.gov/r/pa/ei/bgn/35876.htm.

Kuwait. Ehistory.osu.edu. http://ehistory.osu.edu/middleeast/CountryView

Kuwait Oil Fires, Persian Gulf War - further reading. Espionageinfo.com.

http://www.espionageinfo.com/Ke-Lo/Kuwait-Oil-Fires-Persian-Gulf-War.html.

Kuwait expatriate workforce decreases. www.Saudigazette.com.sa.

Kuwait posts record 72 billion dollar income. AFP. 15 April 2008.

http://afp.google.com/article/ALeqM5hb3ISwr0QiNj-lErPVrAAiHKphAg.

Middle East Economic Digest 2007

Oil & Gas Journal, January, 2007

Pike, John. U.S. Designates Kuwait a Major Non-NATO Ally of U.S. Globalsecurity.org.

http://www.globalsecurity.org/military/library/news/2004/01/mil-040115-usia03.htm.

Rao, P.Subba, International Business, 2nd Edition, 2009, Himalaya Publishing House.

Samir Ranjan Pradhan(2009), India’s Export Potential to the Gulf Cooperation Council

U.S. Census Bureau, Foreign Trade Division, Data Dissemination Branch, Washington,

D.C. 20233

www.businessmonitor.com

www.pai.gov.kw

A

GLOBAL / COUNTRY STUDY AND REPORT ON

“KUWAIT”

Submitted to

(INDU MANAGEMENT INSTITUTE )

IN PARTIAL FULFILLMENT OF THE REQUIREMENT OF THE AWARD FOR

THE DEGREE OF

MASTER OF BUSINESS ADMINISTRATION

UNDER THE GUIDANCE OF

FACULTY GIDE:

KINJAL PANDIYA

Asst. Prof. MBA Department

Submitted by

Name Enrollment No

ARUN R SOLANKI 2068

UMESH A GOHIL 2069

NISHA A PARMAR 2070

VIKRAM P GOHIL 2071

HITENDRA R JADAV 2072

GAJJAR NIKUNJ 2073

[BATCH : 2012-2013]

MBA SEMESTER III/ IV

INDU MANAGEMENT INSTITUTE

AFFILIATED TO GUJARAT TECHNOLOGICAL UNIVERSITY,AHMADABAD

Students’ Declaration

We, ARUN R SOLANKI, UMESH A GOHIL, NISHA A PARMAR ,

VIKRAM P GOHIL, HITENDRA R JADAV ,GAJJAR NIKUNJ , hereby declare that the report for

Global country study Report entitled “EQUATE Petrochemical company” in Kuwait is

a result of our own and our indebtedness to other work Publication, reference , if and,

have been duly acknowledged.

Place : Baroda Signature for all group member

Date :

Institute’s Certificate

“Certified that this Global / Country Study And Report Titled“EQUATE Petrochemical

company” is the bonafide work of Mr./Miss : -ARUN R SOLANKI, UMESH A GOHIL, NISHA A

PARMAR , VIKRAM P GOHIL, HITENDRA R JADAV, GAJJAR NIKUNJ , who carried our the

research under my supervision. I also certify future, that to the best of my knowledge

the work reported herein does not form part of any other project report or

dissertation on the basis of which a degree or award was conferred on an earlier

occasion on this or any another candidate.

Signature of Director Signature of the Faculty Guide

(Dr.Manish Vyas) (KinjalPandiya )

PREFACE

TheGlobal Country Report is an integral part of the MBA program and it is designed in such a way that

student can give maximum knowledge and can get exposure to the global world in minimum time.

With the respect and pleasure, we have privilege to submit our report to the kind hands of eminent

examination of the Indu Management Institute. MBA is a professional course, to be an MBA student

is a matter of pride because through MBA each student is prepared to hold the post of manager very

confidently and we are in field which helps us to develop from normal human being into a disciplined

and dedicated professional.

We have heard that famous saying “God helps those who helps them salves“ and “Experience is the

best teacher “the global country report on “KUWAIT” has given us sufficient knowledge to fill the

gap between the theoretical and practical knowledge.

ACKNOWLEDGEMENT

Every work that one completes successfully stands on the constant encouragement, good will and

support of the people around. I, hereby, avail this opportunity to express my heartfelt gratitude to a

number of people who extended their valuable time, full support in developing this project.

We convey our heartfelt gratitude to our college “Indu Management Institute” under Gujarat

Technological University for giving us this precious opportunity to work for the real-time project.

We also forward our special thanks faculty member & project guide Miss.KINJAL PANDIYA

fromIndu Management Institute for guiding us in this report. The valuable suggestion of the faculty

member during the course of our Project work gives me the inspiration to achieve our goal. The shape

that project has been taken is due to judicious guideline, encouragement & help of our guide.

We own the success of the project to my Project Guide, Miss.KINJAL PANDIYA who wasa

tremendous supporter and an eager teacher, for providing excellent guidance for this project. He is one

of the major sources behind the success of the project.

LIST OF CHAPTER

PART I = ECONOMIC OVERVIEW OF KUWAIT

Sr

No

Chapter Particular Topics Page

No

1 1 Demographic Profile of the country 9-11

2 2 Economic Overview of the country 12

3 3 Overview of industries Trade and Commerce 13-14

4 4 Overview Different Economic sectors of selected

country

15-18

5 5 Overview of Business and Trade at international Level 19-20

6 6 Present Trade Relations and Business Volume of

different products with India /Gujarat

21-23

7 7 PESTEL Analysis OR SWOT Analysis 24

8 8 PESTEL Analysis 25-28

PART II = INDUSTRY / SECTOR / COMPANY SPECIFIC STUDY

Equate Petrochemical Company

Sr

No

Chapter Particular Topics Page

No

2 Introduction of Equate Petrochemical company

Type of Product

29-30

Mission and Vision , Values , Board of Director 31-32

Fact sheet , Achievements , Approach 32-34

Sector and its Role in the economy of Kuwait country 35

Equate Petrochemical Function 36

3 3.1 -Comparison Between Kuwait and India / Gujarat in

petrochemical industry

37-46

3.2- Present Position and trend of Business (import/export)

with India/ Gujarat during last (3 to 5 year)

47-51

4 4.1 – Policies and Norms of Kuwait for Import/Export

including licensing/ Permission , Taxation

52-62

4.2 – Policies and Norms of India for Import / Export to the

Selected country Including licensing / Permission ,

Taxation

63-69

4.3 - Present Trade Barriers for Import/ Export 70-73

5 Potential For Import/ Export in India/ Gujarat Market 74-80

6 Business Opportunities in Future Equate Petrochemical

company

81-84

7 Conclusions and Suggestions

7.1 Conclusions 85-86

7.2 Suggestions 87

I Bibliography 88-89

LIST OF TABLES AND FIGURES

Table No Particular Page No

Part –I – Table and Figures 10- 27

Table - I -1 April 22,1975 and April 21,1980 Censuses 10

Table - I -2 General Economic Indicators 12

Table - I -3 3.1 The Kuwait‟s Top 5 Import Partner 13

3.2 The Kuwait‟s Top 5 Export Partner 14

Table - I -4 Indian Exports/ Imports with Kuwait 23

Table - I -5 Kuwaiti Transport with in infrastructure 26

Table - I -6 Statistic of Kuwaiti communication with in infra 27

Part –II – Table and Figures 29 - 91

Table – II- 1 Kuwait – India Bilateral Trade for five years 47

Figure I A – India – Kuwait Export 48

Figure I B – India – Kuwait % Export Growth 48

Figure I C – India- Kuwait Import 49

Figure I D- India – Kuwait % Import Growth 49

Figure I E - India- Kuwait total Trade 50

Figure I F - India – Kuwait % of total Trade growth 50

Table – II- 2 Type of Licence, Conditions, validity 55

Table – II- 3 Imports Requiring Special Permission 57-58

Table – II- 4 Products Banned from Exportation 2011 59

Table – II- 5 Export Licensing 60

Table – II- 6 Bilateral Trade Between India and Kuwait (US$ million) 75

Table – II- 7 Bilateral Trade Between India and Kuwait (Rs Lakhs) 75

Table – II- 8 Non-oil Trade Between India and Kuwait (US$ Million) 77

Table – II- 9 Non-oil Trade Between India and Kuwait (Rs. Lakhs) 77

Table – II- 10 India‟s Exports to Kuwait 78

Figure II- G Exports to Kuwait 79

Table – II- 11 India‟s Imports form Kuwait 79

Figure II- H Import From Kuwait 80

PART I = ECONOMIC OVERVIEW OF KUWAIT

Chapter 1 - Demographic Profile of Kuwait

Kuwait is a small country to the north east of Saudi Arabia. It is an Arab country located at the

northwestern tip of the Arabian Gulf. Its regional water include nine Island and a seashore that is 290km

long. The country is broadening on north and west by Iraq and on the south by Saudi Arabia and on the

east by Arabia Gulf.

This article is all about the Demographic features of the population of Kuwait, including population

Density, Ethnicity, Education level, Health of the Populace, Economic status, Religious affiliation and

other aspects of the Population.

Approx. 96% of Kuwait‟s population is urbanized ,while 4% are nomadic or semi-nomadic. State of

Kuwait‟s current Population is projected at roughly 3-3.5 million people , counting both locals and

foreigners. Approximately 1million of Kuwait‟s population is local, with 2-2.5million registered as

foreigners/non-locals. It is projected that one in every 3-4 people in Kuwait are Kuwaiti citizenship.

In 2009, more then 580,000 Indian nationals lived in Kuwait making them the single largest expatriate

community. The rest of the foreign population mainly consists of Egyptians , Palestinians, Bangladeshi,

Pakistani, Filipino and Ski Lankan residents other foreigners consist of European and North American

and also Northeast Asian Communities-but these are negligible.

Kuwaitis are predominantly Muslim, though there are a few Christians of atheists. 85% of Kuwait‟s

population is Muslim and the rest belong to other religions (includes Christian, Hindu, Parsi). Literacy

rate of 93 % is, one of the Arab world‟s highest, is due to government support for the education system.

Public school educations free but access is restricted for foreign residents including Kuwait University.

The Government sends qualified students abroad for degrees not offered at Kuwait university.

Kuwait‟s official language is Arabic, though only roughly half of the country speaks language primarily.

Most of foreigners speak languages such as Hindi, Urdu, Filipino, Bengali. Most Kuwaitis are also

bilingual in that they speak to more than one language such as English or Persian Standard of living in

Kuwait is increased. Most of stateless people are Arabs, and count up to 100,000 People.

Table –I- 1 April 22,1975 and April 21,1980 Censuses

RELIGION MEN 1975 (1980) WOMEN 1975 (1980) TOTAL 1975-80

Christians 22,711 (51,354) 22,007 (35,728) 44,718 (87,082)

Muslims 517,808 (702,992) 426,973 (539,716) 944,781 (1,242,708)

Other 3,249 (22,293) 2,089 (5,869) 5,338 (28,162)

Total 543,768 (776,639) 451,069 (581,313) 994,937 (1,357,952)

CIA world Fact book Demographic Statistics

Age Structure: 1) 0-14 Years 25.8%

(Male 348,816 : Female 321,565 )

2) 15-64 Years 72.2% (Male 1,153,433 :

Female 720,392)

3) 65 Year and above 2% (Male 25,443 :

Female 25,979) 201

Gender Ratio

1) at birth 1.047 Male/Female

2) under 15 Years 1.04 Male/ Female

3) 15-64 Years 1.79 Male/ Female

4) 65 Years and over 1.65 Male/ Female

Total Population 1.54 Male/ Female

Population Growth Rate

1.986% (2011 EST)

Birth Rate

2.11 Deaths/1,000 Population (2011 EST)

Death Rate

2.11 Deaths/1000 Population (2011 EST)

Net Migration Rate

0.65 Migrant‟s/1,000Population(2011 EST)

Infant Mortality Rate

8.07Deaths/1,000 Live Births (2011 EST)

Life Expectancy at birth

Total population : 77.09 Years Male 75.95

Years / Female 78.3 Years (2011)

Total Fertility Rate

2.64 Children born/woman (2011 EST)

Nationality Noun: Kuwaiti

Adjective : Kuwaiti

Ethnic Groups (By Nationality)

Kuwaiti 45%,Other Arab Nationals 35%,

South Asian 9%, Iranian 4%, Other 7%

Religions

Muslim 85% (Sunni 70%, Shia 30%)

Other 15%

Literacy

Definition : age 15 and over can read and

write

Total Population : 93.3%

Capital : Kuwait , Area: 18 Km2

Total Population : 2.795

Annual Growth rate: 2.00%

Density :157.00/km2

Urban Population : 98%

Time Difference and Climate

Map of the time zone : Kuwait city (GMT+3)

Summer time Period : Summer months are between June and October. The Temperatures can get

over 100°F (40°C)

Climate:

Kuwait enjoys a variable central climate. Summer months are between June and October and the

rainy season runs from December to February, when moistness can also be high. In summer

temperatures can get over 100°F (40°), But they drop below 70°F (21°C) in winter. The most

pleasant months to travel in Kuwait are in between November and April When days are warm

and luminous, although at night temperatures plummet and can be close to freezing.

Chapter 2- Economic Overview Of The KUWAIT

Kuwait is a rich country high per capita income of about the 30,000 USD. Its GDP has

experienced a growth rate of more than 20% during the past five years. The country has 9% of

the world oil reserves. Kuwait trying to position itself as the entrance gate for investment in area.

The public sector dominates the economy and concentrates three quarters of the country‟s wealth.

It represents three and fourth of GDP. The government is currently trying to transfer the 95% of

the Kuwaitis who work for the government from the public sector to private sector. In Feb.2010,

A 2010-2015 plan to develop infrastructure has been sign, value USD 100 billion, with the

special aim of opening the country‟s economy to the private sector.

Kuwait was affected by the financial crisis of 2008 (in the 4th

quarter of 2008, revenues

from oil decreased by 51% compared to the previous quarter) and the central bank had to provide

help to one of the main banks of Kuwait was experiencing cash shortage. However, the country is

currently coming out of the crisis, namely thanks to the increase in the production of oil, and

recorded a 3% Growth in 2010, hoping to reach 4% in 2011. In addition to each year of the

country shows a surplus budget of between 10 to 20% which in 2010 reached USD 29 Billion.

From the income of the country‟s oil allows to fuel a particularly generous welfare system

Table – I – 2 General Economic Indicators

Years 2009 2010 2011 2012 2013

GDP (Billions USD) 109 131 173 185 191

GDP (annual% charge, constant prices) -5 2 5 5 4

GDP Per Capita 30.96 36.41 46.97 49.44 49.85

General Government Balance - - - - -

Inflation rate 4 4 6 3 3

Current Account (Billions USD) 29 43 48 59 -

Current Account (annual % change) 26 32 33 38 -

Chapter.3 - Overview Of Industries Trade And Commerce

As the member of the world trade organization since 1996, the Kuwait has successfully

established itself as an influential player in the international trading system. This is the result of

focus on diversifying economy through enhancing trade relationship with non-oil products with

in countries worldwide, adopting an open economy with an attractive business environment that

promises continuous economic growth.

As per central intelligence agency the Kuwait today is a major trading partner with

world‟s countries including the US.

Table – I – 3.1 The Kuwait‟s Top 5 import partner are

1 U.S 14.2% Primary products transport equipment, machinery, computer

and electronic products, primary metal manufacturing and

chemicals.

2 China 9.5% Primary products textile products, clothes, light industrial

products, handicrafts, silver, copper iron and steel.

3 Saudi Arabia

7.3%

Primary Products Naphtha and Liquefied petroleum gas and

aluminum, copper

4 Japan 7.2 % Primary Products transport equipment, machinery, foodstuff,

raw material, mineral fuels.

5 India 4.4% Cereals, Meat and Edible Meat offal, Articles of Iron or Steel,

Articles of apparel and Clothing Accessories, Nuclear

Reactors, Boilers, Machinery and Mechanical Appliance,

Residues and Waste from the food Industries, Iron and Steel ,

Edible Fruit and Nuts, Fish and Crustaceans, other Aquatic

invertebrates.

Table – I- 3.2 The Kuwait‟s Top 5 Export Partner are

1 Japan 15.5 % Primary Products : Crude Oil, Aluminum

2 India 15.3% Organic chemicals, Plastic and Articles thereof , Iron and steel,

Fertilizers , Salt; Sulphur, Earths and stone, inorganic chemicals;

Organic or inorganic compounds of precious metals, copper and

Nuclear Reactors, Boilers,

Machinery and Mechanical appliances, Miscellaneous goods.

3 South Koria

13.5%

Crude oil, petroleum products, such as naphtha and liquefied

petroleum gas, aluminum , copper

4 China 10.1 % Crude oil, Petroleum Products

5 U.S 8.4% Crude Oil, Petroleum products and Sulphur, unroasted iron pyrites

The Kuwait‟s main Export Products are oil, natural gas, dried fish , Dates and re-export Products.

Chapter 4 - Overview Of Different Economic Sectors In

KUWAIT

ECONOMIC SECTOR : KUWAIT

Agriculture Sector

Agriculture is limited by the lack of water and arable farming land. The government has

experimented in growing food through hydroponics and carefully managed farms. However,

most of the soil which was appropriate for farming in south central Kuwait was damaged when

Iraqi troops set fire to oil wells in the area and created huge oil lakes. Fish and shrimp are

overflowing in territorial waters and large scale commercial fishing has been undertaken locally

and in the Indian Ocean.

Shipping/Sector

Kuwait Oil Tankers company has 35 crude oil and refined product carriers and is the largest

tanker company in an “OPEC” country. Kuwait also member of the United Arab Shipping

Company.

Financial Sector

The Finance sector is one of the most affected sectors by the crisis. though, banks have focused

on cleaning up their balance sheets to decrease their risk exposure. A number of banks have

registered high provision to cover bad loans. The aggregate balance sheet of local banks

increased by more or less2.7% in the financial year 2009-10 amounting to the KWD 40,584.7mn

from KWD 39,518.1mn in 2008-09. The capital competence ratio of local banks was more than

17% which is higher than the 12% minimum ratio required by the central bank and the 8% ratio

recommended by the Basel committee.

The sector index has been increasing trend in 2010, closing at 11,647 by the end of November

2010, against 8307 in November 2009.

Personal facilities loans represent 33% out of the total loan portfolio in 2009, followed by real

estate and trade & industry. The percentage of non-performing loans increased from 5.3% in

2008 to 9.7% in 2009, which is the highest among the GCC countries according to the IMF.

There are affected the banking sector negatively as many companies in addition to individuals,

was not able to pay back their outstanding loans. On the other hand, the government has initiated

a Defaulters Fund to assist residents with financial difficulties.

Real Estate Sector

The real Estate sector in Kuwait contracted significantly as a result of the global markets crisis.

Prices would extremely inflated prior to the crash which caused a real Estate Bubble. It is worth

mentioning that the real estate sector is positively correlated with the banking sector in Kuwait.

The huge amounts of debt impacted the sector negatively Many real estate investors were in

default and therefore they were not able to commit to their debt obligations with the financial

institutions. According to International Monetary fund is real estate contributed 26% of the bank

loans collection in 2009. Also, the poor performance of investment companies affected the real

estate investors as well.

The real estate index continued to decline where it closed at 2368 in November 2010, against

2748 in November 2009. Trading volume in the sector dropped as well. There is a large amount

of risks related with the real estate sector. The real market in Kuwait, which is very unstable,

could evolve if the government successfully implements the development plan.

Investment Sector

Most of investment companies in Kuwait are financed by large amounts of Debt. The crisis

resulted in a number of issues correlated to liquidity and liquidation. A number of companies

defaulted in paying back their debts to local banks, thus they started shifting to foreign financial

institutions for more funding. The aggregate balance sheet of local investment companies

dropped by almost 10.7% in the financial year 2009/10 to KWD 14,778mn (100 companies) , in

opposition to KWD 16,468mn in 2008/09 (101 companies).

The investment sector index fluctuated throughout 2010, where it witnessed a quick decline in

2Q2010. The index closed at 4906 points in November 2010, aligned with 5634 in November

2009. The sector recorded losses amounting to KWD 105mn during the 1H 2010, which

represents almost a 46% decline. However, the amount of losses in 2009 was KWD 200mn .

The central bank imposed new regulations on the investment companies in June 2010. These

regulations should enhance both liquidity and leverage. All investment companies should comply

with these requirements by June 2012.

Oil & Gas Sector

Oil & Gas are the main income sources in the GCC state. With the fall of oil prices, countries in

the GCC – Oil Exporters-incurred significant declines the revenue. Oil prices in 2010 are still

lower than the average price of 2008, ranging from USD 70 To USD 85 per barrel. On the other

hand, gas price were stable during the period, but also resulted in a lower average than 2008. The

vast uncertainty in the market played an important role in this drop as well as the crisis in Europe

and United State of America. The OPEC oil production incurred the largest decline in 2009 of

7.3%, accordingly, the oil prices increased and they are expected to further rise in the future.

Other energy resources have witnessed a rapid growth of worldwide. Governments of many

countries supported adapting other forms of renewable energy. The Global wind and solar

generation capacity had increased by 31% and 47% respectively, according to BP‟s 2009

statistics. This shift will decrease the demand of oil & gas, which may subsequently result in the

lower prices, thus lower income for the oil exporting countries.

INDUSTRY AND MANUFACTURING

INFRASTRUCTURES

1. ROADS NETWORK

Kuwait gives special attention to road infrastructure. Kuwait has an advanced motorway

system and consisting of seven ring roads intersected by a further series of roads radiating

from the heart of Kuwait city.

As matter of fact, the road network acting as a quasi-exclusive role in the field of goods

transports between the main cities of the country : Kuwait, JARHA, HAWALLI, ALL

AHMADI AND FARAWANIA.

2. AIR TRANSPORT

The concerns air transport, the major part of air traffic is ensured by Kuwait International

airport.

3. MARITIME TRANSPORT

In area of the maritime transport, Kuwait is provided with three large trading ports which

play a pivotal role in foreign trade operation, these are: Shuwaikh , Shuaiba and Doha.

Kuwait is also provided with a relatively important merchant fleet :88 ships, 50 of which are

national. In addition to the oil ships, Kuwait is also brilliant with numerous container ships.

4. TELECOMMUNICATIONS

Kuwait is providing with a performing and modern communication network: automatic

telephone, mobile telecommunications etc. On international level Kuwait has direct links

with its trading partners of Europe, Africa, Asia and America.

Chapter 5 - Overview of Business And Trade at the

INTERNATIONAL Level

Forever since the era of oil began after World War II, the invaluable mineral has been Kuwait‟s

main export product. Thanks to the wide revenue from sales oil. The government accumulated

surplus money and invested abroad. Many of these reserve investments were cash during the

Iraqi occupation and the liberation period to meet the expenses of Kuwait allied of coalition. By

the mid-1990s the value of exports exceeded the costs of imports by US$4 billion. Trade of

Surplus hit a low in 1998, due to reducing oil prices but began rising again in 1999. Figures show

a US$13.5 billion in the value of exports and a US$1 billion drop in imports which total US$8.1

billion, compared to 1998. In 2000, the World factbook estimated

Kuwait has always been a country open to foreign investment and wit the introduction of new

laws in early years, the country is even more open to foreign capital and expertise. In the early

2003 a new law for FDI came into the force. It allows 100% foreign ownership in a number of

the sectors. This law also makes available a number of tax breaks and other number of benefits

which can attract new investors who in return must guarantee a set of quotas regarding the

employment of Kuwaiti nationals.

The current policy to promote FDI focuses on a number of sectors which can benefit most of

foreign investment and expertise. These are including infrastructure investment such as waste-

water treatment improved , power and communications. Kuwait also tries to promote of

investment in the banking and financial sectors of investment aid and insurance, information of

technology and the software development. Investment in the hospitals and pharmaceuticals is

also favored. Authorities are also keen to attract the foreign capital into other sectors such as land

and sea freight and tourism, real estate and the urban development include. A financing plan of

USD 100 billion has in fact been approved by the Parliament in 2010. This project main aims to

develop infrastructure and should leave more space for the private sector.

With the financial crisis in 2008-2009, the influx of foreign capital halved, decreasing from USD

121 million in 2007 to USD 57 million in 2008.

Kuwait is highly dependent on foreign trade, which represents nearly 95% of the GDP. Kuwait‟s

imports total 16 billion of USD. The country depends especially heavily on imports of foodstuffs,

consumer goods (40% of total ) and semi-finished products (38% of total), which ranks it among

countries with the highest per capita import rate. The imports have been an increasingly quickly

due to the country‟s undertaking of large projects and a high private consumption demand.

Kuwait‟s largest suppliers are the Germany, the United States, Japan and Saudi Arabia. Imports

from other the Gulf countries have increased since of the introduction of the GCC (Gulf

cooperation council). The main products imported are cars and agricultural and food products as

well as mechanical industrial products of the electric and electronic products.

Kuwait‟ s exports quadrupled between 2002 and 2008 (USD 87 billion in 2008) Exports of crude

oil and refined products account for 95% of the total. The remaining amount consists of the re-

exports, mainly of machinery and transportation Equipment. Kuwait main clients of the Asian

countries, especially Japan (17.5%) , South Korea (13.9%), Taiwan (9.3%), as well as Singapore,

India and China, but also the US(8.2%) and some of the countries of the European countries. The

trade balance of Kuwait is largely positive due to the high prices of oil.

Chapter 6 - PRESENT TRADE RELATION AND BUSINESS

VOLUME of Different PRODUCTS of KUWAIT with INDIA

Business opportunities in Kuwait

In the Kuwait, economic activity is regulated by individual emirates as well as the federal

government. In Kuwait the authorities have deliberately sought to create an environment which is well

ordered without being unduly restrictive, as a result, Kuwait offers businessmen operating that are

among the most liberal and attractive in the region.

There are many options to international companies seeking to establish a business relationship with

Kuwait. Apart from forming a trading relationship for many companies there are distinct advantages in

being and the sport to research market prospects, make contacts, leases with customers and, see through

the detail of any transaction and orders secured.

Stability and Strength

The growing India-Kuwait economic and commercial relations contributed to the stability and

strength of a rapidly diversifying and bilateral relationship between the two countries. Both the side is

striving to further strength to further strength these ties mutual benefits of the ambassador added.

India-Kuwait Trade Relations

Warmand friendly contacts between India and Kuwait go back number of centuries. Geographical

proximity, historical trade links with cultural affinities and presence of a large number of Indian

expatriates continue to maintain and nurture this relationship. Kuwait‟s are ruling Al-Sabah family too

has longstanding ties with the India. India has been a natural of trading partner and a destination for

higher learning for the Kuwait. Until 1961, Indian Rupee was the legal tender with in Kuwait. Till the

discovery of oil Kuwait‟s economy revolved around its fine herb our and maritime a activities which

included ship the building, pearl diving, fishing and voyages to India on dhows carrying dates that were

traded for the wood, cereals, clothes and spices.

VVIP Visits From India to Kuwait :- these have been made by Honorable Vice

President of India “Dr. Zakir Husain in 1965” By Prime Minister Indira Gandhi in 1981

and By Honorable vice president of India Shri Hamid Ansari in 2009.

VVIP Visits From Kuwait to India :- These have included those by the Crown Prince

and Prime Minister “Sheikh Sabah Al-Salem Al-Sabah in 1964”and the “Amir Sheikh

Jaber Al-Ahmed Al-Jaber Al-Sabah in 1980” and again in 1983 and the “Amir Sheikh

Sabah Al-Ahmed Al-Jaber Al-Sabah in 2006”

The Bilateral Trade Between the India and Kuwait

However , risen steadily in the post liberation period. India-Kuwait relations have always had a pro

trade-bias, and bilateral trade has, rise steadily since in 1991. India-Kuwait trade was US$ 10.4 billion in

2008-2009, of which nonoil trade accounted for approximately $1.2 billion while petroleum exports

from Kuwait to India were Approximately $9.1 billion, India has consistently been among the top ten

trading partners of the Kuwait. As per Indian Government sources

India and Kuwait Bilateral Trade FY 2005-10

Total bilateral trade between India and Kuwait grew by 65% from Rs.431,503.46 Lakhs

(US$974.63 million) in FY 2005-06 to Rs. 713,484.46 Lakhs (US$ 1.57 billion in FY 06-07. The total

bilateral trade between India and Kuwait in US Dollars terms increased by 26.88% from US$ 6,601.33

million in the year 2006-07 to US$ 8,375.75 million in 2007-08 in Rupee terms , it grew by 12.75%

from Rs. 2,989,407.19 Lakhs in FY 2006-07 To Rs.3,370,483.69 lakhs in FY 2007-08. The Difference in

growth rates in Rupee and dollar terms is due to the variation in the exchange rate in corresponding year

Total Bilateral trade between India and Kuwait in US$ terms increased by 23.91% from US$

8385.79 million in the year 2007-08 to US$ 10,391.24 million in 2008-09 in Rupee terms, it grew by

38.94% through Rs.33,70,483.61 Lakhs in 2007-08 to Rs.46,82,785.12 Lakhs in 2008-09. The difference

in the growth rates in rupee and dollar terms is due to the variation in the exchange rate in corresponding

years .

Indian companies in Kuwait

Indian PSUs like TCIL, LIC,LIC housing Finance, New India Assurance co, Oriental Insurance

company, Bridge and Roof and National Aviation co (Indian Airline and Air India) have offices in

Kuwait, while in private co. like L&T, Punj Lloyd, Kalpataru, KEC international ltd

India-Kuwait Bilateral Trade relation :-

(in US$

million)

Table – I – 4 Indian Exports with Kuwait

2006-07 2007-08 2008-09 2009-10

Indian Exports to Kuwait 614.81 681.54 797.50 782.45

Indian Imports from Kuwait 5,993.23 7,704.25 9593.74 8,249.49

Total 6,608.04 8,385.79 10,391.24 9,031.94

Cereals 39%

Meat and Edible Meat Offal

15%

Articles of Iron or Steel 9%

Electrical Machinery and Equipment

8%

Nuclear Reactors, Boilers, Machinery

6%

Residues and Waste from the Food

Industries 5%

Edible Fruit and Nuts 4%

Fish and Crustaceans 3%

Iron and Steel 4%

Articles of Apparel and Clothing Accessories

7%

India‟s Exports to Kuwait

Chapter 7 - SWOT ANALYSIS

Strength Weakness Opportunity Threat

Huge Pool of labor

force

Very high

percentage of

workforce

involved in

manufacturing

Scope for entry of

private firms in

various sectors for

business

Global

economy

recession

/slow down

„Export‟ ability of

primarily two prime

sources, oil and gas.

Around a quarter

of a population

below the Poverty

line

Huge foreign

exchange earning

prospect in IT and

ITES sector

Threat of

government

intervention

in some

states

Diversified nature of

the economy

Low level of

mechanization

Red tapes,

bureaucracy

Huge agricultural

resources, fishing

plantation crops,

livestock

Agriculture

excessively

dependent

on

monsoons

Extensive higher

Education system,

Low literacy rates

unequal

distribution of

wealth

Area of

infrastructure Huge

domestic market:

opportunity for

MNCs for sales.

Population

explosion

,rate of

growth of

population

still high

Chapter 8 - PESTEL ANALYSIS

1) Political Analysis :-

They include goods and service which the government wants to provide and those that the

government does not want to be provided. Furthermore, governments have great influence on the health,

Education and infrastructure of nation. Specifically political analysis includes areas such as a tax policy,

labor law, Environmental law and trade restrictions and tariffs and political stability

Kuwait also many political factors conducted to the organization of petroleum Exporting countries in

industry.

2) Economy Analysis:-

Kuwait has a small, wealthy, and relatively open economy, which is experiencing nearly constant

growth since the gulf war. The source of Kuwaiti income is crude Oil, which composes about 95% of the

country export and government income. That fact imposes high risk of economy vulnerability in a case

of low oil prices, but the trend is seen great extent stable since main Kuwaiti oil importers are booming

Political Analysis

Economic

Analysis

Socio-

Analysis

Technological Analysis

economies of China, South Korea, and India. Geographically small country of Kuwait has 9% of total

world oil deposits and holds the 5th

place in Organization for petrol exporting countries (OPEC) in

amount of oil production after Saudi Arabia, Iran, and UAE. Kuwaiti GDP for 2010 was over $200bn,

and with adjustment to purchasing power parity (PPP) around 166bn of international dollars. Kuwait is

highly depended on the international trade

3) Social Analysis:-

Social factors are the most crucial issues of any market research, since they do describe people who

form the market. The overlook should give a frame for understanding of conditions an entering company

will have to work in.

After the Exploration of Oil, the population of Kuwait increased dramatically-though the 20th

century

population doubled almost 50 times, and native population doubled 35 times.

County is highly Attractive for immigrants because of welfare economy and high salaries. Most of the

immigrants are coming from South-East Asia and India, for an instance. Immigrants are mainly working

in private sector, while native Kuwaitis are occupied in Public sector. Kuwait has a action in order to

solve a problem social structure based on wealth and heredity.

4) Technological Analysis:-

Here present two table from CIA Fact book describing Transportation and Communication

technologies in Kuwait

Transport

Statistic of Kuwaiti transport with in infrastructure

Table – I – 5 Kuwait Transport with in infrastructure

Amount of Air ports (2012) 7

Amount of Heliports (2012) 4

Paved Roadways (2004) 4887km

Amount of ports and terminals(2010) 5

Also , Kuwaiti government is on its way to implement a metro system with 69 stations across the counter

Communication

Table I – 6 Statistic of Kuwaiti communication with in infrastructure.

Telephones –main lines in use (2009) 566,300

Telephones –mobile cellular (2009) 4,4 Million

Million country telephone code 965

Internet country code Kw

Internet hosts (2010) 2,730

Internet users (2009) 1,1 Million

Moreover , in Kuwait there are 4 state-owned broadcasters and one satellite channel. There are several

governmental radio stations in Arabic and English and one private ratio channel.

5) Environmental Analysis:-

Kuwait has large area climate famous for its dryness and hotness distinguish four seasons in the

country.

Summer is Extremely hot –Temperature exceeds 50 degrees. The first part of summer season

lasting from the beginning of June till Middle of August is Extremely hot and dusty and the

second part lasting from middle of August till middle of September has very high levels of

humidity –over 90% but a bit lower temperature above 40.

Autumn-A Synoptic find two months in a year to be an autumn season –October and November

Temperature is around 30 degrees and there are often thunder cloud, which made the air cooler.

Winter- winter in Kuwait is relatively cool- average temperature range from 10 to 20 degrees but

sometimes can fall till 0 During night. Sky is often cloudy and there 320mm rainfall in average.

Also fogs are usual thing for winter.

Spring- Temperature range from 20 to 30 degrees and thunderstorms are quite common during

that time Weather changes pretty fast-in the morning it can be hot and sunny and in the evening

there is heavy rain with cool winds.

6) Legal Analysis:-

Labor Legislative-Statistically, 85% of Kuwaiti employees are actually non-Kuwaiti,

however, they are discriminated by labor laws. For an instance, a non-Kuwaiti worker can

join trade union only after 5 years of work in the related industry, and only to a non-voting

position. Moreover, minimum salaries for Kuwaitis and non-Kuwaitis are different so much -

$210 and $875 per month respectively

Taxation in Kuwait- Kuwait has extremely warm tax environment for doing business.

Corporate income tax is applied only on foreign entities carrying on a trade or business. Tax

rate of 15% is applied on the following incomes – net profit (revenue less allowable

expenses) earned from making business in Kuwait, Royalties, License, Patent, Trademark

and Copy right fees would be received by foreign entities from Kuwait.

Problem Resolutions - Kuwait recognizes and accepts jurisdiction of International Center

for the Settlement of Investment Disputes (Washington Convention) and 1958 New York

Convention on the Recognition and Enforcement of Foreign Arbitral Awards. it is a member

of WTO since January 1995.

Import tariffs - Kuwait has a duty free condition for some food stuffs, medicine, medical

equipment, while applies 100% tariff on the tobacco products. These duties are to be paid in

Kuwaiti Dinar (1 KWD ~ 2,8EUR).

PART – II INDUSTRY / SECTOR / COMPANY SPECIFIC STUDY

CHAPTER -2

“EQUATE PETROCHEMICAL COMPANY”

Introduction of the Company

Established in 1995, EQUATE Petrochemical Company is the single operator of a fully

integrated world-scale Kuwait-based manufacturing facility producing over 5 million tons of high

quality petrochemical products annually.

Representing the collaboration of Kuwait‟s state-owned Petrochemical Industries Company

(PIC), The Dow Chemical Company (Dow), as well as the Kuwaiti private sector through Boubyan

Petrochemical Company (BPC) and Qurain Petrochemical Industries Company (QPIC); EQUATE is

Kuwait‟s first-ever international petrochemical joint venture.

Exemplifying a perfect fit partnership through setting a leading example for best business

practices and pioneering international success, EQUATE enjoys the advantages of combining Dow‟s

technological innovation and industrial expertise with competent human resources, rich feedstock and

valuable infrastructure provided by the Gulf State of Kuwait.

As the proud owner and operator of several world-class petrochemical units, EQUATE manages the

production of the highest grades of

Ethylene, Polyethylene (PE), Ethylene Glycol (EG), Polypropylene (PP),

Styrene Monomer (SM), Paraxylene (PX), Heavy Aromatics (HA) and Benzene

(BZ).

EQUATE plants producing a total of over 5 million metric tons annually (MTA) of:

Ethylene: 1.8 Million MTA

Polyethylene (PE): 825,000 MTA

Ethylene Glycol (EG): 1.2 Million MTA

Paraxylene (PX): 829,000 MTA

Styrene Monomer (SM): 450,000 MTA

Polypropylene (PP): 140,000 MTA

Benzene( BZ): 393,000 MTA

MISSION : VISION : VALUES

Mission

We provide valued products & services to the world

Vision

A global leader & world class producer of petrochemicals

Values

Integrity: Conducting all business affairs while observing ethics, honesty and transparency.

Respect: Teamwork as a cornerstone for success, with people as our most valuable asset through

helping and caring for each other.

Acting Like an Owner: Taking responsibility for all actions while reflecting loyalty through

commitment and care for EQUATE by embodying an ownership driven behavior and being

proactive.

Performance: Excellence through hard work, continuous improvement and discipline, as well as

being rewarded through pay for performance that prioritizes team achievement.

Customer Centric: Responsive to customer needs through win-win agreements as we deliver

value within a context of intimate customer experience.

Learning Organization: Adopting best practices, embodying innovation, mutual outside-in

improvement through exemplary handling of stakeholder requirements, approaching all matters

with open minds, focusing on people growth & development, seizing any available opportunity,

adaptable & flexible attitude with all arising issues, as well as continuous improvement.

Community & Society: Strengthening ties with Kuwait Petroleum Corporation & Subsidiaries

(K Co‟s), local and global stakeholders, as well as implementing green responsible philosophy.

Safety: Adopting Responsible Care Principles.

BOARD OF DIRECTOR

Yousef Al- Ateeqi

Deputy managing director petrochemical

industries

Equate Board chairman

Raja Zeidan EQUATE Board Deputy Chairman ,

Bader Al-Sumait EQUATE Board Member

Dabbous Al-Dabbous EQUATE Board Member

Hamad Al-Subaie EQUATE Board Member

James Fitterling EQUATE Board Member

Keith Cleason EQUATE Board Member

Luis Antuna EQUATE Board Member

Menahi Al-Enezi EQUATE Board Member

Mubarak Al-Sabah EQUATE Board Member

Jehad Al-Hajji Former Equate Board

Luciano Poli Former Equate Board

Mohammad Husain Former Equate Board

Fact Sheet

EQUATE Petrochemical Company is Kuwait‟s first international joint venture in the petrochemical

sector.

Established in 1995 and started production in 1997.

EQUATE‟s shareholders are:

Kuwait‟s state-owned Petrochemical Industries Company (PIC) with 42.5%

The Dow Chemical Company (Dow) with 42.5%

Boubyan Petrochemical Company (BPC) with 9%

Qurain Petrochemical Industries Company with 6%

Recognition of its sustainability achievements, EQUATE has earned several

prestigious honours, including:

American Association for Safety Engineers (ASSE) Gold Award in Health, Safety, and

Environment (HSE) for Gulf private sector companies

Gulf Cooperation Council (GCC) Award for Best Gulf Company in Recruiting Nationals

GCC Best Environmental Company in Kuwait Award

Arabian Business Best CSR Company Award

Oil & Gas (O&G) Middle East CSR Award

O&G Best Implemented Environmental Program of the Year

Middle East Chemical Week (MECW) Plant of the Year Award

Kuwait Petroleum Corporation (KPC) CEO Health, Safety & Environment Award

Kuwait‟s CSR Award for the Industrial Sector

Middle East CSR Awards Summit Highly Commended Best Community Program

Award.

Our Approach to Sustainable Development

Sustainable Development

EQUATE is currently leading the way in both sustainability management, and building its own

unique sustainability brand in Kuwait and beyond.

As a leading industrial organization, EQUATE is committed to its overall sustainability wherever it

operates, and in cooperation with public and private bodies. This is demonstrated through its

professional development opportunities, environmental initiatives, academic agreements, scientific

accords, CSR programs, as well as educational advancement plans for employees and community

members.

Strategy

At EQUATE, we manufacture products that are aimed at making peoples lives better. Therefore,

maintaining the highest levels of quality and world-class standards are paramount to our ongoing

success. Such standard levels extend beyond our business to the communities in which

Our strategic goals provide an overview of our environmental and health and safety performance, as

well as maintaining the welfare of our employees and adding value to the society. Our economic

performance, in terms of our profitability and growth are also included in our strategic goals, but

specific data was not available at the time of this report‟s production. Our current sustainability

elements focus on education, human resources, environment, health, community we operate and

provide service to.

Responsible Care® is a voluntary initiative of the global chemical industry to safely handle products from

their inception in the research laboratory, through manufacturing and distribution, all the way to their ultimate

reuse, recycle and disposal, and to involve the public in companies decision-making processes

Sector and its role in the economy of Kuwait country.

high growth sectors such as Electronics, Water, Energy, Coatings and Agriculture.

The Company‟s more than 5,000 products are manufactured at 188 sitesin 35 countries across the

globe.

Water : In 2011, a total of 434,828,537 m3 of seawater was used for process cooling and supplied

to EQUATE from the Public Authority for

Energy :Fuel gas used in our facilities is supplied from Kuwait Oil Company (KOC). In 2011, we

received a total of 411,473,000 m3 of fuel gas and our total direct energy consumption amounted

to16,530,145 GJ. Industry (PAI).

Waste & Spills :We generate both hazardous and non-hazardous wastes from our plant operations.

In 2011, we produced a total of 6,542 tons of hazardous waste. This included used oil, spent caustics,

slop oil, dimmer wastes, coke, spent charcoal, spent caustic polymer, process waste and

contaminated Personal.

Role in the economy of Kuwait country

Corporate Social Responsibility

EQUATE pays attention to sustainability issues, and notably those of education, healthcare and

environmental affairs. Since establishing the EQUATE Corporate Social Responsibility (CSR)

Program in 2005, EQUATE has launched several world class initiatives, including the Middle East‟s

first plant water recycle project, Kuwait‟s first CO2 recovery project and Kuwait‟s first seawater

cooling towers.

The EQUATE CSR Framework is designed primarily to align the company‟s goals and strategies to the

corporate social EQUATE‟s CSR Framework Corporate Social Responsibility Environment Society

Economy Workplace & Community CSR Sustainability responsibility programs and associated

activities. As a foundation for decisionmaking it enables better planning, project management and

measurement. In essence, it is the roadmap for the company‟s sustainability with a clear medium to long

term vision, and is divided into four distinct areas:

• Environment;

• Society and Community;

• Economy;

• Workplace.

Equate Petrochemical Function

CHAPTER -3

3.1 Comparison Between Kuwait and India in Petrochemical Industry

In 1978 the Indian Petrochemical Industry

Petrochemical Corporation Ltd (IPCL) then state-owned, commissioned a naphtha cracker with ethylene capacity

of 130,000 tpaalong with a large number of downstream plants at Baroda which gave impetus to the growth of

petrochemical industry in the country.

SWOT Analysis of Indian Petrochemical Industry

Strengths

• Strong domestic demand.

• Adequate domestic availability of naphtha and raw materials for the downstream processing industries.

• End-products markets widely spread out in sectors and geographic.

• World-class upstream integrated complexes for Polymer production.

• Supportive Government policies.

• Presence of a vibrant entrepreneur base.

• Advanced domestic technology and processes.

Weakness

• Inadequate availability of natural gas which prevents entry of new players for expansion.

• Zero import duty differentials between polymers and feed stocks.

• Lack of refinery and petrochemical integration (with reference to propylene/butadiene recovery).

• Majority of processing sector is still in sub optimal range. Low focus on value added exports of end

products.

• Fragmented downstream absorption capacities.

• Inadequate infrastructure for exports.

• Inadequate availability of quality power and high cost of energy.

• High capital cost. (High CAPEX, cost of interest and utilities cost).

• Cyclical and volatile nature of business with fluctuating product prices affecting margins.

• Shortage of skilled manpower.

Opportunities

• Large and rapidly growing domestic market for end products.

• Large head-room for future growth (Indian per capita at – 7kg compared to 109 kgs in US, 32 kgs in

Brazil and 29 kgs in China), due to favourable demographics, rising disposable income, development of

rural marketing, growth of organized retailing, developments in agriculture, automobile,

telecommunication, health care, etc.

• Rising labour costs in developed markets in plastic converting sector – an opportunity for India to

expand capacities and export.

• Development of niche products for exports.

• Scope for increased value addition.

• Favourable trade agreement.

Threats

• Dumping by low cost producers.

• Trade deficit in plastic products rapidly rising.

• Negative public perception about plastics.

• Pipeline for technically skilled manpower relatively narrow.

• Low feedstock cost in Middle East (a fraction of Indian cost) for petrochemicals offering huge

competitive advantage to producers in that area.

• Emerging low cost economies.

• Trade agreements with countries having less penetration potential in petrochemicals (i.e economies

with highly exportable surplus in petrochemicals).

• Reduced rate of growth in domestic demand due to high inflationary pressures.

Benzene

Benzene is an aromatic hydrocarbon and one of the primary building blocks for the petrochemical industry. It

is found naturally in crude oil but it is also commercially produced via synthesis from other petroleum based

chemicals.

Production Process

Benzene was originally produced as a byproduct of coke production for the steel industry. However

today, benzene is primarily produced as a by-product of refinery and steam cracker operations. There are also a

number of other processes - toluene disproportionation (TDP), selective TDP (STDP) etc. - that produce benzene

as a co-product. There is only one process, the hydrodealkylation (HDA) process that produces benzene on-

purpose.

The total global production of benzene for the year 2010 was 41 MMT

Uses

Benzene is principally used as a primary building block for the production of Ethyl

Benzene/Styrene, Cumene/phenol, cyclohexane/Caprolactum, Chlorobenzene/derivatives LAB and other

industrial chemicals.

Ethylbenzene/styrene, cumene/phenol and cyclohexane consumeover 80 % of global benzene

demand and are forecasted to grow at an average annual rate over 3.0 % during the five year forecast

period.

Benzene Capacity

India has a nameplate Benzene capacity of 1.23 million metric tonnesthe break-up of which is tabulated

below.

Company Capacity(KT)

RIL 680

IOCL 200

BPCL 80

KRL 85

HPL 125

Steel Plants 60

Total 1230

Benzene Capacity

India has a nameplate Benzene capacity of 1.23 million metric tones the break-up of which is

tabulated below. Metric tones, an increase of 10% from 2009 mainly attributed to increases in local

demand and exports.

The main source of benzene supply comes from pygas and reformate/toluene transalkylation

based production units, each accounting for about 400,000 tonnes and 620,000 tonnes, respectively.

There is also a small volume from coke oven benzene.

New Capacity

Mangalore Refinery, a subsidiary of ONGC, has announced a new aromatics complex in

Mangalore. The aromatics complex is expected to produce 920,000 metric tonnes of paraxylene and

275,000 metrictonnes of benzene. Completion is delayed, with start up expected inearly 2016-17.

OPAL (a subsidiary of ONGC) is planning a grass root petrochemical complex at Dahej, Gujarat

that includes a 135,000 metric ton benzene extraction unit, with start up expected in early 2013-14.

However no new concrete downstream projects have been unveiled by major players. India will

continue to rely heavily on the export market for regional benzene growth.

With new capacity expected to come on stream over the forecast period, Operating rates are

likely to fall to about 70% by 2014. However, the strong export demand is expected to lift regional

operating rates to 77% in 2015.

Demand

Domestic demand in India has grown at a steady pace over the past few years and is expected to

reach almost 600,000 metric tonnes in 2010.

Export demand is projected at over 540,000 metric tonnes in 2011-12. Export volume is expected

to increase substantially to over 900,000 metric tonnes in 2016-17.

Domestic demand will see a steady growth over the forecast period as volume is expected to

reach 935,000 tonnes by 2016-17. The majority of development in domestic demand is expected to be

from Cyclohexane, Cumene/Phenol sectors which are expected to see substantial growth through to

2016-17. However, export demand will increase even faster, surpassing domestic demand from 2013. By

2016-17, exports are expected to be more than 70% above the level of domestic demand.

Imports are not required as India has excess capacity meeting the needs of its downstream

domestic demand. Yet some of the quantity is being imported in the last few years.

Benzene exports are forecast to continue growing at a high rate over the forecast period. Exports

to Southeast Asia are expected to be halted fundamentally due to new large scale capacity coming on

line within that region and as a result India has increased and will increase its exports to other regions,

including the Middle East, West Europe and North America.

Benzene Demand- Supply in India

(KT) 07-08 08-09 09-10 10-11 11-12

Production 940 943 945 1018 1135

Imports 13 36 62 72 20

Domestic Sales 523 460 464 514 570

Exports 399 461 434 429 540

Consumption 536 496 526 586 590

Y-O-Y Growth 4.7% -7.5% 6.0% 11.4% 0.7%

Carg 2.9%

Kuwait Petrochemical Production (Benzene)

List of Company Benzene Production :

Equate Petrochemical Company

Equate joint venture to meet the increasing worldwide demand for leading petrochemical

products, Equate’s shareholders and Kuwait national petroleum company KNPC completed a multi-

billion dollar expansion project in 2009 which greatly increased the production capacities of

polyethylene and ethylene glycol

Products

Polyetlylene capacity 825,000

Ethylene Glycol Capacity 550,000

Kuwait Paraxylene Petrochemicals Company (KPPC)

Petrochemical Production line, the Pioneer Equate Petrochemical company in Kuwait since

1995. The success of our organization is the dedication of our talented staffs

Most Petrochemicals Registered upward price movement on a QaQ basis. The past year was a

Dynamic one in terms of Petrochemicals price and Demand volatility. Butadiene and Benzene prices

moved the most at 228.4 % and 124.7% respectively on YoY basis followed by ethlene, which rose

96.7%on yearly basis

Vision

A Global Leader & World class producer of Petrochemicals. Through hard work, continuous

improvement and discipline, as well as being rewarded through pay for performance that prioritized

team achievement

Mission

We Provide valued products & services to the world. Teamwork as a comer stone for success,

with people as our most valuable asset through helping and carrying for each other.

Business Type

Petrochemical Production Sector.

ISO Certification

EQUATE Follows and adheres to such best business practices as ISO 9001

ISO 14001 and Responsible care. As a certified company, Equate is committed to the implementation of

standards

Sector unit

It is the Private sector unit

Number of Employee working in Petrochemical company in 1000 or More

KPPC Benzene Production capacity 393,000 Emerging as greater Equate this global scale venture has

also introduced kuwait’s first-ever Styrene Monomer, Paraxylene, Heavy aromatics and Benzene

production unit all at the same location and under a unified operational umbrella managed by Equate.

Benzene Plant in Kuwait

Estimated Project Capacity (t/y) 370,000

Expected Completion Year 2009

Estimated Cost $mn 1,240

Saudi Aramco / Dow Chemical company

Ras Tanura integrated refinery & petrochemicals compled phase-2

Estimated Project capacity (t/y) 400,000

Expected Completion year 2015

Estimated cost ($ mn) 20,000

Ethylene, the primary building block, is often considered a proxy to the overall size of petrochemical

industry. Global ethylene capacity was 143 million tonnes in 2010 against a demand of 120 million

tonnes. The capacity is expected to increase to 165 million tonnes in 2015 with demand reaching 151

million tonnes.

Olefins are the major building blocks of the petrochemical industry. Of these Ethylene and Propylene

capacities in India has reached significant levels. However Styrene continues to be in deficit.

Building Blocks Demand supply Gap

Production Ethylene 2011-12 2016-17

Demand 3785 6805

Capacity 3867 7087

Gap 82 282

Majority of the petrochemicals projects were completed in 2009; not many projects are in the

pipeline. Total petrochemicals amounting to 2.0 mmt are expected to be added during 2010-15.

Petrochemicals projects such as Equate form a low-cost base for exports to Europe and Asia,

where demand is expected to grow rapidly in the next decade. Thus, Kuwait has a strong competitive

downstream position overseas.

Kuwait is facing severe shortage of natural gas despite a substantial discovery in 2006. Gas

shortage is a major hurdle in the development of Kuwait’s petrochemicals sector and the

diversification of its economy.

Further development of Kuwait’s petrochemicals sector depends on the development of new

gas supply.

3.1.1 Comparison Between Kuwait and Gujarat in Petrochemical Industry

BASIC KUWAIT GUJARAT

Establishment

Year and

place

Petrochemical Production line, the

Pioneer Equate Petrochemical company

in Kuwait since 1995. The success of our

organization is the dedication of our

talented staffs.

From a Humble beginning in

March 22- 1969 as a Private

Limited Company, Reliance

Industry (IPCL) has completed

More than 43 Year of

Petrochemical

Vision A Global Leader & World class producer

of Petrochemicals. Through hard work,

continuous improvement and discipline,

as well as being rewarded through pay

for performance that prioritized team

achievement.

Through sustainable measures,

create value for the Nation,

Enhance quality of life across the

entire socio-economic spectrum

and help spearhead india as a

global leader in the domains

where we operate

Mission We Provide valued products & services

to the world. Teamwork as a comer stone

for success, with people as our most

valuable asset through helping and

carrying for each other.

Create value for all

stakeholders

Grow through innovation

Lead in good governance

practices

Use sustainability to drive

product development and

enhance operational

efficiencies.

Ensure energy security of

the nation

Foster rural prosperity

Business type Petrochemical Production Sector Petrochemical Sector

Number

Employee

More then 1000 Employee are there work Nearly in Gujarat 7500

Employee are in petrochemical

sector

Sector unit It is the Private sector unit It is the private sector unit

ISO

certification

EQUATE Follows and adheres to such

best business practices as ISO 9001

ISO 14001 and Responsible care. As a

(IRQS) is a department

Functioning under sect 25 of the

companies act 1956

certified company, Equate is committed

to the implementation of standards

Magt System (QMS) ISO

9001:2008)

Environmental Mgt Systems

(EMS) ISO 14001 : 2004

Petrochemical

Product

Ethylene

Polyethylene

Ethylene Glycol

Paraxylene

Polypropylene

Benzene

Benzene

Ethylene Oxide

Linear Alkyl Benzene

Ethylene Glycol

Orthoxylene

3.2 Present Position and Trend of Business (import / export) with India /

Gujarat during last 3 to 5 years

Present Position and Trend of Business with India

Kuwait is 3rd

Largest Trading partner of india in the Arab world (2010 :2011) the value of the two –

way trade between the two countries in 2010- 11 Exceeded US$ 12 billion. Kuwait is the source of

2.78% of india‟s global imports (2010-11) . For Kuwait , India is the 2nd

largest market for its

exports, accounting for more than 15 % of its Global exports 2010. In terms of imports by kuwait ,

india ranks 7th

and is source of around 4.4% of kuwait‟s total imports (2010)

Table – II – 1 Kuwait - India bilateral Trade for the Five years

Sr

No

Year Export % of

Export

Growth

Import % of

Import

Growth

Total % of Total

Growth

1 2007-08 681.54 10.85 7704.25 28.55 8385.79 26.90

2 2008-09 797.50 17.01 9593.74 24.53 10391.24 23.91

3 2009-10 782.45 -1.89 8249.49 -14.01 9031.94 -13.09

4 2010-11 1959.48 150.43 10313.64 25.02 12273.13 35.89

5 2011-12

(april-

sep)

588.26 6580.43 7168.69

INDIA – KUWAIT EXPORT

Figure A -INDIA – KUWAIT IMPORT AND EXPORT

Figure B- India – Kuwait % of Export Growth

2007-08 2008-09 2009-10 2010-11 2011-12

Series1 681.54 797.5 782.45 1959.48 588.26

0

500

1000

1500

2000

2500

Axi

s Ti

tle

Export

2007-08 2008-09 2009-10 2010-11 2011-12

Series1 10.85 17.01 -1.89 150.43

-20

0

20

40

60

80

100

120

140

160

Axi

s Ti

tle

% of Export Growth

Figure C-India - Kuwait IMPORT

Figure D- India - Kuwait % of Import Growth

Figure E-India - Kuwait Total Trade

2007-08 2008-09 2009-10 2010-11 2011-12

Series1 7704.25 9593.74 8249.49 10313.64 6580.43

0

2000

4000

6000

8000

10000

12000

Axi

s Ti

tle

Import

2007-08 2008-09 2009-10 2010-11 2011-12

Series1 28.55 24.53 -14.01 25.02

-20

-15

-10

-5

0

5

10

15

20

25

30

35

Axi

s Ti

tle

% of Import Growth

Figure F- India - Kuwait % of Total Trade Growth

2007-08 2008-09 2009-10 2010-11 2011-12

Series1 8385.79 10391.24 9031.94 12273.13 7168.69

0

2000

4000

6000

8000

10000

12000

14000

Axi

s Ti

tle

Total Trade

2007-08 2008-09 2009-10 2010-11 2011-12

Series1 26.9 23.91 -13.09 35.89

-20

-10

0

10

20

30

40

Axi

s Ti

tle

% of total Trade growth

Major items of Exports from India:

Cereals, Meat and Edible Meat Offal, Articles of Iron or Steel, Electrical Machinery and Equipment and

Parts thereof; Articles of Apparel and Clothing Accessories, Nuclear Reactors, Boilers, Machinery and

Mechanical Appliances, Residues and Waste from the Food Industries, Iron and Steel, Edible Fruit and

Nuts, Fish and Crustaceans, Molluscs and other Aquatic Invertebrates.

Major items of Imports by India:

Organic Chemicals, Plastic and Articles thereof, Iron and Steel, Fertilizers, Aluminum and Articles

thereof, Salt; Sulphur; Earths and Stone, Inorganic Chemicals; Organic or Inorganic Compounds of

Precious Metals, Copper and Articles thereof, Nuclear Reactors, Boiler Machinery and Mechanical

Appliances, Miscellaneous goods.

Major Trade items:

India- Kuwait total Trade in 2007-08 to 2011- 12 ,8385.79 , 7168.69 and growth rate 26.9 ,35.89 only

2009-10 india-kuwait trade growth rate decrease -13.09

Total trade balance india-kuwait in 2007-08 to 2010-11 ,12273.13

[ Note : Equate Petrochemical company import/ export particular data not available so here we

take import/ export data for top particular product]

CHAPTER-4

4.1 Policies and Norms of Kuwait for import / export including licensing /

permission, taxation etc:

A. Limited Liability Company

A limited liability company (WLL) is an entity where the liability of its members is limited to the extent

of their share capital contribution. This is the most common corporate entity in Kuwait and the main

route adopted by foreign companies or investors to enter the market. The capital of a limited liability

company must not be less than KD 7,500, though in practice, the minimum capital currently required is

higher than that.

A limited liability company requires at least two founding members. In this regard, a husband and wife

are considered a single party. Originally, members were required to be natural persons with at least one

member. However, Kuwaiti Law 15/1960 was amended by Law 28/1995, which allowed companies to

be founding members of limited liability companies. Both foreign individuals and corporate bodies may

use this type of entity.

B. Shareholding Company

Shareholding companies may be either public or closed and must have at least five shareholders. The

public shareholding company (SAK or KSC) is similar to a common law limited liability company, with

a higher capital requirement. The founders of a public shareholding company are required to subscribe to

at least 10% of the capital. A public shareholding company can engage in any type of business.

C. Partnership

The Commercial Companies Law also governs the formation of partnerships, both general and limited:

1- A General Partnership - (Joint Liability Company) - is an association of two or more persons

formed under a specific name to carry on commercial business. The partnership has a separate

legal personality, but its members are jointly and individually liable for its obligations to the

extent of their entire personal property.

2- Limited Liability Partnership: There are two types of limited partnership: the simple limited

partnership and the partnership limited by shares.

D. Joint Venture

A joint venture is a commercial association formed by two or more parties. It is a purely contractual

arrangement between the parties, has no separate legal personality distinct from its members, and is not

registered in the commercial register. A joint venture is not considered binding on a third party, and each

party in the venture is separately liable for its obligations. There are no limitations on foreign

participation in joint ventures. It is common for foreign contractors involved jointly in a major project in

Kuwait to form a joint venture or consortium.

E. Commercial Agency

The commercial agency provides a means for a foreign company to conduct organized marketing efforts

without establishing a registered local presence of its own. Agency agreements and regulations are

governed by Law No. 36/1964 of the Organization of Commercial Agencies and Law of Commerce No.

68/1980. Only Kuwaiti individuals or Kuwaiti companies may act as commercial agents, which must be

registered with the Ministry of Commerce and Industry. The application for registration must be

submitted within two months of the appointment of the agent along with the following documents:

• The Agency Agreement with Arabic translation

• Copies of the agent's commercial registration and license

• A copy of the Kuwaiti agent's nationality document

• A certificate of registration from the Kuwait Chamber of Commerce and Industry

The Ministry of Commerce and Industry shall issue a decision on the registration application within

fifteen days of its submission.

F. Branch

A foreign company wishing to open an office in Kuwait to conduct business and commercial activities

can do so through a branch. The branch must be sponsored by a Kuwaiti agent under whose name the

operation is carried out. A foreign company or investor may be exempted from seeking a Kuwaiti agent

if approval is obtained in accordance with the FDI Law.

Imports - Requirements

Licensing Requirements for Commercial Activities - Joint Ventures & Agent Requirements

Licensing Requirements for Commercial Activities – Joint Ventures

In order to establish a business in Kuwait, the Kuwaiti firm or joint venture needs to apply for a business

license issued by the Ministry of Commerce and Industry. Application documentation must be in Arabic.

For special commercial activities such as telecommunications, health services, pharmaceuticals etc. the

relevant ministry, department or regulatory agency may require other certificates or licenses.

Import Regulations

The residents of Non-Kuwaiti origin and companies having 100% foreign capital

participation do not have authorization to import for purposes of marketing / selling in that

country.

Non Kuwaiti inhabitants and 100% foreign capital companies are not allowed to import for

commercial purposes.

Import Licenses

Kuwait maintains a non-automatic, "general" import licensing system, in accordance with the Import

Law (No. 43 of 1964). The licensing system applies to all goods from all countries. Importers must

obtain a commercial license, then an import license, both from the Ministry of Commerce and Industry

(MCI). The MCI is the single administrative body in charge of issuing licenses. According to the

authorities, licensing is not in place to restrict the quantity or value of imports; it is to ensure that goods

do not enter Kuwait if they do not meet the requirements of its different laws, regulations or decisions.

Import licenses may be further grouped into those granted to firms and companies, and those

given to persons and some companies according to their activities. The conditions and validity of these

licenses are listed in Table .There is no penalty for non-use of a licenses; licenses are not transferable.

There are no fees or administrative charges, or deposit or advance payment requirements associated

with the issuance of a license.

Table II – 2 - Type of License, conditions , validity

Type of license Conditions Validity

Import licenses to

firms and

companies

Granted to companies and establishments up on

provision of :

1. Application signed by the person

concerned

2. Copy of valid commercial license

3. Copy of signature certificate of the

person concerned

4. Copy of chamber of commerce

certificate valid for the current year

5. Copy of commercial Register

certification

6. Original import license, in case of

renewal

7. A letter from concerned company/

Establishment requesting a replacement

,if the original is lost

One Year;

Extension may be

granted

Import licenses to

Persons, firms, and

companies

according to

activities

Granted Up on provision of

A: Persons

1. Application signed by the relevant

person

2. Copy of shipment policy

3. Copy of civil identity card

B: Establishment/ Company

1. Application signed by the concerned

person

2. Copy of valid commercial license

3. Copy of shipment policy

4. Copy of signature certificate of the

concerned person

One- Shipment

License

Year Newly issued import

licenses

Import licenses to firms

and companies (New )

Import licenses to

persons and some

companies

2004 2,152 9,619 5,409

2005 1,928 10,084 5,776

2006 1,704 10,214 6,111

2007 1,801 10,536 7,116

2008 1,754 10,955 8,509

2009 1,401 10,944 6,998

2010 1,343 10,076 6,214

Documentation Requirements :Additional licenses or certificates may be required for various

products.

In Kuwait, the import clearing process has historically been time-consuming, requiring numerous

transfers, large quantities of paperwork and numerous redundancies. However, the Customs Department

is currently undergoing a major privatization effort, contracting with a private company to provide

customs support services.

Bill of Lading Requirements

Given Kuwait‟s import license regime, the importer license holder‟s name must appear on the bill of

lading. The importer must be a Kuwaiti national.

Special Documents Required

Certificate of Free Sale: Cosmetics, pharmaceuticals, and foodstuffs may require a certificate of free sale

stating that the commodities in question are in free circulation in the country of export. Applicants

should submit the label and complete formula of the pharmaceutical to be exported.

Import Restrictions & Prohibitions

Kuwait's economy is liberal. As per the regulation of imports, it is to be known that alcohol drinks, pork

meat, gambling machines, subversive and pornographic periodicals and movies as well as goods relating

to the Arab boycott towards Israel are prohibited. Used medical equipment and automobiles over five

years old cannot be imported.

Kuwait Import Prohibitions

Kuwait prohibait the importation of certain goods mainly for religious considerations, as well as

meeting the requirements of international conventions and following UN sanctions, security, health and

safety, moral, and environment protection. Products prohibited from importation cover, inter alia, food

products containing alcohol, pork and their derivatives, as well as cars and trucks with the steering wheel

to the right or the modified steering wheel

General Import Restrictions The

following items are not acceptable for carriage to any international destinations unless otherwise

indicated

APO/FPO addresses.

C.O.D. shipments.

Firearms, weaponry, and their parts (acceptable between the U.S. and Puerto Rico).

Perishable foodstuffs and foods and beverages requiring refrigeration or other environmental

control.

Live animals (including insects) except via our Live Animal Desk (1.800.405.9052).

Plants and plant material, including cut flowers (cut flowers are acceptable from the U.S. to

selected points in Canada and from Colombia and Ecuador to the U.S.).

Lottery tickets and gambling devices where prohibited by local, state, provincial or

national law.

Table II-3- Imports requiring special permission

Description Agency of release

Live animals, animal products Public Authority of

Agriculture Affairs and

Fish Resources (PAAF)

Live trees other plants; bulbs, roots and the like; cut flowers

and ornamental foliage

(Fresh)

PAAF

Edible vegetables and certain roots and tubers

Edible fruits and nuts; peel of citrus fruit or melons

Coffee, tea, mate and spices (Chilled and frozen)

Kuwait Municipality Cereals

Products of the milling industry; malt; starches; inulin; wheat

gluten

Oil seeds and oleaginous fruits; miscellaneous grains, industrial

or medicinal plants; straw and fodder

Animal or vegetable fats and oils, and their cleavage products

and prepared edible fats; animal or vegetable waxes

PAAF

Prepared foodstuffs; beverages, spirits and vinegar; tobacco

and manufactured tobacco substitutes

Kuwait Municipality

Tobacco and manufactured tobacco substitutes Ministry of Health

Common salt (table salt) Kuwait Municipality

Inorganic chemicals; organic or inorganic compounds of metals,

of rare earth metals, of radioactive elements or of isotopes

Environment Public

Authority

Organic chemicals

Fertilizers

Description Agency of release

Tanning or dyeing extracts; tanning and their derivatives, dyes,

pigments and other coloring matter; paints and varnishes; putty

and other mastics; inks

Albuminoidal substances; modified starches; glues; enzymes

Miscellaneous chemical products

Pharmaceutical products Ministry of Health

Essential oils and resinoids; perfumery, cosmetic or toilet

preparations

Soap, organic surface-active agents, washing preparations,

lubricating preparations, artificial waxes, prepared waxes,

candles and similar articles

Wood and articles of wood; wood charcoal Public Authority for

Industry (PAI)

Made up fishing nets of man-made textiles PAAF

Machinery and mechanical appliances; electrical equipment;

parts thereof; sound recorders and reproducers, television image

and sound recorders and reproducers, parts and accessories of

such articles

PAI

Fire extinguishers Kuwait Fire Service

Directorate Other parts for mechanical or jet projecting appliances, not

elsewhere classified

Fire pumps

Fire fighting vehicles

Firemen's helmets

Fire-floats

Private cars (1,000 to 3,000cc) of the current year model, or the

model of the previous five years maximum (in Chapter 8703)

Ministry of Commerce and

Industry

Other breathing appliances and gas masks Kuwait Civil Defence

Directorate

MEASURES DIRECTLY EXPORTS

Procedures

Kuwait maintains simple export procedures. According to the authorities, any natural persons or legal entities,

Kuwaiti, GCC or foreign, may export in Kuwait. The same declaration, registration, and documentation

requirements apply as for imports.

Export prohibitions and licensing

Kuwait prohibits the following products from exportation, for economic, safety, security, and environmental

reasons, and to ensure compliance with international obligations

Table- II – 4- Products banned from exportation, 2011

Description

Wheat or meslin flour

Arms and ammunition; parts and accessories thereof

Live sheep and goats

Maize (corn), barley, bran

Works of art, collectors‟ pieces and antiques

Crustaceans, whether or not in shell, live, fresh, chilled, frozen, dried

Live fish, fresh, chilled or frozen

Other articles of iron and steel, cable

Rice, sugars, sunflower-seed oil, milk and cream, cereals grains otherwise worked, tomatoes, fresh

or chilled

Certain goods require an export license from the competent authorities (Table). Kuwait does not apply export

quotas.

Table - II – 5 Export licensing

Description Authority Rationale

Mineral fuels, mineral oils and products of their

distillation; bitumen substances; mineral wax

Kuwait Petroleum

Corporation "Strategic"

products

Foods Kuwait Municipality Health, SPS

Oil seeds, oleaginous fruit, manufactured Ministry of Health Health

Radioactive isotopes Ministry of Health Health

Apparatus based on the use of X-rays or of alpha Ministry of Health Health

Psychotropic substances Ministry of Health Health

Fish, crustaceans and aquatic invertebrates Public Authority of

Agriculture and Fish

Resources (PAAF)

SPS

Preparations of a kind used in animal feeding PAAF SPS

Animal ecology and leather PAAF SPS

Antiques of an age exceeding 100 years Dept. of Antiques and

Museum Culture

Coin (other than gold coin), not being legal

tender

Central Bank Security

Live horses PAAF SPS

Residual products of chemical or allied industries Environment Public

Authority Protecting

environment

Waste, parings and scrap, of plastics Environment Public

Authority Protecting

environment

Including waste and scrap; articles of hard rubber Environment Public

Authority Protecting

environment

Pharmaceutical products Ministry of Health Health

Primary cells and primary batteries Environment Public

Authority Protecting

environment

Engine oil Environment Public

Authority Environment

protection

Ferrous waste and scrap Ministry of Energy

Ministry of Defense Environment

protection

A. Contribution to KFAS

Kuwaiti shareholding companies are required to pay 1% of their net profits, after the 10% allocation to

the statutory reserve and the offset of loss carry forwards, to the Kuwait Foundation for the

Advancement of Sciences (KFAS), which supports scientific activity by providing sponsorship and

grants to a variety of research initiatives in Kuwait.

B. National Labor Support Tax

In accordance with Law 19/2000, Kuwaiti shareholding companies listed on the Kuwait Stock Exchange

are required to pay an employment tax equal to 2.5% of net profits for the year. In accordance with

resolution number 24/2006 issued by the Ministry of Finance the following can be deducted:

compensations received from the United Nations for losses on account of the invasion of Kuwait by Iraq;

cash dividends obtained from listed companies which have settled the same tax; and dividends collected

from listed subsidiaries and affiliates which have settled the same tax.

C. Social Security Obligations

Employers must make payments to the Public Institution for Social Security (PIFSS) on behalf of all of

its Kuwaiti employees. Contributions are payable monthly. The employer‟s contribution is equal to 10%

of the monthly salary of the employee. The employee makes an additional contribution of 5% of their

monthly salary. Contributions are capped at a monthly salary of KD 2,250.

D. Expatriate Health Insurance

Employers must contribute towards a health insurance scheme for their expatriate staff residing in

Kuwait and their dependents. The annual premium is payable at the time of initial application or renewal

of the expatriate‟s residence permit. The premium is KD 50 for each expatriate employee and from KD

10 to KD 30 for dependents. Employers may also provide health coverage using a private provider, in

which case they will not be obliged to make any additional payments.

E. Zakat Income Tax

The zakat income tax law 46/2006 was introduced in November 2006. This new law will impose a 1%

zakat tax annually on the net income of all Kuwaiti public or closed shareholding companies. All

government owned entities are exempted from this tax, as are all companies subject to the foreign

income tax as per new law 2/2008. A company with a zakat tax obligation must specify the portion of

the tax which represents its Islamic zakat obligation as defined by an appropriate Islamic sharia board. In

addition, a company may request that part, or all, of the amounts due be directed to specific public

services of its own choosing.

Free zone : The free commercial zone is considered as an independent leading project managed by

the private sector, with the full support of the government of the State of Kuwait. Provisions of the free

zone law were set after the best international legislative texts as represented in Kyoto International

Treaty concerning custom tariff procedures. The content of the Kuwaiti law is elevated to the level of

the laws of the best free zones in the world. The said

law exempted the following from taxes and custom duties Kuwait free trade zone avails four different

types of licenses that cover : Commercial license, Industrial license, Services license,

4.2 Policies and Norms of India for Import or export to the selected country

including licensing / permission, taxation etc:

General Provisions

Goods are imported in India or exported from India through sea, air or land. Goods can come

through post parcel or as baggage with passengers. Procedures are different depending on mode of

import or export. Procedures discussed.

AMENDMENT TO DOCUMENTS - Importer, exporter or 'Person In charge' have to submit various

documents to customs authorities like.

Bill of entry

Import manifest

Export manifest

Import Procedures:

Procedures have to be followed by „person-in-charge of conveyance‟ as well as the importer.

WHO IS 'PERSON IN CHARGE' - As per section 2(31), 'person in charge' means (a) In case of vessel -

its master (b) In case of aircraft - its commander or pilot-in-charge (c) In case of train - its conductor or

guard and (d) In case of vehicle or other conveyance - its driver or other person in charge. The

significance of this definition is

He is responsible for submitting Import Manifest and Export Manifest

He is responsible to ensure that the conveyance comes through approved route and lands at approved

place only.

He has to ensure that goods are unloaded after written order, at proper place. Loading also has to be only

after permission.

He has to ensure that conveyance does not leave without written order of Customs authorities.

He can be penalized for (a) Giving false declaration and statement (b) shortages or non-accounting of

goods in conveyance.

Procedure by Importer - The importer importing the goods has to follow prescribed procedures for

import by ship/air/road. (There is separate procedure for goods imported as a baggage or by post.)

Bill of Entry – this is a very vital and important document which every importer has to submit under

section 46. The Bill of Entry should be in prescribed form.

Bill of Entry should be submitted in quadruplicate – original and duplicate for customs, triplicate for

the importer and fourth copy is meant for bank for making remittances.

Under EDI system, Bill of Entry is actually printed on computer in triplicate only after „out of charge‟

order is given. Duplicate copy is given to importer

Types of Bill of Entry - Bills of Entry should be of one of three types. Out of these, two types are for

clearance from customs while third is for clearance from warehouse.

BILL OF ENTRY FOR HOME CONSUMPTION - This form, called „Bill of Entry for Home

Consumption‟, is used when the imported goods are to be cleared on payment of full duty. Home

consumption means use within India. It is white coloured and hence often called „white bill of entry‟.

BILL OF ENTRY FOR WAREHOUSING - If the imported goods are not required immediately,

importer may like to store the goods in a warehouse without payment of duty under a bond and then

clear from warehouse when required on payment of duty. This will enable him to defer payment of

customs duty till goods are actually required by him. This Bill of Entry is printed on yellow paper and

often called „Yellow Bill of Entry‟. It is also called „Into Bond Bill of Entry‟ as bond is executed for

transfer of goods in warehouse without payment of duty.

RATE OF DUTY FOR CLEARANCE FROM WAREHOUSE - It may be noted that rate of duty

applicable is as prevalent on date of removal from warehouse. Thus, if rate has changed after goods are

cleared from customs port, customs duty as assessed on yellow bill of entry and as paid on green bill of

entry will not be same.

Documents to be submitted by importer:

Invoice

Packing List

Bill of Lading / Delivery Order

GATT declaration form duly filled in

Importers / CHAs declaration duly signed

Import License or attested photocopy when clearance is under licence

Letter of Credit / Bank Draft wherever necessary

Insurance memo or insurance policy

Industrial License if required

Certificate of country of origin, if preferential rate is claimed.

Technical literature.

Test report in case of chemicals

Advance License / DEPB in original, where applicable

Split up of value of spares, components and machinery

No commission declaration. – A declaration in prescribed form about correctness of information

should be submitted.

Noting of Bill of Entry - Bill of Entry submitted by importer or Customs House Agent is cross- checked

with „Import Manifest‟ submitted by person in charge of vessel / carrier. It is noted if the description

tallies. „Noting‟ really means taking on record by customs officer This date is relevant for determining

rate of customs duty. Thoka number (serial number) is given in the import section. Otherwise, it is

returned for clarifications. In case of EDI system, noting is done by the system itself which also

generates bill of entry number.

Date of presentation of bill of entry is highly relevant and the rate of duty as applicable on this date will

be considered for calculating the duty payable. Bill of Entry is accepted only after proper scrutiny vis-a-

vis import manifest and various declarations given in bill of entry and attached documents like invoice,

bill of lading etc. If such documents are not attached, the authorities can refuse to accept the Bill of

Entry, and hence submission of such incomplete Bill of Entry cannot be taken as date of presentation of

Bill of Entry

Prior Entry of Bill of Entry - After the goods are unloaded, these have to be cleared within stipulated

time - usually three working days. If these are not so removed, demurrage is charged by port trust/airport

authorities, which is very high. Hence, importer wants to complete as many formalities as possible

before ship arrives. Proviso to Section 46(3) of Customs Act allows importer to present bill of entry upto

30 days before expected date of arrival of vessel. In such case, duty will be payable at the rate applicable

on the date on which „Entry Inward‟ is granted to vessel and not the date of presentation of Bill of Entry.

Assessment of Customs duty - Section 17 provides that assessment of goods will be made after Bill of

Entry is filed. Date stamp of receipt is put on the „Bill of Entry‟ and then it is sent to appraising

department either manually or electronically

Export procedure

Procedures have to be followed by (a) „person-in-charge of conveyance‟ and (b) the exporter. The

procedures are similar to procedures for import, of course, in reverse direction.

NO STOPPAGE OF EXPORT CONSIGNMENT

Exports are vital for our economy. Any stoppage in export consignment means loss of export orders to

the exporter and loss of foreign exchange to the country. Hence, it has been provided that movement of

export consignment will not be interrupted and no export consignment shall be withheld for any reason

whatsoever. In case of any doubt, customs authorities may ask for an undertaking that the export is on

sole responsibility of the exporter.

Entry Outward - The vessel should be granted „Entry Outward‟. Loading can start only after entry

outward is granted. Steamer Agents can file „application for entry outwards‟ 14 days in advance so that

intending exporters can start submitting „Shipping Bills‟. This ensures that formalities are completed as

quickly as possible and loading in ship starts quickly.

LOADING WITH PERMISSION - Export goods can be loaded only after Shipping Bill or Bill of

Export, duly passed by Customs Officer is handed over by Exporter to the person-in-charge of

conveyance. In case of baggage and mail bags, shipping bill is not necessary, but permission of Customs

Officer is required .

Export Manifest - As per section 41, an Export Manifest/Export Report in prescribed form should be

submitted before departure. [The report is popularly called as „Export General Manifest‟ - EGM]. The

details required are similar to import manifest. Such manifest/report can be amended or supplemented

with permission, if there was no fraudulent intention. Such report should be declared as true by the

person-in-charge signing the export manifest. This report is not required if the conveyance is carrying

only luggage of occupants.

Procedures to be followed by Exporter:

Every exporter should take following initial steps -–

Obtain BIN (Business Identification Number) from DGFT. It is a PAN based number Open

current account with designated bank for credit of duty drawback claims

Register licenses / advance license / DEPB etc. at the customs station, if exports are under Export

Promotion Schemes

Exporter has to submit „shipping bill‟ for export by sea or air and „bill of export‟ for export by

road. Goods have to be assessed for duty, even if no duty is payable for most of exports, as „Nil

Duty‟ assessment is also an assessment.

Shipping Bill to be submitted by Exporter - Shipping Bill and Bill of Export Regulations prescribe

form of shipping bills. It should be submitted in quadruplicate. If drawback claim is to be made, one

additional copy should be submitted. There are five types:

Shipping Bill for export of goods under claim for duty drawback - these should be in Green

colour

Shipping Bill for export of dutiable goods - this should be yellow colour

shipping bill for export of duty free goods - it should be white colour

shipping bill for export of duty free goods ex-bond - i.e. from bonded store room - it should be

pink colou

Shipping Bill for export under DEPB scheme - Blue colour

The shipping bill form requires details

Name of exporter

Consignee

Invoice number

Details of packing

Description of goods

Quantity etc

Relevant documents

Copies of packing list

Invoices

Export contract

Other documents required for export-

Four copies of Commercial Invoice

Four copies of Packing List

Certificate of Origin or pre-shipment inspection where required

Insurance policy.

Letter of Credit

Declaration of Value

Excise ARE-1/ARE-2 form as applicable

GR / SDF form prescribed by RBI in duplicate (i) Letter showing BIN Number.

Examination of goods before export - After shipping bill is passed by export department, the goods are

presented to shed appraiser (exports) in dock for examination. Goods will be examined by examiner.

This inspection is necessary

to ensure that prohibited goods are not exported

goods tally with description and invoice

duty drawback, where applicable, is correctly claimed

Taxation in India:

Income tax :

In india the tax is exempt upto 2 lakh rs for general category i.e. male& female

For senior citizen the limit is 2,50,0000 rs

1% TDS on transfer of immovable property

Tax rate for individuals are 10%,20%,30%

Minimum alternate tax rate is 18.5%

15% tax on dividend of foreign companies

30% tax on income from other source.

Excise duty

Standard rate of excise duty is 12%

Levy of 1% on branded precious metal jewellery

Branded silver jewellery are exempted

Duty increase on gutkha, panmasala, tobacco

Duty can be increased on large car.

Custom duty

10% duty on non-agriculture goods

Uptors 35000 duty free allowances under baggage rules

Duty charged on capital goods for setting up iron ore plants is 2.5%

Full exemption given on certain goods.

Service tax

Rate of service tax is 12%

Rate for works contract service is 4.8%

Common returns EST-3 for excise &service tax

4.3 Present Trade barriers for import / Export

TRADE SUMMARY

The U.S. goods trade deficit with Kuwait was $5.1 billion in 2011, up $2.5 billion from 2010. U.S.

goods exports in 2011 were $2.7 billion, down 1.7 percent from the previous year. Corresponding U.S.

imports from Kuwait were $7.8 billion, up 45.1 percent. Kuwait is currently the 57th largest export

market for U.S. goods.

The stock of U.S. foreign direct investment in Kuwait was $1.5 billion in 2010 (latest data available), up

from $1.4 billion in 2009

Introduction

The Non-Tariff Barrier (NTBs) is known as all procedures and constraints that countries adopt

to control their imports to protect specific domestic production or restrict trade for environmental

concerns. These procedures can be in the for of quotas, licensing, various regulations or voluntary export

restraints.

NTBs include a wide range of regulations to control trade that could be defined by several

diverse authorities such as the Ministries of Agriculture, Health, Environment, Economy and Trade,

Finance, Transportation and The General Commission for Standards and Specifications that sets the

technical standards

IMPORT POLICIES

Tariffs

As a member of the Gulf Cooperation Council (GCC), Kuwait applies the GCC common external tariff

of five percent for most products. Tobacco products are subject to a 100 percent tariff.

Import Prohibitions and Licensing

Kuwait prohibits the importation of alcohol and pork products, and requires a special import license for

firearms. Used medical equipment and used automobiles over five years old generally cannot be

imported. The import of books, periodicals, or movies that insult religion and public morals, and all

materials that promote political ideology is prohibited.

All imported beef and poultry products must have a health certificate issued by the country of export and

a halal food certificate issued by an approved Islamic center in that country. Kuwait plans to adopt a new

law requiring for the Halal Food Certificate, which was ratified by the GCC Standardization

Organization (GSO) in its meeting in August 2010. The new certificate requires detailed information on

the imported halal products, including the name and identification number of the accreditation body,

country of origin, sample details, health certificate number, halal certificate number, and producing

plant. Kuwait will begin enforcing the new requirements after the new law has been ratified by

Parliament. A workshop for importers to discuss implementation of the new certification was held in

November 2011, but no updates have been released.

Acting on outdated information, in 2004, Kuwaiti Customs prohibited all types of live fowl, one day old

layer and broiler chicks, and hatching eggs, from Missouri and Minnesota, based on a recommendation

from the Public Authority for Agriculture and Fish Resources. In 2007, Kuwait lifted the import ban on

pet birds only. In September 2011, the ban on live poultry and derivatives from Missouri was lifted. In

December 2011, Kuwait published the decree lifting the ban on live birds, hatching eggs, and day old

chicks from Minnesota.

In June 2011, Kuwait placed a ban on all frozen and chilled poultry from the United States in response to

the incidence of low pathogenic Avian Influenza in certain regions of the United States. On January 10,

2012, the official decree lifting the ban on frozen or chilled poultry was published.

Since 2003, Kuwaiti Customs banned imports of ruminant animals, including domestic cattle, bison,

buffaloes, camels, llamas, giraffes, deer, pronghorns, antelopes, sheep, and goats. Specifically, live cattle

from Alabama have been banned since 2006.

Customs

The import clearance process in Kuwait has historically been time-consuming, requiring extensive

paperwork and involving numerous redundancies. In 2010, the Ministry of Commerce and Industry

formed a separate committee to focus on trade facilitation and streamlining required paperwork. In

September 2011, this committee submitted a proposal to the Kuwaiti Cabinet Council to establish a one

stop shop that would facilitate the issuance of commercial licenses and streamline required

documentation. The proposal is pending review by the council and no timeline has been established for

its completion.

GOVERNMENT PROCUREMENT

Kuwait‟s government procurement policies require the purchase of local products, where available, and

prescribe a 10 percent price advantage for local firms in government procurement. Procurement by the

Kuwaiti government and its agencies is regulated by Law No. 37 of 1964 concerning Public Tenders, in

which any procurement made by the Kuwait government with a value in excess of KD5,000

(approximately $18,000) must be conducted through the Central Tenders Committee. Kuwait is not a

signatory to the WTO Agreement on Government Procurement.

INTELLECTUAL PROPERTY RIGHTS PROTECTION

Kuwait was listed on the Watch List in the 2011 Special 301 Report. The United States welcomes

continued progress on enforcement against copyright piracy and trademark counterfeiting. However,

there are areas of intellectual property rights (IPR) protection and enforcement that continue to represent

barriers to U.S. exports and investment. Key issues cited in the report include the lack of deterrent

criminal penalties and excessive delays in the enactment of key pieces of IPR-related legislation, which

have been pending for years. The draft law is currently under review. The United States provided

comments on the most recent version of the draft law in September 2011 and continues to encourage

Kuwait to pass the necessary IPR-related legislation and improve its enforcement efforts.

The six Member States of the GCC are working to harmonize their IP regimes. In connection with that

effort, the GCC recently approved a common trademark law. Each Member State is expected to adopt

that law. The United States has established a dialogue with GCC technical experts to discuss this law and

other Customs Union efforts regarding IPR.

SERVICES BARRIERS

Banking

Foreign banks are restricted to opening only one branch, offering investment banking services only, and

are prohibited from competing in the retail banking sector. Furthermore, foreign banks are subject to a

maximum credit concentration equivalent of less than half the limit of the largest local bank and are

expressly prohibited from directing clients to borrow from external branches of their bank or taking any

other measures to facilitate such borrowing.

Investment Barriers

Major barriers to foreign investment in Kuwait include regulations that limit the foreign participation in

the petroleum and real estate sectors; long bureaucratic delays associated with starting new enterprises;

and obstacles created by a business culture heavily influenced by clan and family relationships.

OTHER BARRIERS

Corporate Tax Policies

Arbitrary tax assessments are a continuing complaint of foreign companies operating in Kuwait. In 2005,

a number of foreign corporations with local distributors received income tax bills from Kuwaiti tax

authorities, even though these companies had no direct commercial presence in Kuwait. Some of these

companies have challenged the tax bills in court, and others are working with the U.S. and Kuwaiti

governments to seek a legislative or regulatory solution.

CHAPTER -5

Potential for import / export in India / Gujarat Market

Kuwait Import from India‟s have increased in last ten years and the commodity exported also

varying. The major five commodities exported to Kuwait in 2010 were.

1) Mineral fuels, Mineral Oils & products of their distillation bituminous substances & mineral waxes

2) Iron and Steel & its products

3) Meat & its preparations

4) Nuclear reactors, boilers, machinery & mechanical appliances; parts thereof

5) Electrical machinery & equipment and parts thereof; sound recorders & reproducers, television image

& sound recorders & reproducers and parts

Bilateral Trade and Economic Cooperation

Kuwait is a small, relatively open, petroleum based economy with heavy dependence on foreign

manpower. It has always offered an open, highly competitive and affluent market for capital and

consumer goods and for project exports. While Indian companies did well until the 80s in terms of

project exports, there has not been any significant breakthrough on the investment front since the 90s.

The bilateral trade between India and Kuwait has, however, risen steadily in the post liberation period.

India-Kuwait relations have always had a pro trade-bias, and bilateral trade has, risen steadily

since 1991. India-Kuwait trade was US$ 10.4 billion in 2008-2009, of which nonoil trade accounted for

approximately $1.2 billion while petroleum exports from Kuwait to India were approximately $9.1

billion. India has consistently been among the top ten trading partners of Kuwait. As per Indian

Government sources, the trade during 2005- 2009 and 2009-2010 (Apr-Dec) were as follows

Table II- 6 Bilateral trade between India and Kuwait (US$ million)

2005-06 2006-07 2007-08 2008-09 2009-

2010

Indian Exports to Kuwait 513.73 614.81 681.54 797.50 562.74

Indian Imports from

Kuwait

461.85 5,993.23* 7,704.25 9593.74 5,822.11

Total 975.59 6,608.04* 8,385.79 10,391.24 6,384.85

Table II - 7 Bilateral trade between india and Kuwait (Rs. Lakhs)

2005-06 2006-07 2007-08 2008-09 2009-2010

Indian Exports

to Kuwait

2,27,447.64 2,77,989.70 2,74,490.59 3,62,840.57 2,69,976.99

Indian Imports

from Kuwait

2,04,478.80 27,11,417.49 30,95,993.03 43,19,944.55 2,81,872.10

Total 4,31,926.44 29,89,407.19 33,70,483.61 46,82,785.12 30,51,849.09

Source: Department of Commerce, Ministry of Commerce & Industry, Government of India.

India-Kuwait Bilateral Trade FY 2005-10

Total bilateral trade between India and Kuwait grew by 65% from Rs. 431,503.46 lakhs (US$

974.63 million) in FY 2005-06 to Rs. 713,484.46 lakhs (US$ 1.57 billion) in FY 2006-07.

The total bilateral trade between India and Kuwait in US Dollars terms increased by 26.88%

from US$ 6,601.33 million in the year 2006-07 to US$ 8,375.75 million in 2007- 08. In Rupee terms, it

grew by 12.75% from Rs. 2,989,407.19 lakhs in FY 2006-07 to Rs. 3,370,483.69 lakhs in FY 2007-08.

The difference in the growth rates in rupee and dollar terms is due to the variation in the exchange rate in

corresponding years. Total bilateral trade between India and Kuwait in US$ terms increased by 23.91%

from US$ 8385.79 million in the year 2007-08 to US$ 10,391.24 million in 2008-09. In Rupee terms, it

grew by 38.94% from Rs. 33,70,483.61 lakhs in 2007-08 to Rs. 46,82,785.12 lakhs in 2008-09. The

difference in the growth rates in rupee and dollar terms is due to the variation in the exchange rate in

corresponding years.

India‟s Exports to Kuwait

Below is the share of top 10 items of imports from India during 2006-07. This shows that the

major items imported from India were rice (basmati), meat & its preparations, machinery & instruments,

manufactures of metals, glass products, gems & jewelry, cotton & its accessories, iron & steel and

transport equipment‟s.

India‟s exports grew by 33.15% from Indian Rupees 227,428.27 lakhs (US$ 513.69 million) in

2005-06 to Indian Rupees 302,818.46 lakhs (US$ 669.22) in 2006-07. The exports from India to Kuwait

increased by 11.12% in US Dollars terms from US$ 613.87 million in 2006-07 to US$ 682.12 million in

2007-08. In Rupee terms, it, however, declined by 1.26% from IRs 277,989,70 lakhs to IRs 274,490.59

lakhs in the corresponding period due to appreciation of IRs vis-à-vis US$.

The top 10 items of exports from India during 2007-08 shows that the major items exported from

India were Cereals; iron & steel; meat & its preparations; nuclear reactors, boilers, machinery &

mechanical appliances; electrical machinery & equipment, sound recorders, reproducers & parts; plastic

& its products; dairy products, bird‟s eggs, honey; vehicle & parts; coffee, tea & spices and residues &

waste from the food industries & animal fodder.

The exports from India to Kuwait increased by 17.01% in US Dollars terms from US$ 681.54

million in 2007-08 to US$ 797.50 million in 2008-09. In Rupee terms, it increased by 32.19% from Rs

274,490.59 lakhs to Rs 362,840.57 lakhs in the corresponding period.

A pie-chart showing the share of top 10 items of exports from India during 2008-09 shows that the major

items exported from India were Cereals; meat and edible meat offal; electrical machinery and

equipment‟s and part thereof, sound recorders and reproducers, television image and sound recorders

and reproducers and parts; nuclear reactors, boilers, machinery and mechanical appliances, parts thereof;

mineral fuels, minerals oils and products of their distillation, bituminous substances, mineral waxes; iron

and steel; articles of apparel and clothing accessories, not knitted or crocheted; residues and waste from

the food industries; prepared animal fodder; articles of iron or steel; salt, sulphur, earths and stone,

plastering materials, lime and cement.

Table II -8 Non-oil trade between India and Kuwait (US$ million).

2007-08 2008-09 2009-2010 (Apr- Dec)

Indian Exports to Kuwait 674.98 755.88 561.56

Indian Imports from Kuwait 414.74 399.96 209.13

Total 1,089.72 1,155.76 770.69

Kuwait is among the largest supplier of crude oil to India and the second largest supplier from

the Gulf region. Indian imported Rs. 29,291 crores (US$ 7.27 billion) worth of POL from Kuwait in the

year 2007-08. Indian imported Rs. 41,40,219.26 lakhs (US$ 9.19 billion) worth of POL from Kuwait in

the year 2008-09.

Table II – 9 Non-oil trade between India and Kuwait (Lakhs)

2007-08 2008-09 2009-2010 (Apr- Dec)

Indian Exports to Kuwait 2,71,864.46 3,43,414.60 2,69,419.70

Indian Imports from Kuwait 1,66,863.42 1,79,725.29 99,620.49

Total 4,38,727.88 5,23,139.89 3,69,040.19

Total non-oil bilateral trade between India and Kuwait grew by 6% from US$ 1,089.72 million in

2007-08 to US$ 1,155.76 million in 2008-09. In Rupee terms, it rose from Rs. 4,38,727.88. lakhs to Rs.

5,23,139.89 lakhs..

Kuwait is among the largest supplier of crude oil to India and the second largest supplier from

the Gulf region. India imported Rs. 29,291 crores (US$ 7.27 billion) worth of POL from Kuwait in the

year 2007-08. India imported Rs. 41,40,219.26 lakhs (US$ 9.19 billion) worth of POL from Kuwait in

the year 2008-09. India-Kuwait relations have always had a pro trade-bias, and bilateral trade has, risen

steadily since 1991. India has consistently been among the top ten trading partners of Kuwait.

Total bilateral trade between India and Kuwait in US$ terms increased by 23.91% from US$

8385.79 million in the year 2007-08 to US$ 10,391.24 million in 2008-09. In Rupee terms, it grew by

38.94% from Rs. 33,70,483.61 lakhs in 2007-08 to Rs. 46,82,785.12 lakhs in 2008-09. The difference in

the growth rates in rupee and dollar terms is due to the variation in the exchange rate in corresponding

years.

India‟s imports from Kuwait went up by 24.53% from US$ 7704.25 million in 2007-08 to US$

9,593.74 million in 2008-09. In Rupee terms, the imports rose by 39.53% from Rs. 30,95,993.03 lakhs to

Rs. 43,19,944.55 lakhs in the corresponding period. India‟s imports from Kuwait (excluding POL) were

US$ 399.96 million in 2008-09. The major items (other than Petroleum & its products) imported by

India as Salt, Sulphur, earths and stone, plastering materials, lime and cement; Organic Chemicals; Iron

& Steel; Fertilizers; Plastic and articles thereof; Aluminium and articles thereof; Miscellaneous goods;

Ships, Boats and Floating Structures; Copper & articles thereof.

The most important items of Indian non-oil imports from Kuwait are organic chemicals- 37%, metalifers

ores & metal scrap- 39%, fertilizers manufactured- 8%, sulphur & unroasted iron pyrites- 5%, inorganic

chemicals- 4%, artificial resins, plastic materials etc- 3%, other textile yarns, fabrics, made-up article-

2% etc.

Among the developing Countries Turkey, India, Brazil, Jordan etc have presence in Kuwaiti markets.

These countries have increased their market share from a negligible value to a significant level.

Table II – 10 India‟s Exports to Kuwait

Product Export Percentage %

Cereals 39 %

Meat and Edible Meat Offal 15%

Articles of Iron or Steel 9%

Electrical Machinery and Equipment 8%

Nuclear Reactors, Boilers, Machinery 6%

Residues and Waste from the Food Industries 5%

Edible Fruit and Nuts 4%

Fish and Crustaceans 3%

Iron and Steel 4%

Articles of Apparel and Clothing Accessories 7%

Figure II- G Exports to Kuwait

Table – II – 11 India‟s Imports Form Kuwait

Product Export Percentage

Ships, Boats and Floating structures 1%

Miscellaneous CDS 3%

Aluminiumanc articles 5%

Plastic and articles 7%

Fertilizer 9%

Copper & articles 1%

Iron & Steel 17%

Organic chemicals 24%

others 3%

Salt, Sculpture, stone, terling , cement 29%

Inorganic chemicals 1%

Cereals 39%

Meat and Edible Meat Offal

15%

Articles of Iron or Steel 9%

Electrical Machinery and Equipment

8%

Nuclear Reactors, Boilers, Machinery

6%

Residues and Waste from the Food

Industries 5%

Edible Fruit and Nuts

4%

Fish and Crustaceans

3%

Iron and Steel 4%

Articles of Apparel and Clothing Accessories

7%

India‟s Exports to Kuwait

Figure II- H- Import Product from Kuwait

Ships, boats and floating structures

1%

Miscellanecus to cds 3%

Aluminiumanc articles

5%

plastic and articles there of

7%

Fertilizer 9%

copper & articles

1%

Iron & steel 17% organic chemicals

24%

others 3%

salt, sulphur ,stone, 29%

inorganic chemicals and

organic 1%

Import

CHAPTER -6

6.1 Business Opportunities in future Equate Petrochemical

Business Opportunities for Kuwaitis, so they are good investments that support Kuwait‟s trade balance

while diversifying income from non-oil resources.

The head of saudi‟s Al-kahfji commerce chamber said that Kuwaitis have 30 plants in al-kahfji area.

Why did they go there ? Kuwaiti officials are urged to examine what saudi Arabia provides to industrial

investments and projects, as well as what kuwait is missing.

Kuwait Investment Authority directs its investments to bonds, shares, banks and real-estate with good

returns, but to recruit, develop and train future generations, there should be focus on investments outside

Kuwait, such as establishing refineries and petrochemical complexes, as well as launching industrial

acquisitions. Kuwait will lose existing opportunities if not seized, there are many industrial plants up for

acquisition and the global economy has several golden opportunities due to decrease in value. At the

same time, Kuwait has cash in the billions and not being utilized in worthy investments, while Abu

Dhabi‟s investment authority has acquired a number of petrochemical plants in Canada, Spain and

Australia in the past two years.

EQUATE asked one of the world‟s top banks about Kuwaiti international industrial investments, the

bank replied that Europe witnessed acquisitions worth 50 billion euros with 3 billions of which by Gulf

states, while Kuwait hardly had a share in it. State officials must look into this matter as there are several

appealing acquisition opportunities Priorities have been hindered by lack of proper planning. Even

if such planning exists, it does not address the added-value from industrial ventures as a whole and

petrochemicals in specific.

There‟s too much political involvement in economic affairs in which politicians do not have much

knowledge about. MPs are urged to consult experts on the best means to invest Kuwait‟s oil and its

products while creating career opportunities for nationals, then they will be certain that EQUATE is a

worthy model as one of the best investment opportunities that involves the private sector and

contributes about USD 1 billion annually into Kuwait‟s economy.

Why don‟t we have a second, a third and more of EQUATE?

• In five years, petrochemical prices will increase to USD 2,000 per ton, which means doubling

EQUATE‟s profits. Kuwait‟s bureaucracy has greatly hindered industrial initiatives, especially in the

petrochemical sector. Other Gulf states have surpassed Kuwait in this industry.

• Kuwait‟s private sector has proven its success, such as Boubyan Petrochemical Company (BPC) and

Qurian Petrochemical Industries Company (QPIC). This sector has commenced investing in

petrochemical ventures outside Kuwait, with stakes in Saudi Arabia and Oman. This has only taken

place after involving the private sector in the petrochemical industry through EQUATE which has

unveiled additional industrial frontiers.

The international partner plays a role by sharing its technical and administrative expertise. For example,

Dow, as EQUATE‟s international shareholder, has extensive knowledge and has been around for

decades. Such a partner has supported EQUATE‟s performance, especially in operational affairs, not to

mention marketing and administrative matters.

• Kuwait will have a leading industrial position once it determines what it needs from the international

partner. Having such a partner does not mean each partner taking the manufactured product and selling it

on their own. Kuwait‟s international petrochemical joint ventures, as well as the UAE‟s, have been quite

successful. EQUATE even has a number of its employees receiving training for six months to a year at

Dow‟s facilities around the world.

Each partner, local and international, must have a clear overall business vision by knowing feedstock

prices along with defining objectives for the next five years as this industry is based on long term plans.

No partner will think about short-term investments in Gulf states, as such investments are intended for

between 25-30 years. The global partner must feel secure when teaming up with an official state body.

This partner will evaluate political and economic stability among many factors.

• Kuwait is missing the opportunity from benefitting from the region‟s two biggest markets, such as Iran

and Iraq which have Kuwait as their closest geographical neighbor. Such a matter must be considered.

• If Kuwait provides half of what other Gulf states are offering as investment opportunities, it will

definitely benefit a lot. EQUATE announced a net profit of USD 1.05 Billion for the fiscal year ending

December 31st, 2011, which is a 20% increase over what was achieved in 2010.

6.2 Business Opportunities in future Kuwait-India Trade

There are many sectors in which Indo-Kuwait trade offer many opportunities and better prospects.

Following are the major prospects of this study:

1) Indian exporters feel that there is a lot to offer to Kuwaiti market because of its higher per capita

income. For that proper marketing research has to be performed.

2) Kuwait has a population of 3.6 million comprising of 1.12 million Kuwaiti and 2.48 million non-

Kuwaitis. Indian population in Kuwait which is approximately 0.72 million is the highest among non-

Kuwaitis population. Therefore there is a vast demand of Indian products by Indian people in Kuwait

and that market has to be explored properly. In Kuwait there is a high demand of Indian products. There

are many regional products which were not easily available in India (obsolete) but were retailed in

Kuwaiti market. Noorani oil and Pyrohhea-maar manjan were selling in Bakala (General stores).

3) There are also better prospects of Indian products in Retail and Mall Culture. As Indian products

are cost-effective against their Competitors from developed countries. Merchandisers from Super-

markets or Hyper-markets generally prefer buying Indian products due to its cost advantage and similar

needs of consumers. Lulu Hyper-market has a great presence in Kuwait and middle- Eastern countries.

Max India formerly known as Landmark has more than 20 retail outlets in Middle East countries selling

Indian products. Major portion of Retail sector has been discussed.

4) Indian exporters have an edge over Western exporters in terms of price but they have

disadvantage in terms of quality. They have to maintain better quality so that Indian products will have a

comparative advantage of both cost and quality over western products in Kuwaiti products.

5) There are many international retail outlets which are opened in India and have a better prospects

like X-cite, Next and Jumbo electronics.

6) Indian exporters have location advantage over their western counterparts and this will be helpful

in developing South-South Cooperation.

7) India‟s experience an achievements in some specific fields of economic development can provide

a sound basis for bilateral cooperation between the two countries. It is a hard reality that Kuwait will be

a major oil exporting country yet in the development of some other sectors of its economy Indo-Kuwait

cooperation will be beneficial to both of them. It is along term process and the ultimate goal should be

sustained economic growth, especially in the industrial sector to provide better employment

opportunities for the growing population and self-reliance free from the dominance of developed

countries. India‟s new economic policy has given a new push to Indian economy. Free trade, foreign

investment and participation of NRI‟s are contributing a lot to Indian economy.

8) Some developments in oil sector through the government of both countries are under process

which will help to boost Indo-Kuwait Trade. This oil related prospects will offer a lot for Business from

both sides.

9) The mode and model of trade is changing rapidly in recent years. Trade also demands a fair

amount of education and training in the respective field and areas. India is extending cooperation in the

education and training since long back. In accordance with the changing scenario, both the countries can

promote mutual understanding and cooperation through a process of wide sharing of knowledge and

professional talents in both academic pursuits and technical specializations.

10) The Economic Services Centre (ESEC) provides a package of non-banking services and helps

interested parties to invest in industrial ventures in the country. The center provides assistance in

carrying out techno-economic feasibility studies. It also conducts management training programs.

11) Indian Exporters have great prospects in the field of Agricultural products, Food products, Oil

Sector, Telecom Sector, Aviation Sector, Retail Sector, Pharmaceutical Sector, Agricultural Sector,

Investment Sector, Banking Sector, Insurance Sector, Shipping sector, Technology and Engineering

Sector, Software Sector, Apparel Sector, Gems and Jewellery Sector, Infrastructure Development Sector

and Healthcare Products Sector.

CHAPTER -7

Conclusion and Suggetion

7.1 Suggestions

India needs to take the following measures to improve its bilateral ties with Kuwait and to

overcome the constraints to its trade relations with Kuwait

The need of Kuwait is Agricultural products and technical know-how and the need of India is oil.

The proper export and import policy and mutual understanding can solve many problems in single

sittings. Keeping in view the mutual goodwill and friendly relations between the two countries there is a

need to identify the specific areas of mutual cooperation in the context of new economic order of the

world under light of new economic reforms of both the countries.

Since there are many similarities and dissimilarities in the respective economies of India and

Kuwait, the nature and extent of trade and economic cooperation should be based on a long term strategy

as to achieve the desired objectives in conformity with the national interests of the two countries.

Besides a well-planned long-term strategy, there is a need for reorientation of the existing policy

formulations and a sound mechanism to implement them. Such mechanism should be a multi-stage set

up involving the official and non-official agencies like trade organizations, financial institutions and

shipping corporations etc.

The scope for promotion of exports of traditional goods from India to Kuwait being limited, India

should explore avenues of export promotion of manufactured goods involving modern technology and

skill. India also has the capability to reap the advantage of economies of scale in the manufacture of

capital-intensive manufactures, which have sufficient export potentials to Kuwait.

There is a need of effective arrangements for publicity of various categories of Indian goods in

Kuwaiti market and vice-versa. The Kuwaiti people by and large have very little knowledge of the

nature and quality of goods produced in India. This applies not only to the consumers but also to those

involved in import business. Besides regular visits of trade delegation, trade fairs should be organized on

a reciprocal basis.

Another aspect that needs special attention is the quality of Indian goods in the highly

competitive Kuwaiti market. Being a major oil exporting country, the Kuwaiti market is open to

countries like USA, Japan, Germany, France, South Korea and East European countries, which offer a

tough competition to India in respect of the quality and price of their products. Thus India needs

innovation in the quality and price structure of some specific commodities like Engineering goods,

Electrical Appliances, Machinery equipment‟s etc. The policy measures adopted by India in this regard

have not proved so much effective in promoting its exports to Kuwait.

So far the policy measures of India to promote exports are commodity wise. These will be more

effective if they are commodity wise as well as country wise. Countries should be categorized into

different groups for intensive exports promotion.

In the field of industrial development, especially in Kuwait, the most viable means to promote

industrial growth along with trade lies in coordinated measures for technical cooperation and joint

collaboration in the implementation of the industrial projects. This calls for a long-term framework to

implement projects of mutual benefit, especially in Kuwait. These joint ventures can boost and intensify

the export promotion strategy of India through the supply of plant and machinery, technical know-how

for several industrial projects to set up in Kuwait to make its economy self-reliant.

7.2 Conclusion

Kuwait has achieved good track record of economic performance and has been able to create

underlying conditions of human development, governance and institutions favorable for unlocking

economic diversification and growth. The diversification of the economy towards non-oil and gas

industries is a challenging task that would require cluster based, collaborated and liberalized approach

for development between government, industries and foreign investors

Over the last forty years, Kuwait has managed to develop an efficient logistics, financial,

educational, and telecommunication infrastructure that supported the evolution of the petrochemical

cluster.

Kuwait is relatively a liberal market supported by progressive government policies, and the

petrochemical cluster is specifically supported by the oil and gas industry, which is the main driver for

Kuwaiti economy.

Kuwait is growing up by exporting their Oil, and non-Oil and Petrochemical product. Utilizing

their natural resources and they are providing apparels and cloths to others and helping to develop or to

grow their country economy.

Petrochemical and oil , non-oil is the main strength of Kuwait country. Equate Petrochemical

company has potential to grow up in the market of India, because here they have huge market with

different product Ethylene: 1.8 Million MTA ,Polyethylene (PE): 825,000 MTA , Ethylene Glycol (EG):

1.2 Million MTA , Paraxylene (PX): 829,000 MTA,Styrene Monomer (SM): 450,000 MTA

,Polypropylene (PP): 140,000 MTA ,Benzene( BZ): 393,000 MTA

Population is the biggest factor which they attracted because of having population they have

more market, in Petrochemical industries if you have more people you have huge market to sell your

product, another factor by that they attracted to India is oil and chemical production ,

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A

GLOBAL / COUNTRY STUDY AND REPORT

ON

“COUNTRY OF KUWAIT”

Submitted to

Gujarat Technological University

IN PARTIAL FULFILLMENT OF THE

REQUIREMENT OF THE AWARD FOR THE DEGREE OF

MASTER OF BUSINESS ASMINISTRATION

UNDER THE GUIDANCE OF

Mr. Vikas Patel

Submitted by

(Jaynee,Meha,Arti, Mitanshu & Jay)

Batch : 2011-13

MBA SEMESTER III/IV

INDU MANAGEMENT INSTITUTE

MBA PROGRAMME

Affiliated to Gujarat Technological University Ahmadabad

Month, Year

STUDENTS‟ DECLARATION

We jay, Jaynee, Meha, Arti, Mitanshu & Jay hereby declare that the report for Global/

Country Study Report entitled “Country of KUWAIT” is a result of our own work and

our indebtedness to other work publications, references, if any, have been duly

acknowledged.

Place : Vadodara

Date :

INSTITUTE‟S CERTIFICATE

“Certified that this Global /Country Study and Report Titled “COUNTRY OF

KUWAIT” is the bonafide work of Jaynee, Meha, Arti ,Mitanshu & Jay who carried out

the research under my supervision. I also certify further, that to the best of my knowledge

the work reported herein does not form part of any other project report or dissertation on

the basis of which a degree or award was conferred on an earlier occasion on this or any

other candidate.

Signature of the Faculty Guide

(Name and Designation of Guide)

(Certificate is to be countersigned by the Director/HoD)

PART – I

WORK DONE IN SEM. 3

COUNTRY – KUWAIT

Nationality – Kuwaiti

43%

35%

15% 7%

REGION

muslim(official)

sunni

shia

other(christian,hindu,parsi)

INDEX

Sr.No. Particulars Page No.

1 Demographic Profile 6

2 General Economic & Industries overviews 9

3 General overview of Trade and Commerce 16

4 Overview Different economic sectors of Kuwait 20

5 Legal aspects of trade in Kuwait 21

6 Present Trade Relations of India / Gujarat with

Kuwait

25

7 Business Volume of different products 28

8 Investment 30

9 PESTELAnalysis 31

10 Conclusion 34

11 References 35

1. DEMOGRAPHIC PROFILE OF KUWAIT

1. Population

2,646,314 (July 2012 est.)

note: includes 1,291,354 non-nationals

2. Age structure

0-14 years: 25.8% (male 348,816/female 321,565)

15-64 years: 72.2% (male 1,153,433/female 720,392)

65 years and over: 2% (male 25,443/female 25,979) (2011 est.)

3. Median age

total: 28.5 years

male: 29.8 years

female: 26.3 years (2011 est.)

4. Population growth rate

1.883%

note: this rate reflects a return to pre-Gulf crisis immigration of expatriates (2011 est.)

5. Birth rate

20.96 births/1,000 population (2011 est.)

6. Death rate

2.13 deaths/1,000 population (July 2011 est.)

7. Major cities - population

KUWAIT (capital) 2.23 million (2009)

8. Sex ratio

at birth: 1.05 male(s)/female

under 15 years: 1.08 male(s)/female

15-64 years: 1.6 male(s)/female

65 years and over: 0.96 male(s)/female

total population: 1.43 male(s)/female (2011 est.)

9. Infant mortality rate

total: 7.87 deaths/1,000 live births

male: 7.56 deaths/1,000 live births

female: 8.19 deaths/1,000 live births (2011 est.)

10. Nationality

noun: Kuwaiti(s)

adjective: Kuwaiti

11. Ethnic groups

Kuwaiti 45%, other Arab 35%, South Asian 9%, Iranian 4%, other 7%

12. Religions

Muslim (official) 43% (Sunni 35%, Shia 15%), other (includes Christian, Hindu, Parsi) 7%

13. Languages

Arabic (official), English widely spoken

14. Literacy

definition: age 15 and over can read and write

total population: 93.3%

male: 94.4%

female: 91% (2005 census)

15. School life expectancy (primary to tertiary education)

total: 12 years

male: 12 years

female: 13 years (2006)

16. Education expenditures

3.8% of GDP (2006)

17. Health expenditures

6.8% of GDP (2009)

18. Physicians density

1.793 physicians/1,000 population (2009)

2. GENERAL ECONOMICS AND INDUSTRIES OVERVIEW

1. GENERAL ECONOMIC OVERVIEW

Kuwait has a geographically small, but wealthy, relatively open economy with crude oil reserves of

about 104 billion barrels - about 7% of world reserves. Petroleum accounts for nearly half of GDP, 95%

of export revenues, and 95% of government income.

Kuwaiti officials have committed to increasing oil production to 4 million barrels per day by 2020.

The rise in global oil prices throughout 2011 is reviving government consumption and economic

growth. Kuwait has experienced a 20% increase in government budget revenue, which has led to higher

budget expenditures, particularly wage hikes for many public sector employees.

Kuwait has done little to diversify its economy, in part, because of this positive fiscal situation, and, in

part, due to the poor business climate and the acrimonious relationship between the National Assembly

and the executive branch, which has stymied most movement on economic reforms. In 2010, Kuwait

passed an economic development plan that pledges to spend up to $130 billion over five years to

diversify the economy away from oil, attract more investment, and boost private sector participation in

the economy.

1. GDP (purchasing power parity)

$149.8 billion (2011 est.)

$141.7 billion (2010 est.)

$137 billion (2009 est.)

note: data are in 2011 US dollars

2. GDP - real growth rate

5.7% (2011 est.)

3.4% (2010 est.)

-5.2% (2009 est.)

3. GDP - per capita (PPP)

$40,700 (2011 est.)

$39,600 (2010 est.)

$39,300 (2009 est.) note: data are in 2011 US dollars

4. GDP - composition by sector

agriculture: 0.3%

industry: 47.4%

services: 52.3% (2011 est.)

5. Labor force

2.243 million

note: non-Kuwaitis represent about 60% of the labor force (2011 est.)

6. Investment (gross fixed)

26.1% of GDP (2011 est.)

7. Budget

Revenues: $108.3 billion

expenditures: $58.06 billion (2011 est.)

8. Taxes and other revenues

57.4% of GDP (2011 est.)

9. Budget surplus (+) or deficit (-)

20.5% of GDP (2011 est.)

10. Inflation rate (consumer prices)

5.6% (2011 est.)

4% (2010 est.)

11. Agriculture - products

fish

12. Industries

petroleum, petrochemicals, cement, shipbuilding and repair, water desalination, food processing,

construction materials

13. Electricity - production

49.82 billion kWh (2009 est.)

14. Oil - production

2.45 million bbl/day (2010 est.)

15. Natural gas - production

11.49 billion cu m (2009 est.)

16. Exports - commodities

Oil and refined products, fertilizers

17. Exports - partners

Japan 15.5%, India 15.3%, South Korea 13.5%, China 10.1%, US 8.4%

18. Imports - commodities

food, construction materials, vehicles and parts, clothing

19. Imports - partners

US 14.2%, China 9.5%, Saudi Arabia 7.3%, Japan 7.2%, Germany 6.1%, Italy 4.7%, India 4.4% (2009)

20. Stock of direct foreign investment - at home

$3.028 billion (31 December 2011 est.)

$2.128 billion (31 December 2010 est.)

21. Exchange rates

Kuwaiti dinars (KD) per US dollar -

0.2858 (2011 est.)

0.2866 (2010 est.)

0.2877 (2009)

0.2679 (2008)

0.2844 (2007)

22. Fiscal year

1 April - 31 March

Kuwait witnessed major economical changes and events during the past few years. Prior to the global

financial crisis, most sectors were registering strong growth, specially the real estate, banking and

investment sectors.

The financial developments worldwide gave Kuwait sort of a “push” to pursue new development plans

that would enhance its position among other countries and improve its infrastructure.

The spill-over effect from developments in other GCC countries is expected to result in boosting higher

demand for new projects in Kuwait, primarily in infrastructure.

The Central Bank of Kuwait (CBK) used both the monetary and fiscal policies to contain the negative

effects of the financial crisis, and provide stability to the economy.

The steps taken by the CBK have improved the overall market conditions, brought in the much needed

stability and avoided further deteriorations.

Economic Highlights

1. Recent development in the region

2. Kuwait‟s first development plan since 1986

3. Capital Market Authority Law

4. CBK to lower the discount rate to 2.50%

5. Pegging the Kuwaiti Dinar (KWD) currency to a basket of foreign currencies

6. CBK to impose new regulations for banks and investment

GCC Population GDP (2009) Population (mn) GDP per capita (USD)

KSA 25.5 14,744.6

UAE 4.9 45,614.5

Qatar 1.6 59,989.8

Oman 3.1 14,955.2

Bahrain 1.0 19,817.3

Kuwait

3.5 27,835.4

i. INDUSTRIES OVERVIEW

Kuwait is a rich country with a high per capita income of about 30,000 USD. Its GDP has

experienced a growth rate of more than 20% during the past five years. The country has 9% of

the world oil reserves.

Kuwait is trying to position itself as the entrance gate for investment in the area. The public

sector dominates the economy and concentrates three quarters of the country's wealth. It

represents three fourths of GDP.

The government is currently trying to transfer the 95% of Kuwaitis who work for the

government from the public sector to the private sector. In February 2010, a 2010-2015 plan to

develop infrastructure has been signed, worth USD 100 billion, with the special aim of opening

the country's economy to the private sector.

Kuwait was affected by the financial crisis of 2008 (in the 4th quarter of 2008, revenues from oil

decreased by 51% compared to the previous quarter) and the central bank had to provide help to

one of the main banks of Kuwait which was experiencing cash shortage.

The countries poorest were hurt by the crisis too. However, the country is currently coming out

of crisis, namely thanks to the increase in the production of oil, and recorded a 3% growth in

2010, hoping to reach 4% in 2011.

In addition to this, each year the country shows a surplus budget of between 10 to 20%, which in

2010 reached USD 29 billion?

The income from the country's oil allows fuelling a particularly generous welfare system

(automatic access to public employment, artificial maintenance of public prices and prices of

basic products at a very low level, high subsidies for home-buyers, generous medical insurance,

etc.)

ii. Main Industry Sector

Agriculture activity is very limited due to lack of water and arable land. Agriculture contributes

only 2% to GDP.

With 100 billion barrels of oil in reserve (i.e. 9% of the world's total and representing 100 years

of production), the country's industry is based on oil exploitation. Income from this sector

represents more than half of GDP and more than 90% of exports, i.e. more than 95% of the

country's income. By 2030, Kuwait is also planning to invest more than USD 87 billion in the oil

sector, especially in creating new oil refineries.

The non-oil sector is dominated by services, mostly real estate and financial services, which were

relatively hit by the financial crisis.

3. GENERAL OVERVIEW OF TRADE AND COMMERCE

Kuwait is highly dependent on foreign trade, which represents nearly 95% of the GDP.

Kuwait's imports total 16 billion USD. The country depends especially heavily on imports of

foodstuffs, consumer goods (40% of total) and semi-finished products (38% of total), which

ranks it among countries with the highest per capita import rate.

The imports have been increasingly quickly due to the country's undertaking of large projects

and a high private consumption demand.

Kuwait's largest suppliers are Germany, the United States, Japan and Saudi Arabia.

Imports from other Gulf countries have increased since the introduction of the GCC (Gulf

Cooperation Council). The main products imported are cars, agricultural and food products, as

well as mechanical industrial products, electric and electronic products.

Kuwait's exports quadrupled between 2002 and 2008 (USD 87 billion in 2008) Exports of crude

oil and refined products account for 95% of the total. The remaining amount consists of re-

exports, mainly of machinery and transportation equipment.

Kuwait's main clients are the Asian countries, especially Japan (17.5%), South Korea (13.9%),

Taiwan (9.3%), as well as Singapore, India and China, but also the United States (8.2%) and

some of the countries of the EU. The trade balance of Kuwait is largely positive due to the high

prices of oil.

FDI in Figures

Kuwait has always been a country open to foreign investment and with the introduction of new

laws in recent years; the country is even more open to foreign capital and expertise.

In early 2003, a new law for FDI came into force. It allows 100% foreign ownership in a number

of sectors. This law also makes available a number of tax breaks and other benefits which can

attract new investors who in return must guarantee a set of quotas regarding the employment of

Kuwaiti nationals.

The current policy to promote FDI focuses on a number of sectors which can benefit most from

foreign investment and expertise.

These include infrastructure investment such as water, waste-water treatment, power, and

communications.

Kuwait also tries to promote investment in the banking and financial sectors: investment aid,

insurance, information technology and software development. Investment in hospitals and

pharmaceuticals is also favoured.

Authorities are also keen to attract foreign capital into other sectors such as land and sea freight,

tourism, real estate and urban development.

A financing plan of USD 100 billion has in fact been approved by the Par lament in 2010. This

project aims to develop infrastructure (highways, railways, subway) and should leave more space

for the private sector.

With the financial crisis of 2008-2009, the influx of foreign capital halved, decreasing from USD

121 million in 2007 to USD 57 million in 2008.

FDI Government Measures

Kuwait's government, with the goal of attracting foreign investments to the country, issued a law

in 2001, renewed in 2003, regulating Foreign Direct Investments. The new law allows foreign

investors to own majority capital holdings up to 100% equity if their business activities are in the

sectors that the government wants to develop, such as the projects of new infrastructures (water,

power energy, drainage and communications).

It applies also to some investing companies such as insurance, information technologies,

hospitals, hotels, construction of housing zones, freight transportation, etc. This new law

provides the enterprises with tax exemptions that can last up to ten years. The law makes it easier

to recruit foreign low cost labor.

It also provides a guarantee against expropriation and ensures the right to repatriate their capital

gains. New investors are also protected against changes in legislation. However, the right to

benefit from this new law depends on the percentage of national labor force employed by the

enterprise.

The changes provided by this law do not benefit foreign investors that expose obstacles to its

application and exclude investors in the upstream oil development sector even if they can have

joint venture companies in the petrochemical industries.

Country Strong Points

Kuwait presents several advantages. First, the country has a high quality of life; its oil reserves

are consistent. The local population is young and a great consumer.

They are very fond of foreign products, western brands and high technology. Their life and

consuming style brings them closer to the western world. The cost of energy is very low.

Kuwait is endowed with a good financial management and a solid banking system. The Kuwaiti

government is willing to diversify its economy and has launched an open policy to foreign

investments.

To close it up, the countries infrastructures are of high quality, the labour force provided by

immigrants is inexpensive and the absence of taxes is some of the undeniable advantages to

foreign investors.

Country Weak Points

Kuwait is a country that still depends largely on its oil sales.

Its public administration is excessive since 90% of Kuwait's citizens are employed by the

government and this constitutes 60% of its current expenses.

The country remains too closed to foreign investment because of its laws restricting freedom of

establishment to non-citizens. In addition, Kuwait does not insure sufficient protection to

intellectual property.

4. OVERVIEW OF DIFFERENT ECONOMIC SECTORS

OVERVIEW OF THE CURRENT ECONOMY

Kuwait has a geographically small, but wealthy, relatively open economy with crude oil reserves

of about 104 billion barrels - about 7% of world reserves. Petroleum accounts for nearly half of

GDP, 95% of export revenues, and 95% of government income. Kuwaiti officials have

committed to increasing oil production to 4 million barrels per day by 2020. The rise in global oil

prices throughout 2011 is reviving government consumption and economic growth. Kuwait has

experienced a 20% increase in government budget revenue, which has led to higher budget

expenditures, particularly wage hikes for many public sector employees. Kuwait has done little

to diversify its economy, in part, because of this positive fiscal situation, and, in part, due to the

poor business climate and the acrimonious relationship between the National Assembly and the

executive branch, which has stymied most movement on economic reforms. In 2010, Kuwait

passed an economic development plan that pledges to spend up to $130 billion over five years to

diversify the economy away from oil, attract more investment, and boost private sector

participation in the economy.

Definition: This entry briefly describes the type of economy, including the degree of market

orientation, the level of economic development, the most important natural resources, and the unique

areas of specialization. It also characterizes major economic events and policy changes in the most

recent 12 months and may include a statement about one or two key future

5. Legal aspects of trade in Kuwait

1. Domestic Trade

Foreign travellers gave extensive accounts about domestic trade in medieval India. Ibn Batuta had

described Delhi as a major trade centre. The most superior quality rice and sugar from Kannauj, wheat

from Punjab and betel leaves from Dhar in Madhya Pradesh found their way to the markets of Delhi.

Well-maintained roads linking various parts of the country facilitated domestic trade. The threat from

bandits did not in any way affect the flow of goods as merchants travelled in well-armed groups to

ensure their security. According to Barbosa‟s account, trade between Gujarat and Malwa was possible

owing to the routes established in this area.

The roads facilitated the exchange of goods between the different parts of the country. Limbodar in

Gujarat and Dabhol in Maharashtra were major trade centres, which linked the northern and southern

halves of the country. Accounts of foreign travellers give instances of the trade between Vijaynagar and

Bhatkal in Goa with 5000-6000 bulls carrying goods between the two places. Vijaynagar traded in

diamonds with other southern cities.

River routes also facilitated trade between different parts of the country. Boats carrying goods used to

ply on the Indus and the Ganges. Some of the merchants had their own large boats.

Different communities dominated trade in various parts of the country. Multani and Punjabi merchants

handled the business in the north, while in Gujarat and Rajasthan it was in the hands of the Bhats.

Foreign traders from Central Asia, known as Khorasanis engaged in this profession all over India.

Members of the nobility and the royalty took an interest in trading activities. They set up their own

manufacturing centres wherein local artisans were employed.

Internal trade flourished due to the organised system set up by the government. The 14th century Sultan

Alauddin Khilji for instance, used to strictly supervise the market places. Shopkeepers, who were caught

violating the rules, were severely punished. However, the trading community used to face unfair

treatment from the government officials. Sometimes they were forced by these officials to sell their

products at reduced rates or on credit, thus incurring heavy losses in the process. The price list fixed by

the government brought in low returns for the traders.

During the period of the later Mughals in the 18th century, the royalty and the nobility either purchased

luxury goods at very low prices or did not pay at all. Such circumstances forced the trader to hoard his

wealth and lead a frugal existence.

1. Foreign Trade

India‟s exports far exceeded her imports both in the number of items as well as in volume. The chief

articles of import were horses, from Kabul and Arabia, dry fruits and precious stones. India also

imported glassware from Europe, high grade textiles like satin from West Asia, while China supplied

raw silk and porcelain. Foreign luxury goods were highly popular among the royalty and the nobility.

These included wines, dry fruits, precious stones, corals, scented oils, perfumes and velvets.

During the Sultanate period articles of everyday use as well as luxury articles were exported to Syria,

Arabia and Persia from Bengal and Cambay. These included silks, gold-embroidered cloth caps,

exquisitely designed clay pots and pans, guns, knives and scissors. The other prime articles of export

were sugar, indigo, oils, ivory sandalwood, spices, diamonds and other precious gems and coconuts.

Arab traders shipped Indian goods to European countries through the Red Sea and the Mediterranean

ports. Indian products were also sent to East Africa, Malaya, China and the Far East. In China, Indian

textiles were valued more than silk. Trade was also conducted through overland routes with

Afghanistan, Central Asia and Persia. The route lay through Kashmir, Quetta and the Khyber Pass. Iraq

and Bukhara were the other countries with which India conducted trade via the land route.

Foreign trade was in the hands of both local and foreign merchants. Many European travellers had

settled in the coastal regions. Limbodar in Gujarat was a major exporting centre. Horses imported from

Arabia were sent from the port of Bhatkal in Goa to the southern kingdoms. Imports like bronze, iron,

wax, gold and wool were brought in through Goa, Calicut, Cochin and Quilon. The traders of Malabar,

Gujarat and foreign settlers controlled business in the port cities of Calicut, Khambat, and Mangalore.

Chinese ships docked at Quilon and Calicut while in Khambat the volume of trade was such that 3000

ships visited this port annually. This fact gives an idea of the magnitude of India‟s foreign trade during

the medieval period.

Trade with China and Southeast Asia was mainly carried on through the port of Sonargaon now known

as Dacca. Vijaynagar, which was the richest and most extensive state in the 15th and 16th centuries,

enjoyed the most voluminous maritime trade with diverse countries such as Persia, Arabia, Africa, the

Malayan Archipelago, Burma, China and the numerous islands in the Indian Ocean. The magnitude of

trade can be surmised from the fact that there were 300 ports to facilitate the movement of goods. The

shipbuilding industry flourished in the coastal towns.

The city of Vijaynagar was a teeming marketplace for both exports and imports. The fabulous wealth of

the Empire left the foreigners dumbfounded. The people, irrespective of which strata of society they

belonged to, possessed vast quantities of gold, diamonds and material wealth. Domingo Paes described

the citizens as being heavily bejewelled. Abdur Razzak, the Khurasani ambassador to the court of

Vijaynagar, refers to the treasury which had chambers filled with molten gold.

The merchant community in the other parts of the country was a prosperous lot. The Gujarati and

Marwari businessmen who controlled the trade between the coastal towns and North India were

extremely wealthy and spent large sums for the construction of temples. The Multanis who were Hindus

and the Khurasanis who were Muslim foreigners controlled the trade with Central and West Asia. Many

of these Multanis and Khurasanis settled in Delhi where they lived luxurious lives. Cambay was also

home to an affluent mercantile community.

Thus India had always enjoyed a favourable balance in her trade relations with other countries. Her

earnings from the export of textiles, sugar, spices and indigo alone went up to cores of rupees. The state

coffers were amply stocked with gold and silver.

6. PRESENT TRADE RELATIONS OF INDIA WITH KUWAIT

India and Kuwait enjoy traditionally friendly relations. These are based in history and have stood the test

of time.

Geographic proximity, historical trade links, cultural affinities and presence of a large number of Indian

expatriates continue to sustain and nurture this long standing relationship. India has been a natural trading

partner and a destination for higher learning.

Until1961, the Indian rupee was the legal tender in Kuwait. High level visits from India to Kuwait have

included those by Hon‟ble vice president of India Dr. Zakir Husain in 1965, by prime minister Indira

Gandhi in 1981 and by Hon‟ble vice president of India Shri M Hamid Ansari in 2009.

High level visits from Kuwait to India have included those by HH the crown prime minister sheikh Sabah

Al Sabah in 1980 and again in 1983 and HH the Amir Shiekh Sabah Al Jaber Al Sabah in 2006.

India and Kuwait are lid business partners. Our trade relations date back tens of centuries. Today, the

bilateral business ties are being steadily expanded and further strengthened by continuous interaction and

cooperation, including regular exchange of business delegations.

Besides among being the major trade partners, India sees Kuwait as an important economic partner for

investments, joint ventures, transfer of technology projects and joint projects in third countries.

Trade in the current year

During the current financial year i.e. April-sep, 2012-13, exports are the tune of US$ 762.23 million

whereas the imports from Kuwait are to the tune of US$ 12581.33 million. The total trade is US$

13343.66 million.

0

200

400

600

800

1000

1200

1400

1600

1800

2000

2007-2008 2008-2009 2009-2010 2010-2011 2011-2012

674.98 755.88 780.23

1813.29

1174.66

414.74 399.96 339.69

584.55 708.26

Indain exports to Kuwait

Indian imports of Kuwait

2007-2008 2008-2009 2009-2010 2010-2011 2011-2012

Indain exports

to Kuwait

674.98 755.88 780.23 1813.29 1174.66

Indian imports

of Kuwait

414.74 399.96 339.69 584.55 708.26

Total 1089.72 1155.76 1119.92 2397.84 1882.92

India‟s exports to Kuwait

A chart showing the share of top 5 items of exports from India during the year 2011-12 were

cereals; articles of iron and steel; pressures vessels reactors, columns/towers or chemical storage

tanks and industrial valves; electrical machinery and equipments, sound recorders and

reproducers, television image; and meat and edible meat offal.

India‟s Imports from Kuwait

A chart showing the share of top 5 items of imports (excluding petroleum & its products) from

Kuwait during 2011-12 is given – organic chemicals, iron and steel, salt; sulphur; earths and

stone; plastering materials; and lime and cement, plastic and its articales and alminum and its

articles.

7. BUSINESS VOLUME OF DIFFERENT PRODUCTS

# Product Trade

volume(thousands)

Share(%) Growth(%5 yrs)

1 Crude oil 24,854,476 21.50 197.42

2 Non crude oil 10,286,475 8.90 169.26

3 Petrolum gases 1,693,988 1.47 120.84

4 Polymers of ethylene 415,338 0.36 79.62

5 Acyclic alocohols 247,289 0.21 129.62

6 Nitrogenous fertilizers 192,491 0.17 682.04

7 Polymers of propylene &

other olefins

80,377 0.07 126.56

8 Articles of jewelry & parts 62,628 0.05 3,359.37

9 Passenger vechicals 56,739 0.05 7558.51

10 Iron & steel bars & rods-

HR

47,639 0.04 390,257.92

66%

27%

4% 1%

1%

1%

0%

0%

0%

0%

BUSINESS VOLUME OF DIFFERENT PRODUCTS

1 Crude oil

2 Non crude oil

3 Petrolum gases

4 Polymers of ethylene

5 Acyclic alocohols

6 Nitrogenous fertilizers

7 Polymers of propylene & otherolefins

8 Articles of jewelry & parts

8. INVESTMENT IN KUWAIT

Kuwait Investment is a private investment company located in a region that contains 75% of the

world's oil reserves, Kuwait may be small in size but it has best petroleum wealth.

We also supply countries with its vital oil and gas needs by investing in new creating, producing, and

refining, transporting and marketing oil companies.

We invest direct mostly in established Petroleum Corporation and Oil Companies in Kuwait and also

established a Business Angle Network.

We are using 40% of our online investor resources and 60% of our own capital.

We are offer 3 short investment plans suitable for investors worldwide with a principal security fund.

Kuwait Investment introduces this unique blend financial and investment products and serves via

specialist work teams of high-caliber professionals in the various disciplines.

This work teams are organized under departments of which the work is coordinated achieve best

operating results for the Company‟s shareholders and customers.

PESTEL Analysis of KUWAIT

PESTEL analysis stands for “Political, Economic, Social, Technological, Environment and Legal

Analysis”. It is a part of the external analysis when conducting a strategic analysis or doing

market research and gives an overview of the different macro-environmental factors that the

company has to take in Kuwait. It is a useful for understanding market growth or decline,

business position, potential and direction for Kuwait industries.

(1) Political Analysis

They include goods and service which the government wants to provide or be provided and those

that the government does not want to be provided. Furthermore, governments have great

influence on the health, education and infrastructure of a nation. Specifically political analysis

includes areas such as tax policy, labour law, environmental law, trade restrictions, tariffs and

political stability. Kuwait also many political factors conducted to the Organization of Petroleum

Exporting Countries in industry.

(2) Economic Analysis

They include economic growth, interest rates, exchange rates and the inflation rate. Kuwait is one of the

richest countries in the Muslim world. Current GDP per capita reached astonishing peak growth of 439%

in the 1970s.[5] But this proved unsustainable and contracted by 58% in the1980s. However rising

global oil demand helped register growth of 91% in the 1990s. Diversification is a long-term issue for

this over-exposed economy. This is a chart of trend of gross domestic product of Kuwait at market prices

estimated by the International Monetary Fund with figures in millions of Kuwaiti Dinars.

Kuwait is a small country with massive oil reserves, whose economy has been traditionally dominated by

the state and its oil industry. During the 1970s, Kuwait benefited from the dramatic rise in oil prices,

which Kuwait actively promoted through its membership in the Organization of Petroleum Exporting

Countries (OPEC). The economy suffered from the triple shock of the 1982 Souk Al-Manakh stock

market crash, the mid-1980s drop in oil prices, and the 1990 Iraqi invasion and occupation. The Kuwaiti

Government-in-exile depended upon its $100 billion in overseas investments during the Iraqi occupation

in order to help pay for the reconstruction. Thus, by 1993, this balance was cut to less than half of its pre-

invasion level. The wealth of Kuwait is based primarily on oil and capital reserves, and the Iraqi

occupation severely damaged both.

(3) Social Analysis

They include the cultural aspects and health consciousness, population growth rate, age distribution,

career attitudes and emphasis on safety. Trends in social factors affect the demand for a company‟s

product and how that company operates. The attitudes toward achievement motivation among Kuwaiti

social workers. A number of factors are explored, including attitudes toward collaboration and its

relationship to achievement. No studies have been conducted in Kuwait regarding factors of motivation

and collaboration among social workers in different organizations, or its relation to their achievement.

Participants were a convenience sample of 313 social workers from various institutions in Kuwait.

Results of the study indicated that years of experience, age, and number of children correlated positively

with the social worker motivation towards achievement. Additionally attitude toward collaboration,

number of children, and income were significant predictors of social worker achievement motivation.

Suggestions for future research are discussed.

(4) Technological Analysis

They include ecological and environmental aspects, such as research and development activity,

automation, technology incentives and the rate of technological change. Most of Kuwait technological

factors are very important in industrial environment. They can determine barriers to entry, minimum

efficient production level and influence outsourcing decisions. Furthermore, technological shifts can

affect costs, quality and lead to innovation. So, technological analysis is must be determine to the Kuwait

industries

(5) Environmental Analysis

They include weather, climate and climate change, which may especially affect industries such

as tourism, farming and insurance. A favorable investment policy augmenting the influx of

pollution control equipment and a spur in Government projects directed at ground water clean

up, environmental awareness. Are expected to boost the Kuwaiti environmental industry.

Planned technology advances coupled with international co-operation are likely to drive

renewable energies, wastewater sector, desalination capacity and solid waste treatment. This

study provides insights into socio-economic, legal, political and technological factors in Kuwait

and their likely implications on and opportunities for the environmental sector.

(6) Legal Analysis

They include discrimination law, consumer law, antitrust law and health and safety law. These

factors can affect how a company operates, its costs and the demand for its products. Kuwait

follows the civil law system. Islamic Sharia forms a major source of law, although it is not the

exclusive source – laws do not have to conform to Sharia in order to become part of the

constitution. There are three tiers to the court system; the Court of First Instance is the first step

in the process, followed by the Court of Appeal, and the Court of Cassation. Court proceedings

are conducted in Arabic. Kuwait is a democracy and the constitution guarantees fundamental

rights and freedoms, a number of which are governed by law.

It is unusual to hear of a violent crime being committed. Petty theft does exist but is not prolific.

Kuwait has extremely strict laws regarding drugs and they are actively enforced. Anyone found

importing narcotics will be liable to prosecution, and anyone caught and convicted of trafficking

drugs will be subject to the death penalty. Severe punishments, including the death penalty, are

dealt to those convicted of committing murder and rape. Car accidents are very common in

Kuwait. It is a criminal offence to flee the scene of an accident and doing so will result in a jail

term, a fine, and ultimately, deportation. From time to time drivers are caught driving under the

influence of alcohol, resulting in a custodial sentence and deportation. An area in which you may

find yourself in need of a lawyer is in a labor dispute.

PART – II

WORK DONE IN SEM. 3

COUNTRY – KUWAIT

Nationality - Kuwaiti

43%

35%

15% 7%

REGION

muslim(official)

sunni

shia

other(christian,hindu,parsi)

INDEX

Sr. No. Particulars Page No.

1 Introduction of Al Mojil Drug

Company, Kuwait

2 Comparison of Al Mojil Drug Company

& Taj Pharma Company

3 Trade Relations between India and

Kuwait

4.1 India‟s Import To Kuwait

4.2 India‟s Exports From Kuwait

4.3 Trade and economic cooperation

4.4 Kuwaiti investment in India

5 Opportunities of Business in Kuwait

6 Policies , Constraints of business in

Kuwait

7. Trends That Will Shape the

Pharmaceutical Industry in 2013

CHAPTER -1

INTRODUCTION OF AL MOJIL DRUG COMPANY, KUWAIT.

Pharma Company of Kuwait - Al Mojil Drug Company

Al Mojil Drug Company was established in 1964 with the intention of distributing

pharmaceutical and Nutritional products in a safe and hygienic manner.

The organization was started with 10 Employees and the Capital of 10000 US$. In the first

phase, Al Mojil started with one pharmacy near Kuwait City and supply of around 50 products of

Pharmaceutical and Nutritional.

In 1974, Al Mojil started its distribution of beauty care products in Kuwait. Later Al Mojil has

diversified its business to other health care areas such as Diagnostic, Veterinary and Medical

Equipment. Currently Al Mojil has been distributing wide range products (around 700) from 30

Manufactures or Suppliers. Al Mojil has also recognized a specialized.

Al Mojil has also recognized a specialized team for each category of products such as

Pharmaceutical, Nutrition, Cosmetics(Beauty Care), Diagnostic, Veterinary and medical

Al Mojil Drug Company, Kuwait

equipment to ensure the excellence and integrity of the business.

In 2008, Al Mojil Drug Company has changed its status from a partnership company to

(K.S.C.C)

MISSION, VISION AND VALUE OF AL MOJIL DRUG COMPANY

OUR VISION

To be the leading company providing innovative medical products and services to Customers

and achieve high market share in every business that we engaged into.

OUR MISSION

Provide products and services related to pharmaceutical, nutritional, consumer, veterinary and

medical equipments to our customers that include procurement, custom clearance, storage,

distribution, maintenance and service.

OUR VALUE

We will pursue our Mission, Vision, and Customer promise of service with a desire for:

INTEGRITY

Building trust with Customers, Communities, Suppliers and one another by doing what is right:

keeping our promises, being a good citizen, complying with regulations and laws and honoring

rules of engagement.

TEAMWORK

Working across organizational and cultural boundaries to achieve outstanding performance and

deliver to Customers.

EXCELLENCE

Building a culture based on quality in thought and in execution to serve Customers better.

STORES

Our store is situated in two locations at Al-Rai, Shuwaikh and agility is also our service provider

for storage.

We classified our storage area as three sections such as Store for Pharmaceutical, Store for

Cosmetics, consumables, equipments and give away and agility for Nutritional products.

We have around 6000 sq. meter temperature controlled area for storage excluding Agility with

five docks. Our storage operation is supported with “2soft” application for on time updates and

inventory accuracy.

Quality Policy

Pharmaceutical is the major division of Al Mojil Drug Company established in 1964. Due to the

business growth, in the year 2003 Pharmaceutical division was divided into two sectors namely

Private and Institutional sector. Private sector deals with private pharmacies and private hospitals

whereas; Institutional sector deals with Ministries, Charitable Societies, and Government

subsidiaries etc.

Al Mojil Drug Company has the distributor of more than 20 major Pharmaceutical Companies;

around 500 products are distributed to nearly 450 customers all over in Kuwait including the

products of top most global listed drug manufacturers such as Novartis Pharma Services,

Astellas, Abbott, Pfizer and Johnson & Johnson etc.

MAJOR DIVISIONS OF THE COMPANY

Pharmaceutical

Due to the business growth, in the year 2003 Pharmaceutical division was divided into two

sectors namely Private and Institutional sector. Private sector deals with private pharmacies and

private hospitals whereas; Institutional sector deals with Ministries, Charitable Societies, and

Government subsidiaries etc.

Al Mojil Drug Company has the distributor of more than 20 major Pharmaceutical Companies;

around 500 products are distributed to nearly 450 customers all over in Kuwait including the

products of top most global listed drug manufacturers such as Novartis Pharma Services,

Astellas, Abbott, Pfizer and Johnson & Johnson etc.

Nutrition

As a sole distributor of Abbott Nutrition in Kuwait, 40% of Nutritional market is grabbed by Al

Mojil in Kuwait. Kuwait Supply Company (KSC) is the largest customer among the 450

customers in Kuwait where in 47 Nutritional products meet the nutritional requirements of

Kuwait population.

Lab and diagnostics

More than 20 Companies are suppliers of Medical Equipment namely Abbott, Adam Equipment

Company, Barkey GMBH and Analytical Biotechnologies. Abbott diagnostics is our major

supplier for Lab and Diagnostic equipment and MOH is one of the largest customers among the

40 customers in Kuwait.

Consumer

Consumer division in Al Mojil Drug Company was established in 1973, distributing around 185

products in Kuwait to more than 90 customers including wholesalers and retailers. Our major

customers are Lulu Hyper market, Carrefour, City Centre, Gulf Mart, High Way Centre etc.

Church & Dwight, Jaywir and SMI are some of the suppliers of consumer products.

Veterinary

Our Veterinary division distributes medicines for poultry farming, animal husbandry and

aquaculture.

The Companies that supply veterinary products are Bremer Pharma, Lohmann Animal Health

and Vetripharm. We distribute around 27 products to nearly 30 customers namely Agrifish, Naif

Poultry Company and Kuwait United Poultry Company etc. Our major products are

Amoxyinject, Ampicillin, Gentamicin, Aviblue, Lovit, Electrovit, Kopper Kare etc

CHAPTER -2

INTRODUCTION OF TAJ PHARMA COMPANY LIMITED, INDIA

Taj Pharmaceuticals – is Headquartered at Mumbai, India.

Group Headquarters: The Taj Pharmaceuticals incorporates all those companies that are

wholly owned by Taj Pharmaceuticals Holding Ltd, Mumbai, or in which it has a majority

interest. Group management - Group Headquarters - is based in Mumbai, lndia.

Corporate Office

Divisional Headquarters

Taj Pharmaceutical's two divisions - Pharmaceuticals Division and Diagnostics Division - are

run by separate organizational units with headquarters in the Mumbai area.

The beginnings:

With a basket including personal care, health care and other products, TAJ GROUP has set up

Group Companies across the world that can manage its businesses more efficiently. Given the

vast range of products, sourcing, production and marketing have been divested to leading group

companies that conduct their operations independently.

The company has a clear vision to bring Ayurveda to society in a contemporary form and to

unravel the mystery behind the 5,000 year old system of medicine. This included referring to

ancient ayurvedic texts, selecting indigenous herbs and subjecting the formulations to modern

pharmacological, toxicological and safety tests to create new drugs and therapies. They export

API, branded formulations and generic formulations to over 14 countries. Their inherent strength

lies in identifying relevant API and formulations, and selling them at affordable prices across the

world. All this has been possible because of our innovative and sustained marketing efforts. They

are all set to spread our wings further and touch more lives across the globe.

History

The founder of Taj Pharmaceuticals, Dr. R. K. Singh, is a pioneering entrepreneur who is

convinced that the future belonged to branded pharmaceutical products. He is among the first to

recognise that the industrial manufacture of standardized medicines would be a major advance in

the fight against disease.

This led him to found Taj Pharmaceuticals Ltd. in India & Abroad. From the very beginning, Dr.

R. K. Singh attached great importance to product information as the link between the

pharmaceutical manufacturer and doctors, pharmacists and patients. Shortly after the foundation

of the company, affiliates were opened in Mauritius, Malaysia, Dubai, Moscow,

England, France, the US, Great Britain and Russia.

Since then, Taj Pharmaceuticals has grown into one of the world's leading healthcare companies

and one of the most important India.

HealthyEnvironment

As a responsible corporate citizen espoused to the cause of a better quality of life, Taj

Pharmaceuticals accords high priority to Safety, Health and Environment. They are committed to

protecting the environment they operate in, and ensuring the health and safety of their employees

and stakeholders.

Our Mission

Our mission is to become the recognized leader in accelerating discovery and development of

novel, small molecule drug therapies. The innovative application of our proprietary

computational lead drug design technology provides the opportunity to substantially compress

the time and cost of drug development and have a dramatic impact on important disease states.

Taj Pharmaceuticals products can broadly be categorized into four main ranges

1. Pharmaceutical

2. Personal Care

3. Well-being

4. Animal Health

Medicines

the medicinal range broadly classified into four categories

1. Children‟s Health

2.Men's Health

3.Women's Health

4.General Health

Pure Herbal & gaributti

Amalaki: Useful in treating cough, cold, sore throat and respiratory tract infections. It protects

cells from free radical damage and is an excellent anti oxidant.

Arjuna: This herb improves blood circulation and is used as a tonic for the heart.

Ashvagandha: Commonly known as Winter Cherry, this herb acts as an ant-stress agent that

imparts a sense of well-being and helps in coping with life's daily stresses.

Brahmi: A well-known herb that helps in improving general alertness.

Karela: Commonly known as Bitter Gourd, it is known to aid in the metabolism of

carbohydrates.

Lasuna: Commonly referred to as Garlic, Lasuna helps in controlling the excess conversion of

lipids and cholesterol.

Neem: A popular herb, Neem has anti-bacterial, anti-fungal and blood purifying properties. It is

very useful in skin disorders and helps maintain a healthy, beautiful and glowing skin.

Shuddha Guggulu: It regulates fat metabolism and helps remove excess cholesterol from the

body.

Shallaki: This herb treats joint problems.

Tagara: It has mild sedative properties, which are useful for insomnia and sleep disorders.

Triphala: A digestive aid compound and a bowel cleanser.

Tulasi: It has anti-microbial and anti-inflammatory properties, and is useful in respiratory tract

infections like dry or wet cough, cold and sore throat.

Providing products and services to treat and monitor diseases is at the core of Taj

Pharmaceutical's activities in all major therapeutic areas. The product range makes it

possible to offer real improvements to doctors, hospitals and patiensts.

For many of these areas and the corresponding indications, Taj Pharmaceuticals has

provided a large range of therapeutic option.

Taj Pharmaceuticals is one of the world‟s leading innovation-driven healthcare groups.

Its core businesses are pharmaceuticals and diagnostics. Taj Pharmaceuticals is number

one in the global diagnostics market and is the leading supplier of pharmaceuticals for

cancer and a leader in virology and transplantation. As a supplier of products and

services for the prevention, diagnosis and treatment of disease, the Group contributes on a

broad range of fronts to improving people‟s health and quality of life. Taj Pharmaceuticals

employs roughly 65,000 people in 150 countries.

Generally, allopathic medicine

refers to the broad category of

medical practice that

is sometimes called Western

Injection (medicine), it is a method of

putting

liquid into the body with a syringe and

a hollow

medicine. needle that punctures the skin. More..

Human immunodeficiency

virus (HIV) is a lent virus (a

member of the retrovirus

family) that causes acquired

immunodeficiency syndrome

(AIDS),

With all the choices of over-the-

counter (OTC) products available in

the marketplace it is increasingly

difficult to select the proper product(s)

for you and your family.

Ayurveda describes massage as

one of the best way to remain

healthy. Apart from daily

massage, it prescribes many

other massages to heal and

rejuvenate the body. More..

A generic drug (generic drugs, short:

generics) is a drug which is produced

and distributed without patent

protection. The generic drug

may still have a patent on the

formulation but

not on the active ingredient. More..

Taj Pharmaceutical's pioneering approach to healthcare innovation enables us to deliver

significant benefits to patients as well

as to healthcare providers and systems. In our vision of the future, therapies will be

available for many of today's untreatable diseases, it will be possible to optimize drug

efficacy and safety, and effective strategies will be in place for preventing disease. Early

diagnosis and improved new treatments will significantly reduce the need for expensive

surgical operations and long hospital stays.

While this vision is an aspiration for the future, Taj Pharmaceuticals has begun pioneering

the path, with a wide range of products and services available to:

determine disease predisposition

provide health information that can be acted upon to prevent or delay the onset of

illness

diagnose disease

treat numerous diseases and conditions

monitor the progress of therapy

CORPORATE GOVERNANCE

Taj Pharmaceuticals is committed to all its shareholders and strives to serve the diverse

interests of customers, employees, shareholders and holders of Taj Pharmaceuticals

nonvoting equity securities in a balanced fashion. This commitment is reflected in our

operating businesses‟ focus on value creation, in a management culture that conforms to

modern standards of corporate governance and in our Group‟s policy of communicating

transparently.

A series of documents and corresponding details are made available to all key stakeholder

groups: shareholders, employees, customers, suppliers and the general public

Taj Pharmaceuticals Diagnostics Centre Mumbai

EXPORT & IMPORT

The Company is in process to expand the export Business in the Below Listed

Countries

Expanding The Pharmaceuticals Business in the world

Afghanistan

Australia

Austria

Canada

China

Denmark

Dubai

France

Germany

Indonesia

Italy

Japan

Iraq

Iran

Lebanon

Israel

Korea (North &

South)

Kuwait

Malaysia

Mauritius

Mexico

Morocco

Nepal

Netherlands

New Zealand

Poland

Qatar

Russia

Syria

South Africa

Spain

Switzerland

Thailand

Turkey

United Kingdom

United States of

America

Zambia

Zimbabwe

Pakistan

Jamaica

Philippines

Bangladesh

Vietnam

Panama

CHAPTER-3

COMPARISON OF AL MOJIL DRUG COMPANY & TAJ PHARMA

1. Al Mojil Drug Company is majorly into 4 man divisions of Pharma, Nutrition, Lab &

Diagnostics, and Consumer Goods & Veterinary.

2. Taj Pharma is majorly into Ayurveda medicines more. Taj Pharma has its branches or

industries in many other parts of the world. Taj Pharmaceuticals is one of the world‟s leading

innovation-driven healthcare groups. Its core businesses are pharmaceuticals and diagnostics.

3. Al Mojil Drug Company has been distributing wide range products (around 700) from 30

Manufactures or Suppliers.

4. Taj Pharma has a wide range of products for Pharma & health care driven groups.

5. Taj Pharma employs roughly 65,000 people in 150 countries.

Al Mojil Drug Company, KUWAIT Taj Pharma Company, INDIA

Chapter – 4

TRADE RELATIONS BETWEEN INDIA & KUWAIT

1. Kuwait is a small, rich, relatively open, petroleum-based economy with heavy

dependence on foreign manpower. It has always offered an open, highly competitive and

affluent market for capital and consumer goods and for project exports. It has estimated

crude oil reserves of 100 billion barrels or 8-10% of world reserves. Kuwait oil revenues

constitute the main source of income and amount to approximately 95% of its

revenues. Kuwait has posted record budget surplus of KD 13.2 billion ($ 47 billion) during

fiscal year 2011-12 for the 13th consecutive year, previous high being KD 9.33 during 2007-

08. Its GDP per capita was $38,778.39 in 2010. The climate in Kuwait is not suitable for

agriculture; resultantly, it depends on imports from other countries for all its food

requirements. To meet its need for potable water, Kuwait depends on either desalination or

import.

2. Kuwait is a relatively diverse project market. It is expected to award contracts worth

more than $ 117 billion in various sectors during 2012-16 as part of its Development

Plan. The projects cover a wide range and include oil and gas sector both upstream and

downstream, construction, including new cities, hospitals and housing units, infrastructure,

including roads, airport, port, metro and railway projects, power and transmission,

petrochemicals, gas processing, pipeline, etc.

3. Historically, Indo-Kuwaiti relations have always had an important trade

dimension. The overall trend of our trade with Kuwait has been positive. India-Kuwait trade

was US$ 17.56 billion in 2011-2012, of which non-oil trade accounted for approximately

US$ 1.9 billion (approx) while petroleum exports from Kuwait to India were approximately

US$ 15.67 billion. Our exports to Kuwait during 2010-11 and 2011-12 were over US$ 1

billion which in the past had been in the range of $ 700-800. India has consistently been

among the top ten trading partners of Kuwait.

The bilateral trade during 2007-08 to 2011-12 was as follows:

INDIA- KUWAIT BILATERAL TRADE FY 2007-08 TO 2011-12

in US$ million

2007-08 2008-09 2009-10 2010-2011 2011-12

Indian Exports to

Kuwait

681.54 797.50 782.45 1856.01* 1,181.41

Indian Imports from

Kuwait

7,704.25 9593.74 8,249.49 10,313.64 16,375.37

Total 8,385.79 10,391.24 9,031.94 12,169.65 17,556.78

Source: Department of Commerce, M/o Commerce & Industry

(MOCI), GOI

The figure is revised as per the latest data of MOCI. Earlier it

was US$ 1,959.48 million. in Rs. Crores

2007-08 2008-09 2009-2010 2010-2011 2011-2012

(April –

Sept)

Indian

Exports to

Kuwait

2,744.90 3,628.40 3,710.37 8,915.17 2,658.78

Indian

Imports

from Kuwait

30,959.93 43,199.44 38,987.99 46,976.02 28,414.00

Total 33,704.83 46,827.85 42,698.36 55,891.20 31,072.78

Source: Department of commerce, M/O commerce & industry GOI all figure on FOB

basis

Note : POL imports accounted for US$ 7,278.97 million (Rs. 29,291.29 crores) in the year

2007-08; US$ 9,193.78 million (Rs. 41,402.19 crores) in the year 2008-09; US$ 7,909.80

million (Rs 37,391.30 crores) in the year 2009-10; US$9729.09 million (Rs 44,320.03

crores) in the year 2010-11; and US$ 15,667.11 million (Rs.75,813.01 crores) in the year

2011-12.

4.1. INDIA‟S EXPORTS TO KUWAIT

4. During 2011-12, the top 5 items of exports from India were cereals; articles of iron

and steel; pressure vessels reactors, columns/towers or chemical storage tanks and industrial

valves; electrical machinery and equipments, sound recorders and reproducers, television

image; and meat & edible meat offal. A pie chart on our exports to Kuwait is given below:

Source: Department of Commerce, Ministry of Commerce & Industry, Government of

India

4.2. INDIA‟S IMPORTS FROM KUWAIT

5. India‟s imports from Kuwait went up by 58.77% from US$ 10.313 billion in 2010-11

to US$ 16.375 billion in 2011-12. In Rupee terms, the imports rose by 68.6% from

Rs.46,976.02 crores to Rs.79,188.34 crores in the corresponding period. India imported

US$15.67 billion (Rs.75,813.01 crores) worth of POL from Kuwait in the year 2011-12.

6. India‟s imports from Kuwait (excluding POL) were US$ 708.26 million in 2011-12.

A pie-chart showing the share of top 5 items of imports (excluding Petroleum & its

products) - organic chemicals, iron and steel, salt; sulphur; earths and stone; plastering

materials; and lime and cement, plastic and its articles and aluminum and its articles - is

given below:

Source: Department of Commerce, M/o Commerce & Industry, Government of India

NON – OIL BILATERAL TRADE

7. Total non-oil bilateral trade between India and Kuwait dropped by 21.5% from

US$2,397.84 million in 2010-11 to US$ 1,882.92 million in 2011-12. In Rupee terms, it

dropped by 17.42% from Rs.10, 908.79 crores in 2010-11 to Rs.9, 007.99 crores in 2011-

12.

INDIA – KUWAIT NON – OIL TRADE FY 2008-09 TO 2011-12

In $ millions

2008-09 2009-2010 2010-2011 2011-12

Indian Exports

to Kuwait

755.88 780.23 1813.29 1174.66

Indian Imports

from Kuwait

399.96 339.69 584.55 708.26

Total 1,155.76 1119.92 2397.84 1882.92

In Rs. Crores

2008-09 2009-2010 2010-2011 2011-12

Indian

Exports to

Kuwait

3,434.14 3699.89 8252.80 5632.66

Indian

Imports from

Kuwait

1,797.25 1596.69 2655.99 3375.33

Total 4,387.27 5,231.39 10,908.79 9007.99

Source: Department of Commerce, Ministry of Commerce

& Industry, Government of India

All figures on FOB basis

4.3. TRADE AND ECONOMIC COOPERATION

Historically, India-Kuwait relations have always had an important trade dimension. India

has consistently been amongst the top ten trading partners of Kuwait. Kuwait is an important

partner in India‟s quest for energy security, annually providing 10-11% of India‟s crude oil

imports. Bilateral trade has been rising steadily in recent years. 2011 was a landmark year

for trade between India & Kuwait, as for the first time, bilateral trade crossed US$ 10 billion

mark to reach its all time high of US $ 12.27 billion. Exports from India to Kuwait in FY

2010-11 grew by 150% to over US$ 1.95 billion, crossing US$ 1 billion mark for the first

time. Of the total trade, non-oil trade accounted for approximately US$ 2.5 billion while

petroleum exports from Kuwait to India were approximately US$ 9.77 billion. Major items

exported from India during 2010-11 were articles of iron or steel, nuclear reactors, boilers,

machinery and mechanical appliances; parts thereof, cereals, meat and edible meat offal,

electrical machinery and equipment and parts thereof; sound recorders and reproducers,

television image and sound recorders and reproducers and parts. Major items (other than

Petroleum & its products) imported by India during 2010-11 were mineral fuels, mineral oils

and products of their distillation; bituminous substances; mineral waxes, organic chemicals,

plastic and articles thereof, iron and steel, aluminum and article.

AGREEMENTS BETWEEN INDIA AND KUWAIT IN THE ECONOMIC FIELD

1. Trade Agreement was signed in February 1974.

2. MOU on cooperation in the field of Telecommunications was signed in February

1992.

3. Agreement for the promotion of Economic, Commercial and Technical Cooperation

was signed in February 1992.

4. Agreement for Encouragement and Reciprocal Protection of Investment was signed

in November 2001 and ratified in June 2003.

5. Agreement on Drug Demand Reduction and Prevention of Illicit Trafficking in

Narcotic Drugs, Psychotropic Substances and Precursor Chemicals and Related

Matters was signed in June 2006 is awaiting ratification.

6. MOU on Civil Aviation between India and Kuwait authorities, latest one signed in

June 2007.

7. Agreement on the Avoidance of Double Taxation and Prevention of Fiscal Evasion

of Taxes on Income was signed in June 2006; it came into force with effect from

October 17, 2007

8. MOU on Health Cooperation was signed on April 23, 2012.

4.4. KUWAITI INVESTMENT IN INDIA

According to Secretariat for Industrial Assistance (SIA) figures, Kuwaiti investment in India

has been very modest. According to SIA approved FDI figures from Kuwait during 2000-12

are as follows:

2000-04 2005 2006 2007 2008 Cumulative till

February 2012

175.15 8.73 123.73 1.4 9.85 843.80

Amount in Rs. Million

Kuwait Investment Authority (KIA) has indicated that it has invested about $ 1.0 billion

through the stock exchange/institutional fund managers.

PRESENCE OF INDIAN CORPORATE SECTOR IN KUWAIT

o M/s Larsen & Toubro Ltd

o Ranbaxy Laboratories Limited

o M/s Wockhardt India

o Dr. Reddy‟s Laboratories

o Lupin Limited,

o Claris Lifesciences Limited

o IPCA Lab

o Cadila Pharmaceuticals Limited

o Cadila Healthcare Limited

o Ambalal Sarabhai

o Dr. Reddy‟s Lab and Cipla Limited

o Punj Lyod

o Shapoorji Pallonji

o TATA Consultancy Services

o Toyo Engineering Co.

o Apollo Hospital group and Fortis Group of India

o Bridge & Roof Company Ltd

o UTI Asset Management Company

o KEC International Ltd, Mumbai

o Shalimar Valves

Vast scope of boosting trade between India, Kuwait: FM „Investments in India always safe‟

NEW DELHI, May 17, (KUNA): India enjoys close relations with Kuwait and there is a

tremendous scope of enhancing bilateral trade which stood at $12.3 billion last year, said Indian

External Affairs Minister S.M. Krishna while meeting the ten-member delegation of Kuwaiti

journalists in New Delhi, Thursday.

He said the free media of both the countries could play a constructive role in bringing the two

countries closer and diversifying the bilateral links.

“Our ties have been defined by close geographical proximity and cultural affinity. People on

both sides have known each other for centuries, and both the governments have also maintained

regular high-level of contacts,” he said while welcoming the Kuwaiti journalists.

Laying stress on enhanced bilateral trade and Kuwaiti investment in India, he said, “there is

enough scope for Kuwaitis to make investments in India in different sectors. I may assure you

that investment in India is always safe and solid with comparatively higher returns. Despite

global slowdown, India has grown at a satisfactory pace since 2008, when the meltdown hit the

developed economies of the world.” He further stated that India has set a target of making

investments of one trillion $in the next ten years, and “Kuwait can pitch in here”.

Imports

To a question about US‟ pressure on India to cut down oil imports from Iran, the Indian minister

told the Kuwaiti journalist-delegates that India and Iran enjoy civilization ties, even as Iran meets

nearly 11 percent of India‟s crude oil needs. “And, we made it clear during the recent visit of US

Secretary of State that no decision has been taken yet to reduce oil imports from Iran,” he said.

He, however, acknowledged that due to US‟ sanctions on Iran, India has been facing problems of

payments for Iranian oil.

Touching on India‟s foreign policy, he said that his country wanted peace and tranquility in Asia

and world over. “Our relations with our immediate neighbors Pakistan and China have been

improving in the recent past, and all diplomatic efforts are being made to take them one step

higher,” he added.

To a pointed question about India‟s recent military build-up along the Chinese border, Krishna

said: “We do safeguard our border like any other country does. Sometimes media reports create

problems where there is none. Ansari, who had paid an official visit to Kuwait in 2009, told the

journalist-delegates that both the nations enjoy ties since ancient times to the modern era.

“Imprints of Kuwait can still be seen along the Mumbai coast, where Kuwaiti traders once used

to come and trade in spices and other commodities,” he said. He added that the Indian

community working in Kuwait always praises their employers.

Proves

“People-to-people relationship is very important as it proves in defining the foreign policy of any

two countries,” he stated. Lok Sabha Speaker Meira Kumar hailed the age-old friendly ties

between the two sides.

She made a special emphasis about both India and Kuwait having democratic set up and a

written Constitution.

“Democracy has flourished in India for 60 years, and will continue to do so in future. It‟s a

multi-religion and multi-ethnic country, which is a house to the second largest Muslim

population in the world,” she said.

Replying to a question on the role of women in Indian politics, she informed the Kuwaiti

journalists that there were “one million elected women representatives” in India at different

levels, from village to corporations and local bodies.

REVIEW OF EXPORT MARKET

Pharma export to grow by 25%

Depreciating rupee to help Indian drug industry to achieve exponential growth in

overseas sales

Indian pharma industry is set to defy recession by registering a 25% growth in exports during the

current fiscal. As per projections made by Centre for Monitoring Indian Economy (CMIE)

pharma exports from India is expected to touch the figure of Rs 36,471 crore in 2008-09 against

the exports of Rs29,140 crore in the previous year. Depreciation in Indian rupee and cost

advantage will help the industry to post such an exponential growth in overseas sales. The

forecast seems quite optimistic, as the industry posted just 8% growth in export in 2007-08

compared to Rs26,895 crore recorded in 2006-07. However, depreciation in Indian currency is

going to help them in a big way to achieve the growth. In the first half of the current fiscal, rupee

depreciated by whopping 6.6% against the dollar and the trend is likely to continue till the end of

the fiscal. India's export of drugs and pharmaceuticals accounts for almost 40% of the sectors'

aggregate sales.

"Global recession is not expected to impact Indian pharma sector due to its low cost

manufacturing advantage. Indian companies are mostly into the manufacturing of generic drugs

and offers drugs at a price much lower than the patent holder company. In fact, slowdown will

prove to be a boon forIndian pharma companies, as foreign customers will look for cheaper

products. However, growth of exports may slowdown in last two quarters," says Sarabjeet Kaur,

vice president, research-pharmaceuticals, Angel Broking. "The first two quarters have been

good for pharma sector and no significant impact of slowdown was visible.

However, last two quarters may not be same and the sector may see some slowdown in export,"

says Kamlesh Udani, executive director of JB Chemicals and Pharmaceuticals Ltd.

The US is the largest market for Indian pharma companies and for China; India is the largest

market for exports. India exported drugs and pharmaceuticals worth Rs1, 872 crore to the US

and Rs564 crore to Germany in 2007-08. Import from China and Switzerland in the same year

was Rs1,320 crore and Rs288 crore respectively.

Bucking the trend

Pharma exports are expected to be around Rs36, 471 crore this fiscal against Rs29, 140 crore

in the previous year

Export accounts for almost 40% of the aggregate sales of the industry. Global recession is a

boon for the sector, as foreign customers are looking for cheaper drugs

CHAPTER-5

OPPORTUNITIES OF BUSINESS IN KUWAIT

To a foreign business entity or entrepreneur contemplating the country for the first time,

Kuwait seems a very attractive place to do business because:

About 40% of its population of nearly 2.5 million enjoy some of the highest

disposable incomes in the world.

The economy has continuous requirements for imported goods, technical expertise

and labour.

There are plenty of opportunities for major contracts, especially in the oil and related

industries;

The government is actively pro-business;

There is a stable legal framework of business laws;

There are few controls over imports and exports;

There are no exchange controls nor restrictions on the repatriation of funds;

The country has excellent communications and a sophisticated trading infrastructure;

It is possible for foreigner to have 100% ownership of a local business under the new

direct foreign investment laws; and last, but not least,

English is used fairly extensively as the second language of business.

Also, the simplicity of operating within a system where taxes are for the most part non-

existent for individuals (but not companies) and everything is open to negotiation is a major

enticement. In addition, resident senior executives will find that their life-style is almost as

good as it could be anywhere else.

The competition however is intense and decision-making is notoriously slow. Kuwait also

abounds with rules and regulations which can cause confusion and frustration. Generally

speaking:

Foreign individuals and firms may not own real estate in Kuwait;

Foreign equity participation in local firms is limited to a minority interest of 49%;

Foreign individuals and corporations may not acquire commercial licenses in their

own name.

A foreign individual or firm carrying on business in the country must be represented

by a Kuwaiti person or firm;

A branch of a foreign firm must be represented locally by a Kuwaiti service agent;

A foreign firm may only bid for a public sector contract through a local

representative; and, in addition,

Foreign corporations (but not individuals), unlike local companies, are taxed at some

of the highest rates in the world.

The purpose of these restrictions is to ensure that control of domestic business is retained by

locals. Nowadays, however, most of the restrictions can be circumvented.

Establishing a presence in Kuwait's Free Trade Zone allows a wholly-owned foreign

business entity to be set up with a minimum of fuss and time. However, the KFTZ is really

only suitable for SMEs.

Large international corporations intending to make a substantial investment in the country

can do so under the Direct Foreign Investment law. But this will require the approval of the

Council of Ministers, ie the government, and is likely to take some time.

In this writer's view the greatest impediments to doing business successfully in Kuwait are

cultural and language barriers. The Kuwaiti people have a different way of looking at the

world than do persons from the West or the Far East, a difference that is reflected in the

State's social, political, economic and legal foundations. Unless Kuwaiti business culture is

understood by overseas businessmen, and their approach modified accordingly, any success

they achieve is likely to be due to luck rather than a planned effort.

CHAPTER-6

POLICIES & NORMS OF KUWAIT

A) Kuwait

1. Regulatory Constraints & reliefs

Exchange controls

Kuwait has a stable currency and imposes no exchange controls.

Foreign ownership of business

Normally 51% Kuwaiti ownership is required in companies incorporated in Kuwait.

Foreign ownership is allowed up to 49% of capital.

Under the terms of the Amiri Decree Law No 10 of 1999 concerning the direct

investment by foreign capital in the State of Kuwait (the Foreign Capital Investment

Law), foreign investors may now own up to 100% of business enterprises in Kuwait and

there are tax and other incentives and protection for such foreign investment.

2. Government attitude and incentives

The Kuwaiti government favors a free-market economy with little official intervention.

However, under the government's offset programme, foreign companies that obtain large

contracts in the public sector may be required to invest an amount equivalent to the offset

credit obligation

New industrial undertakings, including those having foreign participation, may benefit

from certain incentives, including a 10 year tax holiday.Such incentives are extended and

clarified in the new Foreign Capital Investment Law.

3. Tax system

Kuwait levies no personal income taxes but does levy corporate income tax on foreign

companies. Rates of tax range from 0% for profits up to KD 5,250, to 55% for profits of

KD 375,000 and above in Kuwait and 20% for profits up to KD 500,000, to 57% for

profits of KD 500,000 and above in the specified territories of the partitioned neutral

zone between Kuwait and Saudi Arabia; The tax rates are not progressive.

4. Financial reporting and audit requirements

Companies incorporated in Kuwait must have annual audits and comply with the

standards promulgated by the International Accounting Standards Committee.

Foreign contractors must support their income tax filings by providing audited financial

statements of their Kuwaiti operations.

B) Business Environment. Business and investment environment

Kuwait's modern economic history began with the discovery of oil in 1938, and soon

after the end of World War II, Kuwait became a major oil exporter. Today, apart from the

refining of oil and petrochemicals, there is only a limited manufacturing industry in

Kuwait.

Following the quadrupling of the price of oil in 1973, Kuwait experienced a construction

boom that lasted into the early 1980s. The boom provided opportunities for foreign

contractors and investors, as substantial amounts were expended on the creation of a

modern infrastructure. Notwithstanding the setbacks caused by the Iraqi invasion in 1990,

Kuwait now has up-to-date ports, an efficient network of roads, an international airport,

an advanced telecommunication system, modern hospitals,schools , and universities.

The Kuwaiti government tends to give business preferences to Kuwaitis whenever

possible. Consequently, the economy is dominated by locally owned companies.

However, the government recognizes that the accomplishment of the objectives described

above will require a significant amount of foreign investment and with this objective in

mind promulgated the Foreign Capital Investment Law in June 1999 which should

encourage foreign investors to engage in profitable operations in Kuwait.

Kuwait has recently embarked on an economic development plan involving an estimated

spending of about KD37bn (US$125bn), which aims for making Kuwait a regional trade

and financial hub through sustaining economic development, economic diversification

and GDP growth. The plan is driven by government spending coupled with increased

private sector participation.

i) Economic trends and performance

Kuwait enjoys a highly favorable balance of payments position because of its huge trade

surpluses.

The government is committed to increasing overall economic efficiency. In additional,

the government is considering the following measures: reduction of government provided

services, including those provided under the generous welfare system and the reduction

of subsidies.

The government is also the government is also considering imposing personal income

taxes in the foreseeable future.

The success of the government's strategy to reduce the government payroll bill depends

on the private sector's ability and willingness to absorb new Kuwaiti entrants into the

labour market.

The government is focusing on increasing the participation of the Kuwait labour force in

the private sector and reducing.

ii) Currency

The Kuwaiti unit of currency is the dinar (KD), which is divided into 1,000 units called

fils. The dinar is freely convertible.

Dependence on expatriate labour.

iii) Economic structure

Government policy generally favors a free-market economy. However, the government

accounts for a significant portion of Kuwait's gross domestic product (GDP), and about

80% of Kuwaiti employees work for the government. The government intends to

privatize certain industries.

At least 10% of the country's annual revenue is deposited in the Reserve Fund for Future

Generations, which was formed in 1976. The amounts in the fund are invested in high-

quality securities with an emphasis on long-term growth and stability.

The Kuwait Investment Authority (KIA), which was established in 1982, manages both

the Reserve Fund for Future Generations and the General Reserve. The KIA also

manages all foreign debt of the government and runs the country's privatization

programme.

iv) Relationship of government and business General

Since 1970s, the government spent a large amount of money building the country's

infrastructure. The government is now encouraging the private sector to take greater

responsibility for industrialization.

The government accounts for a significant portion of Kuwait's GDP, including all of the

revenue from the oil sector.

The government has privatized certain companies that it wholly or partly owns.

v) Banking system

Central Bank

The Central Bank of Kuwait determines the country's monetary policy and supervises the

operations of commercial banks, investment companies and foreign exchange houses. It also

directs relations with international financial institutions, functions as banker for the

government and all other banks, and prints and issues the Kuwaiti currency.

Commercial banks

Commercial banks offer a full range of modern banking services – conventional as well as

Islamic. As of December 2010, the Kuwaiti banking sector comprised:

► 6 conventional banks

► 3 Islamic banks (excluding one which is yet to commence operations)

► 10 foreign branks, represented by a branch office.

Investment companies

A number of investment and finance companies including Islamic investment companies

operate in Kuwait. These also include large companies engaged in Kuwait and abroad in

activities such as floating and managing investment funds, loan syndication, bond issuance

and property development.

By the end of December 2010, there were 100 investment companies, of which 54 were in

accordance with Islamic Sharia.

Exchange houses

Several exchange houses operate in Kuwait, providing a full range of foreign-exchange

services. The exchange houses, which are supervised by the central bank, principally engage

in money changing, foreign currency remittances and the issuance of drafts and travelers

cheques. Certain of them engage in bullion trading. Their relatively small fees and late-

afternoon hours make them popular for retail transactions. Unlike commercial banks, the

exchange houses may not offer chequing accounts or accept deposits.

vi) Foreign trade leading

Imports and exports

Kuwait derives approximately 90% of its export revenue from oil. Its major imports are

machinery and transport equipment, manufactured goods and food and live animals.

Trading partners

Kuwait's principal import trading partners are Japan, United States of America, Germany, Saudi

Arabia and the United Kingdom.

Regional and international trade associations

Kuwait is one of six countries belonging to the GCC. The other member countries of the GCC

are Bahrain, Oman, Qatar, Saudi Arabia and the United Arab Emirates. Formed in 1981, the

GCC promotes economic and industrial co-operation among members. Customs duties among

GCC members are not levied on products produced in the Gulf, and cross border ownership of

shares is permitted. Nationals of GCC countries may move freely among other member countries

without visas and may also work in other GCC countries.

C. Foreign investment

i) Exchange controls and debt-to-equity requirements

Kuwait imposes no foreign-exchange controls. Equity and loan capital, interest,

dividends, branch profits, royalties, management and technical services fees, and personal

savings are freely remittable out of the country.

Shareholding (joint stock) or limited liability companies may distribute any amount of

profit as dividends after transferring a sum equal to 10% of their annual profits to a

statutory reserve, until the reserve reaches at least 50% of paid-up capital. Joint stock

companies must also make contributions to the Kuwait Foundation for the Advancement

of Sciences (see Section F7) before distributing profits. In addition, Decree No. 62 of

1999 requires Kuwaiti registered companies which have net assets in excess of KD

500,000 or more to pay 2.5 of their net profit as National Labour Support Tax.

Further, the Government of Kuwait passed law no 46 of 2006, for the imposition of Zakat

in Kuwait, effective from 10 December 2007. The salient features of the proposed Zakat

law are:

Kuwaiti Shareholding Companies (KSC) both public and closed will be liable to pay the

Zakat annually, which is computed at 1% of their annual net profit. Every KSC will be

required to submit a Zakat declaration annually.

Debt-to-equity rules

Kuwait imposes no statutory debt-to-equity requirements.

ii) Restrictions on foreign investment

General

The Kuwaiti government encourages foreign investment and, with few exceptions, treats foreign

investors as local investors. Exceptions include the taxation of profits and the requirement that

Kuwaitis have a majority ownership in companies with foreign participation.

The Council of Ministers approved the implementing regulations for its new Direct Foreign

Capital Investment Law-Law number 8/2001-passed by the National Assembly on 11 March

2001, through Resolution number 1006/1/2003 on 1 November 2003. The legislation authorizes

foreign majority ownership and 100 percent foreign ownership in certain industries including:

infrastructure projects, investment and exchange companies, insurance companies, information

technology and software development, hospitals and pharmaceuticals, air, land and sea freight,

tourism, hotels and entertainment, housing projects and urban development. Projects involving

oil and gas production are not authorized for foreign investments and must be approved by a

separate law. (Source: U.S. and Foreign Commercial Services and U.S. Department of State,

2006)

Kuwait grants certain privileges, including ownership of land and locally traded company shares,

to nationals of other GCC countries on a reciprocal basis.

Although the oil industry is entirely government-owned, the government -owned oil company

contracts with foreign oil companies for certain specialist expertise. Such arrangements generally

have been short-term, but Kuwait is considering longer term arrangements with these specialists

in order to benefit from transfers of technology. Foreign investment All Rights Reserved Doing

Business in Kuwait 14 – Ernst & Young

Offset programme

Kuwait has designed a counter trade offset programme to meet the objectives of its economic

development plan. The offset programme derives from the government's concern that the long-

term benefits from job creation and capital accumulation resulting from government contracts

with foreign suppliers unfairly accrue to the suppliers, at the expense of Kuwaiti companies and

citizens. The objective of the offset programme is to remedy this problem by encouraging

collaborative business ventures between foreign contractors and the Kuwaiti private sector.

Accordingly the offset programme has been established with the following objectives:

► Promoting sustainable economic development in Kuwait, by the assimilation of modern

technology and know- how in the local economy .

► supporting projects that generate high skilled jobs for Kuwaiti nationals .

► Attract foreign investment capital to facilitate economic development in Kuwait .

The Minister of Finance (MOF) issued guidelines for the programme in 1995. According to

Ministerial order 13 of 2005, the following are significant aspects of the programme:

► The contractors covered by the offset obligation are required to invest 35% of the value of the

contract with Kuwaiti government bodies.

► Offset obligators have the following options for fulfilling their Offset obligation.

► Implement investment projects suggested by the Offset Programme Management

► propose their own investment projects, and seek approval of the Offset Programmed

Management

► Participate in any of the funds that the Offset Programme Management may establish

► Purchase of commodities and services of Kuwaiti origin. The MOF is however still finalizing

detailed regulations in this regard.

► Contractors covered by the offset obligation must provide unconditional, irrevocable bank

guarantees issued by Kuwaiti banks to the Ministry of Finance equal to 6% of the contract price.

The value of the bank guarantee submitted will be reduced gradually based on the actual

execution of its work by the foreign contractor/ supplier. The MOF has the right to cash in the

bank guarantee if Offset obligor fails to respect their offset obligation.

Offset process

The offset process consists of four stages leading to the implementation of the offset obligation.

1. Concept paper

A foreign contractor is required to begin the offset programme when they are short listed for a

supply contract with the government. The contractor is required to submit a concept paper for the

proposed offset project, if they choose to initiate an independent business venture, to the Offset

Project Department (OPD). Alternatively the contractor may choose to participate in one of the

offset projects proposed by the OPD or an offset fund.

2. Management of agreement

Once the foreign contractor reaches an agreement with OPD on the implementation of an offset

project, and supply agreement is granted to the contractor, a Memorandum of Agreement (MOA)

is signed with the OPD. The MOA will specify the value of the offset obligation and the

investment project to be implemented.

Upon signing the contract the contractor should provide an unconditional and irrecoverable bank

guarantee from a Kuwaiti bank. The value of the bank guarantee should equal 6% of the supply

contract. The bank guarantee will only be released upon the implementation of the proposed

project. Foreign investment All Rights Reserved Doing Business in Kuwait 15 – Ernst & Young

3. Business plan

Within four months from the date of signing of the supply contract, a detailed business plan

should be submitted to OPD on the offset project. OPD will evaluate the business plan and

should the business plan not be approved, the contractor would be required to submit a new

business plan, including the required amendments.

4. Project execution

A grace period of a maximum of six months would be granted from the day the business plan is

approved. By the end of the six month period the offset project should be ready for

implementation.

iii) Investment incentives

As part of the government's drive to encourage foreign investments in Kuwait, the following

concession are provided to the investors under law number 8/2001 which regulates direct foreign

capital investment in Kuwait:

► Exemption from income tax or any other taxes for a period up to ten years from the start of

the operations as well as exemptions for subsequent investments made by the investor.

► Benefit from the privileges provided under double taxation agreements as well as investment

encouragement and protection agreements.

► Total or partial exemption from customs duties on the following import:

I. Machinery, equipment and spare parts required for construction, expansion and development.

II. Raw material, semi-processed goods, wrapping and packing material and such other material

required for production purposes.

► Allotment of land and real estates required for investment purposes in-accordance with the

laws and regulations applicable in state of Kuwait

► Recruitment of required foreign labour in accordance with the laws and regulations applicable

in the country

These concessions will be provided to the foreign investors subject to employing Kuwaiti

employees as per the regulations and the project being inline with the economic development

plan of Kuwait.

The government has setup two entities namely Foreign Capital Investment Committee and

Kuwait Foreign Investment Bureau (KFIB), which would facilitate foreign investments in

Kuwait. The responsibilities of the two entities are as follows:

The foreign capital investment committee

The responsibilities of the committee are to:

► Study applications for investment, and submit recommendations thereof.

► Promote investment opportunities in Kuwait and take the initiative to attract foreign

investments.

► Grant privileges to encourage the foreign investor and Kuwaiti private sector to make

investment with the competent authorities, with special emphasis on encouraging the Kuwaiti

private sector.

► Facilitate the enterprise's license and registration process.

► Impose methods for monitoring, follow-up and assessing the performance of foreign

investments, identify any obstacles facing such investments and to surmount the same.

► Investigate the complaints raised by foreign investors and other concerned parties as a result

of implementing the provisions of this law, and submit its reports thereon to competent authority

Foreign investment All Rights Reserved Doing Business in Kuwait 16 – Ernst & Young .

Kuwait foreign investment bureau

The responsibilities of the bureau are:

► Inform international markets about the enterprises placed for investment and highlight the

benefits enjoyed by the foreign capital investors.

► Provide all necessary information, clarifications and statistics requested by foreign investors.

► Follow up execution of licensed enterprises and eliminate the obstacles and difficulties which

may confront such enterprises.

► Coordinate with the concerned authorities in order to facilitate the foreign investor's entry and

residence in the country as well as dealers having business connections with him.

The following privileges, however, are granted to Kuwaitis only:

► Participation in government contracts, other than those opened to international bidding;

► Ownership of real estate, with some limited exceptions;

► No income tax is imposed on limited liability companies wholly owned by Kuwaitis and

registered in Kuwait

The government has established a free-trade zone in the vicinity of the Shuwaikh port.

Businesses set up in the zone are exempt from taxes on operations conducted in the zone and

foreign entities can own 100% of such businesses.

Law No. 12 of 1998 allows formation of investment and leasing companies with foreign or

Kuwaiti share-holding having their principal place of business within the state of Kuwait. This

law provides for a five-year income tax holiday to non-Kuwaiti founders or shareholders from

the date of the formation of such companies.

iv) Sources of finance for foreign investors

Kuwait's domestic commercial banks are the country's primary sources for short-term financing

of business enterprises.

Specialized financial institutions provide medium and long-term financing. The Industrial Bank

of Kuwait, owned jointly by the Kuwaiti government, the Central Bank of Kuwait and Kuwait's

commercial banks, finances industrial and agricultural projects that meet the objectives of

government planning. The Industrial Bank tailors the terms and conditions of its loans to each

project, but in general, interest is payable at subsidized rates, and the bank finances 50% of a

project's total cost. Foreign investment All Rights Reserved Doing Business in Kuwait 17 – Ernst

& Young.

v) Importing & Exporting

Restrictions

Companies and individuals are required to obtain an import license to import goods into Kuwait.

Companies that import goods or act as commercial agencies (see Section D.4) may obtain such

license if they satisfy the following conditions:

►They are registered in the commercial register of the Ministry of Commerce and Industry as

well as with the Kuwait Chamber of Commerce and Industry.

► Kuwaiti shareholders own at least 51 % of the company.

Certificates of origin are required to enable goods to enter the country. Kuwait follows Arab

boycott rules, which forbid the import of goods from Israel. In addition, the government also

bans the import of pork products and alcohol because these items are prohibited by Islamic rules

and beliefs. Documents for goods exported to Kuwait must be authenticated by a Kuwait

embassy or other authorized government agency.

Certain classes of goods, such as firearms, explosives and drugs, require special import licenses.

Restrictions also apply to the use of certain additives and chemical products used in the

preparation of foodstuffs. All foodstuffs are subject to strict regulations with respect to

packaging, labeling, description of contents, dates of manufacture and expiration. When

imported for the first time, foods, including samples, are subject to examination at the

municipality's public health laboratories. Pharmaceutical products must be registered with the

Ministry of Public Health.

With the exception of a few items, Kuwait does not restrict the export of any goods. Foreign

contractors must obtain no-objection certificates from the Director of Income Taxes to send plant

and machinery out of Kuwait.

Customs duties and procedures

The six member states of the Gulf Cooperation Council have entered into a GCC Customs

Union. Under the terms of the Customs Union, member states have agreed to unify the regional

customs tariffs at 5% on all taxable foreign imports, down from individual country rates that

ranged between 4 and 15 percent, as of 1 January 2003.

In general, after landing in Kuwait, goods may be cleared through customs within two weeks if

documentation is completely in order. Customs examination is rigorous for all imported goods.

This also applies to containerized cargoes arriving at the two main ports, Shuwaikh and Shuaiba.

Lorries may be off-loaded on a random basis at a special inspection point in Kuwait City.

Customs accepts no responsibility for damage, delays or losses. The Department of Standards

and Metrology has established a large number of minimum-quality standards, based on a

combination of American, British, German and other national standards. Foreign investment All

Rights Reserved Doing Business in Kuwait 18 – Ernst & Young.

vi) Registration of intellectual property

Kuwait is a member of the World Trade Organization (WTO) and plans to be in compliance with

its obligations under the Trade Related Aspects of Intellectual Property (TRIPS) Agreement.

Kuwait joined the World Intellectual Property Organization (WIPO) in April of 1998.

Patents

A system of patent registration protects inventions and ideas from unauthorized use or copying.

Patents are registered for an initial period of 10 years and may be registered for a further five

years only. Food and drug manufacturing processes may be patented for only 10 years. A fee of

KD 10 is required to register a patent. Patents may be licensed.

Trademarks

Trademarks are one of the most valuable and widely used forms of intellectual property in

Kuwait. A trademark may be registered for 10 years and may be renewed indefinitely for further

10-year periods. The registration process takes about three weeks to complete, and the fee is KD

24.

Registration gives an owner the exclusive right to use a trademark on the goods for which a

trademark is registered. The owner may prevent other parties from using the trademark on

competing products.

If a trademark has not been effectively used for a five-year period, an interested party may apply

to the courts to have it cancelled.

Copyrights

Under Kuwaiti laws, original literary or artistic works, including computer software, and video

and audio tapes, are protected.

CHAPTER-7

Trends That Will Shape the Pharmaceutical Industry in 2013

Life sciences companies face unprecedented challenges as revenues come under pressure as a

consequence of pricing pressures caused by healthcare reforms and austerity measures, increased

competition, and challenges in bringing new drugs and other products to market.

1 Context-Based Services: Where You Are and What You‟re Doing

Today, location-based capabilities and wide-scale use of smart phones and other 3G and 4G

devices have helped pharmaceutical companies find new ways to engage patients and provide

them with useful services that can improve quality of life. For example, the makers of Clarityn

created an app which provides users with detailed information about local pollen count and

where to find nearby medication to help ease seasonal allergy symptoms.

Beyond apps, technology can be used to collect patient data in real time.

2 Using "Big Data" for New Value

Similar to other major industries, the pharmaceutical industry is learning how to utilize “Big

Data,” the catchall term for the explosion of data and technologies emerging to support it. In

healthcare, we‟re seeing electronic medical record (EMR) data coming together with genomic

and genetic data; financial data; and patient-reported data to deliver insight into which therapies

provide the highest overall value to patients and healthcare systems at the lowest cost.

3 Industrialized Data Services

While organizations continue to hunt for new and useful data, they are also looking for

opportunities to share it. Enter: data services.

Traditionally, data has been used in silos, but data services helps to find opportunities to use data

in many different ways, unlocking far more potential. For example, in R&D, establishing data

services enables the use of clinical-trial data in trial simulations, which can yield findings at

lower cost and with lower risk.

4 Pharma Gets Social

Over the years, social media has been a highly sensitive area for life sciences companies, which

are often bound by strict marketing and FDA regulations. But some companies are beginning to

experiment with the new medium. For example, drug maker Sanofi has emerged as a social

media leader by building a Face book community for diabetes sufferers who connect online to

share their experiences with the disease.

5 Focusing on the Cloud to Cut Cost and Improve Business Functions

To date, the cloud market has mainly served as a tool for sales and marketing teams within most

pharmaceutical companies. But that‟s quickly changing. Today, the cloud market is adapting to

meet the needs of all areas within life sciences and has shown to be particularly helpful in

overcoming IP issues, security issues and has allowed many companies to cut down on

operational costs. In fact, drug maker Roche recently announced it was moving to Google‟s

cloud-based applications, including Gmail and Google Docs, to support its more than 90,000

employees globally. The company believes it will enable employees to collaborate strategically

without requiring large expenditures and potentially disruptive upgrades.

In terms of R&D, Gartner predicts that by 2014, 25 percent of R&D organizations will pilot

discovery research applications using cloud computing. Eli Lilly and Pfizer, for example, have

both adopted Amazon‟s Elastic Compute Cloud (EC2) Platform to conduct simulation models in

early discovery that have been operational within hours, whereas traditional in-house

implementations would have taken weeks.

6 Growing Security Concerns

As life sciences organizations begin to adopt cloud, social media and mobile technologies in

order to access and share information, they also face potential new security threats and breaches.

To deal with these complex and ever-changing array of threats, organizations must move from

simply monitoring and collecting data to understanding it and visualizing new behaviors and

anomalies. As an example, companies could identify a possible internal threat by analyzing

activity patterns of a suspect employee‟s time spent downloading confidential data, which would

in turn trigger a compliance check.

Conclusion

The Kuwaiti government is willing to diversify its economy and has launched an open

policy to foreign investments. To close it up, the countries infrastructures are of high

quality, the labour force provided by immigrants is inexpensive and the absences of taxes

are some of the undeniable advantages to foreign investors.

The country remains too closed to foreign investment because of its laws restricting

freedom of establishment to non-citizens.

BIBLOGRAPHY

http://www.kspico.com/

http://www.tajpharma.com/Kuwait.htm

http://kw.sanofi.com/l/kw/en/layout.jsp?scat=6AFC3AB3-9737-40DA-8068-891C6E0C916F

http://www.tajpharmaceuticals.com/Taj%20Headquarters.htm

http://www.linkedin.com/company/kuwait-saudi-pharmaceuticals-industries-company

http://en.wikipedia.org/wiki/Sanofi

http://www.industryweek.com/emerging-technologies/six-tech-trends-will-shape-

pharmaceutical-industry-2013?page=3

http://www.arabtimesonline.com/NewsDetails/tabid/96/smid/414/ArticleID/183345/reftab/3

6/Default.aspx

A

GLOBAL / COUNTRY STUDY AND REPORT

ON

“COUNTRY OF KUWAIT”

Submitted to INDU MANEGMENT INSTITUTE, BARODA

IN PARTIAL FULFILLMENT OF THE

REQUIREMENT OF THE AWARD FOR THE DEGREE OF MASTER OF BUSINESS ASMINISTRATION

In

Gujarat Technological University

UNDER THE GUIDANCE OF

Ms. Upasna Gupta

Submitted by

Brinda Desai : 117190592081 Sumit Patel : 117190592083 Khushbu Mehta : 117190592086

Batch: 2011-13 MBA SEMESTER III/IV

INDU MANAGEMENT INSTITUTE MBA PROGRAMME

Affiliated to Gujarat Technological University, Ahmadabad.

Institute‟s Certificate

“Certified that this Global /Country Study and Report Titled “GULF AGENCY

COMPANY" is the bonafide work of Mr./ Ms…Sumit Patel, Brinda Desai,

Khushboo Mehta , who carried out the research under my supervision. I also

certify further, that to the best of my knowledge the work reported herein does not

form part of any other project report or dissertation on the basis of which a degree

or award was conferred on an earlier occasion on this or any other candidate.

Signature of the Faculty Guide

(Name and Designation of Guide)

(Certificate is to be countersigned by the Director/HoD)

_______________________________________________________

Student‟s Declaration

We, Brinda, Sumit, Khushbu, hereby declare that the report for Global Country Study

Report entitled “Gulf Agency Company (Kuwait) Ltd” in Kuwait is a result of our own

and our indebtedness to other work publications, references, if any, have been duly

acknowledged.

Place: ……………………..

Date: ……………………… Signature: ............................

PREFACE

The Global Country Report is an integral part of the MBA program and it is designed in

such a way that student can give maximum knowledge and can get exposure to the global world

in minimum time.

With the respect and pleasure, we have privilege to submit our report to the kind hands of

eminent examination of the Indu Management Institute. MBA is a professional course, to be

an MBA student is a matter of pride because through MBA each student is prepared to hold the

post of manager very confidently and we are in field, which helps us to develop from normal

human being into a disciplined, and dedicated professional.

We have heard that famous saying “God helps those who helps them salves“ and

“Experience is the best teacher “the global country report on “KUWAIT” has given us

sufficient knowledge to fill the gap between the theoretical and practical knowledge.

ACKNOWLEDGEMENT

Every work that one completes successfully stands on the constant encouragement, good

will and support of the people around. I, hereby, avail this opportunity to express my heartfelt

gratitude to a number of people who extended their valuable time, full support in developing this

project.

We convey our heartfelt gratitude to our college “Indu Management Institute” under

Gujarat Technological University for giving us this precious opportunity to work for the real-

time project.

We also forward our special thanks faculty member & project guide Miss. Upasana Gupta

from Indu Management Institute for guiding us in this report. The valuable suggestion of the

faculty member during the course of our Project work gives me the inspiration to achieve our

goal. The shape that project has been taken is due to judicious guideline, encouragement & help

of our guide.

We own the success of the project to my Project Guide, Miss. Upasana Gupta who was

a tremendous supporter and an eager teacher, for providing excellent guidance for this project.

He is one of the major sources behind the success of the project.

Country: Kuwait

Map:

Currency: Kuwaiti Dinar

National Flag:

INDEX

Sr. No. Particulars Page No.

1 Demographic Profile of Kuwait 6

2 General Economic & Industries overviews 11

3 General overview of Trade and Commerce 14

4 Overview Different economic sectors of Kuwait 15

5 Legal aspects of trade in Kuwait

6 Overview of business and trade at international 19

7 Present Trade Relations of India / Gujarat with Kuwait 20

7 Business Volume of different products 23

8 Investment In Kuwait 26

9 PEST Analysis or SWOT Analysis 27

1. DEMOGRAPHIC PROFILE OF KUWAIT

This critique is about the Demographic sort of the inhabitants of Kuwait , including Population Density, Ethnicity, Education Level, Health of the Populace , Economic Status , Religious affiliation and other aspects of the population .

Approximately 96% of Kuwait’s Population is urbanized while 4% are nomadic or semi-nomadic. The country of Kuwait’s in progress inhabitants is estimated at nearly 3-3.5 million people; together with in cooperation locals and foreigners. Roughly 1 million of Kuwait’s inhabitants are narrow, with 2-2.5 million citizens register as foreigner/non-locals. It is sketchy that one in each 3-4 people in Kuwait are of Kuwaiti nationality.

Kuwaitis are Predominantly Muslim, though there are a few Christians of atheists. 85% of Kuwait’s population is Muslim ( Sunni 70%, Shia 30%) and the rest belong to other religions (includes Christian, Hindu, Parsi).

Kuwait has a biologically small, but well heeled, relatively open market with improvised

lubricate reserves of about 104 billion barrels - about 7% of globe coffers. Petroleum accounts

for nearly half of GDP, 95% of export revenues, and 95% of management returns. Kuwaiti

officials have steadfast to greater than ever oil construction to 4 million barrels per sunlight

hours by 2020. The rise in global oil prices throughout 2011 is reviving government

consumption and economic growth. Kuwait has experienced a 20% increase in government

funds takings, which has led to elevated funds expenditures; predominantly take-home pay hikes

for many public segment human resources. Kuwait has done slight to broaden your horizons its

economy, in part, because of this positive fiscal situation, and, in part, due to the poor business

climate and the acrimonious relationship between the National Assembly and the executive

branch, which has stymied most movement on economic reforms. In 2010, Kuwait passed an

economic development plan that pledges to spend up to $130 billion over five years to diversify

the economy away from oil, attract more investment, and boost private sector participation in the

economy.

Here are small numbers of Kuwaiti Christians and Jews. The 93% literacy rate, one of the Arab world’s highest, is due to extensive government support for the education system. Public school education, including Kuwait University, is free, but access is restricted for foreign residents. The Government sends qualified students abroad for degrees not offered at Kuwait University. Kuwait’s official language is Arabic, though only roughly half the country speaks the language primarily. Most foreigners speak Hindi, Urdu, Filipino or Bengali. Most Kuwaitis are also bilingual in that they speak more than one language. E.g. English, Persian; Kuwait’s standard of living increased; many have flocked to the country. Most stateless people are Arabs, and count up to 100,000 People. Most obtain nationality by marrying Kuwait

women. 30-35% of stateless men in adulthood have married Kuwait women, and this number is rising.

CIA World Fact Book demographics

1. Age Structure

0-14 Years : 25.8% (Male 348,816 ; Female 321,565) 15-64 Years : 72.2% (Male 1,153,433; Female 720,392) 65 Years and over: 2% (Male 25,443; Female 25,979) (2011 Est.)

2. Population

Sex Ratio

Population growth rate

1.986% (2011 EST.)

3. Life expectancy at birth

total population: 77.09 years

Male: 75.95 years

Female: 78.3 years (2011 EST.)

Age Ratio (male/Female)

Total 1

At Birth: 1.047

Under 15: 1.04

15-64: 1.79

Over 65: 1.54

(2011 estimated.)

4. Total fertility rate

2.64 children born/woman (2011 EST.)

5. Nationality

Noun: Kuwaiti(s)

Adjective: Kuwaiti

6. Ethnic groups (by nationality)

Kuwaiti 45%

Other Arab nationals 12%

South Asian 30%

Iranian 4%

Other 7%

7. Religion

Muslim 85% (Sunni 70%, Shia 30%)

other 15%(includes Christian, Hindu, Parsi)

8. Language

Arabic (official),

English widely spoken,Balochi,Hindustani,Pashto also

9. Literacy

Age 15 and over can read and write

Population group %

Total Population 93.3%

Male 94.4%

Female 91%

(2005 census)

10. Education expenditures

3.8% of GDP (2006)

11. Health expenditures

6.8% of GDP (2009)

12. Urbanization

Urban population: 98% of total population (2010)

Rate of urbanization: 2.1% annual rate of change (2010-15 EST.)

2. General Economic & Industries overviews

1. GENERAL ECONOMIC OVERVIEW:

Kuwait has a geographically small but wealthy, relatively open economy with crude oil reserves

of about 104 billion barrels - about 7% of world reserves. Petroleum accounts for nearly half of

GDP, 95% of export revenues, and 95% of government income. Kuwaiti officials have

committed to increasing oil production to 4 million barrels per day by 2020. The rise in global oil

prices throughout 2011 is reviving government consumption and economic growth. Kuwait has

experienced a 20% increase in government budget revenue, which has led to higher budget

expenditures, particularly wage hikes for many public sector employees. Kuwait has done little

to diversify its economy, in part, because of this positive fiscal situation, and, in part, due to the

poor business climate and the acrimonious relationship between the National Assembly and the

executive branch, which has stymied most movement on economic reforms. In 2010, Kuwait

passed an economic development plan that pledges to spend up to $130 billion over five years to

diversify the economy away from oil, attract more investment, and boost private sector

participation in the economy.

1. GDP - (purchasing power parity)

$165.9 billion (2012 EST.)

$156 billion (2011 EST.)

$144.3 billion (2010 EST.)

Note: Data are in 2012 US dollar

GDP (official exchange rate)

$174.6 billion (2012 EST.)

GDP - real growth rate

6.3% (2012 EST.)

8.2% (2011 EST.)

2.5% (2010 EST.)

2. Composition by sector - GDP

Agriculture: 0.2%

Industry: 42.3%

Services: 57.5% (2012 EST.)

3. Population below poverty line

NA%

4. Labor force

2.304 million (2012 estimated.)

5. Unemployment rate

2.2% (2004 estimated.)

6. Household or income consumption by percentage share

Lowest 10%: NA%

Highest 10%: NA%

7. Investment (gross fixed)

15.3% of GDP (2012 estimated.)

8. Budget

Revenues : $106.9 billion

Expenditure: $69.18 billion (2021 estimated.)

9. Taxes and other revenues

61.2% of GDP (2012 estimated.)

10. Public debt

7.1% of GDP (2012 estimated.)

7.5% of GDP (2011 estimated.)

11. Inflation rate (consumer prices)

3.2% (2012 estimated.)

4.7% (2011 estimated.)

12. Industries

Petroleum, petrochemicals, cement, shipbuilding and repair, water desalination, food processing,

construction materials

13. Industrial production growth rate

8.7% (2011 estimated.)

14. Export

$109.4 billion (2012 estimated.)

$104.3 billion (2011 estimated.)

15. Import

$24.1 billion (2012 estimated.)

$21.96 billion (2011 estimated.)

16. Exchange rates

Kuwaiti dinar (KD)/US dollar

0.2801 (2012 EST.)

0.276 (2011 EST)

0.2866 (2010 EST.)

0.2877 (2009 EST.)

0.2679 (2008 EST.)

2. INDUSTRIES OVERVIEW

Sector in the medium term to implement trade policies, tariffs and intra-regional trade

promotion account the global market to fully participate in the rationalization of Kuwait

purposes are taken.

Therefore, the national macro-economic objectives, policies, and strategies that other multilateral

Uruguay Round results and opportunities presented by trade agreements to take account of the

structure have been adopted. Medium-term trade zone policy attraction feet: -

• Creating a buoyant and self-sustaining export sector.

• Expansion of the local trade goods at reasonable prices to ensure the availability countrywide

Proficient and useful administration method to investigate bring in.

Anti-monopoly laws and other regulations for consumer protection of Adoption...

All of the rate setting and the identification of all non-tariff barrier to buy and sell, global buy

and sell, anti-dumping policy

• energetic and useful contribution in many-sided trade, especially exports to Kuwait increased

market access for processed and semi-processed goods into commodities for export Kuwait

secure and stable, fair and remunerative prices to achieve.

• An immediate and sustainable industrial policy thrust within a liberal and global economic

development, promotion of industrial development.

. • 37% to 16% from the current level of 12% with an average growth rate of GDP, increasing

industrial share

3. GENERAL OVERVIEW OF TRADE AND COMMERCE

Kuwait major export include chemical product, crude oil, fuel, miscellaneous manufactured

goods, petroleum products and synthetics lubricants, while the major import include animals,

chemical products, construction equipment, food ingredients, machinery, textiles and knitwear

and transport equipment.

There is no exchange control and residents and nonresident may freely purchase and sell foreign

currencies in Kuwait. Import from any permitted source may bra paid freely.

Licenses are issued freely to registered Kuwait companies and there are no free ports or trade

zones. Kuwait‟s parliament has passed a bill to establish a free trade zone at Shuwaikh Port.

Globally, Kuwait stands at 112 in the ranking of 183 economies on the ease of trading across

borders. The rankings for comparator economies and the regional average ranking provide other

useful information for assessing how easy it is for a business in Kuwait to export and import

goods.

4. OVERVIEW OF DIFFERENT ECONOMIC SECTORS

1. OVERVIEW OF THE CURRENT ECONOMY

Kuwait is an associate of the association of Petroleum Exporting Countries (OPEC); export the

fourth major amount of oil among the group in 2010.

At the same time, Kuwait's economy is one heavily dependent on petroleum sell abroad

revenues, which description used for part of its on the whole disgusting domestic product (GDP),

95 percent of total sell abroad income, and 95 percent of administration revenues. Kuwait has an

active sovereign-wealth finance, the Kuwait venture right, which oversee all condition

expenditures and global funds. Kuwait also allocates 10 percent of its state revenues into the

distance Fund for Future Generations (RFFG), for the day when oil income starts to decline.

Article 21 of the Kuwaiti constitution specifically allocates all natural resources and revenue

they generate to the situation. on the other hand, the overseas straight wealth funds rule approved

by the National Assembly in March 2001, has facilitate some overseas venture and maturity in

those sector, cause noteworthy disagreement in Kuwait.

STRUCTURE OF THE ECONOMY

Kuwait‟s economy is extremely reliant on oil. Fuel financial records for in the region of

half of GDP, 95% of sell abroad revenues, and 80% of administration revenues. Kuwait‟s

market has been succeeding at a speedy velocity recently due typically to growing oil

prices Kuwait has very limited agricultural possibilities and has to import most food

products from other countries to get together it‟s require. There is some go fishing, but

this is miniscule in evaluation to the amount of other food products Kuwait needs from

foreign countries in order to sustain itself. About 75% of potable water must be distilled

or imported.

Kuwait‟s manual labor strength consists typically of foreigner, about 60 %.

1. Kuwait environmental industry

A favorable investment policy augmenting the influx of pollution control equipment and a spur

in government project directed at ground water cleanup environmental awareness are expected to

boost the Kuwaiti environmental industry. Plan technology advance coupled with international

cooperation are likely to drive renewable energies waste water sector desalination capacity and

solid water treatment. This study provides insights into social economies legal, political and

technological factor in Kuwait and their likely implications on and opportunity for the

environmental sector.

2. Service sector

The services sector is the fastest growing area of the Kuwait economy. Value added in the

service sector as percent of GDP importance of service in the economy of Kuwait and countries

his measured as the value added o service as % of GDP. The service sector includes whole sale

and retail trade, transport financial services, health care, education, and real estate. Service rate

of for few years is as following:

0

10

20

30

40

50

60

70

80

90

1965 1968 1971 1974 1977 1980 1983 1986 1989 1992 1995 1998 2001

Service Area Content:

• Trade, vehicle repairs, household goods

• Hotels and restaurants

• Transport and storage

• Information and Communication

• Financial and insurance activities

• Real Estate Activities

• Business and other service activities

• Public Administration

• Education

• Health

• Personal Service Activities

3. Industrial sector

As a wind of globalization blows, trade barriers are being dies mantled worldwide with the result

that goods and service technology, capital, labor, information and even films are now moving

more freely than ever before crossing national boundaries. Every countries economic survival

now directly depends on the adoption of the most efficient market oriented and international

production system at this historical juncture of industrialization, Kuwait is prepare its industry to

get on on an take action planned of manufacturing growth.

Industry sector is mainly made:

• Mining and quarrying

• Manufacturing

• Electricity

• Water and Sewer

• Construction

5. LEGAL ASPECTS OF TRADE IN KUWAIT

Kuwait‟s legal system is a civil law system base on French and company mostly Egyptian

models. The principal‟s legislation concerning the conduct of business is found in the

commercial company‟s law no. 15 of 1960, as amendatenda and law no.68 of 1980.

The law of commerce, which includes the law pertaining to commercial agencies. The principal

ministerial authority for enforcement of commercial laws is the ministry of commerce an

industry. The conduct of business in Kuwait. His regulated through the issuance of license by the

ministry commerce and industry such license for the conduct of business are issued only to

Kuwaiti national or Kuwaiti register company. Kuwaiti register mostly at least 51% Kuwaiti own

as a general matter therefore foreign company missing the conduct business in Kuwait must

either invest as minority shareholder in a Kuwaiti company which hold license

6. PRESENT TRADE RELATIONS OF INDIA WITH KUWAIT

Trade and Economic Cooperation:

Historically, India-Kuwait relations have always had an important buy and sell measurement.

Kuwait is an imperative associate in India‟s quest for energy security, annually providing 10-

11% of India‟s crude lubricates imports. Export from India to Kuwait in FY 2010-11 grew by

150% to over US$ 1.95 billion, voyage US$ 1 billion mark for the first time. Of the total buy and

sell, non-oil buy and sell accounted for roughly US$ 2.5 billion even as oil export from Kuwait

to India were roughly US$ 9.77 billion.

Indian companies in Kuwait:

Finance, New India Assurance Company, Oriental Insurance Company, crossing and Roof and

National Aviation Company (Indian Airlines and Air India) have bureau in Kuwait, while Private

Company like L&T. Shalimar Valves, etc. are implement major projects in Kuwait, including in

petroleum and Power sectors. TERI signed a dirt remediation contract with Kuwait lubricate

Company worth US$ 39.36 million In February 2012 while L&T currently has $150 million

worth of contracts in Kuwait.

Kuwaiti Investment in India:

A huge deal of it has gone to India during global savings companies or Through Mauritius,

Singapore or other countries only if tax breaks. Major Kuwaiti Presence in India includes those

by Alghanim Group of Kuwait; the KAPICO group; NAS; Liveliness Logistics, Hasibat Holding

Co, KGA faction, KCIC, KIPCO, Global Investment House, Kuwait business House etc among

others. India related money launch in Kuwait include India Account (2006); Tijari India Fund

(December 2007); India fair play Fund (January 2008); Kuwait India Holding Company; Indian

Private Equity Fund; India Private Equity Fund; 3rd

Real Estate Islamic Fund (May 2009); and

Mayur Hedge Fund (August 2009). On 23 July 2010, UTI Asset management Co. set up a $500

million private fairness fund with Kuwait's Noor Financial Investment Company to invest in

unlisted Indian infrastructure companies.

Civil Aviation:

1. Indian Airline,

2. Go Airways

3. Kuwait Airways have direct flights to Indian cities.

Kuwait has usage contracts for more than Ten Indian airports.

India-Kuwait Agreements:

1. Mutual Legal support in Criminal Matters (2004);

2. Extradition (2004); on Juridical and

3. Judicial Cooperation in Civil and business Matters (2005);

4. MOU on Labour, Employment and Manpower Development (2007);

5. Scientific and Technological Cooperation (2009);

6. Cultural and Information Exchanges (2009);

7. Education and Learning collaboration (2009).

Major items of Exports from India:

India shows that the major items exported from India were Cereals, Meat and Edible Meat Offal,

Articles of Iron or Steel, Electrical Machinery and Equipment and Parts thereof; Articles of

Apparel and Clothing Accessories, Nuclear Reactors, Boilers, Machinery and Mechanical

Appliances, Residues and Waste from the Food Industries, Iron and Steel, Edible Fruit and Nuts,

Fish.

Major items of import by India:

The major items imported by India were Organic Chemicals, Plastic and Articles thereof, Iron

and Steel, Fertilizers, Aluminum and Articles thereof, Salt; Sulphur; Earths and Stone, Inorganic

Chemicals; Organic or Inorganic Compounds of Precious Metals, Copper and Articles thereof,

Nuclear Reactors, Boilers, Machinery and Mechanical Appliances, Miscellaneous goods

7. BUSINESS VOLUME OF DIFFERENT PRODUCTS

Agriculture Kuwait, the Kuwait Forestry, and Fishing in Kuwait.

1. Oil

According to Oil & Gas Journal, as of January 2011, Kuwait‟s territorial boundaries contained an

estimated 101.5 billion barrels (bbl) of proven oil reserves, roughly 7 percent of the world total.

Additional reserves are supposed in the Partitioned Neutral Zone, which Kuwait

Share on a fifty- fifty base with Saudi Arabia. The impartial Zone holds an extra 5 billion barrels

of established reserves, bringing Kuwait's total oil reserves to 104 billion barrels. These coolness

estimates have been openly questioned by some analysts and a number of Kuwaiti

Parliamentarians, with some put minerals as low as 48 billion barrels.

2. Production

Compared to many other Asian countries, Kuwait's industrial base is relatively increased.

(Using scrap) steel;; tires; oil refining; flour pisavani; beverages; tobacco; simple consumer

goods; and a car, truck, bus and assembly of the import-substitution industries include textiles.

ERP strategies are difficult for the government to help local enterprises. Committed to

privatization and free market forces rule, the government or some policies that affect local

producers apparently was constrained from intervening directly offered assistance. However,

Rawlings government began a program to encourage local production.

3. Energy:

Kuwait has an installed generation ability of 11,300 Mega Watt, which was a little over height

demand of 10,900 Mega Watt in the summer of 2010. Exciting creation comes from Kuwait‟s

five existing authority plants: Doha East, Doha West, Shuaiba North, al-Subiya, and al-Zour

South. In 2009, Kuwait had overall electric generation of 49.8 terawatt hours (Twh). Kuwait has

come to represent the worries facing the region‟s electricity networks, with rapid demand growth

causing rolling blackouts at times of peak power require. Slow execution of developments

devices, as well as a lack of feedstock, has serve to create shortages in power provide in the

warm summer months. Formerly having one of the largest reserve margins in the region, Kuwait

is continually in a state of power deliver shortage. In the past decade, the growth of Kuwait‟s

electric sector has stalled due to opinionated factors; despite reliable annual require growth of

8%. Only one influence plant was particularly made during that time, bringing a relaxing reserve

margin to a lack beginning in 2006.

4. Services:

Kuwait monetary services in the past have seen improvements. Kuwait during the Banking

Amendment Act of 2007 a common banking permit for suitable banks and offshore banks in the

country, with the completed work allows. Barclays Bank Limited. It will be the first bank in the

state in general banking permit. Thus, non-resident individuals and foreign companies, it is likely

for Kuwait to open abroad bank Account statement.

5. Tourism:

Tourism is one of Kuwait's largest foreign income earners to circle into, and the Kuwaitian

management support and the expansion of more tourist places great importance.

Gold market:

Souk Mubarakiya has a nice-looking gold market and price is fairly reasonable. Kuwait is a best

place to find 21 to 24 carat gold souvenirs.

Kuwaiti towers:

Kuwait‟s unofficial sign found on everything except the flag these three towers are Kuwait top

draw, design by Swedes built by yugoslavsand open in1979

Fireworks light up the sky near the Kuwait tower has Kuwait celebrated 50 anniversary of the

constitution

6. Telecommunications:

These efforts also cellular mobile operators, pejinga companies, information service and Internet

service providers licensed by being complementary. The result of their efforts, the number of

telephones has increased over the years and people are given greater access to

telecommunication Services. Kuwait‟s fastest growing Internet country in Asia.

Telephones- main line in use: 514,700 (2011) 510300(2005)

Mobile cellular: 4.9millions (2011) 2.7million (2007)

Fiber optic link around the globe linked to Bahrain Qatar.

7. INVESTMENT IN KUWAIT

The Kuwaiti financial system is large and well residential. It includes a growing number of

financial companies and investment funds, as well as an active stock exchange. The insurance

sector is growing quickly

Foreign Direct Investment is neither good quality nor terrible; it all depends On how you deal

with it. A properly regulated FDI can bring growth, jobs, Technology, skills, market access and

development.

Kuwait in the course of liberalization of trade has started promulgating laws That would expand

private sector's role in the production of goods and Services.

Issuance of policy of functioning, by Kuwaiti minister of commerce, Pertaining to direct

investment of foreign capital law no. 8/2001 is a step Forward in the expansion of private sector's

role in the Kuwaiti economy. Following economic activities are being offered to the foreign

investors, Where they can invest in:

1. Industries except for enterprises related to Oil or Gas examination or Production.

2. Structure, act and moving administration enterprise In the fields of water, power, drainage and

communications.

3. Banks, investment and foreign exchange companies with the due Approval of Central Bank of

Kuwait on their incorporation.

4. Insurance companies with the due approval of Ministry of Industry on their And incorporation

Commerce

5. Software Development and Information Technology.

6. Pharmaceutical industries and Hospital.

7. Sea and Road, Air transport.

10. Complete home projects and expansion of areas except for real Estate speculation.

11. Genuine estate investment through foreign investor's donation to the Kuwait shareholding

companies in agreement with the provisions of law No. 20/2000.

8. SWOT Analysis

The next have been known as strengths:

• Low levels community debt

• Solid banking scheme

• Self-regulating Central Bank

• Independence of the press

• High nation state credit rating

• A democratic system,

• Political reform: two amendments have been introduced to the election law. These are:

- The improve force down law: This has allowed for the establishment of new the media.

• The initiation of fight against corruption: This has materialized in:

- The ratification of the United Nations anticorruption agreement.

- Increasing public awareness and a gradual enforcement of actions against

Corruption.

• In progress financial Reform: This has been supported by:

- The enforcement of the disclosure law regarding equity holdings.

- The drafting of a new law for Public Private company, which is expected to Improve

community returns from BOT projects‟ the course of an anti‐trust act enhancing the public

personal partnership in education.

2 Weaknesses

Business Environment

• Useless government organisation

• Provisional employment policy

• Insufficient learned workforce

• Corruption

• Unfortunate work ethic in nationalized employment power

• Class of Power Provide

The Subsequent is a list of indicators from the GCR. An indicator is considered as a fault if it has

a rank lesser than the mean rank in the KNCC example.

Institutions (Public and Private)

• Wastefulness of government spending

• Business costs of corruption

• Protection of minority shareholders‟ interests

• Quality of information regarding changes in policies and regulation

• Effectiveness of law‐making bodies

• Centralization of economic policymaking

• Favouritism in decisions of government officials

• Burden of government regulation

• Impact of nepotism

Infrastructure

• Generally infrastructure excellence

• Excellence of port infrastructure

Education and Training

• Low enrolment rates

• Quality of the educational system

• Quality of math and science education

• Home accessibility of expert study and preparation services

• Amount of staff exercise

Market Efficiency

• Foreign ownership restrictions

• Intensity of local competition

• Reliance on professional management

• Number of procedures/time required to start a business (hard data)

• Distortive effect of taxes and subsidies on competition

• Extent of bureaucratic red tape

Technological Readiness

• Technological readiness

• Quality of competition in the ISP sector

• Impact of rules on FDI

• FDI and technology transfer

• Government prioritization of ICT

Business Sophistication

• Home supplier quality

• Charge chain presence

• Location of competitive advantage

• Willingness to delegate authority

• Extent of incentive compensation

Innovation

• Class of logical research institutions

• Capacity for innovation

• Management procurement of advanced technology products

• Industry research collaboration

• Business spending on research and development

• Accessibility of scientists and engineers

• Logical property protection

3 Opportunities

We identify the following list of opportunities to Kuwait's competitiveness:

• GCC addition: perseverance in initial and recovering the addition potentials.

• The continuous strength of the international oil market. Prices are still high compared to

Their past levels as a result of increasing demand mainly from non‐conventional

Sources.

• The potential of signing free trade agreements with other countries.

• The adoption of an open sky policy.

4. Threats

We can identify the following list of external threats to Kuwait's competitiveness:

• National political instability due to a likelihood of the following conflicts:

• Feasible increases in business cost due to the rising regional terrorism threat.

• Introduction to imported inflation due to higher import prices.

• The Uninterrupted decline of the current Population structure towards low trained

Expatriates.

Analysis Of particular

industry/sector/company of selected country

Gulf Agency Company (Kuwait) Ltd

Company: Gulf Agency Company (Kuwait) Ltd

Type: 1. Ship agency

2. Tanker agency

3. International and local logistics services

4. Ship spares logistics

5. Warehousing and distribution

6. Local and international moving

7. Project logistics

Employees: Team of more than 100 professionals and over 1000 Employes

Address : Street Address: Kuwait Free Trade Zone,

Phase 2 - Future Area

Plot No.C28 / D1 - D10, Building Number 7

Shuwaikh, Kuwait

Po Box : 20637

Zip : 13067

Tel : +965 222 64 164

Fax : +965 248 36 375

Email: kuwait@gacworld.com

Site : www.gacworld.com

1. Introduction company overview

Gulf Agency Company (GAC) Ltd. provides logistics, shipping, and marine services

internationally. The company was founded in 1956 and is based in Dubai, United Arab Emirates

with additional offices in Dubai, Singapore, Hong Kong, Rotterdam, Mumbai, Piraeus, the

United Kingdom, Sao Paulo, and various countries worldwide. Its logistics services include

supply chain management, land transportation, warehousing and distribution, project logistics,

international moving, upstream logistics, and freight solutions; and shipping services include hub

agency, husbandry, owners‟ protective agency, canal transits, bunker fuels, ship supply,

protection and indemnity, freight contracting, protective, ship lay-up, and weather solutions. The

company also provides marine services, which include offshore support, tug and barge

operations, and mooring master, as well as project logistics services, including site

survey/feasibility studies, full/part charter parties, multi-modal transport, special equipment

transport, freight negotiations, and administration; and transfer, ship spares logistics, work wear,

and training and service solutions. It serves automotive, construction, cruise, dredging, dry bulk,

oil and gas, entertainment/events, fashion, fast moving consumer goods, health care,

humanitarian aid, liner, military, offshore, project logistics, protection and indemnity, retail, ship

owners/operators/managers, sports logistics, technology, liquid bulk, yacht services, and

telecommunications industries in the United Arab Emirates and internationally.

Vision

To provide leadership and innovation in global business and community life by delivering a

flexible portfolio of services built on quality, safety, honesty, vigor and a commitment to long-

term business relationships.

Mission

GAC is a worldwide service provider dedicated to building long-term relationships with

customers, staff and suppliers. We are committed to delivering integrated services to

GAC Spirit

The GAC Spirit emphasizes loyalty between management and staff and two-way responsibility

to each other.

The GAC Spirit emphasizes loyalty between management and staff and two-way responsibility

to each other. We recognize that people‟s lives extend beyond their jobs and that working

efficiently and having fun are not mutually exclusive. It‟s through a smart and efficient

combination of work and play that we achieve service excellence.

For us at GAC, who you are is just as important as what you do. Our relationships are both

professional and personal. We know that high-value service is achieved by combining

professional discipline with a human touch. It‟s a combination that matters, and one that works.

The GAC Brand

For more than a decade, GAC has been known as the service provider who‟s there – 'Wherever

you go'. That tagline helped establish us as a truly global organization with the reach and

resources to provide professional services wherever your business may take you.

For more than a decade, GAC has been known as the service provider who‟s there – 'Wherever

you go'. That tagline helped establish us as a truly global organization with the reach and

resources to provide professional services wherever your business may take you.

GAC teams are operationally strong. We‟re good at solving problems, we never give up, we get

the job done. „Delivering your strategy.‟ tell customers that we have the skills, the assets, the

values and the drive to work with them to achieve their business goals.

It underlines the central theme of Vision Z: Global Performance, our five-year plan that will take

us through to 2017. That plan is built on four strong pillars:

Values

The GAC Spirit, our ethical practices, our HSSE focus and our determination to give back to the

communities in which we work.

Long-term approach to customer relationships

GAC aims to be long-term strategic partners with our customers, not just service

providers.

Assets

Good equipment, good technology and great people.

Structure

Each GAC region has the flexibility to decide what works best in their part of the world.

'Delivering your strategy.' raises the bar. We‟re good at what we do. But we want to be better –

to make your business better.

Our customers are the stars of the show. And with GAC as your strategic partner, you have a

world-class supporting cast of thousands.

2. GAC STRUCTURE,FUNCTIONS AND BUSINESS ACTIVITIES OF GAC

Structure and Business Activities Of GAC:

Bengt Ekstrand has taken over from Lars Safverström as GAC Group President

effective from 1 January 2013. Ekstrand started with GAC in 1992 in

Bahrain and held company management positions in the Middle East region

before becoming Regional Director of the Middle East and later Group Vice

President for Asia Pacific region.

Bengt brings substantial experience in GAC‟s core businesses

plus an intimate understanding of GAC‟s values to the position of Group

resident,” says GAC‟s Co-Chairman and Principal Trustee, Björn Engblom. “He

has been part of the GAC team for 20 years and has shown in that time that

he has the vision and the determination to take GAC forward.”

The appointment of a new Group President has led to other senior

management changes. Andrew Leach takes on the role of Group Vice President, Indian

Subcontinent while continuing in his role as Group Vice President, Legal. Lars Bergström has

been appointed Group Vice President, Middle East. The previous holder of this position, Dan

Hjalmarsson, has been appointed Group Vice President for Asia Pacific region. Lars Heisselberg

remains Group Vice President, Americas. Erland Ebbersten continues in his role as Group Vice

President, Africa, Russia & Central Asia and Ivo Verheyen remains as Group Vice President,

Europe. “Our senior team possesses a wealth of business and management experience,” says

Engblom. “With our strengthened regional structure in place, we expect to see robust growth and

development across all six regions in coming years.

Next Five-year strategic plan Vision Z: Global Performance is the blueprint for how we will

conduct our business in coming years and I look forward to sharing this with our customers as

we go forward.”

Functions and Business Activities Of GAC:

Shipping :

GAC Kuwait represents international shipping lines and tramp vessel owners in handling

various types of cargo ranging from containers, Ro-Ro cargo and breakbulk, to liquid and dry

bulks, heavy lift, project cargo and offshore projects. All oil exports from Kuwait are handled by

state agent Minatank. Leveraging our excellent relationship with Minatank, we are able to serve

as owner‟s representative for any tanker Principal.

We also act as owner‟s representative / OPA within the state oil ports, namely Mina Al Ahmadi,

Mina Abdulla and Shuaiba product pier. GAC Kuwait also acts as agents for tankers calling at

Mina Saud.

Local logistics services :

We operate full domestic services including customs clearance, haulage, transit clearance and

packing / crating. GAC Kuwait has a solid track record in offering reliable freight management

services. Currently, we are the exclusive logistics partner for several multinational companies

from diverse sectors ranging from FMCGs to cement and chemical products.

Warehousing and distribution:

Our two warehousing facilities, strategically located in Shuwaikh and the Kuwait Free Trade

Zone, provide both cool and ambient storage services. The facilities are ideal for companies

seeking efficient supply chain management capabilities without having to make sizeable

investments.

Ship spares logistics:

GAC Marine Logistics (GML) provides highly specialised doorto- deck delivery service for ship

spares and marine parts. With flexibility in a range of transport options and seamless time-

definite delivery, GML meets the needs of ship owners, managers and spares suppliers for cost

and time efficiency.

Comparative Position of GAC With Indian Shipping Company

Market Capacity Comparision

Name Last

Price

Market

Cap.(Rs.Cr)

Sales

Turnover

Net

Profit

Total Asset

Pipavav

Defence

68.50 4,803.21 2,586.47 28.72 4,703.87

GE Shipping 242.00 3,686.19 1,735.19 146.26 8,635.25

Gujarat Pipavav 47.20 2,281.84 416.03 73.96 1,515.62

ABG Shipyard 291.20 1,482.84 2,099.66 107.13 4,724.41

GAC 73.30 181.26 165.92 50.14 642.24

Comparative Position: The Shipping Corporation of India

The Shipping Corporation of India was established on October 2nd, 1961, by the

amalgamation of Eastern Shipping Corporation and Western Shipping Corporation.

Starting out as a marginal Liner shipping Company with just 19 vessels, the SCI has today

evolved into the largest Indian shipping Company. The SCI also has substantial interests in

various segments of the shipping trade. SCI‟s owned fleet includes Bulk carriers, Crude oil

tankers, Product tankers, Container vessels, Passenger-cum-Cargo vessels, Phosphoric Acid /

Chemical carriers, LPG / Ammonia carriers and Offshore Supply Vessels. Sailing through for

nearly five decades, the SCI today has a significant presence on the global maritime map.

As the country‟s premier shipping line, the SCI owns and operates around one-third of the Indian

tonnage, and has operating interests in practically all areas of the shipping business; servicing

both national and international trades.

In view of the demand from Indian trade, the SCI has diversified into a large number of areas.

The SCI is today the only Indian shipping Company operating: break-bulk services, international

container services, liquid/dry bulk services, offshore services, and passenger services. In

addition, the SCI mans and manages a large number of vessels on behalf of various government

departments and organizations.

The SCI has immensely contributed to the growth of India‟s EXIM trade and the national

exchequer, by being a net earner/saver of valuable foreign exchange.

Over the years, SCI has been a lifeline for the country in times of emergency and distress, by

ensuring continued and uninterrupted supply of crude oil, which drives the country‟s economy.

Liberalization and globalization of the Indian economy has presented the SCI with a suite of

growth and diversification opportunities. The SCI‟s growth has been additionally spurred on by

the presence of a modern, young and diversified fleet, operated by a large pool of well-trained

and experienced manpower, both onshore and at sail.

As a profitable commercial venture of the Government of India, the SCI has an excellent track

record of profitability since its inception. The SCI‟s annual performance has consecutively been

rated excellent for a record 18 times, under the Memorandum of Understanding (MoU) signed

with the Government of India.

The Government of India has conferred “Navratna” status to SCI on 01.08.2008 - enhanced

autonomy and delegation of powers to the Company towards capital expenditure, formation of

Joint Ventures, mergers, etc.

Continued profitability of the SCI is been due to a slew of innovative and timely strategies and

measures adopted by the SCI management. Amongst these include, inter alia, judicious and

optimal utilization of available tonnage, by deploying it in the most remunerative sectors;

commencement of new services in niche markets; identification and expeditious disposal of

value destroyers or non-performing assets; forging alliances with leading market players to

enhance cargo; availability and apportioning of expenses; and administrative cost cutting.

The SCI takes pride in being a responsible and socially committed owner, placing greater

emphasis on the safety of life, vessels, cargo and the environment it operates in. Today, the SCI

has evolved into a highly quality and safety conscious organization.

Not surprisingly, the SCI has received numerous awards and accolades from various national and

international organizations for excellence in customer satisfaction, operational efficiencies,

human resource training and emergency preparedness.

In tune with the global trend for specialization and the premium placed on core competencies,

the SCI has charted a definitive course of action for the future. Thrust areas for growth and

diversification focus on energy transportation, including a sunrise segment like transportation of

LNG and containers. The SCI forays into new thrust areas could either take the form of direct

capital investment or by forging strategic and symbiotic alliances with significant market players

in the market.

The SCI has heralded India‟s entry into the specialized field of LNG transportation, by acquiring

a stake in the two Indian LNG transportation agreements contracted till date, after a global

bidding process. SCI is the only Indian shipping company engaged in transportation of LNG, a

vital fuel for India‟s power plant and chemical / petrochemical industry. For the same purpose,

SCI has formed three Joint Ventures with one vessel each. On two of these LNG vessels, SCI is

managing onboard operation and technical management and the remaining vessel is fully

manned by SCI.

The SCI possesses all the ingredients essential for emerging as a truly world-class international

shipping Company. The endeavor of the management is to facilitate the release of boundless

energy and initiative streams, which will be channeled for the growth and prosperity of the

Company and the nation.

SCI, through its corporate policy and philosophy, has committed itself to social responsibility for

the benefit of society at large.

SCI formulated its CSR Policy on 19 March 2009 and earmarked 1% of Net Profit of preceding

year towards CSR. Subsequently, in March 2010, Department of Public Enterprises (DPE) issued

“Guidelines on Corporate Social Responsibility for Central Public Sector Enterprises”. SCI

policy on CSR conforms to these guidelines.

To avoid resources from spreading thin, SCI‟s CSR initiatives target specific areas. These are

• Education

• Scholarship to meritorious students belonging to SC, ST and OBC categories.

• Imparting-Vocational-Training

• Skill-Development

• Promotion of Art and Culture

Brief on India Kuwait Trade and Economic Relation

Kuwait is a small, rich, relatively open, petroleum-based economy with heavy dependence on

foreign manpower. It has always offered an open, highly competitive and affluent market for

capital and consumer goods and for project exports. It has estimated crude oil reserves of 100

billion barrels or 8-10% of world reserves. Kuwait oil revenues constitute the main source of

income and amount to approximately 95% of its revenues. Kuwait has posted record budget

surplus of KD 13.2 billion ($ 47 billion) during fiscal year 2011-12 for the 13th consecutive year,

previous high being KD 9.33 during 2007-08. Its GDP per capita was $38,778.39 in 2010. The

climate in Kuwait is not suitable for agriculture; resultantly, it depends on imports from other

countries for all its food requirements. To meet its need for potable water, Kuwait depends on

either desalination or import.

Kuwait is a relatively diverse project market. It is expected to award contracts worth more than $

117 billion in various sectors during 2012-16 as part of its Development Plan. The projects

cover a wide range and include oil and gas sector both upstream and downstream, construction,

including new cities, hospitals and housing units, infrastructure, including roads, airport, port,

metro and railway projects, power and transmission, petrochemicals, gas processing, pipeline,

etc.

Historically, Indo-Kuwaiti relations have always had an important trade dimension. The overall

trend of our trade with Kuwait has been positive. India-Kuwait trade was US$ 17.56 billion in

2011-2012, of which non-oil trade accounted for approximately US$ 1.9 billion (approx) while

petroleum exports from Kuwait to India were approximately US$ 15.67 billion. Our exports to

Kuwait during 2010-11 and 2011-12 were over US$ 1 billion, which in the past had been in the

range of $ 700-800. India has consistently been among the top ten trading partners of Kuwait.

The bilateral trade during 2007-08 to 2011-12 was as follows:

India-Kuwait Bilateral Trade FY 2007-08 to 2011-12

In US $ million

2007-08 2008-09 2009-10 2010-2011 2011-12

Indian Exports to Kuwait 681.54 797.50 782.45 1856.01* 1,181.41

Indian Imports from Kuwait 7,704.25 9593.74 8,249.49 10,313.64 16,375.37

Total 8,385.79 10,391.24 9,031.94 12,169.65 17,556.78

Source: Department of Commerce, M/o Commerce & Industry (MOCI), GOI

* The figure is revised as per the latest data of MOCI. Earlier it was US$ 1,959.48 million.

In Rs. Crores

2007-08 2008-09 2009-2010 2010-2011 2011-2012

(April – Sept)

Indian Exports

to Kuwait 2,744.90 3,628.40 3,710.37 8,915.17 2,658.78

Indian Imports

from Kuwait 30,959.93 43,199.44 38,987.99 46,976.02 28,414.00

Total 33,704.83 46,827.85 42,698.36 55,891.20 31,072.78

Source: Department of Commerce, M/o Commerce & Industry, GOI

All figures on FOB basis

Note : POL imports accounted for US$ 7,278.97 million (Rs. 29,291.29 crores) in the year 2007-

08; US$ 9,193.78 million (Rs. 41,402.19 crores) in the year 2008-09; US$ 7,909.80 million (Rs

37,391.30 crores) in the year 2009-10; US$9729.09 million (Rs 44,320.03 crores) in the year

2010-11; and US$ 15,667.11 million (Rs.75,813.01 crores) in the year 2011-12.

India‟s Exports to Kuwait

During 2011-12, the top 5 items of exports from India were cereals; articles of iron and steel;

pressure vessels reactors, columns/towers or chemical storage tanks and industrial

valves; electrical machinery and equipments, sound recorders and reproducers, television

image; and meat & edible meat offal. A pie chart on our exports to Kuwait is given below:

Source: Department of Commerce, Ministry of Commerce & Industry, Government of India

India‟s Imports from Kuwait

India‟s imports from Kuwait went up by 58.77% from US$ 10.313 billion in 2010-11 to US$

16.375 billion in 2011-12. In Rupee terms, the imports rose by 68.6% from Rs.46,976.02 crores

to Rs.79,188.34 crores in the corresponding period. India imported US$15.67 billion

(Rs.75,813.01 crores) worth of POL from Kuwait in the year 2011-12.

India‟s imports from Kuwait (excluding POL) were US$ 708.26 million in 2011-12. A pie-chart

showing the share of top 5 items of imports (excluding Petroleum & its products) - organic

chemicals, iron and steel, salt; sulphur; earths and stone; plastering materials; and lime and

cement, plastic and its articles and aluminum and its articles - is given below:

Source: Department of Commerce, M/o Commerce & Industry, Government of India

Non-Oil Bilateral Trade

Total non-oil bilateral trade between India and Kuwait dropped by 21.5% from US$2,397.84

million in 2010-11 to US$ 1,882.92 million in 2011-12. In Rupee terms, it dropped by 17.42%

from Rs.10,908.79 crores in 2010-11 to Rs.9,007.99 crores in 2011-12.

India-Kuwait Non-Oil Trade FY 2008-09 to 2011-12

In $ millions

In Rs. Crores

Source: Department of Commerce, Ministry of Commerce & Industry, Government of India

All figures on FOB basis

Agreements between India and Kuwait in the Economic Field

1. Trade Agreement was signed in February 1974.

2. MOU on cooperation in the field of Telecommunications was signed in February 1992.

3. Agreement for the promotion of Economic, Commercial and Technical Cooperation was

signed in February 1992.

4. Agreement for Encouragement and Reciprocal Protection of Investment was signed in

November 2001 and ratified in June 2003.

5. Agreement on Drug Demand Reduction and Prevention of Illicit Trafficking in Narcotic

Drugs, Psychotropic Substances and Precursor Chemicals and Related Matters was

signed in June 2006 is awaiting ratification.

6. MOU on Civil Aviation between India and Kuwait authorities, latest one signed in June

2007.

7. Agreement on the Avoidance of Double Taxation and Prevention of Fiscal Evasion of

Taxes on Income was signed in June 2006; it came into force with effect from October

17, 2007

8. MOU on Health Cooperation was signed on April 23, 2012.

Kuwaiti Investment in India

According to Secretariat for Industrial Assistance (SIA) figures, Kuwaiti investment in India has

been very modest. According to SIA approved FDI figures from Kuwait during 2000-12 are as

follows:

Amount in Rs. Million

2000-04 2005 2006 2007 2008 Cumulative till

February 2012

175.15 8.73 123.73 1.4 9.85 843.80

Kuwait Investment Authority (KIA) has indicated that it has invested about $ 1.0 billion through

the stock exchange/institutional fund managers.

Presence of Indian Corporate Sector in Kuwait

M/s Larsen & Toubro Ltd

Ranbaxy Laboratories Limited

M/s Wockhardt India

Dr. Reddy‟s Laboratories

Lupin Limited,

Claris Lifesciences Limited

IPCA Lab

Cadila Pharmaceuticals Limited

Cadila Healthcare Limited

Ambalal Sarabhai

Dr. Reddy‟s Lab and Cipla Limited

Punj Lyod

Shapoorji Pallonji

TATA Consultancy Services

Toyo Engineering Co.

Apollo Hospital group and Fortis Group of India

Bridge & Roof Company Ltd

UTI Asset Management Company

KEC International Ltd, Mumbai

Shalimar Valves

Indian PSUs in Kuwait

LIC (International),

LIC Housing Finance Company,

New India Assurance Company,

Oriental Insurance Company and

National Aviation Company – NACIL (including Indian and Air India)

ONGC TERI Biotech Ltd (OTBL)

Kuwait seeks more business, trade with India

New Delhi, Mar 8 (IANS): After the visit of a large Saudi business delegation, a Kuwaiti

business delegation is now headed here to explore possibilities of diversifying trade ties with

India and encourage Indian companies to bid for gas and construct hospitals, schools and other

infrastructure projects in the emirate.

The delegation from Kuwait, led by Sheikh Nasser Sabah Al-Ahmad, minister of Amiri Dewan

(Royal Court), will pay a three-day visit to India to explore possibilities of expanding and

diversifying trade between the two nations.

Kuwait is expected to spend a staggering $117 billion in various sectors over the next three years

and it wants Indian companies to bid for gas, railways, construct hospitals and schools and other

infrastructure projects.

The projects cover a wide range besides oil and gas sectors. It includes real estate, construction

of new cities, hospitals, housing units, infrastructure, roads, airports, metro and railway projects,

power and transmission, petrochemicals, gas processing and, pipelines.

The Indian government extended an invitation to Kuwait to send its trade delegation when

Advisor to Emir, Sheikh Abdullah Abul Hasan, visited here last month to deliver a special

message to Prime Minister Manmohan Singh, urging him to help in transforming the Asian

continent into an Asian union. Kuwait and other Gulf nations are keen to focus on India, China,

South Korea and Malaysia in view of the economic recession in Europe.

Ambassador of Kuwait to India, Sami Mohammad Al-Sulaiman, said Friday that Sheikh Nasser

Sabah Al-Ahmad, will have wide ranging discussions with Finance Minister P. Chidambaram,

Petroleum Minister Veerappa Moily, Minister of External Affairs Salman Khurshid and

Commerce Minister Anand Sharma.

The visiting delegation will discuss and explore the possibility of further enhancing the trade and

commerce between Kuwait and India.

India is a major importer of crude from Kuwait. It imports about $16 billion of crude annually

from Kuwait.

The bilateral trade is in the range of $17.5 billion and Kuwait is keen to diversify the trade

relations.

India has consistently been among the top 10 trading partners of Kuwait.

Farouq Al-Zanki, CEO of Kuwait Petroleum Corporation, who is accompanying Sheikh Nasser,

is likely to meet ONGC Chairman Sudhir Vasudeva and Indian Oil Corporation Chairman R.S.

Butola, to discuss ways and means to strengthen ties in hydro carbon sector.

There is a likelihood of exploring the possibility of joint venture for petro-chemicals complex

between Kuwait and India, the ambassador said.

Salman Khurshid will host a lunch in honour of the visiting Kuwaiti delegation at Hyderabad

House.

Sheikh Nasser will also call on Vice President Hamid Ansari. He will also meet the Deputy

Chairman of Planning Commission Montek Singh Ahluwalia.

Policy of Kuwait

Kuwait does not implement any customs duties on food, agricultural items, or essential consumer

goods, or on imports of some machinery, most spare parts, and all raw materials. The General

Administration of Customs collects a 5 percent general tariff on most imports, which includes

the cost, insurance, and freight value of the goods. The Ministry of Commerce and Industry may

impose higher protective tariffs, up to around 25 percent, on imports that compete with goods

manufactured in smaller local industries.

Standards

Kuwait maintains high restrictive standards, which hinder the marketing of U.S. exports. For

example, shelf life requirements for processed foods are far lower than necessary to preserve

freshness in Kuwait than they are abroad. Therefore, local merchants tend to prefer products

from suppliers closer to Kuwait, as these products are susceptible to longer shelf life

requirements. This impedes the competitiveness of U.S. products.

Export Subsidies Policies

Kuwait does not directly subsidize any of its exports, which consist almost exclusively of crude

oil, petroleum products, and fertilizer.

Kuwait imports almost 98 percent of the country's food products.

Some local vegetables are grown by farmers, and are subsidized by the government; some of

these vegetables are sold to nearby countries.

However, the amounts grown and sold are not significant enough to have any real impact on

local or foreign agricultural markets.

Customs Evaluation

For perishable items arriving via air, land, or sea, customs clearance is prompt and takes about

three hours. To complete clearance, the importer presents its import license and quality test

certificate (see below). Customs' evaluation of duty on the imported goods is usually based on

the value on the commercial invoice. However, if the customs officials believe the declared value

is not realistic, they may make their own assessment.

Import Licenses

Importers must obtain an annual import license from the Ministry of Commerce and Industry.

The license authorizes the import of any amount of goods from any country on a multi-entry

basis, during its one-year term. To obtain this license, an importing company must fulfill the

following requirements:

- It must be registered in the Commercial Register at the Ministry of Commerce and Industry,

and with the Kuwait Chamber of Commerce and Industry.

- The Kuwait share holding in the capital of the company must be at least 51%. A special import

license is required to import certain kinds of goods, such as firearms, explosives, drugs, and wild

animals.

Export Controls

Only a few items being exported from Kuwait require export licenses, and generally there are no

export restrictions on Kuwaiti products. No duties are levied on goods exported from

Kuwait. Foreign contractors, however, need a letter of clearance from the Director of Income

Taxes, Ministry of Finance, to be able to export equipment from Kuwait for use outside Kuwait.

Import/Export Documentation

Imports to Kuwait from the U.S. require three certified and legalized copies of the commercial

invoice, three copies of the bill of lading (air waybill), and a certificate of origin. The certificate

of origin should:

- be duly certified by a U.S. Chamber of Commerce or the National U.S.-Arab Chamber of

Commerce. Legalization is done by the Kuwait

Consulate in New York City, or by the Kuwait Embassy in Washington, D.C.

- contain the full name of the manufacturing plant or producer as well as

the full name of the freight forwarder.

- show the means of transportation.

- indicate the country of origin.

Invoices and documents should be available to the importer before the arrival of goods in Kuwait,

as goods cannot be cleared through customs without these documents.

Labeling and Marking Requirements

All goods imported into Kuwait must be clearly marked with the country of origin. All foodstuffs

should carry an Arabic language label stating the name of the manufacturer, the brand name of the

food product, the name of the food product, its composition (ingredients and additives), net and

gross weight in metric units, country of origin, and its production and expiration dates. All fats

and oils used as ingredients must be specifically identified on the label.

Prohibited Imports Kuwait prohibits the importation of pork, pork products, alcoholic beverages,

products containing alcoholic beverages, gambling machines, and pornographic materials.

Policy of India

Shipping Policy for Domestic Orders (within India)

Domestic orders (within India) would be processed within 2 days and shipped through a

domestic courier company.

Most orders are delivered within one week to Indian metro cities.

If you wish to purchase multiple items and ship them to two or more different addresses,

please place them as different orders.

Once the products are shipped from our location, we will send you the shipper‟s

reference number (airway bill number/docket number) through email.

All domestic shipments are insured by RmKV against loss or theft, free of charge to the

customer.

We reserve the right to release information to local, state, central or international law

enforcement officials when we believe in good faith that the law requires it, or when

required to, by order of a Court or authorized administrative agency.

Octroi or entry tax if any should be borne by the customer.

Shipping Policy for International Orders (outside India)

All international orders (outside India) would be processed within 2 days and shipped

through an international courier company.

Most orders are delivered within 7 days to foreign destinations.

If you wish to purchase multiple items and ship them to two or more different addresses,

please place them as different orders.

Once the products are shipped from our location, we will send you the shipper‟s

reference number (airway bill number/docket number) along with the courier company

details through email.

You can track the status of your package through the courier‟s website or by contacting

their local customer service center.

The courier will attempt delivery twice at your specified shipping address, before they

inform us that your package is not deliverable.

We reserve the right to release information to local, state, central or international law

enforcement officials when we believe in good faith that the law requires it, or when

required to, by order of a Court or authorized administrative agency.

Present Position and Trend of Business India during past years

Established in 1983, GAC India's extensive network of 27 offices provides a full range of

professional shipping, logistics and marine services throughout the country.

As one of the leading ship agents in India we offer our Principals a comprehensive range of ship

agency services around the clock in all ports in India for any type of port call and any type of

cargo. Whether you require full agency, owners protecting agency or husbandry agency services

GAC India can handle your call. Our extensive portfolio of services includes loading and

discharge of wet and dry bulk, general cargo and containers, dry dockings, supply of bunker fuel,

crew changes, spare parts and more. We cover all ports, terminals, anchorages, holding areas and

repair yards throughout the country.

Our support to the Oil and Gas Industry, both on- and offshore, includes a full range of agency

and logistic services offered as an integrated and complete package. It contains initial advice and

documentation to facilitate the import and re-export of specialized marine equipment (rigs,

platforms, support vessels) as well as handling and storage of consignments like drilling tools,

machinery, spares and more. As a licensed customs house agent (CHA), all import and export

clearances can be provided in-house.

Our extensive range of logistics services includes everything from supply chain management,

customs clearance, sea, and airfreight, warehousing and distribution to project and event

logistics. We also provide international moving services.

With a network of over 300 GAC offices worldwide, we combine local expertise with the

worldwide infrastructure and resources of the GAC Group including strong relationships with the

world‟s premier carriers, which enables our customers to benefit from favorable rates and gain

priority access to capacity even during peak times.

Policies and Norms of India for Import or Export to Kuwait

GENERAL PROVISIONS REGARDING IMPORTS AND EXPORTS

Exports and Imports shall be free, except where regulated free unless regulated by FTP or any

other law in force. The item wise export and import policy shall be, as specified in ITC (HS)

notified By DGFT, as amended from time to time. Import of rough diamond from Cote d?Ivoire

shall be prohibited in compliance to Paragraph 6 of UN Security Council Resolution (UNSCR)

The import/export of rough diamond from / to Venezuela shall be prohibited in view of

voluntary separation of Venezuela from the Kimberley Process Certification Scheme (KPCS).No

Kimberley Process Certificate shall be accepted/ endorsed/ issued for import and export of rough

diamonds from / to Venezuela. Direct or indirect export and import of following items, whether

or not originating in Democratic People‟s Republic of Korea (DPRK), to / from, DPRK is

prohibited: All items, materials equipment, goods and technology including as set out in Lists in

documents (United Nations Security Council Documents) which could contribute to

DPRK?snuclear-related, ballistic missile-related or other weapons of mass destruction-related

programmers.

Direct or indirect export and import of all items, materials, equipment, goods and technology

which could contribute to Iran‟s enrichment-related, reprocessing or heavy water related

activities, or to development of nuclear weapon delivery systems, as mentioned below, whether

or not originating in Iran, to / from Iran is prohibited:

I) Items, listed in INFCIRC/254/Rev8/Part I in document S/2006/814, in Sections B.2 to B.7 as

well as A.I and B.I except supply, sale or transfer of equipment covered by B.I when such

equipment is for light water reactors and low-enriched uranium covered by A.1.2 when it is

incorporated in assembled nuclear fuel elements for such reactors;

ii) Items listed in S/2006/815 except supply sale or

iii) Transfer of items covered by 19.A.3 of Category II.

iv) Above-mentioned UN Security Council documents are

V) Accessible from DGFT web site.

Compliance with Laws

Every exporter or importer shall comply with the provisions of FT (D&R) Act, the

Rules and Orders made there-under, FTP and terms and conditions of any Authorization granted

to him. All imported goods shall also be subject to domestic Laws, Rules,

Orders, Regulations, technical specifications, environmental and safety norms as applicable to

domestically produced goods. No import or export of rough diamonds shall be permitted unless

accompanied by Kimberley Process (KP) Certificate as specified by Gem & Jeweler EPC

(GJEPC).Interpretation of PolicyIf any question or doubt arises in respect of interpretation Of

any provision contained in FTP, or classification of any item

In ITC (HS) or HBP-v1 or HBP-v2, or Schedule of DEPB Rates Said question or doubt shall be

referred to DGFT whose decision Thereon shall be Finland binding.

Policies and Norms of Kuwait for Import or Export to India

Import :

Free Import when traveling within EU Although there are no limits on the amount of alcohol and

tobacco one can bring in from EU countries, customs officials are more likely to ask you

questions if you have more than:

Tobacco products:

• 500 cigarettes or

• 2 pounds of tobacco products

• Reasonable amount of perfume

• Essential medicines

• Industrial farm products from other GCC states

Prohibited:

• Illegal or unlicensed drugs

• Guns, explosives and ammunition

• Knives and deadly weapons

• Alcoholic products

• Plant and plant products

• Pork, Meat and meat products

• Pets – unless authorized to do so

• Birds – unless from certain countries

• Unsealed milk products and mineral water

• Food prepared abroad

• Politically subversive material

• Pornographic material

Restricted:

• A special permit from the Kuwait Ministry of the Interior will be needed in order to legally

import any weapons or ammunition into the country.

• All alcoholic beverages and associated materials for the construction of alcoholic drinks are

denied entry into the country.

• All beef, pigs, pork, pork and pigskin products (such as handbags, wallets and shoes) are

banned from entering the country from England and The Republic of Ireland.

• Jewels, precious stones and metals may only be imported subject to approval by the Ministry

of Commerce and Industry

• Authority must be obtained from the Ministry of Health for drugs and medicines

• Cats, dogs and other animals being imported into the country will require a Veterinarian health

certificate and permission from the General Directorate for Agricultural and Sea Wealth. All

species of birds are banned from entry unless originating from Albania, Italy, Jordan, Malaysia,

Myanmar, Palestine, Thailand, Ukraine and Zimbabwe. No animals from Iraq are permitted entry

into the country.

Export:

Prohibited:

l. All goods the exportation of which is prohibited under any law for the time being in

force in I‟ve Bahamas.

2. Goods to Kuwait and Iraq.

Restricted:

1. Zoological,

2.Botanical,

3.Anatomical,

4.Historical,

5.Archaeological, Ethnographic.

6. Acetic acid,

7.Acetic anhydride, 8.

Acetone,

9. Ammonium,

10.Anthracitic acid and its salts,

11. Benzene.

Objective Of Company

The global shipping, logistics and marine services provider GAC Group is launching a new

corporate tagline in 2013 that emphasizes its support for customers in achieving their business

objectives.

„Delivering your strategy.‟ places customers‟ ambitions and strategic targets at the centre of

GAC‟s service promise.

It replaces „Wherever you go‟ which, over the past decade, has accompanied the Group‟s

development into a truly global organization.

"With „Delivering your strategy.‟ we clearly state our aim to be our customers‟ strategic partner

and not simply their service provider," says GAC Group President, Bengt Ekstrand.

Major Country And Port Connected with GAC:

1. Australia, Adelaide.

2. Belgium, Antwerpen,Netherlands.

3. Brazil,Alumar, Rio de janeiro.

4. China,Shnghai.

5. Egypt,Alexandria.

6. EGYPT, Cairo,Ghana

8.India as well as Gujara:

Mundra,Kandla,Navlakhi,Okha,Pindhara,Salaya,Porbandar,Veraval,Jafrabad,

Pipavav,Bedibandar,Sikka (Jamnagar),Bhavnagar,Dahej,Magdalla / Hazira,Mahuva,

Mandvi,Alang,Dholera,Dahanu,Dighi,Ratnagiri,JaigadMumbai,Mormugao,Panjim,Karwar,Belek

eri,

Mangalore,BeyporeCochin,Gopalpore,Paradip,Dhamra,Kolkata,,Neendakara,Thankassery,Vizhi

njam,Kolachel,Tuticorin,Pondicherry,Cuddalore,Karaikal,Nagapattinam,Ennore,Chennai

10. Usa,Boston, Florida.Miami.

GAC BUSINESS IN INDIA

GAC India has extended its agency agreement with Mumbai-based Sarjak

Container Lines Pvt Ltd (Sarjak), to handle its operations in Chennai. This comes

Twelve months after GAC‟s appointment to manage Sarjak‟s operations in Delhi and

northern India.

Sarjak specialises in transporting Over Dimensioned Cargo (ODC) in containers using its

fleet of hard top, open top, flat rack, super rack and GP containers. Sarjak‟s big inventory

of special equipment enables the company to handle shipments that cannot fit into normal

containers. Cargoes handled from the region include transformers, boilers, chiller units,

pressure vessels, and sugar manufacturing plants, oil well equipment, and various

engineering goods.

The company was awarded “NVOCC of the Year (Special Equipment)” in the 3rd All

India Maritime & Logistics Awards (MALA) 2012. Sarjak is increasing its commercial

presence in Chennai in order to enhance customer support and satisfy customer demands.

Solid foundation Captain Sathya Chandrasekhar, GAC India‟s General Manager of

Shipping Operations, says there are few carriers specializing in containerized project

shipments in the Indian break bulk sector at a time when imports and exports of

machinery are on the rise. “We understand the importance of the timely delivery of such

equipment and spare no effort in ensuring that all formalities are cleared within the

shortest time possible,” he says. GAC‟s long track record in managing odd and over-

sized shipments and its dedicated service have given us he assurance that our cargoes

will be well taken care of and delivered safely on time. GAC International Moving has

expanded to Bangalore after entering the Indian market In March 2012. International

Moving now has four offices in the country including Mumbai, Cochin and Delhi. Paul

Hageman, Managing Director of International Moving opens in Bangalore GAC India,

says: “Since launching GAC‟s Personalized moving services in India, we have witnessed

consistent demand, Which we expect to continue, or even increase, as moving activities

into and out Of the country heighten.”

GAC International Moving has been providing a full portfolio of packing and moving

services throughout the Middle East for more than thirty years. The service was extended

to India and Sri Lanka in 2012.

Business opportunities in future

GAC India‟s commitment to India‟s oil and gas sector has resulted in a major contract

with L&T company beat stiff competition to seal the deal under which it will provide

agency services for their vessels and crew working for the ONGC Project involving

installation of the Mumbai High North Processing Platform and Living Quarters. In

addition, GAC will provide statutory clearances, crew operations, sea and air freight

and marine base support services for the project.

There has been a big increase in the number of business opportunities in

This sector,” says Paul Hageman, GAC India‟s Managing Director. “And thanks

to our experience, expertise, local know-how and global resources, GAC India has

what it takes to provide such services in the domestic oil & gas sector.”

Meeting energy demand India ranks fifth in the world in total energy

consumption. However, almost 75% of its primary crude oil and natural gas needs

are met through imports. The New Exploration Licensing Policy (NELP), initiated

by the Government in 1998, has significantly boosted the development of the

energy sector.

Although only a few of the offshore blocks have been explored to date,

Efforts are in hand to bridge the ever-increasing gap between demand and supply

of petroleum products. With the Indian economy expected to grow exponentially,

the demand for upstream and downstream support services will require all that

Gas‟s worldwide network has to offer. New potential Competition is made keener

by the limited availability of specialized vessels in India to undertake seismic

surveys, drilling, oil field development and production. In such an environment,

GAC India can provide total logistics solutions by calling on GAC Marine‟s fleet

of support vessels and other assets.

The company can coordinate with GAC oil & gas teams in the Middle East,

Singapore, USA and Europe to meet the demands of the rapidly developing

sector. Many major clients have already used GAC India‟s oil & gas support

services, including Gazprom, L&T, JR McDermott, COMACOE, EGS, UOS,

Posh SEMCO, Sapura, Tidewater, CGG, Global Geophysical, Helix, Cal

Dive, Britoil, Seaways International, Swiss co Offshore and Global Marine.

Conclusions and Suggestions

Conclusion

GAC Kuwait, is a good and reputed company. It plays a very important role in the

national income of Kuwait. It brings in busienss of many countries. GAC is a company

who is known for its product quality and services.

Suggestions

The import and export business need more effort in the small island like sri-

lanka,fiji,philipince,etc

The in-between countries trade barriers should be reduced to a great extent. The company both in

Kuwait and India should have a separate Research and development department in the company.

This department helps them to know the latest technological change and helps them to improve

their service with more and more better quality.

Bibliography

http://en.wikipedia.org/wiki/Kuwait_people

http://en.wikipedia.org/wiki/economy_of_kuwait

http://www.encyclodiea.com/topic/Kuwaitaps

http://globaledge.msu.edu/countries/Kuwait/economy/

http://globial.com/globialtalksbusiness/trade-in-kuwait/

http://www.indexmundi.com/kuwait/demographics_profile.html

www.gacworld.com

http://www.shipindia.com/Uploaded_pdfs/Infozone/citizens'charter