Potential Sectors for Expansion of Exports From India to Colombia

7/29/2019 Potential Sectors for Expansion of Exports From India to Colombia

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Potential Sectors for Expansion of Exports from

India to Colombia


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Introduction Gained independence from Spain on 20thJuly,

1810.

Most populated country in Latin America, afterBrazil & Mexico

Worlds largest producer of Emeralds.

Major industries in Colombia include Coffee, Oil &Gas, Mining, Emeralds, and Consumer goods.

The bilateral trade between India & Colombia isUS$ 1,446.47 million (2011-12 data)

Major industrial areas in Colombia are Bogota,Cali and Medellin.

Importante Colombian Banks are Ban Caf,

BancoPacifico,BancoIndustrial etc.


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Economy of Colombia

Category Colombia India

Population (2012 est.) 45,239,079 1,205,073,612

Area (in squarekilometer) 1,138,910

3,287,263

Total land (in squarekilometer) 1,038,700

2,973,193

Arable land (aspercentage of total land) 2.01%

48.83%

Cultivated land (insquare kilometer) 15,603

622,860

GDP (Purchase PowerParity), 2011 $471.9 billion

$4.421 trillion

GDP (Nominal), 2011 $322.4 billion $1.798 trillion


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Ease of doing Business in Colombia

Doing Business 2013

Rank

Doing Business 2012

Rank

Change in Rank

45 44 -1

Topic Rankings DB 2013 Rank DB 2012 Rank Change in Rank

Starting a Business61 65 4

Dealing with Construction

Permits 27 26 -1

Getting Electricity134 129 -5

Registering Property52 53 1

Getting Credit70 67 -3

Protecting Investors 6 6 No change

Paying Taxes99 99 No change

Trading Across Borders91 91 No change

Enforcing Contracts154 151 -3

Resolving Insolvency21 19 -2


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LAC Programme

FOCUS: LAC launched by the Commerce Ministry in November 1997 &extended up to March 2014.

The Programme Aims at:

1. Sensitizing the organizations viz. Export Promotion Councils, Chambers ofCommerce & Industry, EXIM Bank, ECGC, etc.

2. Granting various incentives to Indian exporters and launching of exportpromotion measures

3. Focusing on the Latin American region with added emphasis on major tradingpartners of the region.

4. Focusing on the following major product groups for enhancing Indias exportsto the Latin American region:

o Textiles including ready-made garments carpets and handicrafts

o Engineering products and computer software

o Chemical products including drugs/pharmaceuticals


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Improved Market Access

1. Foreign Trade Policy initiatives:

Double Weight: To exports made to LAC

Focus Market Scheme: To offset high freight cost and other externalities, totalduty credit scrip @4% of FOB value.

2. Market Development Assistance (MDA):

Grant to Individual Exporters : Cost of built up stalls along with international airfare in economy/excursion class shall be reimbursable to the member-exportingcompanies of Export Promotion Councils (EPCs) if eligible under MDA Guidelineswith an upper ceiling of Rs. 180000/- per company per event for participating in

Trade Fairs/Exhibitions in LAC

For EPCs etc. led Trade Delegations, 60% of the rent of the Councils central stalland other organising expenses subject to a limit of Rs. 15 lakh per event.

60% of the total cost of Translation Facilities in foreign languages and vice versa,Product Catalogues in CD Rom will be reimbursable


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EconomicInfrastructureFacilities.

1. ECGC Cover: As perECGC Country Risk andCover Policy on LACregion, Colombia placedin low risk categories ofA1.

2. Lines of Credit: The

EXIM Bank has currentlyextended lines of credit tothe followingbanks/Governments inColombia (as on05.09.2012)

Sr. No.

1.

2.

Borrower

Banco de

ComercioExterior deColombia S.A.

(Bancoldex),Colombia

CorporacionAndina deFomento(AndeanDevelopmentCorporation)(coveringBolivia,Colombia,Ecuador, PeruandVenezuela)

Amount

of

Credit

$10 M

$10 M

Purpose

Generalpurpose

Generalpurpose

Tenure

Up to 5years

TrancheA:

Up to 5years

TrancheB:

Up to 2years


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Opportunities & Challenges

Opportunities

The growth projection for 2012 forColombia is 4.5% (ECLAC)

Colombia in Indias Top 10 tradingPartners in Latin America.

No particular Trade Block likeMERCOSUR(trade bloc of Argentina Brazil Paraguayand Uruguay)

Regional trade arrangements such as

LAIA(Latin American Integration Association)

Challenges

Distance

Language barriers

Inadequacy in the exchange ofinformation

Absence of direct shipping and air

links.


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Top items of Indias exports to Colombia (2011-12)

Petroleum (crude & products)

Transport equipments

Drugs, Pharmaceuticals & finechemicals

Machinery and Instruments

Plastic & Linoleum products

Manmade Yarn, Cotton YarnFabrics

Inorganic/Organic/Agro Chemicals

Manufactures of Metals

Primary & semi-furnished iron& steel

RMG Cotton including accessories

Rubber manufactured products

except foot wares.

Other Ores and Minerals

Electronic Goods

Dyes & Tar chemicals


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Potential Products Identified for Exports to Columbia

1. Cotton.

2. Vehicles other than railways or

tramways rolling stocks and partsand accessories thereof.

3. Organic chemicals.

4. Articles of apparel & clothing

accessories not knitted orcrocheted.

5. Pharmaceutical products.

6. The other made-up textile

articles; sets; worn clothing & worntextile articles; rags.

7. Miscellaneous chemicalproducts.

8. Nuclear reactors, boilers,machiner a liances Parts.

9. Man made filaments.

10. Electrical machinery &

equipments and parts thereof;sound recorders and reproducersTV

11. Wool fine or coarse animal hairhorse hair yarn & woven fabrics.

12. Tanning or dyeing extracts;tannings & their derivatives; dyespigments & other colouring matter;paints & varnishes; putty & othermastics; inks.

13. Articles of apparel and clothingaccessories knitted or crocheted.

14. Plastic and article thereof.

15. Miscellaneous articles of basemetals.


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Potential Products Identified for Exports to Columbia (Cont)

16. Optical photographic cinematographic measuringchecking precision medical or surgical instruments

and apparatus; parts and accessories thereof.

17. Coffee, tea, mate and spices.

18. Carpets and other textile floor covering.

19. Articles of iron and steel.

20. Cereals.

21. Mineral fuels mineral oil & products.

22. Aircraft spacecrafts.

23. Iron & steel.

24. Rubber & articles thereof.

C l bi S i l


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Colombian Social

and BusinessCulture

DO expect to spend a lot oftime getting to know yourColombian businesscounterparts before any

business takes place.

DO translate all your marketingliterature, business cards andany other documents youpresent in your business

dealings into Spanish. Failure todo so may jeopardize yourbusiness potential.

DO accept invitations from yourColombian business

counterparts to social orbusiness occasions. Socialevents are an ideal time todevelop relationships which arean essential part of Colombianbusiness culture. They are alsoa great opportunity to

experience and learn moreabout Colombian culture.

Key Concepts:

Family

Indirect

Communication

Time

Business Etiquette (Dos and Donts)DONT rush business dealingswith your Colombian colleaguesand avoid pressing for finaldecisions.

DONT be overly aggressive whilenegotiating business deals, as it isconsidered rude and oftenperceived as arrogant.

DONT ignore formal Colombiandining etiquette as this will reflectpoorly on you as an individual andwill also negatively impact anybusiness dealings in Colombia


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Potential Sectors for Expansion of Exports From India to Colombia

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