Delhi seeks duty waiver on billet export to BD

[bluesky]

25 Jul 2016, 00:35:14
Delhi seeks duty waiver on billet export to BD
Cites SAFTA rules on trade
Doulot Akter Mala

India has requested Dhaka to allow duty-free export of their non-alloy steel billet to Bangladesh through a reversal of the recently levied regulatory duty and value added tax (VAT) on the item.

To back up their desire, the Indian High Commission in Dhaka in a letter to the Bangladesh government cited the South Asian Free Trade Area (SAFTA) rules.

The government has withdrawn the zero-duty benefit for the item under the SAFTA agreement in the budget for current fiscal year.

In the budget for fiscal year 2016-17, the government has introduced 20 per cent regulatory duty and 15 per cent VAT to protect the domestic industry. However, it has waived the customs duty (CD) on the product.

"This has effectively reduced the SAFTA benefits to Indian exporters to nil and is adversely affecting their exports. Since the duty structure has been imposed and adjusted with immediate effect, it has also led to a difficult situation to the Indian exporters whose goods are already in transit to Bangladesh," the high commission letter reads.

Customs officials said import of billet is subject to duty of Tk 11,500 per tonne for import from India under the current duty structure for both SAFTA and non-SAFTA countries. Until FY 2015-16, import of the item had required Tk 7,000 per tonne for other countries, apart from India.

In the recent letter, the Indian mission in Bangladesh requested the ministry of foreign affairs to take necessary steps for restoring the duty on non-alloy steel billets to the previous structure to enable Indian exporters to be covered under the SAFTA umbrella which facilitates free trade in the region, including between India and Bangladesh.

It has requested allowing the goods already in transit to be imported into Bangladesh under the previous duty structure.

Billet is a semi-finished steel product which is used as a raw material for producing MS rod, bar and other steel products.

Officials said some local industries have made huge investment in this industry to meet domestic demand. BSRM and Abul Khair steel mills are among the local industries producing billets.

Industry sources said local demand for billet is 4.0 to 3.0 million tonnes. Local industries said they can meet more than 60 per cent of the requirement.

 

[bluesky]

I am surprised at this childish Indian request to duty and VAT waiver for their export to Bangladesh. BD must protect its industries from a concentrated attack by India's Marwaris and Gujjis.

Only Teesta water can enter BD without a duty and a VAT.

 

[Nilgiri]

I am surprised at this childish Indian request to duty and VAT waiver for their export to Bangladesh. BD must protect its industries from a concentrated attack by India's Marwaris and Gujjis.

Protecting your inefficient local production of an Intermediate Good only hurts you in the long run given Bangladesh wants to focus on high employment manufacturing.

Lets see what Bangladesh decides to do.

Only Teesta water can enter BD without a duty and a VAT.

Any treaty on this will extract concessions from Bangladesh in many ways you cannot even imagine and several times more in value and significance than duties and VAT. SHW and BAL proxies are just the first step in a long-term vision India has for Bangladesh.

So don't worry about it, its several levels above your pay grade.

 

[Bilal9]

Protecting your inefficient local production of an Intermediate Good only hurts you in the long run given Bangladesh wants to focus on high employment manufacturing.

Lets see what Bangladesh decides to do.



Any treaty on this will extract concessions from Bangladesh in many ways you cannot even imagine and several times more in value and significance than duties and VAT. SHW and BAL proxies are just the first step in a long-term vision India has for Bangladesh.

So don't worry about it, its several levels above your pay grade.

Bhaisaab itna dard dene waali baat sahi nahi hai.....

25 Jul 2016, 00:35:14
Delhi seeks duty waiver on billet export to BD
Cites SAFTA rules on trade
Doulot Akter Mala

India has requested Dhaka to allow duty-free export of their non-alloy steel billet to Bangladesh through a reversal of the recently levied regulatory duty and value added tax (VAT) on the item.

To back up their desire, the Indian High Commission in Dhaka in a letter to the Bangladesh government cited the South Asian Free Trade Area (SAFTA) rules.

The government has withdrawn the zero-duty benefit for the item under the SAFTA agreement in the budget for current fiscal year.

In the budget for fiscal year 2016-17, the government has introduced 20 per cent regulatory duty and 15 per cent VAT to protect the domestic industry. However, it has waived the customs duty (CD) on the product.

"This has effectively reduced the SAFTA benefits to Indian exporters to nil and is adversely affecting their exports. Since the duty structure has been imposed and adjusted with immediate effect, it has also led to a difficult situation to the Indian exporters whose goods are already in transit to Bangladesh," the high commission letter reads.

Customs officials said import of billet is subject to duty of Tk 11,500 per tonne for import from India under the current duty structure for both SAFTA and non-SAFTA countries. Until FY 2015-16, import of the item had required Tk 7,000 per tonne for other countries, apart from India.

In the recent letter, the Indian mission in Bangladesh requested the ministry of foreign affairs to take necessary steps for restoring the duty on non-alloy steel billets to the previous structure to enable Indian exporters to be covered under the SAFTA umbrella which facilitates free trade in the region, including between India and Bangladesh.

It has requested allowing the goods already in transit to be imported into Bangladesh under the previous duty structure.

Billet is a semi-finished steel product which is used as a raw material for producing MS rod, bar and other steel products.

Officials said some local industries have made huge investment in this industry to meet domestic demand. BSRM and Abul Khair steel mills are among the local industries producing billets.

Industry sources said local demand for billet is 4.0 to 3.0 million tonnes. Local industries said they can meet more than 60 per cent of the requirement.

তাফালিং কইরা লাভ নাই। চীনের বিলেট থেকে কমদামে কেউই দিতে পারবোনা। চীনের স্টীল ফিনিশড হোক আর ইন্টারমিডিয়েট (বিলেট) হোক সবচেয়ে সস্তা।

লোকাল বিলেট আর ইন্ডিয়ান বিলেট এর দামের তফাৎ কতো ?

 

[livingdead]

i read it bullet

 

[TopCat]

Protecting your inefficient local production of an Intermediate Good

Everything we make is inefficient, bad, worst and everything India makes are the best.



India should now concentrate more to export iron ore instead of billet to Bangladesh.

 

[Nilgiri]

Everything we make is inefficient, bad, worst and everything India makes are the best.



India should now concentrate more to export iron ore instead of billet to Bangladesh.

We fetch better prices for our marginal iron ore exports from countries that actually rank somewhere in steel production with dedicated blast furnace infra.

Bangladesh is mostly (if not all) electric arc furnace to process scrap steel from its domestic ship breaking and imports the rest to meet its consumption (which is meagre but growing at least).

You have no way to utilise iron ore import and even if you did, your demand is not worth mentioning for what we can spare, when prices and supply chains are more stable in more developed markets.

We have recently scrapped the duty on our low grade iron ore export so you are welcome to import that if you can actually do something with it (i.e if you can economically create a modern blast furnace facility with billions of dollars of investment).

Till then you will simply have to import billets to make up the shortfall regarding your internal demand and supply.

India wants a SAARC discount to compete better with Chinese billets rather than your own (since you still have a huge deficit anyway). Its up to Bangladesh to choose.

 

[TopCat]

We fetch better prices for our marginal iron ore exports from countries that actually rank somewhere in steel production with dedicated blast furnace infra.

Bangladesh is mostly (if not all) electric arc furnace to process scrap steel from its domestic ship breaking and imports the rest to meet its consumption (which is meagre but growing at least).

You have no way to utilise iron ore import and even if you did, your demand is not worth mentioning for what we can spare, when prices and supply chains are more stable in more developed markets.

We have recently scrapped the duty on our low grade iron ore export so you are welcome to import that if you can actually do something with it (i.e if you can economically create a modern blast furnace facility with billions of dollars of investment).

Till then you will simply have to import billets to make up the shortfall regarding your internal demand and supply.

India wants a SAARC discount to compete better with Chinese billets rather than your own (since you still have a huge deficit anyway). Its up to Bangladesh to choose.

BD is not a ore producing country but we would love to see India as our solid supplier of iron ore. I would recommend to reduce the duty to 0% in ore and increase the duty on billet to 40% instead of current proposed 20%.
India should be able to compete with Chinese due to geographic proximity with BD instead of asking discount. As our domestic industry popping up, its to protect them not the Chinese. Our domestic industry is in disadvantage as they have to import the raw material unlike indians.

 

[Nilgiri]

BD is not a ore producing country but we would love to see India as our solid supplier of iron ore.

Please put a blast furnace complex in place so we can export to you (i.e understand that an EAF cannot handle raw ore)

Right now you import 0 iron ore because you have no blast furnace.

The land constraints alone make this a really difficult proposition for Bangladesh to do viably (most blast furnaces that produce cheaply are located near the ore + coal fields like in US, Russia, China and India....or have tremendously developed supply chains and logistics infra like those in Korea and Japan).

I would recommend to reduce the duty to 0% in ore and increase the duty on billet to 40% instead of current proposed 20%.

Bangladesh is free to do whatever it wants. But the govt must balance taking into account how many people are employed in the steel fabrication industry (billets from EAF) + its growth potential compared to how many are in higher level manufacturing that use these billets + this industry growth potential.

This is important because you do not want to insulate/overprotect for example 1000 jobs when their final product prices govern the long term viability (through input costs) of industries that employ say 100,000+ people.

This is the same reason why India cannot simply slap on huge duties to many of the intermediates we import from China currently (they support far more jobs higher up in the supply chain that would be affected).

Its a delicate and precise thing to do....and you cannot afford to get it wrong because it will take many years to recover from a mistake.

India should be able to compete with Chinese due to geographic proximity with BD instead of asking discount. As out domestic industry popping up, its to protect them no the Chinese. Our domestic industry is in disadvantage as they have to import the raw material unlike indians.

There is a shortfall of 30% or so between demand and supply in Bangladehs for steel.

http://www.lightcastlebd.com/blog/2016/02/market-insight-emerging-steel-industry-in-bangladesh

"Although the country currently imports 1.2 million tonnes of billets each year, the annual demand for billets stands at 4 million tonnes."

There is a paucity of articles concerning Bangladesh steel industry, its all mostly projections and such and little concrete current numbers in metrics regarding pig iron processing capability (for which Bangladesh apparently has 0 duty on), import of billets % currently from sources and many other things since Bangladesh does not even find a mention in most International Major World Steel organisations and reports.

So when the market is this underdeveloped still, India will make a token request to try prop up a few millions of dollars of export (unless you have a figure that suggests otherwise)....but its really not a focus priority of India (Bangladesh steel market) since your demand is so low and you have propped up high duties and VAT etc at this early stage.

It is your decision in the end.

 

[Homo Sapiens]

SHW and BAL proxies are just the first step in a long-term vision India has for Bangladesh.

May be she is pretending to be friend of India to achieve Bangladesh's interest smoothly? She settled sea boundary dispute and land boundary agreement largely in favor of BD.By that process she gained for BD thousands of sq. km maritime zone as well as 10,000 acres(40 sq. km) land.These settlements are irreversible.It doesn't amount much if you raise fence in few km border at zero line,that land is still your.It is true that she handed over north east freedom fighters and disbanded their presence in BD,but doing so she has freed BD from a big headache of future extremism threat.Our local islamic militants could have got weapon or training or use their armes smuggling and other networks to flourish.She actually made BD safer.Also she is offering a transit carrot to India to involve it in BD's infrastructure development.It doesn't matter much whether we get 100 crore or 200 crore from transit charge,the fact is India is investing large amount of money in BD.Future govt. can backtrack from giving transit citing popular opposition or other enviornmental or security excuse.The fact is she is getting things for BD concrete and in exchange giving India sweet talks or helping those things which also amount to help BD.She also trying to get excess to Indian market and teesta water deal favorable to BD.

She knows very well,if BD had to resist Indian bulling,it has to become strong both economically and militarily.Economic growth comparatively rapid during her tenure and she is committed to build a strong armed forces.In the last seven years she increased military budget 3 times(most rapid in south asia).Procured or ordered several billion dollars of arms,increased army manpower(raised 2 division,expanded other divisions,another division in making).So my request,don't fall for the jamati lie here so often made by several members.Sheikh Hasina or Awami league are no friend of radical hindu govt. in India.She is trying to make something positive for BD from unwilling powerful neighbor with friendly smile.See this video-

 

[Nilgiri]

May be she is pretending to be friend of India to achieve Bangladesh's interest smoothly? She settled sea boundary dispute and land boundary agreement largely in favor of BD.By that process she gained for BD thousands of sq. km maritime zone as well as 10,000 acres(40 sq. km) land.These settlements are irreversible.It is true that she handed over north east freedom fighters and disbanded their presence in BD,but doing so she has freed BD from a big headache of future extremism threat.Our local islamic militants could have got weapon or training or use their armes smuggling and other networks to flourish.She actually made BD safer.Also she is offering a transit carrot to India to involve it in BD's infrastructure development.It doesn't matter much whether we get 100 crore or 200 crore from transit charge,the fact is India is investing large amount of money in BD.Future govt. can backtrack from giving transit citing popular opposition or other enviornmental or security excuse.The fact is she is getting things for BD concrete and in exchange giving India sweet talks or helping those things which also amount to help BD.She also trying to get excess to Indian market and teesta water deal favorable to BD.

She knows very well,if BD had to resist Indian bulling,it has to become strong both economically and militarily.Economic growth comparatively rapid during her tenure and she is committed to build a strong armed forces.In the last seven years she increased military budget 3 times(most rapid in south asia).Procured or ordered several billion dollars of arms,increased army manpower(raised 2 division,expanded other divisions,another division in making).So my request,don't fall for the jamati lie here so often made by several members.Sheikh Hasina or Awami league are no friend of radical hindu govt. in India.She is trying to make something positive for BD from unwilling powerful neighbor with friendly smile.See this video-

Make whatever excuses/conspiracies you want that its a jamati lie blah blah. She is our proxy and we will ensure she stays and then her son for a long time, unless you come up with a better alternative (also has to be friendly to be India).

The die has been cast a long time back. BNP and JEI are our common enemies and we will ensure they are completely obliterated bit by bit.

We will deal with anything Hasina is "hiding" if she is so smart and devious w.r.t country that hosted her in exile for so long when the time is more appropriate. Now is not that time, we have much to do together.

And dont bring Bangladesh military into it. It defines the word joke to us.

 

[Bilal9]

i read it bullet

Ha ha LOL its Billet not bullet......

 

[kobiraaz]

Everything we make is inefficient, bad, worst and everything India makes are the best.



India should now concentrate more to export iron ore instead of billet to Bangladesh.

Off topic.Someone I know recently traveled by Indian made trains in Bangladesh and informed me that some of the food servers were Sikh. Why? Any idea?

 

[TopCat]

Off topic.Someone I know recently traveled by Indian made trains in Bangladesh and informed me that some of the food servers were Sikh. Why? Any idea?

I dont know, I seen Afhganis, Sikhs, South Indian and all kind.. May be to give some exotic flavor?

 

[Bilal9]

Everything we make is inefficient, bad, worst and everything India makes are the best.



India should now concentrate more to export iron ore instead of billet to Bangladesh.

Converting ship scrap to billet in Bangladesh may be more efficient in the short term without investing in a costly blast furnace....a lot cheaper to process and you end up with a cheaper product (may or may not be higher quality) than all the way from iron ore.

Officials said some local industries have made huge investment in this industry to meet domestic demand. BSRM and Abul Khair steel mills are among the local industries producing billets.

Industry sources said local demand for billet is 4.0 to 3.0 million tonnes. Local industries said they can meet more than 60 per cent of the requirement.

I am sure local lobbying by billet-producer companies like Abul Khair Steel plays a part in decisions like this. BTW local billet is largely used for one thing - producing re-inforced TMT iron rod (re-bar) using re-rolling method for RCC building construction purposes.

Here's a 60 TPH Re-Rolling Mill at KSRM Steel, Chittagong.