Rising Costs for India’s Engineering Exporters, Digital Economy Growth Trends – India Market Watch

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Engineering exporters, shipping companies in India suffer increased costs under GST

The Engineering Export Promotion Council of India (EEPC) has reported increased costs for shipping companies under the Goods and Services Tax (GST) regime due to changes to the refund schedule and roll back of tariff incentives.

Under the GST, drawback refunds will not be released till the end of September or October. Further, supplies of goods to export oriented units (EoU) from domestic tariff area are no longer considered as ‘deemed exports’; shippers will not be allowed to import inputs without payment of duty under Advance Authorization.

In addition, exporters will incur the costs of paying the basic customs duty and cesses, as input tax credit (ITC) can only be availed on the IGST.

Resolving the sector’s grievances is necessary: the export of engineering goods accounts for the biggest share in India’s total export basket; they are vital for job creation, particularly in small and medium enterprises.

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India is world’s third-biggest beef exporter

In their latest report – Agricultural Outlook 2017-2026, the Food and Agriculture Organisation (FAO) and the Organisation for Economic Cooperation (OECD) establish that India is the world’s third-biggest exporter of beef, and will stay so for the next decade.

Although not specified in the report, beef exports from India appears to be mostly from buffaloes.

India exported 1.56 million tons of beef in 2016 while total world beef exports amounted to 10.95 million tons. India is expected to account for 16 percent of global exports by 2026.

Brazil followed by Australia are ranked as the world’s top beef exporters.

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India’s digital economy continues to expand: e-commerce, digital payments, fintech services

The e-commerce, digital payments, and fintech sectors – all continue to rapidly expand in India, promising high potential for future growth and investments.

According the government, India’s e-commerce market touched an estimated US$33 billion in the fiscal year 2016-17, registering a 19 percent growth.

Meanwhile, India has been categorized in the ‘break out’ segment of the Digital Evolution Index 2017 that tracks the digital economy of countries. The index, jointly released by the Fletcher School at Tufts University and Mastercard, notes that India is attractive for investors despite lower levels of digital advancement.

This is because of its rapidly evolving digital payments ecosystem, which was catalyzed by the government’s demonetization decision last November. The government has also sought greater acceptance of cashless payments through economic programs, reforms, and improving infrastructure, thereby, creating a positive environment for the online payments industry.

This has directly fed into the proliferation of startups in India’s financial technology sector: more than 600 new enterprises have emerged in the field of lending, payments, insurance, and trading. Altogether, India’s fintech software services market stands at US$8 billion, and is expected to grow to about US$14 billion by 2020 as per the Niti Aayog CEO Amitabh Kant.

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