Services to enhance SME Engineering Exports to Germany

Presentation by Mr. Bhaskar Sarkar,

Executive Director & Secretary, EEPC India—May 31, 2013

About EEPC India

The oldest and largest trade promotion organisation in India - promotes international trade in the engineering sector

Set up in 1955 by Ministry of Commerce & Industry, Government of India

Membership of more than 13,000 companies - represents a wide cross-sector of the engineering industry

60% of the total membership comes from the SMEs

Has been instrumental in promoting India’s engineering exports from US$ 10 million in 1955-56 to US$ 57 billion in 2012-13

The Indian Engineering Sector

Forms the crucial backbone of the economy - largest segment of the Indian industrial sector

Accounts for 3.48% of India’s GDP at Current Market Prices (2010-11)

Is the largest foreign exchange earner with respect to merchandise goods.

The total engineering goods production (total output) was approximately USD 381 billion in FY 2010-11 while Net Value Added (Total Output-Total Input-Depreciation) was USD 58.66 billion.

Enjoys 30.5 per cent weight in the Index of Industrial Production (IIP); 29.9 per cent share of total investment; and 62.8 per cent share in foreign collaborations

Sectoral exports account for over 20% of India’s total exports - 35% of the exports belonging to the MSME sector

Classification of Indian engineering sector

Heavy Engineering Light Engineering

Engineering Sector

Transport Equipments

Capital Goods

Other Machineries

Note: Heavy engineering dominates the sector accounting for nearly 80% of the output

Low-tech items like castings, forgings and fasteners

Highly sophisticated micro processor based process control equipments and diagnostic medical instruments

India’s MSME sector plays a crucial role in the socio-economic development of the country. It contributes about 8% to country’s GDP. It accounts for 45 per cent of the country’s manufacturing output and 40 per cent of exports. The sector employs 60 million people in 26 million units producing over 6,000 products.

Role of MSME in Indian Engineering sector

Diversification of Indian engineering products

During the nascent stage, Indian engineering exports were mainly confined to Asia and to a small extent to Africa. Exports to Europe & America were 0. Over the years, the scenario has completely changed and as of date, about 40% of total engineering exports are made to developed countries, Europe claiming the highest.

Africa 13%

America 16%

Asia (excl. Middle East)

27%

Europe 24%

Middle East 16%

Oceania 3%

Others 1%

India’s engineering exports to Europe

United Kingdom 20.25%

Germany 19.70%

Netherlands 12.39%

Italy 11.65%

France 8.32%

Belgium 6.45%

Spain 6.39%

Sweden 2.13%

Poland 1.89%

Hungary 1.20%

Rest 9.63%

Why Germany?

5th largest economy in the world.

Indo-German bilateral trade has increased steadily over the years from 5.15 bn USD in Yr. 2003 to 21.89 bn USD in Yr. 2012, showing a growth of more than 4 times.

The balance of trade has traditionally been in favor of Germany.

Largest destination for India’s exports of engineering goods in Europe after UK.

Engineering goods constitute more than 50% share in Indo-German bilateral trade.

Huge untapped potential.

In tandem with government initiatives like “60 years of Indo-German Diplomatic Relations”

Exports Imports

Parts & access of motor vehicles

Cast articles of iron or steel nes

Cars (incl. station wagon)

Iron & steel screws,bolts,nuts,coach-screws,

etc

Aircraft parts

Electric app for line telephony,incl curr line

system

Articles of iron or steel nes

Bars & rods of stainless steel nes; angles,

shapes

Part for use solely/principally with the motor

engines

Optical fibre, cables; sheets&plate of polarising

mat

Parts & access of motor vehicles

Cars (incl. station wagon)

Machines&mech appl having indiv functions, nes

Diesel or semi-diesel engines

Electro-medical apparatus (electro-cardiographs,

infra-red ray app, sy

Electric transformer, static converter

Transmission shafts & cranks, bearing housing;

gearing; etc

Electric app for line telephony, incl curr line

system

Tap, cock, valve for pipe, tank for the like, incl

pressure reducing valve

Ferrous waste and scrap; remelting scrap ingots

or iron or steel

Indo-German Bilateral Trade: Engineering Goods

Focused efforts to promote SME exports to Germany

India Pavilions at important engineering exhibitions like – Hannover, Automechanika, ACHEMA, GIFA, International Hardware Fair etc

B2B meeting

Hosting & networking with overseas delegates in India

Added publicity

Specialised editions in IE2

Export awareness seminars

EEPC India coordination & network

Ministry of Small & medium

Enterprises

Deptt. Of Commerce &

Industry

Deptt. Of Heavy

Industry

Ministry of External Affairs

EEPC

Indian missions abroad

Foreign missions in

India

IIT IIFT NSDC DGFT NSIC

EEPC services to MSME sector

EEPC

Representation to government

in various forums

Incentives under the

Focus Product/Focus

market

scheme

MDA/MAI scheme to

members for export

promotion in focus markets

India Show & INDEE

exhibitions

Technology Development

institutions for Capital Goods

sector

Capital Goods Skill

Development Council

Functions of EEPC India

Fixes Annual Export Target in line with Government of India’s Foreign Trade Policy and decides upon various measures to be undertaken

Acts as an interface between exporters and various Government of India Bodies like DGFT, Customs, Central Excise, RBI, EXIM Bank etc on policy matters related to exports

Organizes various Promotional Activities in India and Abroad under MDA/MAI scheme of Government of India

Disseminates a host of useful trade information to member exporters in areas like enquiry, tender, project, trade opportunities, market reports, country reports, trade statistics etc. by means of e-mails and hosting in the Council's Website on regular basis. For this purpose Council has a full-fledged Trade Informatics Division

Provides information to overseas buyers about the India's business information and acquainted them with Indian counterparts

Undertakes publicity campaign and brings out publications, film, CDs, market survey reports etc. on regular basis

Promotional Activities

India Engineering Exhibition (INDEE)

EEPC India, to create increased awareness on India’s rapid progress in the engineering sector, organizes wholly Indian Engineering Exhibition, known as INDEE with more than 150 participants

EEPC India has successfully organized 26 INDEE’s in:

Singapore, Indonesia, Thailand, Kenya, Nigeria, Sri Lanka, Egypt, Venezuela, UK, Australia, Ethiopia, Brazil, Kazakhstan, Indonesia, Mexico, Egypt again in 2006, Johannesburg, St. Petersburg, Kuala Lumpur, Shanghai, Brazil, Indonesia, Colombia, Cairo, Bangkok & Morocco.

These INDEE’s have made a significant impact on the increasing India’s bilateral trade with the countries.

Forthcoming INDEE – Vietnam

Financial Assistance for Members

Export promotion continues to be a major thrust area for the EEPC India. The

council provides assistance to its members by various schemes like

Marketing Development Assistance (MDA)

(REVISED GUIDELINES W.E.F. 1.6.2013)

Market Access Initiative (MAI)

Support under MDA scheme O/o DC (MSME)

National Small Industries Corporation (NSIC)

Marketing Development Assistance (MDA)

Under MDA scheme assistance to individual exporters for export promotion activities

abroad provided participation in EEPC India led Trade Delegation/ BSMs/Trade

Fairs/Exhibitions :

Sl. No Area/Sector No. of visits eligible Maximum Financial ceiling per event

1. Focus LAC 1 Rs. 2,50,000

2. Focus Africa (Including WANA countries)

1 Rs. 2,00,000

3. Focus CIS 1 Rs. 2,00,000

4. Focus ASEAN +2 1 Rs. 2,00,000

5. General Areas 1 Rs. 1,50,000

TOTAL 5

•Exporting companies with an f.o.b. value of exports of upto Rs. 30 crore in the preceding year this will be subject to the condition that the exporter is having complete 12 months membership with EEPC India and have filed returns regularly. •Assistance would be permissible on travel expenses by air, in economy excursion class fair and/or charges of the built up furnished stall. This would, however, be subject to an upper ceiling mentioned in the table per tour.

Market Access Initiative (MAI)

Market Access Initiatives (MAI) Scheme is an Export Promotion Scheme envisaged to

act as a catalyst to promote India’s export on a sustained basis. The scheme is

formulated on focus product-focus country approach to evolve specific market and

specific product through market studies/survey. Assistance would be provided to

Export Promotion Organizations for enhancement of export through accessing new

markets or through increasing the share in the existing markets.

Criteria for Sanction:

Market Access Initiatives (MAI) Scheme is based on Focus country-product

approach and the eligible agencies should formulate a comprehensive project for market access on the basis of Focus-Country Focus – Product approach.

The assistance under the Scheme for activities under the project will not be provided for which assistance under MDA has already been sanctioned.

The funding is on cost sharing basis subject to approval of Sub Committee and Empowered Committee headed by Commerce Secretary

Future Initiatives

IESS 2014

Largest Engineering Sourcing Show in India

3rd edition, 22-24 Jan 2014, Mumbai, India

400 Indian exhibitors

100 international exhibitors

1000 overseas delegates from 100 countries

including Europe

JV & technology transfers

Global Sourcing Meet

Investment Meets

Focus sectors where German partnership is invited

- Research & Technology Development

- Cutting Edge Technology

India Show - Hannover

India to participate as “Partner Country”

8-12 April 2014, Hannover, Germany

What does India’s presence as Partner Country mean

- Prime location

- Intensive publicity & media presence

- VIP presence

- Partnership in seminars, conference

- R & D Exchange & technology transfers

-Networking & B2B meetings

-- Special publication “Invest in Germany” to be

released

EEPC India Calendar of events in Germany

Year 2013-14

NAME OF THE EVENT VENUE DATES

India Pavilion at Hannover Messe 2014

Hannover, Germany 8-12 April 2014

India Pavilion at EMO Hannover 2013 Machine Tools

Hannover, Germany

16-21 September 2013

India Pavilion at International Hardware Fair Hardware, Handtool & DIY Equipment

Colonge, Germany 9-12 March 2014

Future Vision

EEPC India planned calendar of activities in Germany:

NAME OF THE EVENT VENUE DATES

Interpack Packaging Machinery

Hannover, Germany 8-14 May 2014

K International Exhibition: Plastics & Rubber

Hannover, Germany

16-23 October 2013

ACHEMA Biotechnology/Chemical Process/Power plant

Frankfurt, Germany 15-19 June 2015

Developing linkages & partnering with industry & government to develop common

platform to promote brand India with specific emphasis to SMEs.

EEPC India & International events Exhibitions….

Japan, Canada, Turkey, Thailand, Egypt, Colombia, Brazil, Malaysia, Indonesia, Czech

Republic, Germany, United Arab Emirates, Brazil, Bangladesh, Morocco, South Africa,

United Kingdom, Russia, Vietnam, etc