Global Country Study Report

On

STEEPLED Analysis of Tea industry

W.R.T

Business Opportunities for Mauritius & Gujarat

Submitted to

Institute Code 711

Parul Institute of Management & Research - MBA

Under the Guidance of

Prof. Apoorva Kamathania

In partial Fulfilment of the Requirement of the award of the degree of

Master of Business Administration

Offered By

Gujarat Technological University

Ahmedabad

Prepared by:

Divya Thummar (137110592217)

Miral Thummar (137110592218)

Vihar Upadhyay (137110592220)

Vadaliya Kelvin (137110592222)

Vaghani Kinjal (137110592225)

Vandan Pandya (137110592227)

Group No: 10

Students of MBA (Semester-III)

January-2014

DECLARATION

We, following students, hereby declare that the Global/ Country Study Report titled “STEEPLED Analysis of Tea industry W.R.T Business Opportunities for Mauritius & Gujarat” is a result of our own work and our indebtedness to other work publications, references, if any, have been duly acknowledged. If we are found guilty of copying any other report or published information and showing as our original work, or extending plagiarism limit, we understand that we shall be liable and punishable by GTU, which may include ‘Fail’ in examination, ‘Repeat study & re-submission of the report’ or any other punishment that GTU may decide.

Enrollment No Name Signature

(137110592217) Divya Thummar

(137110592218) Miral Thummar

(137110592220) Vihar Upadhyay

(137110592222) Vadaliya Kelvin

(137110592225) Vaghani Kinjal

(137110592227) Vandan Pandya

Place: Date:

CERTIFICATE

We certified that this Global /Country Study and Report Titled “STEEPLED Analysis of Tea industry W.R.T Business Opportunities for Mauritius & Gujarat” is the bonafide work of

Divya Thummar (137110592217)

Miral Thummar (137110592218)

Vihar Upadhyay (137110592220)

Vadaliya Kelvin (137110592222)

Vaghani Kinjal (137110592225)

Vandan Pandya (137110592227)

Have carried out their 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. I have also checked the plagiarism extent of this report which is 10.9 % and the separate plagiarism report in the form of html file is enclosed with this.

Signature of the Faculty Guide

Signature of Principal/Director

PLAGIARISM REPORT

PREFACE

The aim behind to prepare is to gain practical knowledge through experience. To attain practical knowledge observation and understanding of the actual work situation and environment is must. In the report present here, sincere efforts have been made by us to mention the knowledge we attained during the research.

Mauritius is a tourism island which is developing very fast. The economic status of Mauritius states that by Comparing the inflation rate of the two countries the inflation rate in Mauritius was 6.5% in 2011 compared to India which was 8.9% in 2011. During the year 2011 the mortality rate of Mauritius is 6.73 currently estimated unemployment rate is 8.2%. The main industry in the country is agriculture industry, food processing and in which the mainly sugar mining industry, textiles industry, clothing industry, chemicals industry, metal products, transport equipment, nonelectrical machinery, and tourism sector.

Mauritius is a stable economy democracy is followed over there. There are various polices related to investment are followed like foreign investment policy, monitory policy, fiscal policy etc.

The social culture of Mauritius consists of Franco Mauritians, Indo Mauritians, and Sino Mauritians. Official language of Mauritius is English and French. There are various religions in Mauritius but Hinduism, Muslimism and Christianity are very famous over there.

The vision of it industry is based on a deliberate movement to develop substantially the national information technology capability of Mauritius. It needs a far-reaching use of IT in the economy and within the society of Mauritius. The Ecology of Mauritius states that Mauritius depends more on exports than on imports.

According to the legal environment of Mauritius there are various trade unions. Economic environment has been set up in Mauritius which facilitates investors to invest in the country. There are various institutional framework and various trade policies which are to be followed.

Industries are playing major role in any countries. Here also in the Mauritius there are no. of industries like sugar industry, tea industry, textile industry, Fishery industry, financial industry, Banking Industry, Agriculture Industry, Tourism Industry and so on. All these industries are playing major role in the financial condition of Mauritius. But as per our work we are contributing for some of the industries among that. We are doing analysis of some of the brightest industries in Mauritius which are known as upcoming growth industry in Mauritius.

As per our research we can know that the tourist industries are very well developed in Mauritius. And the market of tourist industries are open for outside so its fruitful for invest in that industry or its giving some higher facilities than other nation. The tourism sector is supervised by the Ministry of Tourism and Leisure, the Mauritius Tourism Promotion Authority (MTPA) promotes Mauritius by conducting advertising campaigns, participating in tourism fairs and organizing, in collaboration with the local tourism industry, promotional campaign and activities in Mauritius and abroad. The Tourism Authority (TA) is responsible

for licensing, regulating and supervising the activities of tourist enterprises, pleasure crafts, skippers and canvassers.

If we talking about the fishery industry than its also developed very well. The government of Mauritius developed a strict rule for the fishery industry but if any entrepreneur enter in this business than its helpful for them to earn a high amount of money.

Agriculture industries are developed in Mauritius. In Mauritius about 40 per cent of the island's surface is being used for cultivation and out of which almost 90 per cent is sugar cane, the rest is tea, tobacco and food crops. Sugar cane cultivation was the main agricultural activity in Mauritius since many years.

We are also analysed tea industry in Mauritius they developed a tea sector very well they known for their different types of tea in the Mauritius. Around 680 hectares lands are under cultivation for tea. And the main benefit is that they developed latest technology for their tea industry.

We analyse that the policy of the Mauritius for financing sectors are very strong so many banking sectors are jump into their economy. Many international banks are there in the Mauritius.

Textile industries are developed a lot in the Mauritius because they developed different types of materials in the market.

ACKNOWLEDGEMENT

I would like to thank my department Parul Institute of Management & research(PIMR),

MBA Department, Gujarat technological University, and Dr. P G K Murthy (Director

of institute) for giving us this opportunity of doing a GCSR project to gain financial and

marketing information about other countries which enables me to understand the demands of

the professional market. I am thankful for the experience gained, which has given me

confidence and has enhanced my professional skills so as to become competent.

I started out this project with excitement of embarking on a new and long journey. The

journey has not been a smooth one though. Initially, it was very hard to cope up, learn,

convince and get acquainted with this subject and persons.

I wish to express my heartfelt appreciation to many who have contributed to this project both

explicitly and implicitly. Words can never express the extent of ineptness, but I still wish to

express my deep sense of gratitude to all the people for their valuable time and co-operation,

which they had given me.

I would like to thank my project guide Prof. Apoorva Kamathania for their encouragement and contribution of time, counsel and materials.

SR. No

Particular Page No

1 SUMMARY OF PART – I REPORT (MBA III SEMESTER)

2 SUMMARY OF PART – II REPORT (MBA IV SEMESTER)

3PART–II: MICRO ANALYSIS: COMPANY /PRODUCT

/SERVICE STUDY.

4Introduction of the selected Company / Firm and its Export – Import

Trade or Investment (actual or potential) with / in the selected Country / Province

5 SWOT analysis

6

Market Opportunities for Export – Import Trade and/or Investment in selected country

7 (or Inward Investment into Gujarat / India)

8Policies and Norms of India for Import or export to the selected

country including licensing / permission, taxation, Trade Barriers etc.

9Global Strategy Problem of the company / firm with reference to

selected Country / Province / State

10Winning Strategies for the Company / Firm

11Future Projections of Trade (Export - Import) of the Company /

Firm’s products or services with selected Country / Province / State during next 3 to 5 years

12Resources required to tap the business opportunity in selected

country

13 Findings & Suggestions

14Conclusion In terms of Proposed Business Plan / Model/ Business

Strategies

15 Annexure

16 Bibliography

TABLE OF CONTENTS

EXECUTIVE SUMMERY OF SEMESTER 3

PROJECT TITLE: - STEEPLED Analysis of Tea industry W.R.T Business Opportunities for Mauritius & Gujarat

Mauritius or “Ile Maurice”, as it is called in French, is a small island in the middle of the Indian Ocean. It is located to the east of Madagascar Island, near South Africa

The Island was formed as a result of volcanic activity in the Indian Ocean, millions of years ago.

The people of Mauritius are descendants of European (mostly French) settlers, the Franco- Mauritians; African slaves and creoles, the Afro-Mauritians; Chinese traders, the Sino-Mauritians; and Indian labourers, the Indo-Mauritians. Such cultural diversity and geographic isolation have led to a nationalized sense of pride. There is unity in being a Mauritian despite not having a shared language and customs. For this reason Mauritius is often considered a global example of successful cultural integration.Demography The current population is approximately 1.1 million. The majority live in the capital and largest city, Port Louis. The population density is one of the highest in the world.

Mauritius has been experiencing an annual average economic growth of 5.5% till 2000. However, since 2000 it has been on a slowdown path. It reached its lowest rate in 2005 with 2.5% but picked up last year with a growth of 3.8%.The dismantling of the MFA and the ending of the Cotonou agreement is creating added pressure on the local economy. There is a high concern for the diversification of the economy and the government is exploring new avenues. However a number of structural issues have to be addressed to be able to achieve these objectives.

As per the survey of 2012 Mauritius is having highest GDP and GDP per capita income in the African Group of countries. In African group of countries Mauritius is considered to be the freest economy in the terms of investment, climate, and governance. In African economies also Mauritius is ranked first by the World Bank for five consecutive years. As per 2012 index of Economic Freedom Mauritius has a fast growth free market.

Trade because of the relatively small size of the island and scarcity of natural resources, Mauritius have to import huge amounts of goods from countries such as France, South Africa, and India. Major imports included textiles, petroleum, machinery, metals, andfood.Major exports include industrial products and sugar. Agricultural products also exported are tea, peanuts, tobacco, potatoes, tomatoes, and bananas. Exports tend to be centred on the United Kingdom, France, and the United States. In 1997 the net export value was $1.616 billion (U.S.) and net imports $2.264 billion (U.S.), for a trade deficient of $648 million (U.S.).

Mauritius - Customs and duties

A value-added tax are 12% levied on all imports Petroleum, Vehicles, alcohol, cigarettes, and furniture have a special excise duty of up

to 360%. Most of the imports require a license and state enterprises control to import of rice,

flour, petroleum, wheat, cement, tea, tobacco, and sugar. The country is also member of the Common Market for Eastern and Southern Africa

(COMESA), which give preferential rates of duty between the member states.

Other Trade Bloc is

ANDEAN (Andean Community) BSEC (Organization of the Black Sea Economic Cooperation) CARICOM (Caribbean Community) ECOWAS (Economic Community of the States of West Africa) EFTA (European Free Trade) SAARC (South Asian Association for Regional Cooperation) SADC (Southern Africa Development Community)

In 1992 Mauritius became a republic. The presidency of the republic is a ceremonial office only; the president is appointed by the prime minister and the National Assembly, whose members are chosen via general elections. The prime minister is the leader of the majority in the National Assembly. In the National Assembly, eight seats in addition to the sixty-two elected seats are awarded to candidates defeated in the general election: four to those candidates who fared the best in relation to the other defeated candidates, and four on a party and community basis. There has been discontent with this system, and a major reworking of the electoral process has been widely discussed.

The economic success of industry has led to low unemployment rates. This has changed the workplace and home life as women joined the workforce. This industrialization also led to women being promoted faster. According to the Minister of Women, Family Welfare, and Child Development, a quarter of all managers are now women. Women are the traditionalhome keepers of the society. Between 1985 and 1991 the numbers of women working outside the home increased from 22 percent to 41 percent. With that trend continuing, hired housekeeping and child care have become relatively new and important industries.

Bilateral Trade 

India is Mauritius’ largest trading partner and has been the largest exporter of goods and services to Mauritius since 2007.

In 2012-2013, India exported goods worth US$ 1.31 billion and imported goods worth US$ 28.49 million.

India’s exports to Mauritius comprise largely of petroleum products. A three-year

Agreement to supply petroleum products to Mauritius was renewed between the

Mangalore Refinery and Petrochemicals Ltd (MRPL) and the State Trading

Corporation of Mauritius in 2010. This agreement is expected to be renewed also.

Besides petroleum products, main items of India’s exports to Mauritius in 2012-13 were pharmaceuticals, cereals, cotton, electrical machinery, and apparel and clothing accessories.

Main items of Mauritius’ exports to India in 2012-13 were iron and steel, pearls, precious/semi-precious stones and optical, photographic and precision instruments.

Tea (Camellia Sinensis) was introduced in Mauritius by a French priest, Father Galloys in 1760. However under French rule tea cultivation was not a priority and even Pierre Poivre planted widely in 1770. However, until the advent of the British that he was little more than a station museum. In the 19th century, Sir Robert Farquhar, the Governor of Mauritius encouraged commercial cultivation of tea and had a tea garden at Le Reduit. Plantation were encouraged and reached 190 hectares. Unfortunately, when he left Mauritius, abandoned farms no one was interested in this scheme.

One of the pioneers was Mr. Raoul Corson. After the Second World War, government accelerated the development of industry and launched the Tea Smallholding Scheme and the Tea Project Planters Scheme in 1955

In 1955, the government launched a plan possession of small tea farmers project planning. Objective of the project is to establish a small tea plantations acquisition of Crown Lands lease at the end of the day on the long-term nominal rental rates for smallholder tea grouped in cooperative society.

At present, the government through the Tea Board protects the tea industry locally. Indeed the Council, as a general principle, do not allow the importation of black tea except for a small amount for the purposes of blending. Imported tea has to pay for the import license from 5,000 rupees / - for each shipment of any kind of tea imported, which meets the import decreased 17% of the value of CIF Mauritius and customs duties of 40%. with the general trend of global trade liberalization, the future of the tea industry local depend on how successful the government will protect the domestic industry tea to prevent the import in the country.

History of the company

With blessings from Mahatma Gandhi, Sir Narandas Desai set foot on Indian soil in the year1982. After gaining experience in tea business as an owner of tea garden in South Africa which then was mired in racial misgivings that made the continuity of his business a futile endeavor there.

He started WaghBakri Tea Company in the year 1982, which then was represented by small company retail shop at Ahmadabad, Gujarat. Since then the growth of the endeavor has been phenomenal and presently WaghBakri Tea Company has an employee base of professional managers and skilled personals with ever increasing space for more, to tend to the expanding group enterprise in India and abroad.

WaghBakri tea house markets various tea brands in loose leaf cartons and tea bags for tea lovers all over the globe – the finest certified black teas from Darjeeling tea estates, Assam and Nilgiri. The company sells organic black and green tea for the health conscious.

Introduction to Company

WaghBakri Company is a family owned tea business amongst conglomerates and mega corps that tower the International business scenario all over the world.  WaghBakri house is one of the largest tea producers and sellers in India today. The group is making leading strides in tea exports and ships in bulk and retail consumer packing to countries all over the world. Its outstanding performance is credited to excellence in management and a spirit that results into a quantum jump in annual growth in face of stifling competition and cut throat scenario that dominates the tea industry today.

Philosophy of the company

Sir Narandas Desai, our founder, believed that his Company was not just about tea, but more a confluence of his values and beliefs.   

Wagh- Of the strong and the meek

Bakri- Of co-existence and harmony.

  To make Tea a common denominator that overrides differences of caste, creed, culture or color. 

The same beliefs are reflected in out Corporate Philosophy even today. 

Build long lasting relationships through trust and fair play towards all stakeholders. Is result oriented. Contribute positively. Be progressive and lead from the front. Change with the times. Be socially responsible. Return to the society a share of the gains from commercial

enterprise.

Vision, Mission and Objectives and Strategic Choice

Vision:-

Build long lasting relationships through trust by maintaining the Quality.

Be result oriented.

Be progressive and lead from the front.  Change with the times.

Be socially responsible.  Return to the society a share of the gains from commercial enterprise.

Mission Statement:-

Serving the Taste of trust

Objectives:-

Main objective is to become a national player.

Wagh Bakri Tea Lounge objective is to offer consumers tea in a style of their own and enjoy drinking with their favorite choice of snacks. 

Top Management

Top management consists of those executives who have the authority to take the important policy decision. Top management is referred to as top level or highest level or director level. It is made up of the board of directors, managing directors and the other key officers.

Top management is found invariably in all types of business organization. It is made up of the owner himself in the individual proprietorship, active partner in the partnership, firm and director and chief executive in a joint stock company. The managing committee is treated as top-management in co-operative society. At the top level management, there is more of management than administration. The degree of the success of the business unit mainly depends on the degree of efficiency of its top level management.

The WaghBakri group is led by Mr. Piyush O. Desai, a highly regarded tea expert and tea taster, with rich experience in the tea business.  He plays an active role in the tea industry by being an involved member and leader of various tea associations.  He was the Chairman of Federation of Tea Traders Association (FAITTA) of India during the years 1998-2002.  Mr. Desai is also strongly committed to philanthropic cause and regularly contributes to the society. 

Supporting him are Mr. Pankaj R. Desai, Managing Director - Finance and Mr. Rasesh R. Desai, Managing Director - Marketing. 

Mr. Pankaj R. Desai has won WaghBakri a respectable, profitable and committed standing in the financial community.  An able tea taster himself, he has over 30 years’ experience in the tea industry. 

Mr. Rasesh R. Desai has created a formidable Marketing network that is enviable even among multinationals.  Our systems have been a source of emulation for many companies.  It also attracts attention as a case study in premier business schools of India. 

Mr. Parag Desai and Mr. Paras Desai, management graduates from prestigious business schools in United States, are hands-on contributors among the fourth generation of management. 

Mr. Harish Parekh, Ex-Chairman of J. Thomas Company and a veteran tea professional, is on the Board of Directors.   Mr. M.P. Shah, Management Consultant from Mumbai is also part of management team.

Departmentalization

Meaning:

Departmentalization is the process of grouping activities into unit for purposes of administration. With the help of departmentalization, an organization can take the advantage of specialization.

Various activities can be grouped into departments on following several basis;

Functions Customers Products Regions Time Process Combined base

Among the above mention basic, function is the most popular basis of departmentalization. The enterprise is divided into the departments on the basis of functions like production, sales, personnel, finance, etc.

From a one man Company to over four hundred employees, the WaghBakri Group is today a large family.   

While a strong sense of family bonding overrides the organization, professionalism is encouraged by including experts in the team from various fields.  The work environment extends adequate freedom for creative and positive contributions to the organization and society.  In the same light while forging ahead to aggressively tap the packaged food industry, WaghBakri welcomes talented human resource to share and nurture its success.

Production

Production is regarded as the most important economic activity in the present day world economy. Production is apart of the business activity. Production is the preliminary objectives of business. From the society point of new products is of most important because without production it is impossible to satisfy human needs and desires. Production takes place when something gifted by nature is transported into a useful product. In other words Production is defined as creation of activity.

Business of every kind has production function in greater or lesser degree. Several types of company in particular industry have to do with production. Production is creation of goods and services but the manufacturing mining, farming, fishing of manufacture is the most direct concern with production manufacturing changes the form utilizing the goods.

Plant location

When the promoters of an industry take a conscious decision regarding the site of the industry, it is called location of industry. Location has a very great influence on productivity, efficiency and profitability of the particular industrial unit.

The plant base is at Dholka in an impressive spread of 65000 yards with a modern Processing plant and state of art blending and packaging unit that conforms to International norms in processing, blending and packaging of the finest tea for worldwide consumption.

Product Portfolio

WaghBakri tea house dates to the 19th century and is one of the oldest hot tea brands in India. Narandas a pioneer in tea growing, and blending entered tea business in India in year eighteen

Top Management

Production Department

Research & Development Quality Control

Finance Department

Human Resource

Department

Marketing Department

Production

ninety two. Since then the tea company has grown four fold and is one of the largest tea producer and exporter from Indian sub-continent. On strength of entrepreneurship he mastered the art of blending finest organic green tea leaves which undergo less oxidation and for the warm full bodied flavour, aroma and special taste black tea. Sir Narandas added wide range of high quality premium teas to buy online of many fine varieties as oolong, red and white tea for the benefit of tea lovers all over world. WaghBakri Organic Tea delivers optimum health benefit.

WaghBakri offers a basket full of brands for different need groups and price segments. 

Good Morning

True to its name, Good Morning is a blend of premium Assam CTC tea and traces of orthodox tea which is high on taste and aroma.  Its fruity flavour tempts you to reach for another cup.

In keeping with the Group’s high quality standards, the blend is not offered in the market if good quality tea is not available due to external factors.  No wonder, Good Morning enjoys a strong customer loyalty.

Good Morning has been rated by experts as one of the best blends in the world.

Available in pack sizes of 250 Gms. And 500 grams.  Soon to be introduced in 100 Gms. packs too.

Wagh Bakri

Our very raisons deter.  A legendary brand with extraordinary brand loyalty built and preserved painstakingly for more than 5 years.  It’s the best selling brand in Western India.  Customers are known to carry along supplies on long and overseas journeys! 

 

A blend of select Assam teas, WaghBakri is high on strength and instantly refreshes a person.  Consistency of quality through the years is another feather in our cap.  It is available in Leaf, Dust and Fanning varieties.

 

WaghBakri (Leaf) with large granules brews a strong and sweet taste (earning it the sobriquet of ‘Kadak Meethi’).  WaghBakri (Dust) with very fine granules is the strongest variety and is preferred by institutional segment.  It produces largest number of cups per kg of tea.  WaghBakri (Fanning) is a blend cut between Leaf and Dust. It is strong in taste and bright in color.

Available in pack sizes of 25 grams, 50 grams, 100 grams, 250 grams, 500 gram poly pouches and 1 kg PET jar.  Now also available in 500 Gms. Lined cartons.  

Special International Blend 

WaghBakri is now available for export markets in special packaging. 

Available in PET jars of 1/2 lb., 1 lb., 2 lbs.  WaghBakri International tea bags are available for those who prefer tea bags.

Tea Bags

Wagh Bakri Masala Chai Tea Bags

An Aromatic Delight with a Difference now gets more out of your regular cup of tea, with the WaghBakri Masala Chai. A fine International blend of the rich Assam tea and the spices, WaghBakri Masala Chai, in every sip, is truly an enticing experience.

The hand plucked leaves are blended with exotic spices, which enhance the flavour of the tea, and the tea tastes deliciously different.

No wonder then, the refreshing aroma of WaghBakri Masala Chai fills up your senses like never before, cup after cup.

Good Morning Tea Bags (Assam)

Good Morning Tea Bags make for the 'fast and fashionable' way of drinking fine tea. The Assam blend is available in a pack of 100 tea bags. These tea bags have a double chamber for faster infusion of tea, and come sealed in an envelope to keep the tea fresh and flavourful.

Good Morning Tea Bags (Darjeeling)

Good Morning Tea Bags make for the 'fast and fashionable' way of drinking fine tea. The Darjeeling blend is available in a pack of 100 tea bags. These tea bags have a double chamber for faster infusion of tea, and come sealed in an envelope to keep the tea fresh and flavorful.

Wagh Bakri Tea Quick Tea Bags

Tea bags are convenient and hygienic where the normal elaborate preparation is not feasible.  Tea Quick tea bags from WaghBakri were one of the first ones to enter the Tea Bag segment.  Tea Quick is especially flavored as it creates a cuppa that is very close to the normally brewed tea.  Moreover, the advanced imported production facility of Tea Quick produces tea bags free from staple pins. 

Available in packs of 25 & 100 tea bags. 

Mili

Mili is an ideal brand for those who otherwise prefer loose tea.  Mili offers good taste & strength with consistent quality and hygienic packaging along with great pricing value.  Mili is a blend of good Assam teas and comes in Leaf and Dust form.  It comes in an attractive bandhani pack design. 

Available in 1Kg Pack and Pet jars of 500 Gms and 250 Gms.

Plant operation

The company produces product range from 1rs. 4gm. packs to 5 kg packs.

It produces on an average 6 lacs packs daily

In 1 single month the company packs 2.5 crores tea packs of various range

Mainly all the machines in the factory are hi-tech excluding few hand operated machinery.

About 8 lacs packs of tea in raw materials form is stored in company’s go down.

Quality Control

In the absence of quality control many products may be found defective and worthless at the end of manufacturing process and may be thrown away as scrap. Quality control avoided such a situation and saves the cost of labor and materials involved in the production of defective products. Similarly, it also saves the loss which will arise out of re-working on the rejected products

It ensures the maintenance of high standards of quality and helps the concern using it to build their goodwill.

It reduces the expenses of inspection considerably and enables the products to be produced economically.

If certain products are not up to the desired standard of quality, they may have to be downgraded and sold cheaper. It maintains the standard of quality and thus enables the producer to secure the standard price for all products.

Art of Tea Tasting 

Tasting is a refined art which encompasses a large number of variables.  A taster’s palate and olfactory senses are finely sensitive and highly discriminatory.

An experienced taster can identify the garden, ambient conditions of the plucking day and can even suggest adjustments in the manufacturing process.  A taster uses his sharp sense of sight, smell, touch and taste while judging the quality of the tea. 

A taster must also have an in-depth knowledge about the prevailing market conditions, consumer preferences and manufacturing techniques while evaluating the tea.  These are endowments of birth - it would be true to say that tasters are born and not made. These natural talents, however, have to be trained and developed through long years of practice before the palate is proficient enough to register the minute differences.   Distinguishing between qualities of teas is possible by the human palate only - no wonder this craft is viewed with a tinge of awe and wonder.  The art of tea tasting is valued much at WaghBakri Group.

The Tasting Procedure 

In the tasting procedure, pots and cups made of the finest china, kept spotlessly clean, are used; 2.5 gm of each tea is weighed into pots and water which has just come to the boil is poured over it. The pots are then covered with a lid and the tea is infused for either 5 or 6 minutes, depending on the individual taster’s preference. The liquor is poured out into a cup and the tea is ready for tasting. 

The colour and evenness of the infusion, as also its nose, are an index to the intrinsic value of the brew. This examination takes place in a well lit room away from direct sunlight, shade and shadow. Light from the north, which is steady and uniform, is ideal.

The scrutiny of the leaf and infusion over, the taster turns his attention to the liquor and takes a sip from the cup, rolls it in his mouth and spits it out. In that split second, the palate registers the taste - Flavors, Briskness, Strength and any faults and flaws are recorded and the taster is ready with his judgment.

Market segmentation

A market segment consists of a group of customers who share a similar set of needs and wants. A company needs to identify which market segments it can serve effectively. Such decisions require a keen understanding a consumer behavior and careful strategic thinking. market segmentation have four types they are shown in the following

Geographic segmentation Demographic Segmentation Psychographic Segmentation Behavioural segmentation

Geographic segmentation calls for dividing the market in to different units such as nations, stats, regions, countries, cities or neighbourhoods.

Demographic Segmentation, the market is dividing in to groups on the bases of variables such as age, family life cycle, gender, income, social class etc.

Psychographic Segmentation, buyers are divided in to different groups on the basis of psychological traits, life cycle, or values.

Behavioural segmentation buyers are divided in to different groups on the basis of their knowledge of product, attitude towards product, use of products and response to the product.

Wagh Bakri Tea

Parent Company Gujarat Tea Processors & Packers Ltd

Category Food & Beverage

Sector Food Products

STP

Segment People looking to make tea instantly

Target Group All people in the upper and middle class

Positioning Healthy tea brand

SWOT Analysis

Strength

1.Rich taste and flavour

2.Unique aroma

3.Good packaging

4.Good advertising/ brand visibility

Weakness 1. Affected by moisture/storage problem

Opportunity

1.Corporate tie-ups/ hotel tie-ups

2.Cheaper packets for rural areas

Threats

1.Competing tea brands

2.Preference for people having coffee or other beverages

Porter Analysis of Wagh Bakri Chai

Threat of New entrants

Encouraging Government Policies Like Food and Beverage Act.

Focus is now on the existing Markets but if Focus changes for tapping the international markets than this may affect high market share in Gujarat as national players like HCL and Tata focusing towards these markets.

Bargaining Power of Suppliers

Large Number of Producers of tea in India

Suppliers product create Low switching Cost.

Industry rivalry

Approx 700 tea companies in India having intense rivalry among them

Market dominated by large unorganized players.

Low switching Costs.

Slow Industrial growth

Bargaining Power of Buyers

Large Number of Buyers Buying the Product

Bargaining Power of Buyers is extremely High as many options available

Not Much product Differentiation in terms of taste and also Low switching Cost.

Buyers Purchase large Proportion of Industry Total Output

Threat of Substitute Products

Substitutes Like coffee, juices, Cold Drinks, etc.

Existing Consumers are Loyal

Substitute Product price may be lower and price war is unavoidable

Substitute Product Quality and Performance may be better

SWOT ANALYSIS of Wagh Bakri

Strengths

The company has an advantage of its marketing research.

The company has the quality consistency in their products and they are very keen about the quality of their product.

The company has a variety of quality product according to the taste of consumers.

The company has a great advantage of their goodwill in the market.

Weakness

Though the company has third position in the market, yet they have not captured the all over world market.

One of the weaknesses of the company is ‘oolong tea’, it is mainly exported but it is not sold in domestic market even if may captured a good market share.

It is tuff to sell tea in those regions were mainly people are non-tea drinkers.

Opportunities

To be a Market Leader nationally.

Market Opportunity in Mumbai and to capture the Mumbai Local market.

Launch of Exclusive tea bars ( Opened in Mumbai and now at other places.)

Export Potential in some major Countries.

To come up with New flavors of tea apart from

the existing Flavors

New Product Development

Export Potential.

Mergers and Acquisitions.

Threats

Rising inflation, which reduces disposable income of consumers

Threat from loose tea Market Shares.

Competition from MNC

Global Competition

Low Barriers.

Globalization.

The company faces competitions by HUL who has 10% growth in market.

The company faces severe competition with regional players in some regions.

Value Chain Analysis

Tea Buying from the Tea plantations in Assam and Darjeeling.

Tea blending ( Mixing of Tea and making it in a powder form to make different blends of tea)

Tea tasting by the top management

Tea Packaging in Pet Jars, packets and Staple Free bags

Tea Marketing ( Advertisements, Print Ads, Radio, TV)

Tea Selling ( Online, Retail Stores, distributors, etc)

Retail Outlets and Tea Lounge.

5 Generic competitive strategies

LOW-COST LEADERSHIP:-As name symbolizes Chai for all segments,

Nav-chetan for lower segment people

Mili tea for mass market

Darjeeling tea for the Rich People.

BROAD DIFFERENTIATION:-

Tea Bags- Staple Free bags ( Only company in india having staple free machines)

Consistent Quality and quality control for all the kinds of tea.

FOCUS STRATEGY BASED ON LOW COST:-

Mili tea –Good Quality at reasonable price.

VERTICAL INTEGRATION STRATEGIES:-

Backward- By purchasing Tea Plantations for increasing the quality of products.

Forward- Tea Lounge by giving wet sampling.

BCG Matrix

INTRODUCTION OF MAURITIUN PRODUCT

Market Share

High Low

MARKET

GROWTH

High

Low

Darjeeling TeaOrganic TeaWagh Bakri Perfect

Tea Bags

?

Bois Chéri is the first tea plantation in Mauritius dates back to 1892.

Tea can hardly be called a trend – after all, it’s been grown, picked, traded and sipped for centuries. But for the last few decades – in the West at least – tea has continually played second fiddle to coffee in the realm of hot drink worship, receiving nowhere near the level of esteem and adoration as the beloved bean.

So as it becomes clear that big brand coffee chains are starting to re-focus their attention on the humble tea leaf – with some already opening specialist tea bars – you can be sure they’ve been keeping their ears to the ground. Because tea is back, in a big way, and it’s emerging from the teapot into juices, cocktails and the kitchens of innovative chefs – in ways more audacious than ever before.

The Tea RouteOf course, Mauritians’ passion for tea has never waned, and as a visitor you can explore this fervor by following the Tea Route at the Bois Cheri tea plantation – a culinary and cultural journey into the history of tea production in Mauritius.

Under the name of the Bois Cheri Company, the first large-scale Mauritian tea plantation was established at the end of the 19th century by Messrs.’ Bour and Le Breton, and the 250 hectares of land now produce up to 700 tonnes of tea every year, 25% of which is reserved for export.

Domaine des AubineauxIt all begins in Forest Side, a little way south of Curepipe, where the town gives way to a more rustic area. Here liesDomaine des Aubineaux and its gardens, a handsome colonial house-turned-museum filled with antiques, paintings, vintage photographs and furniture from the East India Company.Just beyond, and surrounded by aromatic camphor trees, a former stable houses a distillery where essential oils are extracted in an old still to this day. To experience how this process translates to modern day varieties, take an English-style tea break at the old pool room. A wide range of infusions are offered: flavoured black tea (plain, mint, coconut, bergamot, earl grey, lemon or vanilla), herbal teas (with ayapana, lemongrass or ginger) and green teas – plain or with jasmine.

Bois Cheri factory and restaurantAll products are manufactured at the Bois Cheri factory itself. You’ll pass by an old locomotive’s steam engine once used to dry out tea leaves, while guides explain the various different stages of production, from harvest and fermentation to drying, sieving and packaging. And you cannot travel through Bois Cheri without stopping to admire the panoramic views from the chalet.

Grab a few minutes on its wooden terrace – cup of tea in hand – and gaze down on an ancient volcanic crater now transformed into a small lake, surrounded by century-old trees and shrubs.

For 21st century-style culinary innovation however, you’ll need to take a table at the Bois Cheri restaurant. This is the only place where you can enjoy a most unusual tea chutney – a blend of black tea with coriander, mint, olive oil and grated coconut, served on canapés.

Or opt for one of the young chef’s more revolutionary creations, like the black tea tiger prawns; a delectable bisque made with tea, finely chopped onions, butter and parsley, all simmered in fresh cream and drizzled over perfectly grilled prawns.

It’s the perfect place to witness this resurgent love of tea in action.

SWOT ANALYSIS OF MAURITIAN TEA

.

SWOT OF CORSON TEA

Strength

The raw-material for tea is supplied by its own supplier Corson TEA is a leading company in the tea industry in Mauritius. They have invested in sophisticated machinery to develop new markets.

Weakness

Competition for the sale of a product Mauritius tea in the market is very difficult. Difficulties in the introduction of mechanization in field operations due to

topographical constraints and quality. Low declaration on the local market. Poor distribution because not all products are available everywhere.

Opportunity

Strong level of awareness around the world as to the health of the attribute which led to the tea growing demand for good quality tea.

Increase the power of small farmers and show a good response to a proposal by the Tea Board for a collective approach.

Threat

Hurricane hard summer in Mauritius can produce damage to the quality of the tea plant.

A younger age than shrubs (better quality of tea) than other domestic goods. Competition must be maintained on

alternative products such as soft drinks and juice.

BOIS CHERIE TEA FACTORY

Strengths

Continuous innovation to incur value for customers.

FIRST to provide a range of soft in the country.

The pioneers of the nose and throat er green tea in Mauritius.

The only company to offer round tea bags in Mauritius.

Weakness

It is a major obstacle to the Bois Cherie tea to put out in the minds and Encourage consumers to engage in brand switching. Most sales issue, distributor cash then they can turn to competitors. In the long term there will be a lucrative market for tea and ice tea flavour.

Opportunities

In the long term there will be a lucrative market for tea and ice tea flavours. Market growth of the market because they tea bag intuitive object Continuous

innovation to increase value for customers

Threats

Stable rules and management of public companies hinders tea. Strong competition in the rural and urban areas An increase in global tea prices

INTRODUCTION OF FIVE FORCE MODEL for Mauritius Tea Industry

Threat of new entry

Power is also affected by the ability of people to enter your market If it costs little in time or money to enter the market and participate efficiently, if there are few economies of scale in

place, or if you have little protection technologies major private , you can then enter new competitors quickly your market and weaken your position.

Mauritius in the country and has a population size 1,291,456 (2012 estimate). Government of Mauritius is not based on any newcomer to start is own tea estate in the country. Thus an economy of scale is high.

The Bargaining Power of Suppliers - (High)

This is how suppliers can put pressure on business. If one supplier has an effect large enough to affect the company's margins and volumes, then it holds great strength. Here are some of the reasons that may have the power suppliers:

Belle plant tore an annual capacity to 1.2 million kilos. No pipe products 2.0 million kg. All these factories used Rotorvane / CTC manufacturing method. Nouvelle France has an annual capacity of .08 million kilos, and makes both Orthodox and ROTOVANE / CTC tea. Dubreuil, with CLC / CTC manufacture, has the capacity to 2.0 million kg

Low switching cost. Where the

There are a very few number of suppliers for a particular product And there are fewer alternatives Raw materials are provided by the company of its own.

Supply industry has a higher profitability of the industry buying.

Bargaining Power of Buyers - (Low)

This is the amount of stress can put customers on business. If one client has an effect large enough to affect the company's margins and volumes, then the client a great strength. Here are some of the reasons that clients may have power.

there are large numbers of buyers buy the product Bargaining power of buyers is very Low, as buyers have a few options available Buyers purchase a large proportion of the industry's total output Competition for the sale of a product Mauritius tea in the market is very difficult.

Availability of Alternatives - (Average)

What is the likelihood that someone will turn into a competitive product or service? If the cost of conversion is low, then this is a serious threat. Below are some of the factors that could affect the threat of alternatives:

Alternatives available are coffee, juice, cold drinks Existing customers are loyal Different flavor in the tea industry is the same as a substitute in the tea industry.

Tradition and culture

Drinking tea and firmly rooted in the traditions of Mauritius. The average tea consumption on the island is one kilo per head. Mauritius average black tea drinks. Mauritius some of Chinese descent are taking green tea.

Tea price is much cheaper when compared with coffee. Known as the Queen of the drinks, tea fascinates millions all over the world. While increasing awareness of the population to adapt to dietary habits that promote health, it is expected that the average Mauritius will continue to drink tea as they are getting more and more scientific evidence to confirm that tea is good for health, and can be consumed to prevent cancer development and reduce the risk of heart disease.

Competitive Rivalry - (High)

This describes the intensity of competition between existing companies in the industry. Industries highly competitive generally earn low returns because the cost of high competition. May result in a highly competitive market of:

Industry growth is slow The market is dominated by a large number of unorganized players As is the size of a limited company, but on the other way the retailer of tea is also

able to compete. The dealer or retailer of tea able to compete if the company paid a sufficient amount of commission or margin on the product.

Agriculture (including plantation) No FDI/NRI Investment is permitted other than Tea sector. FDI, permitted up to 100% in Tea sector, including tea plantations, with prior Government approval and subject to following conditions.

Compulsory divestment of 26% equity in favour of Indian partner/Indian public within a period of five years, and

Prior State government approval required in case of any future land use change.

Tabular representations of the key changes proposed under the FDI Limits are as follows:

Sector/Activity

Before the proposal After the proposal

% of FDI /Equity

Entry Route% of FDI / Equity

Entry Route

Tea Plantation 100%Government Route

100%

Automatic up to 49% Government route beyond 49% and up to 100%

Procedures for Imports in Mauritius1. Registration and Customs Formalities 2. Import Permit3. Incoterms (International Commercial Terms)4. Clearing and Forwarding5. International Terms of Payment6. Useful Websites

Registration and Customs FormalitiesThe following registration procedures should be completed by all importers:

Registrar of Companies Any person wishing to import goods on a commercial basis must hold a Business Registration Card from the Companies Division..

MRA Registration with the Mauritius Revenue Authority is compulsory for companies with an annual turnover exceeding Rs. 4 million.

CustomsAll importers must be registered with the Customs Department. On arrival of a consignment, a company must complete Customs formalities which consist in submitting a Customs Declaration (also called Bill of Entry) electronically through the Tradenet System giving all details of the goods imported such as the quantity, value and precise nature of the goods. An importer may use the services of a Freight Forwarding/Clearing Agent or a Customs Broker for the Customs formalities and the clearing of goods. Any person who is a registered user of the TradeNet system may also submit the Customs declaration.

Main Documents for Import

The following documents are required at importation:

Invoice indicating the FOB and/or CIF value of goods Packing list Bill of lading / Airway bill Bill of entry

Insurance certificate (if applicable) Certificate of inspection (if applicable) Certificate of origin (if applicable) Other documents (required by government agencies (e.g health, agriculture and

veterinary services)

Invoice- an invoice is a commercial document issued by a seller (exporter) to the buyer (importer), indicating the products, quantities, weight and agreed prices for products or services the seller has provided the buyer.

Packing list- A packing list is prepared by the exporter and it commonly includes all the details of the package contents, number of packages, carton numbers, net weight and gross weight and may or may not include customer pricing.

Bill of Lading- A Bill of Lading (sometimes referred to as a BOL, or B/L) is a document issued by a carrier, e.g. a ship's master or by a company's shipping department, acknowledging that specified goods have been received on board as cargo for conveyance to a named place for delivery to the consignee who is usually identified.

Bill of entry- a Bill of entry also known as the Single Goods Declaration is the electronic declaration accepted and assigned with a number by the Customs Department. It is a proof that goods have been received for export and/or import.

Insurance certificate(if applicable) - An insurance certificate is a representation of the insurance policy taken out by the importer or the exporter (depending on the Incoterms) for a shipment.

Certificate of inspection(if applicable) - A certificate of inspection is required by some importers and/or importing countries. It is sometimes also referred to as the "Pre-shipment Inspection" (PSI) certificate and is issued by an independent third party confirming the buyer's specifications, quantity and value of goods prior to shipment.

Certificate of Origin- The Certificate of Origin indicates the country in which the goods are manufactured. There are two types of certificates of origin:

Non-preferential Certificate of Origin attests the origin of the products and do not confer any tariff preferences.

Preferential Certificate of Origin attests that the goods originate from a country with which a trade agreement has been signed and the goods are eligible for tariff preferences. The following certificates of origin are accepted by Customs Department and goods are granted preferential access:

o COMESAcertificates of origino SADCcertificates of origino IOCCertificates of origino Pakistan-Mauritius PTACertificate of origino EUR-1 Certificates of Origin

Import Permit:

A limited number of products are subject to import control mainly for health and security reasons, environmental purposes and national interest.

The table below gives a list of the different permits/certificates on controlled items:

Agency DescriptionAFC Asbestos Free CertificateALP Ministry of Agriculture Landing PermitAMB Agricultural Marketing Board PermitAPC Ministry of Agriculture Phytosanitary CertificateCFC CFC Free CertificateDCCB Dangerous Chemical Control BoardFA Fisheries AuthorityFDP Food and Drugs PermitHHC Ministry of Agriculture Certificate / Human HairIMP Import PermitMF Mercury Free CertificateMOA Ministry of Agriculture PermitMOH Ministry of Health AuthorityMSBA Mauritius Standards Bureau ApprovalMSBC Mauritius Standards Bureau CertificatePHYTO Phytosanitary CertificatePoP Police PermitTB Tea Board ApprovalTBB Tobacco Board Approval

Procedures for Exports Registration and Customs Formalities Export Permits Incoterms (International Commercial Terms) Clearing and Forwarding International Terms of Payment Useful websites

Registration and Customs FormalitiesThe following registration procedures should be completed by all exporters:

Registrar of Companies Any person wishing to export goods on a commercial basis must hold a Business Registration Card from the Companies Division. MRA Registration with the Mauritius Revenue Authority is compulsory for companies with an annual turnover exceeding Rs 2 million.

Customs

All exporters must be registered with the Customs Department.

The registration form along with the following documents must be submitted to the Customs Department to process the registration:

o Copy of Business Registration Card (for sole proprietors or partnerships)o Certificate of Incorporation (for companies)o VAT Certificateo Copy of Export Invoiceo Copy of Bill of Ladingo Any other document as may be requested by Customs

The process of registration at Customs is usually done by the Customs Broker or the Freight Forwarder on behalf of the company.

Any person, who is himself the exporter, can personally file the Customs declaration provided he is registered at Customs as a declarant and is owner of the Front End System of the TradeNet. However, because of the technicalities required to file a Customs declaration, it is recommended to hire the services of a customs broker or a freight forwarding agent.

Commodity Description and Coding System

An exporter needs to be aware of the Harmonised System (HS) codes of the products he is exporting. The HS is an eight-digit nomenclature for classifying traded products. The first four digits are referred to as the heading. The first six digits are known as a subheading. Individual countries may extend a Harmonized System number to eight or ten digits for customs purposes.

An application for HS Codes classification can be made to the Customs Department which has the authority to classify goods in Mauritius.

Main Documents for Export

The main documents that are relevant to the exporter are listed hereunder:

o Invoiceo Packing listo Bill of lading / Airway billo Bill of entryo Insurance certificate (if applicable)o Certificate of inspection (if applicable)o Certificate of origin (if applicable)o Export permit (if applicable)

Invoice- an invoice is a commercial document issued by a seller to the buyer, indicating the products, quantities, weight and agreed prices for products or services the seller has provided the buyer.

Packing list- A packing list is prepared by the seller and it commonly includes all the details of the package contents, number of packages, carton numbers, net weight and gross weight and may or may not include customer pricing.

Bill of Lading- A bill of lading (sometimes referred to as a BOL,or B/L) is a document issued by a carrier, e.g. a ship's master or by a company's shipping department, acknowledging that specified goods have been received on board as cargo for conveyance to a named place for delivery to the consignee who is usually identified.

Bill of entry- a Bill of entry also known as the Single Goods Declaration is the

electronic declaration accepted and assigned with a number by the Customs. It is a proof that goods have been received for export and/or import. A bill of entry shows the description and quantity of the goods.

Insurance Certificate(if applicable) - An insurance certificate is a representation of the insurance policy taken out by the buyer or the seller (depending on the Incoterms) for a shipment.

Certificate of Inspection(if applicable) - A certificate of inspection is required by some importers and/or importing countries. It is a certificate issued by an independent third party attesting the condition of cargo prior to or after the unloading.

Certificates of Origin- Certificates of origin (CO) traditionally state from what country the shipped goods originate, but "originate" in a CO does not mean the country the goods are shipped from, but the country where there goods are actually made.

A preferential certificate of origin is a document attesting that goods in a particular shipment are of a certain origin under the definitions of a particular bilateral or multilateral trade agreement. This certificate is required by a country’s customs authority in deciding whether the imports should benefit from preferential treatment in accordance with the specific trading area such as the Common Market for Eastern and Southern Africa (COMESA) or the Southern African Developments Community (SADC), or before anti-dumping taxes are enforced.

Policy in Tea Sector after Independence

To better safeguard the interest of all stakeholders, the Tea Industry Control Ordinance was repeated and replaced by the Tea Industry Control Act 1975. The Act established the Tea Board with undue powers in replacement of the Tea Control Board. Following promilgation of the Tea Industry Control Act 1975, the TDA and the metayers on private estates which fell outside the ambit of the ordinance of 1959, were included within the purview of the Tea Board. As a consequence, the Board started determining green leaf prices for TDA smallholders and metayers.

Three-Year Rehabilitation Plan with the Cooperation of the Government of India 

In 1990, an attempt to redress the unhealthy situation in the public tea sector, Government approved a 3-Year Rehabilitation Plan prepared by an Indian Consultancy Team. The rehabilitated plan was implementedas from 1991-92. The primary objective of the plan, financed jointly by the Government of India and Mauritius, was to improve efficiency at all levels – production, manufacturing and marketing and thus secure the Industry’s viability and profitability.Agricultural Diversification of Public Tea Sector

Attempts to improve the economy of this industry remained unsuccessful. Mauritius could not compete with major tea producing countries such as India, Sri Lanka and Kenya because in these countries, tea is produced at altitude much higher than Mauritius. As a consequence, the quality is not comparable. To safeguard the livelihood of tea smallholders, government came forward with the projects to diversify tea to other activities principally sugarcane. A package of incentives was forward to the tea planter to encourage him to join the project.Agricultural diversification in the Public Tea Sector started in February 1995. The project aimed at converting some 2,500 hectares (6,000 arpents) of tea into sugar cane and was originally scheduled to end in year 2001. With the additional quota of 85,000 tonnes of sugar from the Eurorefiners, Government decided with the help of the five sugar estates involved in the conversion of the tea belts, to accelerate the diversification programme. The diversification programme was completed in August 1999.

The Modern Tea Industry

As from 1999-2000, the tea industry moved into a new phase marked by the following:

(1) Tea Plantation covered an area of about 760 hectares.

(2) Only private tea factories are in operation. These are Bois Cheri, Corson, La Flora and a new factory La Chartreuse that started in January 2000.

(3) Tea is mainly manufactured for local consumption. Imports were effected only where the return was higher than the cost of providing the produce on the market concerned.

(4) The guaranteed green price scheme was discontinued. There being no justification for its continued existence in the new phase.

Future of the Tea Industry in Mauritius

At present, Government through the Tea Board protects the local tea industry. In fact the Board, as a general principle, does not allow the import of black tea except minor amount for blending

purposes. An importer of tea has to pay for an import licence fee of Rs 5,000/- per consignment for any type of tea imported, an import levy of 17% of CIF value landed Mauritius and a customs duty of 40%. With the general trend of liberalization of World Trade, the future of the local tea industry will depend on how far Government will be successful to protect the local Tea Industry namely to prevent import of tea to the country.Irrespective of the outcome of what may happened with development at International level, the Tea Board envisages to consolidate the tea industry further. To that end, it is proposed to implement

(1) an infilling programme to improve outputfrom exsting area under tea plantation.

(2) the enhancement of the quality of tea manufactured at tea factories through better control of the standard of green leaf and the manufacturing process. Thus to promote wth a better product.

(3) to develop an adequate marketing strategy for the improved product.

Customs and compliance for importing the product 2202.90.7 from India into Mauritius

Customs duties and local taxes applied in Mauritius

Customs duties when importing from India

15% of CIF value

Customs duties when importing from countries involved in trade agreements with Mauritius

INDIA: 15% of CIF value

VAT:

15% of CIF value + duties (customs duty, excise, etc.)

Excise Duty:

0%

The Indian Ocean Rim Association (IORA) was launched in Mauritius on 6-7 March, 1997.

The Indian Ocean Rim defines a distinctive area in international politics consisting of coastal states

bordering the Indian Ocean. It is a region of a diverse mix in terms of culture, race, religion, economic

development and strategic interests.

MEMBERSHIP

The Association comprises the following eighteen members:

1. Australia

2. Bangladesh

3. Comoros

4. India

5. Indonesia

6. Iran

7. Kenya

8. Madagascar

9. Malaysia

10. Mauritius

11. Mozambique

12. Oman

13. Seychelles

14. Singapore

15. South Africa

16. Sri Lanka

17. Tanzania

18. Thailand

19. United Arab Emirates

20. Yemen

The objectives of IORA are

To promote sustainable growth and balanced development of the region and member states.

To focus on those areas of economic cooperation which provide maximum opportunities for development,

shared interest and mutual benefits

To promote liberalisation, remove impediments and lower barriers towards a freer and enhanced flow of

goods, services, investment and technology within the Indian Ocean Rim

PREFERENTIAL TRADE AGREEMENT

At the first meeting of the High Level Task Force (HLTF) of IORA which was held in Colombo, Sri Lanka, in

October 2001, Sri Lanka made a proposal to establish a Preferential Trading Agreement (PTA) for the

IORA. Six member countries namely Iran, Kenya, Mauritius, Oman, Sri Lanka and Yemen have proposed

to enter into a PTA. The greatest challenge would be how to reconcile IORA PTA with the trade regime of

the existing Free Trade Areas (FTAs) and Regional Economic Communities (RECs) in the region. There is

also the question of how to render the eventual IORA PTA compatible with the WTO in view of the fact that

Iran, Yemen are not yet WTO members.

. No.

Name of

Country

April-2010-March-2011

April-2011-March-2012

April-2012-March-2013

%Growth

in INR

%Growth in

US$Value in INR Lacs

Value in US$ Million

Value in INR Lacs

Value in US$ Million

Value in INR Lacs

Value in US$ Million

1

India Export to

Mauritius

3,86,060.70

853.91

676,907.61

1400.51

713,661.96

1310.80

5.43 -6.41

S. No.

Name of Country

April-2010-March-2011

April-2011-March-2012

April-2012-March-2013

%Growth in

INR

%Growth in US$

Value in

INR Lacs

Value in US$ Million

Value in INR Lacs

Value in US$ Million

Value in INR Lacs

Value in US$ Million

1

India Import from

MAURITIUS

7,512.67

16.51

18,141.52

38.52

15,517.22

28.44

-14.47

-26.17

Export Licence

Majority of goods are allowed to be exported without obtaining a licence. Export licenses are only required for items listed in the Schedule 2 of ITC (HS) Classifications of Export and Import items. An application for grant of Export Licence for such items must be submitted to the Director General of Foreign Trade (DGFT). The Export Licensing Committee under the Chairmanship of Export Commissioner considers such applications on merits for issue of export licenses.

Export of Special Chemicals, Organisms, Materials, Equipment and Technologies (SCOMET) items are also permitted under a licence or prohibited altogether.

Export of Samples

Export of samples upto specified limits are allowed free. The exporter is required to be registered with the appropriate Export Promotion Council to avail of this benefit. Samples with permanent marking as "sample not for sale" are allowed freely for export without any limit.

Processing of Shipping Bill

In case of export by sea or air, the exporter must submit the 'Shipping Bill', and in case of export by road he must submit 'Bill of Export' in the prescribed form containing the prescribed details such as the name of the exporter, consignee, invoice number, details of packing, description of goods, quantity, FOB value, etc. Along with the Shipping Bill, other documents such as copy of packing list, invoices, export contract, letter of credit, etc. are also to be submitted. There are 5 types of shipping bills:-

Shipping Bill for export of duty free goods. This shipping bill is white coloured. Shipping bill for export of goods under claim for duty drawback. This shipping bill is

green coloured. Shipping bill for export of duty free goods ex-bond i.e. from bonded warehouse. This

shipping bill is pink coloured. Shipping Bill for export of dutiable goods. This shipping bill is yellow coloured. Shipping bill for export under DEPB scheme. This shipping bill is blue in colour.

The Bills of Export are:-

Bill of export for goods under claim for duty drawback Bill of export for dutiable goods Bill of export for duty free goods Bill of export for duty free goods ex-bond

Let Export Order

After the receipt of the goods in the dock, the exporter may contact the Customs Officer designated for the purpose and present the checklist with the endorsement of Port Authority and other declarations along with all original documents. Customs Officer may verify the quantity of the goods actually received and thereafter mark the Electronic Shipping Bill and also hand over all original documents to the Dock Appraiser, who may assign a customs officer for the examination of the goods. If the Dock Appraiser is satisfied that the particulars entered in the system conform to the description given in the original documents, he may proceed to allow "let export" for the shipment.

Import Duties

The government levies import duties on most of the items imported for trade purposes. These are of different types including Basic Duty, Additional Customs Duty, True Countervailing Duty, Anti Dumping or Safeguard Duty and Education Cess.

Payment of Duty

Provisional Deposit Account with Bank: Facilities are available to debit duty amounts directly from the Banks nominated by Customs. This facility reduces delays in receipt of customs duties from Importers and also payment of interest after 2 days. Importers are required to open a deposit account with the nominated Bank and maintain a minimum balance as per the Banks guidelines. On completion of assessment of the Entries, the importer can authorize debit of the duty amount against authorization slips.

Payment by Draft/Bankers Cheque: RBI has issued new guidelines to the nominated banks for acceptance of payments against instruments from nationalized banks only.

Interest: Interest is charged on duties not paid within 2 days.

Bill of Entry

It is a document certifying that the goods of specified description and value are entering into the country from abroad.If the goods are cleared through the Electronic Data Interchange (EDI) System   no formal Bill of Entry is filed as it is generated in the computer system, but the importer is required to file a cargo declaration having prescribed particulars required for processing of the entry for customs clearanceThe Bill of entry, where filed, is to be submitted in set, different copies meant for different purposes and also given different colour scheme. Bills of Entry are of three types:-

Bill of Entry for home consumption Bill of Entry for Warehouses Bill of Entry for Ex-Bond Clearance

Details about these and the documents to be filed in case of Non-EDI system can be found here.

Green Channel facility

Some major importers have been given the green channel clearance facility. It means clearance of goods is done without routine examination of the goods. They have to make a declaration in the declaration form at the time of filing of bill of entry. The appraisement is done as per normal procedure except that there would be no physical examination of the goods. Only marks and number are to be checked in such cases. However, in rare cases, if there are specific doubts regarding description or quantity of the goods, physical examination may be ordered.

This facility can be claimed by the Importers who have been approved by the Customs as eligible for claiming the facility. Importers having a clean record can apply to the Customs (EDI) with a request for Green Channel facility against a covering letter and enclosing copy of Balance Sheet showing proof of Duty paid in a year.

Dumping

Dumping is said to have taken place when an exporter sells a product to India at a price less than the price prevailing in its domestic market. However, the phenomenon of dumping is per se not condemnable as it is recognized that producers sell their goods at different prices to different market. However, where dumping causes or threatens to cause material injury to the domestic industry of India, the Designated Authority initiates necessary action for investigations and subsequent imposition of anti-dumping duties.

Anti Dumping Guidelines issued by the Government of India must be understood and complied with while carrying out import of goods.

http://business.gov.in/importexport/procedureexport.php

http://www.mcci.org/trade_procedures_import.aspx

http://agriculture.govmu.org/English/Pages/default.aspx

http://www.mcci.org/trade_procedures_export.aspx

http://www.waghbakritea.com/whatsnew.html

http://www.india-briefing.com/news/import-export-licensing-procedures-india-6804.html/