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EXPORT AND IMPORT


TAKING NORTH EAST INDIA ( ASSAM ) ACROSS THE GLOBE

 

     A good or service brought into one country from another. Along with exports, imports form the backbone of international trade. The higher the value of imports entering a country, compared to the value of exports, the more negative that countrys balance of trade becomes.

 

     The word "import" is derived from the word "port," since goods are often shipped via boat to foreign countries. Countries are most likely to import goods that domestic industries cannot produce as efficiently or cheaply, but may also import raw materials or commodities that are not available within its borders. For example, many countries have to import oil because they either cannot produce it domestically or cannot produce enough of it to meet demand.

 

     Imports and exports may seem like prosaic terms that have little bearing on everyday life, but they exert a profound influence on the consumer and the economy. In todays interlinked global economy, consumers are used to seeing products and produce from every corner of the world in their local malls and stores. These overseas products or imports provide more choices to consumers and help them manage strained household budgets. But too many imports in relation to exports which are products shipped from a country to foreign destinations can distort a nations balance of trade and devalue its currency.The value of a currency, in turn, is one of the biggest determinants of a nations economic performance. Read on to learn how these mundane staples of international trade have a more far-reaching influence than most people imagine.

 

Effects on the Economy

     According to the expenditures method of calculating gross domestic product, an economys annual GDP is the sum total of C + I + G + ( X-M ), where C, I and G represent consumer spending, capital investment and government spending, respectively.

     While all those terms are important in the context of an economy, let’s look closer at the term ( X-M ) which represents exports minus imports, or net exports. If exports exceed imports, the net exports figure would be positive, indicating that the nation has a trade surplus. If exports are less than imports, the net exports figure would be negative, and the nation has a trade deficit.

     Positive net exports contribute to economic growth, something that is intuitively easy to understand. More exports mean more output from factories and industrial facilities, as well as a greater number of people employed to keep these factories running. The receipt of export proceeds also represents an inflow of funds into the country, which stimulates consumer spending and contributes to economic growth.

     Conversely, imports are considered to be a drag on the economy, as can be gauged from the GDP equation. Imports represent an outflow of funds from a country, since they are payments made by local companies (the importers) to overseas entities (the exporters).

     However, imports perse are not necessarily detrimental to economic performance, and in fact, are a vital component of the economy. A high level of imports indicates robust domestic demand and a growing economy. Its even better if these imports are mainly of productive assets like machinery and equipment, since they will improve productivity over the long run.

     A healthy economy, then, is one where both exports and imports are growing, since this typically indicates economic strength and a sustainable trade surplus or deficit. If exports are growing nicely but imports have declined significantly, it may indicate that the rest of the world is in better shape than the domestic economy. Conversely, if exports fall sharply but imports surge, this may indicate that the domestic economy is faring better than overseas markets. The U.S. trade deficit, for instance, tends to worsen when the economy is growing strongly. The countrys chronic trade deficit has not impeded it from continuing to be one of the most productive nations in the world.

     But a rising level of imports and a growing trade deficit do have a negative effect on a key economic variable the level of the domestic currency versus foreign currencies, or the exchange rate.

     Assam is a huge potential state for export oriented natural resources like tea, coffee, agriculture, floriculture, horticulture, crude oil, gas and minerals.


     Assam is rich in natural resources, minerals, forests and water and has vast tracts of fertile land. It is primarily an agrarian economy, with 74% of its population engaged in agriculture and allied activities. Cereals like paddy, wheat and plantation crops like tea are grown extensively. Amongst mineral resources, oil takes the top place. Oil was first struck more than one hundred years ago and the oil well of Digboi and other area is a major source of fuel for not only the North-East but for the country as a whole.


The economy of Assam can be broadly divided into three sectors- Primary (agriculture, mining etc.) secondary (manufacturing) and tertiary (services like electricity, water, trade, finance, banking, telecommunication etc).


Medicinal Herbs and Plants


     With its vast hills and forests, Assam is the home to a variety of medicinal herbs and plants such as eg. Sarpagandha (rauvolfia serpentine Benth.ex.Kur), Pippali (Piper longam Linn), Amlakhi (Emblica Officinalis Gaertn), Hilikha (Terinalia Chebula Retz.), Bhomora (Terminalia belerica), Arjuna (Terminalia arjuna Wight & Arn.).


     About 300 types of medicinal herbs and plants are known to exist in abundance in the state with the Brahmaputra valley itself having 150 varieties of herbs and plants of commercial value.

     It is estimated that only about 5-10% of the plants and herbs are currently utilised and the rest hold a vast potential.


Agriculture


     An agrarian economy since time immemorial, about 77% of Assams workforce is engaged agriculture and allied activities contributing roughly 40% to the state's GDP. Roughly 40% of the total area is cultivated.

Exotics

 

Assam Lemon: A unique product of Assam with a high percentage of Vitamin C (10 mg.) besides Vitamin B (0.02 mg.), Niacin (0.1) per 100 gm. Extractable oil content of the peel is around 0.8% and can be used in the cosmetic industry.

Hatkora: An exclusive export item belonging to the citrus family. Peel is used for tenderizing meat and enhancing flavour in culinary dishes.


Orchids: Of the 925 varieties available in India, over 600 can be grown in Assam. Around 200 varieties are unique to this region of which 60% are ornamental in nature.


Aromatic Rice (Joha Rice): Quality comparable with any popular aromatic rice in the world.


Glutinous Rice (Bora Rice): Quality above standard than that of Indonesia, Thailand and other region of the world.


Bhut Jalakia (Capsicum Chinensis Jacq.) : Hottest chilli on earth with Scovelli Heat Unit (SHG) of 10,41,047.
Outenga, Robab Tenga and all types of leafy veggies ( khutura hag, lettuce, spinach, mani muni hag etc.)


Sericulture


     The climate and general environment of Assam is well suited to sericulture. Traditional varieties of silk cultured include eri, muga and mulberry. The muga silk, known for its fine sheen and golden colour is used by the local silk weaving industry and this has contributed to the development of the muga culture in the State. There are vast opportunities in silk processing and spinning units.


Horticulture & Spices


     The agro-climatic conditions favors cultivation of wide range of horticultural crops including plantation crops and various fruits and vegetables, flowers, spices, medicinal & aromatic plants, nut crops and tuber crops. Most horticulture products are organic as the use of Chemical Fertilizers is very low with the majority of the farmers still sticking to traditional organic farming methods.


     Assam has over 600 varieties of Orchids. Around 200 varieties are unique to this region of which 60% are ornamental in nature. Assam also has a vast array of aromatic plants. At present most of the oils extracted are sold in crude form. Some of the plants are Citronella (Cymbopogan flexuosus Steud Wats), Lemon Grass, Patchouli (Pogostemon cabiln Benth.), Agar (Aquilaria agallocha Roxb.), etc. Assam is called the Home of the finest quality of Agar. The climate and the landscape of Assam are best suited for Agar tree plantation. At present, in NE India 100% of raw materials supply to the distillers and processors are coming from private plantations mostly from homestead planting in Golaghat, Jorhat and Sibsagar districts of Assam, Nagaland, Manipur, Tripura, Meghalaya, Mizoram. Assam remains one of the leading producers of Agar wood and Agar wood products. There is a high demand of Agar wood of Assam in the markets of the South East Asia, Middle East and Japan because of its best quality aroma. True Assam Agar wood oil is the epitome of pure Oudh fragrance. This Oudh possesses a deep, musky, and highly therapeutic aroma. Its ethereal scent releases into a rich mystical fragrance with exotic light and deep notes.

 

Forest resources


     The state of Assam has a rich forest cover encompassing nearly a quarter of its land area. Roughly half of the forests are reserved. Blessed with plentiful rainfall, the forests are a reserve of such commercially useful produce like timber, bamboo, stone, cane, etc. Bamboo is the best natural engineering material on this planet. TheGovernment of Assams objective is to promote bamboo as a substitute for wood and to make it the timber of the 21st century.


     Indias 64% and worlds 20% growing stock of bamboo grows in NE India. North east annually harvests bamboo worth of 500 billion rupees.


     Consumption of wood is rising at 10% per annum in India. As a subsitute for wood, it can be extensively used as a material for building, scaffolding and furniture.


Mineral resources

     Assam is rich in mineral resources like Coal (320 Mn.T.), Limestone (703 Mn.T.), Iron Ore(11 Mn.T) and Granite(1 Bn. Cu. Mtrs) along many more resources like Fireclay, Lithomarge, Fullers Earth, Sillimanite and Glass Sand. The coal found in Assam has a high sulphur content and high volatile matter content, thereby reducing its cokeability.


     Limestone with reserves of about 500 million tonnes is another important resource and is available in various grades. The China clay available in the Karbi-Anglong district is a vital input for the ceramics industry and has already spawned a few small plants. Deposits of decorative stone like granite estimated to be more than a billion cubic meters are available in various shades and colours, which have a huge market potential locally and abroad.


     Opportunities based on minerals are Gasification & Liquefaction of Coal, De-Sulphurisation of Coal, Coal based Power Plant, Coal Bed Methane (CBM) Extraction, Exploration of Oil & Natural Gas and HDPE / LLDPE / Polypropylene based industries.


Energy,Oil,Gas Based Industry


     
Assam has over 1.3 billion tonnes of proven crude oil and 156 billion cu. mt of natural gas reserves. Superior quality natural gas available at an attractive price.


     Assam accounts for about 15% of Indias crude output. The wells at Digboi, Duliajan, Sivasagar etc. also produce Natural gas accounting to about 50% of India's total onshore production.

The refineries have the following capacities:;

Digboi Refinery (Capacity 0.65 MMTPA)
Guwahati Refinery (Capacity 1.00 MMTPA)
Numaligarh Refinery (Capacity 3.00 MMTPA)
Bongaigaon Refinery & Petrochemicals Ltd. (Capacity 2.35 MMTPA)

The Assam Gas Cracker Plant is coming up. The HDPE/LLDPE is 220,000 TPA, Polypropelene is 60,000 TPA. In the last 4 years or so, private sector and JV companies have made about 32 significant hydrocarbon discoveries.

 
Tourism


     To nature lovers all over the world, wildlife enthusiasts, sightseers, ornithologists and photographers, Assam is a dream destination.


     Its natural landscape, lush green forests, wild life sanctuaries, pilgrimage spots and tea gardens offer a wide choice to cater to the tastes of a variety of tourists from the casual sightseer to the adventure tourist. With the withdrawal of the Restricted Area Permit (RAP), tourism is poised for a major boom.


There are immense opportunities in the following areas:

Accommodation Projects Hotels, Motels, Lodges, Resorts

Food Oriented Projects Restaurants, Cafeterias, Wayside Amenities

Service Oriented Projects Travel Agencies, Tour Operators, Training Institutes
Ropeways, amusement parks


A few tourist destination in the state are given below :


Wildlife Sanctuaries

Kaziranga, Manas, Orang, Sonai, Rupai, Laokhowa, Pobitora, Dibru-Chaikhowa.

Scenic Beauty

Chandubi, Bhairabkunda, Daranga, Bhalukpung, Haflong

Pilgrimage

Guwahati, Hajo, Majuli, Batadrawa

Golf courses with air strips

Narengi, Borsola, East Boraoi and 21 others

 

Manpower Availability and Skills


     Assam has numerous educational institutions with a substantial portion of the population in the 15 to 25 age group in the major towns being computer literate.


     The state has a literacy rate of 73.2%.The Male literacy of 78.8% and the female literacy in this region of 67.03%.


Assam has ten universities and one agricultural university. It also has 6 medical colleges and one ayurvedic medical college.

 

With reference to technical education, the state has 4 engineering colleges including an IIT (Indian Institute of Technology), 23 vocational training institutes (ITI), 8 polytechnics and 1 junior technical school. There is a big gap between the national average and state figure in terms of technical education and all efforts are being made to achieve the national average by the end of the current plan.

As per The Assam Private University Act 2007, the following incentives are available to private investors:

  • Legal Coverage provided
  • University to be self financed
  • Sponsoring body to establish endowment fund of Rs. 10 Million in tribal area and Rs. 20 million in other areas.
  • Allows campus in the state and study centres at different places.

     The MJI Group is trying to export and outsource the above mentioned resources. The processes involve importing Agar wood and make the goods to finished product and re export via same port. The MJI Group is taking vast initiative for the growth of the local economy through export and outsourcing and also bringing in foreign exchange.