India’s export of agricultural and allied products has increased to $33.54 billion in 2012-13

The Federation of Andhra Pradesh Chambers of Commerce and Industry (FAPCCI) is organized one day State Level Seminar on “Enhancing Competitiveness of Agro produce & Food Processing under changing scenario” on November 28, 2013 at Federation House, FAPCCI, Hyderabad.

Sri Kanna Lakshminarayana, Hon’ble Minister for Agriculture and Agriculture Technology Mission, Govt. of AP was the chief guest for this occasion.

Sri Papi Reddy, IRTS, Commissioner of Horticulture Sri Srinivas Ayyadevara, President, FAPCCI, Sri Shiv Kumar Rungta, Senior Vice President, FAPCCI, Sri Anil Reddy, Vice President, FAPCCI, Sri. Bhaskar Reddy, Chairman, Agriculture Committee, FAPCCI have addressed at the seminar.

Sri Kanna Lakshminarayana stated that the Agriculture is a backbone of the Indian economy and contributes 27% of GDP and despite the structural change, agriculture still remains a key sector, providing both employment and livelihood opportunities to more than 70% of the country`s population who live in rural areas. 

I really appreciate the organizers of the Seminar for choosing the right topic i.e., “Food processing”. Agriculture and industry are the two pillars of economy. Food processing industry provides vital linkages between these two important sectors. Further, it establishes crucial linkage between agriculture and the final consumer. The food processing industry also contributes to National Food security by reducing the wastages in agriculture sector. Further food processing industry has been identified as one of the thrust areas of development.

India today is not only self-sufficient in grain production but also has a substantial reserve except in pulses and edible oils.  The introduction of the National Food Security Bill ensures entitlement of food for 75 and 50 per cent of the rural and urban population respectively. The key factor in the implementation of the NFSB is production of sufficient quantity of food grains and to minimize the post production losses. More than 70 per cent of the farmers are small or marginal in Andhra Pradesh, it not sufficient if only productivity is increased, it should be aimed to increase the income of the farmer through value addition.  Establishment of small scale grain and /or food processing units will create demand of raw material and effective utilization without any post harvest losses. At present, the primary processed food products constitute the majority of the processed food sales in India, it is estimated that around 58% of the total processed food sales come through primary processed food items. The primary processed food includes items such as packed fruits and vegetables, unbranded edible oil, packed milk, sugar, coffee, pulses etc.

The Indian food processing industry holds tremendous potential to grow, considering the still nascent levels of processing at present. Though India’s agricultural production base is reasonably strong, wastage of agricultural produce is sizeable. As per the figure given to me, processing of fruits and vegetables is low at 2%, around 35% in milk, 21% in meat and 6% in poultry products. By international comparison, these levels are significantly low - processing of agriculture produce is around 40% in China, 30% in Thailand, 70% in Brazil, 78% in the Philippines and 80% in Malaysia. Value addition to agriculture produce in India is just 20%, wastage is estimated to be valued at around US$ 13 bn (Rs 580 bn).

Awareness for quality food and increasing purchase capacity of the public is a positive trend for the promotion and development of the food processing industry. Government of Andhra Pradesh is encouraging the organic farming in different crops which will also help in establishing the export oriented fruit and vegetable processing units. “Right Food” is becoming a major item to ensure good health and high performance. Coarse grains like Jowar, bajra, ragi, korra have very good nutritional value and these crops are mostly grown in tribal and low fertile soils. Based on the nutritional value of these crops, they are included in NFSB.   Value addition of these grains will also help in reducing the malnutrition in Indian population. In respect of Cold chain there is a tremendous scope for the development of cold chain facilities. 

The cold storage sector is undergoing a major metamorphosis, with the Government focusing on food preservation. Andhra Pradesh is the second biggest in value added in food products and beverages with 10% share of the total value added in the country.  The concept of food parks, Agri Export Zones, Human Resource Development have been initiated besides several incentive schemes.  The Government of Andhra Pradesh formed four Agri Export Zones for different fruits and vegetables. 

India’s export of agricultural and allied products has increased from $29.8billion in 2011-12 to $33.54 billion in 2012-13 which is 8.51 and 10.76 % respectively. There is very good scope to increase the agri based exports to at least 15%. Many aspects of food industry are covered in today Seminar on “Enhancing Competitiveness of Agro produce & Food processing under changing Scenario”. I hope that some useful suggestions and solutions for improving the agro based value addition through appropriate processing will come out and ultimately help farming community Sri Kanna Lakshminarayana said.

Sri Srinivas Ayyadevara, President, FAPCCI Requested the Government to involve FAPCCI as member in the “State Food Processing Development Council (SFPDC) at State and District Food Processing Mission (DFPM) at District level for effective implementation of the objectives of National Mission of Food Processing because of FAPCCI organized six programmes Food Processing.

Seed is the most important input for higher productivity.  The farmer cannot access the best seeds in the market due to restrictions and distortions, restrictions on private seeds, GM seeds etc. and distortions by subsidies on seeds sold through the public system.

Farmers in backward area face serious constraints of market, road and warehousing infrastructure.  In fact many of the poor farmers live in naturally endowed, but weak infrastructure areas.  They can produce much more when support them with infrastructure

The lack of post harvest infrastructure is resulted in huge quantities of horticulture products in the State going waste.  Apart from focusing on the enhancement of product and productivity, there is an urgent need to preserve horticulture and agriculture produce. Infrastructure development must be given top priority to ensure the development of modernization of the food processing industries in Andhra Pradesh.

Sri. Bhaskar Reddy, Chairman, Agriculture Committee, FAPCCI said that the agricultural sector`s performance has direct impact on the processing industry and its exports.  The raw agricultural and horticultural yield into human consumption is called processed foods such as fruit cam, jelly, milk products.  The performance of the agri-processed food industry essentially depends upon the general performance of the economy and the performance of agriculture and industry sectors in particular.  The processed foods are slowly capturing the rural market also.  In urban areas the processed foods become one of essential items due to change of life style and long working hours and also many urban families are depending upon the processed ready to eat foods.  The food market is growing considerably due to rapid urbanization.  Andhra Pradesh is the second largest producer of horticulture products in India and it is expected that the production will reach 22.90 million tones by the year 2020. As per the Agro Climatic Zones the major crops which are Mango, Coconut, Cashew, Oil Palm, Chillies, Banana,  Sweet Potato,  Oranges, Guava, Papaya, Tomato, Chillies etc. are grown in Andhra Pradesh.

 The State has about Rs.5,000 crore investment in the food processing sector contributing 20% of the total existing investments in the State.  The annual production in this sector is about Rs.9260 crore contributing 20% of the total industrial production in the State.

The Andhra Pradesh state is very strong in the crops like Rice, Groundnut, Pulses and Bajra.  The industries in food products contribute 19.36 % to total industrial production in the State.  The major segments in the Food & Agro Processing sector are Rice Mills, Sugar, Dal Mills, Diary units, Milk Products and Confectioneries, Palm Oil and other Oil Mills, Biscuits, Mushrooms, Cold storage's.

$ 120 bn worth investment opportunities in Iran

The Federation of Andhra Pradesh Chambers of Commerce & Industry (FAPCCI) organized a meeting with “Hi-level business delegation of Iran” today (November 26, 2013) at Federation House, Red Hills, Hyderabad. His Excellency His Excellency Mr. Hassan Naurian, Consul General of Republic of Iran was the chief guest for this occasion.

Mr. Yahya Ale-es hagh, Leader of the delegation and President of Tehran Chamber of Commerce, Industries, Mines & Agriculture, Sri Srinivas Ayyadevara, President, FAPCCI, Mr. Mohammad Reza Bakhtiarti, Deputy for International Affairs,   Tehran Chamber of Commerce, Industries, Mines & Agriculture, Mr. Massoud Maleki, Director of Asia, Tehran Chamber of Commerce, Industries, Mines & AgricultureSri Shiv Kumar Rungta, Senior Vice President, FAPCCI, Sri Prem Kumar, Presidet, Chamber of Commerce of Iran, Sri. Shyam Sunder Pasari, Chairman, International Trade Committee, Mr. A.S. Kumar, Secretary General, Chamber of Commerce of Iran was the key speakers.

His Excellency Mr. Yahya Ale-es hagh invited the industrialist to invest into Agriculture, Minig, Petrochemical, Educational Services, IT & ITeS, Pharmacy, Infrastructure, Railway, Telecom, Energy, Engineering, Steel and dry Fruits sector with the total worth of $ 120 billion investment opportunities. We all know, the private sector in India has come a long way since the beginning of economic reforms.  The bilateral economic and commercial relationship between the countries is marked by growth in several sectors, especially in the oil and gas sector which offered possibilities of setting up mutually beneficial projects both in Iran and India.   There is also immense potential for cooperation in the areas of railways, telecommunication, water and power sector, paper and pulp, textile, cement, agriculture, infrastructure, human resource development by training and skill enhancement, etc.

During 2012-13, exports were to the tune of US$ 2068.08 million whereas the imports from Iran were US$ 8471.64 million. The total trade is US $ 10539.72 million.  India’s exports to Iran include rice, machinery & instruments, metals, primary and semi finished iron & steel, drugs/pharmaceuticals & fine chemicals, processed minerals, manmade yarn & fabrics, tea, organic/inorganic/agro chemicals, rubber manufactured products, etc.  India’s imports include Crude Oil, urea, Petroleum products, Saffron, Dry Fruits.  It is understood that there are more than 8,000 Iranian students studying in India.  India over the years has emerged as one of the favorite tourist destinations for Iranian tourists and every year around 40,000 Iranians visit India for various purposes he said.

Mr. Srinivas Ayyadevara said that the State of Andhra Pradesh is one of the fastest growing economies in India and became one of the hottest investment destinations among the various investment options in the fast growing emerging economies. The State is ranked 2nd in the country in attracting investments. In a World Bank Report, Hyderabad is ranked second easily accessible city in India for doing business.

FAPCCI is working very closely with the Consulate General of Islamic Republic of Iran, Hyderabad, to promote the trade between the two countries by organizing interaction meetings with the business delegations on a regular basis.  With a view to further build on these initiatives and leverage the potential of India-Iran synergies, a Chamber of Commerce for Iran Trade Promotion has been formed.   

FAPCCI had also signed MoUs with Iran Chamber of Commerce, Industries and Mines and Commercial Organization of Khorasan Province, to foster friendship and to promote trade, investment, social, economic, human resource development, technical and scientific cooperation and all other spheres of economic activity Mr. Srinivas said.

Seminar Economy & Business Opportunities in Luxembourg

The Federation of Andhra Pradesh Chambers of Commerce & Industry (FAPCCI) organized a Seminar Economy & Business Opportunities in Luxembourg on November 19, 2013 at 4.30 p.m. J.S. Krishna Murty Hall, Federation House, Hyderabad.

His Excellency Mr. Gaston Stronck, Ambassador of the Luxembourg was the chief guest for this occasion. He made a detailed presentation on 5 reasons to be in Luxemburg.

Mr. Srinivas Ayyadevara, President, FAPCCI, Mr. Shiv Kumar Rungta, Senior Vice President, Mr. V. Anil Reddy, Vice President and Mr. Shyam Sunder Pasari, Chairman, International Trade Committee was the key speakers.

Sri Srinivas Ayyadevara, President, FAPCCI stated that the Andhra Pradesh is one of the fastest growing economies in India and became one of the hottest investment destinations among the various investment options in the fast growing emerging economies. The State is ranked 2nd in the country in attracting investments. In a World Bank Report, Hyderabad is ranked second easily accessible city in India for doing business.

His Excellency Mr. Gaston Stronck, Ambassador of the Luxembourg stated that the Luxemburg have a highly strategic position within the European market. A stable socio-political environment, favorable legal and regulatory framework, supportive administration, highly qualified service provider have proved that the Luxembourg is the ideal platform for coordinating and managing your European business activities.

Mr. Gaston Stronck said that the Luxembourg is ranked second richest country in the world as per capita GDP on purchasing-power parity (PPP). It has a wide range of business sectors, particularly steel, chemical, plastics and synthetic materials, textiles, engineering, mechanical construction, industrial machinery, processing of ferrous and non-ferrous metals, car industry, precision instruments, electronic supplies and glass production. Luxembourg is the world's second largest investment fund center (after the United States), the most important private banking center in the Euro zone and a prominent place for listing bonds.

The total annual trade between India and Luxembourg in 2012 was of € 63.4 million with India’s imports from Luxembourg at € 51.9 while its exports were at € 11.5 million. The major items of India’s exports to Luxembourg are textiles and garments; engineering products and chemicals. The major items of India’s imports from Luxembourg are engineering goods, metals, plastics, textiles and garments etc.

FDI flows from Luxembourg to India between April 2000 and April 2013 are about US$ 479.02 making it the 25th most important investor in India and the 11th largest within the EU. The sectors that attracted maximum investments from Luxembourg include trading, computer software & hardware, services sector, agricultural machinery and chemicals.

The economic liberalization and rising incomes have stimulated rapid trade growth with European countries and significantly increase in trade relations between India and Luxembourg.  As you are aware, India’s diverse economy with a current growth provides increasing opportunities for Luxembourg companies to explore business opportunities and enhance trade between the two countries Mr. Gaston Stronck said. 

Lecture on “Safe Harbour Rules and International Taxation issues”

The Federation of Andhra Pradesh Chambers of Commerce and Industry (FAPCCI) organized a Lecture on “Safe Harbour Rules and Panel Discussion on Specified Domestic Transactions and other International Taxation issues” on November 16, 2013 at Federation House, Red Hills, Hyderabad.

Mr. Madan, Chartered Accountant - Tax & Regulatory Services, Ernst & Young Pvt. Ltd., Mr. H. Srinivasulu, IRS., (Retd.), Advisor – Direct Taxes, Deloitte, Mr. Samuel Nagadesi, Chartered Accountant, Ms. Anshu Khanna, Chartered Accountant, Mr. Srinivas Ayyadevara, President, FAPCCI, Mr. Anil Reddy Vennum, Vice President, FAPCCI and Mr. Abhay Kumar Jain, Chairman, Direct Taxes Committee, FAPCCI was the key speakers for this occasion.

Mr H. Srinivasulu, IRS., (Retd.), Advisor – Direct Taxes, Deloitte gave a detailed power point presentation on “Specified Domestic Transactions” He stated that the Finance Act 2012” extended the scope of Transfer Pricing provision to “Specified Domestic Transactions” (SDT).The provision apply from the financial year 2012-13 onward if the aggregate value of the transaction exceed INR (Indian National Rupee) 50Million in the relevant financial year.SDT includes payment to related parties, inter-unit transfer of goods or services of profit-linked tax holding-eligible units, transactions of profit-linked tax holding-eligible units with other parties and any other transactions that may be notified by the CBDT. By extending Transfer pricing provision to SDT, pricing of these transactions will need to be determined with regard to arm’s length principles using method prescribed under TP regulation.TP regulation will now applicable to all taxpayers including Individuals, Hindu Undivided Families (HUFs).The risk of tax arbitrage abuse by opportune taxpayers may arise due to presence of accumulated losses or differential tax rates.

CA Madan from Ernst & Young Pvt. Ltd. Focus on “Advance Pricing Agreement & Safe Harbors – Indian scenario”.

►APA provisions introduced w.e.f July 1, 2012

► APAs are valid for a maximum period of 5 consecutive years

► Binding on taxpayer and tax authorities, unless there is a change in law/facts

► No provision for “roll back”

► Bilateral APAs, Withdrawal and Amendments to application permitted under the Rules

► Application needs to be filed by 31 March 2014 for APA to be applicable for FY 2014-15 and subsequent years

► New rules introduced in Income-tax Rules, 1962 - Rules 10F - 10T & Rule 44GA

India-Japan bilateral trade reached US $ 18.61 billion in 2012-13

The Federation of Andhra Pradesh Chambers of Commerce & Industry (FAPCCI) organized a seminar on “Business Opportunities in Agriculture Sector in Japan” on November 04, 2013 at Federation House, Red Hills, Hyderabad.

Mr Masaki Takaoka, Leader of the Delegation and Deputy Mayor, Miyoshi City, Japan was the chief guest for this occasion. 

Sri Srinivas Ayyadevara, President, FAPCCI, Mr. Katsuaki Hirata Chairman and Director of Hirata Farm, Mr.Rama Bhadra, President, ASA Bhanu Japan Centre, Mr. Tsuyoshi Uesugi Advisor of Miyoshi International Relations Association, Mr. Takayoshi Takehara Deputy Chairman, Miyoshi City Council, Mr. Hiroyuki Kohmura Associate Professor, Faculty of Life and Environmental Science, Hiroshima Prefectural University, Mr. Toshihiro Tominoi Executive Director, Japan Agricultural Cooperative, Mr. Kosho Toyoshima Manager, Industrial Development Department, Miyoshi city, Mr. Yuki Ochi Graduate Student (Special Study of Tomato), Hiroshima Prefectural University, Mr. Tomomi Kano Undergraduate Student (Special Study of Asparagus), Hiroshima Prefectural UniversityMr. Shiv Kumar Rungta, Senior Vice President, Mr. V. Anil Reddy, Vice President, Mr. Shyam Sunder Pasari, Chairman, International Trade Committee and Mrs. P. Vydehi, Secretary (Incharge) was the key speakers. 

Sri Srinivas Ayyadevara, President, FAPCCI explained the investment opportunities in the State of Andhra Pradesh. He said that the Andhra Pradesh is one of the fastest growing economies in India and became one of the hottest investment destinations among the various investment options in the fast growing emerging economies. The State is ranked 2nd in the country in attracting investments. In a World Bank Report, Hyderabad is ranked second easily accessible city in India for doing business.

Mr Masaki Takaoka, Deputy Mayor, Miyoshi City, Japan stated that the India-Japan bilateral trade reached US $ 18.61 billion in 2012-13 as against US $18.43 billion in FY 2011-12. India’s exports to Japan were US $ 6.1 billion and imports from Japan were US$ 12.51 billion. India’s primary exports to Japan have been petroleum products, iron ore, gems and jewelry, marine products, oil meals, ferroalloys, inorganic/organic chemicals, etc. India’s primary imports from Japan have been machinery, transport equipment, iron and steel, electronic goods, organic chemicals, machine tools, etc. Japanese FDI into India reached $2786 million in 2012, showing an increase of 19.8% over the previous year. 

Japan is the largest bilateral donor to India. Japanese Official Development Assistance (ODA) has been supporting India’s efforts for accelerated economic development particularly in the infrastructure sector. Cumulative commitment of ODA till March 2013 reached Yen 3807.763 billion on commitment basis.

Agriculture, forestry, and fishing form the primary sector of industry of the Japanese economy, together with the Japanese mining industry, and they account for 1.3% of gross national product. Miyoshi City is a largest city in Hiroshima Prefecture. Miyoshi is also famous for its wineries, sake (rice wine) and its beer breweries. Both Japan and India especially Andhra Pradesh offer substantial opportunities and we can cooperate each other in the field of agriculture, food-processing, biotech, and other similar sectors, by adopting new/latest technology.