The Council of EU Chambers of Commerce in India along with Holland International Distribution Council organized a webinar on “Access to Europe for Indian Products” on March 16, 2021 .


The Speakers of the Webinar were Mr. Sharad Kumar Saraf, Chairman, Technocraft Industries (India) Ltd., Mr. Jelle De Rooij, Sr. Manager Supply Chain Solutions, Holland International Distribution Council (HIDC), Dr. Viju Jacob, Managing Director, Synthite Industries Private Ltd.

Dr. Renu Shome welcomed all the attendees and spoke about the activities of the Chamber. Mr. Abhijeet Nair, Chairman of the Logistics and Shipping Committee, introduced the subject and said that in the age of e-commerce everyone wants everything to be delivered quickly and hence the concept of being locally available has gained more significance.

He also said that EU is one of the biggest buying house in the world and it is very big opportunity for Indians to explore and  many prefer having their products on time and hence the concept of being locally present is the next big thing.

Mr. Sharad Kumar Saraf the first speaker at the webinar shared the perspective of Indian Exporters with regard to access to European Market. He mentioned that his company Technocraft Industries (India) Ltd is a client of almost all the logistic companies, the company believed in expand and looking for new markets increasing its exports. He said in the 80’s there were no fax machines there were only telex machines, it was difficult to get foreign currency from the RBI making the exporting a difficult job. In 1990-91, the Government of India (GOI) opened Indian Economy by taking some path breaking steps. As the economy was opened Mr. Saraf said he realized that if you want to serve the customer it was important to get as close to the customer as possible. He realized that the large market, which would appreciate our qualities or services, was Europe.  He stated that Technocraft is exporting to more than 60 countries worldwide. Mr. Saraf shared India’s performance with EU. He said that in the calendar year 2020 India exported to EU (excluding UK) was USD 38.5 billion, which is nearly 14% of our total export. India’s export to UK in 2020 was USD 7.9 billion which is 2.86% of our exports. India’s import from EU in the year 2020 was USD 37.70 billion which was 9.8% of our imports and the imports from UK was only USD 3.1 billion which is 0.82%. If we combine UK and EU then we have a positive trade balance. Since UK has exited EU now, India is now working for a very favourable free trade agreement with the UK. He mentioned that to export to the EU is a little difficult as they need very high quality and it takes a lot of time to convince Europeans that our quality is good, the EU are also obsessed with registrations and certifications so a lot of testing is required to be done in their laboratories which is also very expensive.

Mr. Saraf suggested the ones who have a business in EU to use the services of Mr. Jelle de Rooij and also suggested that if a company wants to do large volume business then it is necessary to stock the products and give quick deliveries.

Mr. Jelle de Rooij who was the next speaker spoke about how Indian companies can serve their European Customers from logistic perspective in the age of e-commerce. He mentioned that E-commerce in Europe has grown tremendously due to the pandemic. He mentioned that HIDC was founded in 1987 by the Dutch Logistics Industry and has grown to 300 members all-active in logistics. Half of the members of HIDC are logistics service providers. They focus on exporters from North America and Asia, they give them neutral advice on their supply chain setup for the European Markets and introduce them to the right partners.

He mentioned that Brexit being a very hot top in the EU and at HIDC they are very busy right now as there are many companies who are redesigning their European Supply chain and generating new relationship. Many companies considering Netherlands for short term and long term to set up their companies. There has been a dramatic drop from the exports from the UK to EU and the EU exports to the UK has been postpone by the UK governments. He mentioned that HIDC is currently working with more than 100 UK companies that need a ‘quick fix’. Many North American companies are realizing that the UK and EU will indeed be a separate markets and there is a need to change accordingly. The Guardian in its publication on January, 23, 2021 had mentioned that British businesses that export to the continent are being encouraged by the government trade advisors to set up a separate company in the EU in order to get around extra charges, paperwork and taxes resulting from Brexit.

He said that due to Covid one saw an increase in online shopping also many first time online shoppers. But also when you look at the supply chain, the long supply line for example the far east Europe have proven to be very vulnerable but now the consumer is now more used to e-commerce, so there has now been a sustainable shift. The European market is the second largest consumer market with 27 countries after Brexit. Once you custom clear your products into the EU you are allowed to move your products easily to all these countries. If you look at the European market (EU) size the number of inhabitants is bigger than the USA. Besides the e-commerce boom 75% of European Consumers shop cross-border, this is very interesting as for online shoppers the market is very big. Since buyer expect a good service a company must focus on Convenience, Speed of Delivery, Cost Transparency and Great Customer Service. He mentioned that to serve your European Customer one should study the Market Size, market structure, Country differences and cultures, language differences. It’s necessary to set a clear business strategy like route to market and sales channels. There are limitations for Indirect supply chain models as there are no direct contact with the customers, no market data etc. the European customers end up paying import duties and taxes which is less attractive to them. One can opt for direct service to future clients as you will have stock in the local markets and have control of your supply. Such model makes one very flexible, there is a lot of activities that one can think of and extend his or her business.

He mentioned that in Netherlands you are exempted in paying the import VAT. For European Customer you are the desired supplier as they want one stop shop principle, one invoicing covering products, transportation and duties and taxes etc. He mentioned that Indian Companies can consider to invest in Netherlands as it’s the famous gateway to Europe. It also has good infrastructure, it’s the number 1 logistics hub in Europe, has competitive cost for labour, real estate and transport, there is no VAT payments at imports, it has 3 main ports for air, data and sea and has excellent connectivity to Europe and all continents.

Dr. Viju Jacob talked about the his company Synthite established in the year 1972, has been a pioneer in the field of value added spices and has special focus on EU business with more than 15% contribution to the total business. Synthite is also into wind-energy, hospitality, realty, seasoning and flavours. The business of Synthite during the pandemic was 20% more as the demand for turmeric and pepper was high for high immunity level. When the FDA and FSSI in India is compared with the EU, European MRL’s are very high and it’s a very difficult task to get in material to Europe. Despite of Synthite trying its level best in getting the MRLs right they still face challenges.

He said that the recent changes to the MRL level for pesticides, by setting it to extremely low levels of 0.01ppm for most molecules, have given an indication that EU is indirectly enforcing stringent Non-Tariff Barriers. The Government of India has highlighted the issue with WTO as the levels are even stringent than CODEX level, which are globally accepted, and less stringent. The recent MRLs specified have a cascading impact as most of the agri produce come from countries such as India, China etc., wherein even the approved bio pesticides have higher MRLs. Therefore, these are all the challenges faced by spice industries from India or from any other country.

Mentioning about the Regulations in Registration of Herbal Medicinal Products he said that European Medicines Agency (EMA) has set guideline as 30 years of use, including 15 years in EU for Traditional Use registration of Herbal Medicinal Products. This is an upfront barrier for new formulations in Ayurvedic and nutraceutical products from India as it will prolong the time to market. Even for registration under well-established use marketing authorization, efficacy study on medicinal use within EU for at least 10 years is required. Easing of the above guidelines is required for giving a competitive advantage to the Ayurvedic & nutraceutical products from India. These are the challenges that a company faces while dealing in nutraceutical products as well as MRL for spices extract because when one does the MRLs its difficult to get the structure of the MRLs, its difficult because when one does the extraction the spice gets concentrated so whatever pesticides are therein the spices get concentrated and the MRL levels goes up. He mentioned that he would like to take this issue with the EU (policy or standards maker) as it is more than the CODEX.

Mr. Bhavik Mota summarized the webinar. He thanked the Speakers for taking the time out of their busy schedule and for sharing their thoughts and opinion, which was very helpful. He said that we have talked enough above Covid and Post Covid, and the way world evolved and according to him what customers are looking either in pre covid or post covid is a greater resilience because what we are talking today is mainly about India to Europe market and if we list down the top commodities the number 1 commodity that goes from India to Europe is basically lifestyle retail and apparels.  And it is the commodity that is very transit sensitive because it is about reaching in time in the stores for the fashion or for the season. So the relevance of having very predictable and resilience supply chain is very important. What the Europeans also look for is the agility as in the demand of a product is very volatile according to him nobody can make predictions about the demand. It is important to manage this kind of uncertainty as everybody is looking out for multiple options and there are various products that the industry is looking into. There are customers who are saying that take my cargo from my source to a transshipment port, store it because I don’t know whether the next demand or surge is going to be in UK or in Belgium or elsewhere and two weeks later they will send an order to deliver 7 boxes to UK or any other specific country, so they don’t have a clear line of sight for a long period and they want agility and that’s why the solution has changed from storing at a destination to storing at a transshipment hub where they can decide at the last minute and have that kind of agility. The second aspect is that there are a lot of last minute request of sending products in time. Customers are also looking for a combination of sea and air product. Lastly the service industry in Europe was doing very well but the demand immediately after Covid slipped, for 2 months nobody knew what to do and then when the demand started rising it started rising on the essential retailers side reason being lockdowns and restrictions what was running down the clock in most of the countries in Europe and otherwise such as super markets and small time stores. So all the dollar stores and best seller companies their demand had gone up almost 3x and nobody had predicted such a high surge. This surge also gives a unique opportunity for Indian exporters to be a partner for Europe. As the products that are made in India have raw material available, there are lot of tariff restrictions on our neighboring countries hence we are a preferred partner for European Countries, In India the supplier/exporters are happy to send small parcels because the demand is so dynamic and fluctuating, being English the second language the communications of Indians with Europeans becomes more and more easier. He mentioned that we have a great opportunity in Holland which is a developing port, along with other ports in the EU. He mentioned that there are great opportunities and we need many more sessions to help our member companies to understand the dynamics of business and the way the world is evolving. He concluded saying that it was a very engaging and learning session for all of us.  The webinar concluded with a Q & A session.