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A
GLOBAL / COUNTRY STUDY REPORT
ON
“AUTOMOBILE SECTOR IN FIJI COUNTRY”
Submitted to
Gujarat Technological University
IN PARTIAL FULFILLMENT OF THE
REQUIREMENT OF THE AWARD FOR THE DEGREE OF
MASTER OF BUSINESS ADMINISTRATION
UNDER THE GUIDANCE OF
Prof. Dhaval Dave(Asst.Professor)
Submitted by
Chintan Raval [Batch: 2010-12, Enrollment No.: 107880592034]
MBA SEMESTER III/IV
C.C.GARDI INSTITUTE OF MANAGEMENT
MBA PROGRAMME
Affiliated to Gujarat Technological University
Ahmedabad
May, 2012
1
Students’ Declaration
I am Chintankumar Sanjaykumar Raval, students of C. C. Gardi Institute of
Management, hereby declare that the report for Global/ Country Study Report entitled
“ AUTOMOBILE SECTOR IN FIJI COUNTRY” is a result of our own work & our
indebtedness to other work publications, references, if any, have been duly
acknowledged.
Place : …….. (Signature)
Date : (Name of Student)
2
Institute’s Certificate
3
Preface
Today we are at the door step of 21st century. The world is widening without having a
New and new developments are coming these days in all fields all over India to make
the people life more comfortable and luxurious. The industries are growing so fast in
India in order to satisfy all the needs of people. Similarly government has supported to
these companies for their development and progress of private companies.
Thus in order to stay alive in the market one should have theoretical as well as Practical
knowledge about all different fields prevailing in market. With this view point. For this we
have chosen Fiji country for Global country report.
4
Acknowledgement
We feel pleasure to submit this report, which includes the practical aspect of study. We
are very happy to express our deepest gratitude to all the persons who spared their
valuable time & helped us in preparation of this Global Country Report.
We would like to thank our project guide Asst. Prof. Nilesh Ankaleshvariya and Asst.
Prof. Dhaval Dave for their moral support & guidance.
DATE:
PLACE: Rajkot Signature of Student
5
Contents
SR. NO. Content Page no
PART – I ECONOMIC OVERVIEW OF THE FIJI COUNTRY
1 Demographic Profile of the Country 11
2 Economic Overview of the Country 15
3 Overview of Industries Trade and Commerce 18
4 Overview Different economic sectors of selected country 19
5 Overviews of Business and Trade at International Level 20
6 Present Trade Relations and Business Volume of
different products with India
22
7 PESTEL Analysis 23
8 SWOT Analysis 31
PART - 2 INDUSTRY/SECTOR/COMPANY/PRODUCT/SERVICE/NEW VENTURE
FIJI COUNTRY
Chapter - 4
Policies and Norms of selected country for selected
Industry/company for import / export including licensing /
permission, taxation etc
Policies and Norms of India for Import or export to the
selected country including licensing / permission,
taxation etc .Present Trade barriers for import / Export
of selected goods (if any).
37 – 53
6
PART – I ECONOMIC OVERVIEW OF THE
SELECTED COUNTRY
7
Abstract
Fiji is the most advanced economy in the Pacific island region and is the hub for air and
sea transportation and telecommunications in the South Pacific. Fiji is a viable venue for
investment because of the unique blend of advantages the country offers to foreign
investors; favorable economic, social and environmental circumstances and the
continuing application of the free enterprise philosophy; good international air, a well-
developed economic infrastructure and sea links, an adaptable efficient English
speaking workforce and telecommunications.
These advantages are reinforced by a government and people committed to the
development of Fiji's tourism industry; a commitment underlined by real growth and
special incentives. A timely and exciting opportunity for foreign investors.
The dominant industries of Fiji for foreign exchange earnings are sugar and tourism. For
the year ending 1997, they gained the country some $460.2m and $673.649 million
being the contribution from Tourism.
The tourism industry dominated by the private sector has been the country's largest
foreign exchange earner over the last 3 years. Tourism expenditure generates an
estimated 15% of GDP and provides 40,000 employment or 15% of the workforce.
8
CHAPTER-1 ECONOMIC OVERVIEW OF THE FIJI
9
Content
Sr
No
Particulars Page
No
1 Demographic Profile of the Country 11
2 Economic Overview of the Country 15
3 Overview of Industries Trade and Commerce 18
4 Overview Different economic sectors of selected country 19
5 Overviews of Business and Trade at International Level 20
6 Present Trade Relations and Business Volume of different
products with India / Gujarat
22
7 PESTEL Analysis 23
8 SWOT Analysis 31
Demographic Profile of the Country
10
In 1970, Fiji became independent after nearly a century as a British colony. Democratic
rule was disturbed by 2 military coups in 1987, it was caused by importance over a
government thinking as dominated by the Indian community (descendants of contract
laborers brought to the islands by the British in the 19th century). A 1990 constitution
supported native Melanesian control of Fiji, but resulted into heavy Indian emigration;
the population loss resulted in economic difficulties, but it was made sure that the
Melanesians became the majority. Changes enacted in 1997 made the constitution
more reasonable, Peaceful and free elections in 1999 resulted in a government led by
an Indo-Fijian, but a coup in May 2000 ushered in a longer period of political chaos.
Parliamentary elections held in August 2001 provided Fiji with a democratically elected
government and gave a mandate to the government of Prime Minister Frank
Bainimarama.
.
History
11
Fiji, which had been inhabited since the second millennium B.C., was found out by the
Dutch and the British in the 17th and 18th centuries. In the year 1874, an offer of
cession by the Fijian chiefs was received, and Fiji was proclaimed a ownership and
dependency of the British Crown. In the year 1880s large-scale farming of sugarcane
began. more than next 40 years, more than 60,000 indentured workers from India were
bring to the island to work to the plantations. By the year 1920, all indentured servitude
had ended. Tribal clashes between Indians & the local Fijians has been central to the
small island's history.
Fiji got independence on Oct. 10, 1970. In the year Oct. 1987, Brig. Gen. Sitiveni
Rabuka staged a revolution to prevent an Indian-dominated union party from taking
power. The military revolution caused a migration of thousands of Fijians of Indian
beginning who suffered ethnic prejudice at the hands of the government.
A new constitution, which took effect in month of July 1998, provided for a multiracial
cabinet and increased the prospect of a coalition government. The previous constitution
had assured dominance to ethnic Fijians. In the year 1999, Fiji's first national Indian
Prime Minister, Mahendra Chaudhry, took power.
Pottery art from Fijian towns shows that Fiji was settled before or around 3500–1000
BC, even though the question of Pacific migration still exists. It is believed that the
Lapita people or the ancestors of the Polynesians settled the islands first but not much
is known of what became of them after the Melanesians arrived; they may have had
some influence on the new culture, and archaeological proof shows that they would
have then shifted to Tonga, Samoa and even Hawaii.
12
About 5000 years ago, the first settlements in Fiji were started by voyaging traders and
settlers from the west. Lapita pottery shards have been found at many excavations
around the country. Fijian culture aspects are similar to Melanesian culture to the
western Pacific but have stronger link to the older Polynesian cultures such as those of
Samoa and Tonga. Trade between these 3 nations long before European contact is
quite obvious with canoes made from native Fijian trees found in Tonga and Tongan
words being part of the language of the Lau group of islands. Pots prepared in Fiji have
been found in Samoa and even the Marquesas Islands.
Ratu Tanoa Visawaqa
Across 1000 kilometres from east to west, Fiji has been a nation of Various languages.
Fiji's history was one of agreement but also of mobility. Over the centuries, a distinctive
Fijian culture has been developed. Constant conflicts and cannibalism between military
tribes was quite widespread and very much part of everyday life. During the 19th
century, RatuUdreUdre is said to have inspired 872 people and to have made a load of
stones to record his achievement.
Geography of Fiji
Location Oceania, island group in the South Pacific Ocean, about two-
13
thirds of the way from Hawaii to New Zealand
Geographic
coordinates
18 00 S, 175 00 E
Map references Oceania
Area total: 18,270 sq km
water: 0 sq km
land: 18,270 sq km
Area comparative slightly smaller than New Jersey
Land boundaries 0 km
Coastline 1,129 km
Maritime claims measured from claimed archipelagic straight baselines
continental shelf: 200-m depth or to the depth of exploitation;
rectilinear shelf claim added
exclusive economic zone: 200 nm
territorial sea: 12 nm
Terrain mostly mountains of volcanic origin
Elevation extremes lowest point: Pacific Ocean 0 m
highest point: Tomanivi 1,324 m
Natural resources timber, fish, gold, copper, offshore oil potential, hydropower
Land use arable land: 10.95%
permanent crops: 4.65%
other: 84.4%
Irrigated land 30 sq km
Natural hazards cyclonic storms can occur from November to January
Environment - current
issues
deforestation; soil erosion
Economic overview of the country
14
Economy:
Fiji, gifted with fish, forest, and Mineral resources, is one of the more developed of the
Pacific island economies, though still with a great subsitence sector. Natural resources
include copper,fish,gold, timber, offshore oil and hydropower. Fiji qualified a period of
fast growth in the year 1960s and 1970s but stagnated in the year 1980s. The coup of
1987 caused further reduction.
Economic liberalization in the years following the revolution created a boom in the
garment industry and a stable growth rate inspite of growing uncertainty of land
possession in the sugar industry. The end of period of leases for sugarcane farmers
has reject to a decline in sugar production inspite of a subsidized price. Subsidiy for
sugar have been provided by the European Union and Fiji has been the second largest
beneficiary after Mauritius.
Urbanization and expansion in the service sector have contributed to the current GDP
growth. Sugar exports and a fastest growth in tourist industry with 430,800 tourists in
the year 2003 and increasing in the subsequent years — are the major sources of
foreign exchange. Fiji is highly relient on tourism for revenue. Sugar processing adds
upto one-third of industrial activity. Lasting problems such as low investment and
uncertain property rights. The political chaos in Fiji has had a severe impact on the
economy, which shrank by 2.8% in the year 2000 and grew by only 1% in the year
2001.
The tourism sector improved fastly, however, with visitor arrivals reaching pre-coup
levels again during the year 2002, which has since resulted in a modest economic
recovery. This recovery continued into year 2003 and 2004 but grew by 1.7% in the
15
year 2005 and grew by 2.0% in the year 2006. Although inflation is Very reduce, the
policy indicator rate of the Reserve Bank of Fiji was raised by 1% to 3.25% in February
in the year 2006 due to fears of excessive consumption financed by debt. Lower interest
rates have not produced better investment for exports.
However, there has been a housing boom from declining commercial mortgage rates.
The tallest building in Fiji is the fourteen-storeyReserve Bank of Fiji Building in Suva,
which was inaugurated in the year 1984. The Suva Central Commercial Centre, which
opened in the month of November in the year 2005, was planned to outrank the
Reserve Bank building at 17 stories, but last-minute design changes made sure that the
Reserve Bank building remains the tallest.
Trade and investment with Fiji has been criticized due to the country's military
dictatorship. In the year 2008, Fiji's interim Prime Minister and Revolution leader Frank
Bainimarama announced election delays and that it would pull out of the Pacific Islands
Forum in Niue, where Bainimarama would met with Australian Prime Minister Kevin
Rudd and New Zealand Prime Minister Helen Clark.
The South Pacific Stock Exchange is the only licensed securities exchange in Fiji and is
based in Suva. It is one of the vision of the Regional Exchange.
Economy of Fiji
GDP $3.19 Billion US dollars
GDP - real growth rate 0.1%
16
GDP - per capita Purchasing power parity $3.869 billion
Population below poverty line 25.5%
Inflation rate consumer prices 5.5%
Labor force 335,000
Labor force by occupation Agriculture, including subsistence agriculture 70%
(2001 est.)
Unemployment rate 7.6%
Budget Revenues: $427.9 million
expenditures: $531.4 million
Agriculture products sugarcane, cattle, coconuts, cassava, rice, sweet
potatoes, bananas; pigs, horses, goats; fish
Industries clothing, tourism, sugar, copra, gold, silver, lumber,
small cottage industries
Overview of industries trade and commerce
17
Trade liberalization brings real economic challenges for small Pacific Island countries.
Free trade rules and regulations framed under regional free trade agreements have
created a combination of intimidate that threaten the viability of Pacific Island
economies and political and social stability in the region. In this paper assesses that the
impact of regional Free Trade Agreements. Examples to support arguments are drawn
from three countries namely, Fiji, Solomon Islands and Vanuatu. The paper suggest the
main challenges for the effective implementation of Free Trade Agreements in the
Pacific. The end part of the paper suggests possible strategies for meeting those
challenges in view of the inevitability of an open global economy and its reach into the
South Pacific.
Resources
Electric power 200,000 Kw
Fish catch per year 39,379 tonnes
Oil production and reserves Not oil producer
Estimated livestock resources 340,000 cattle, 247,000 goats, 3.7m
chickens
Main mineral resources Gold, Silver
Overview of different economic sectors of Fiji
18
The Fiji Islands offers various investment opportunities in a wide range of sectors like,
tourism, manufacturing industry, garments industry, textile industry, fisheries industry,
forestry, agro-processing industry, flori-culture, mining industry and services including
information technology. The Government’s policy of Fiji supports private sector to
increase growth and have put in place attractive incentives to encourage and facilitate
private sector investment in Fiji.
Economy (all figures in U.S. dollars)
GDP composition by sector: Services 59.7%, industry 30.4%, agriculture 9.9%.
Industry: Types-- sugar, tourism, garments.
Trade (January-September 2010): Exports--$553.9 million: gold, sugar, fish, garments
and mineral water.
Major markets-- U.S., U.K., Australia, New Zealand and Japan. Imports--$1.174 billion:
machinery, mineral fuel products and transport equipments.
Major sources-- Australia, China, Singapore, New Zealand, U.S. ($43.96million).
Overview of business and trade at international level
19
Fiji's international relations policy recognizes the important role in small developing
island states like Fiji plays in the international political/economic arena and seeks to
build upon the positive relationships which Fiji enjoys with a wide range of nations in the
whole world. It also testifies to the cultural, political and economic values play important
role. Fiji attaches to the political relations it is now forging with Asia in its "Look North"
policy and the traditional relationship which Fiji has enjoyed with the Pacific Forum
States, European Union, North America and the Commonwealth.
Exports
Imports
20
Fiji has traditionally had Good relationship with its major trading partners Like, Australia
and New Zealand. A number of countries including Australia, New Zealand, and the US
have placed targeted sanctions on the unconstitutional government. Fiji has pursued
closer relationship with a number of Asian countries, includes the People's Republic of
India, Indonesia, and Chaina.
21
Present trade relations and business volume of different products
with India and Gujarat
Fiji’s have good relationship with the Republic of India is often seen by observers
against the background of the sometimes tense relations between its local people and
the 44 percent of the population who are of Indian descent. In India has Been used its
influence in international forums such as the Commonwealth of Nations and United
Nations on behalf of national Indians in Fiji, lobbying for sanctions against Fiji country in
the wake of 1987 coups and the 2000 revolution, both of which removed governments,
one conquered and one led, by Indo-Fijians.
22
Pestel Analysis
23
Political conditions
Fiji was a parliamentary democracy after 17 years became independence. During that
time, political life was conquered by Ratu Sir Kamisese Mara and the Alliance Party,
which combined with the traditional Fijian chiefly system with most important elements
of the Indian Communities and European Part. The focal parliamentary opposition by
the National Federation Party, represented by Largely rural Indo-Fijians and Inter joint
relations were managed without serious conflict.
However, when a cabinet with extensive national Indian representation was installed
after the April in the year 1987 election, revolutionary elements played on ethnic Fijian
fears of domination by the Indo-Fijian community, resulting in a military revolution. This
began what many now refer to as the "coup cycle." The most current revolution took
place in month of December 2006, but has its roots in the previous 2000 revolution &
mutiny. Military commander Bainimarama helped decide the 2000 crisis by imposing
martial law. Bainimarama appointed a temporary government lead by interim Prime
Minister Laisenia Qarase. Consequently, Qarase was elected in the year 2001 and
2006, but pursued some policies favoring the local Fijian community.
24
Economy
Fiji is one of the more industrial of the Pacific island in the economies, although it
remains a developing country with a great subsistence agriculture sector. In the year
2010, Fiji's economy grows by 0.1%. For the year 2011, the government forecasts a
2.7% growth rate.
For several years’ sugar industry and textile industry exports group Fiji's economy.
However, neither industry is rival effectively in globalized markets. Fiji's sugar industry
passes from poor Administration quality concerns, and the phasing out of a preferential
price agreement with the European Union that lead to sugar price reductions of 36%.
The European Union promised a huge amount of financial help to assist the sick sugar
industry, but, post revolution, has clarified that the aid will only be approaching if Fiji
improves its human rights situation and moves fastly towards democracy.
In current years, growth in Fiji has been mostly driven by a strong tourism industry.
Tourism has expanded since the early years 1980s and is the important economic
activity in the islands. Tourist competitors increased by the year 2010. Fiji's visitors
come from Australia, with great contingents also coming from united state New zealand
and the Pacific Islands. In the year 2010 more than 53,000, or around 8.4%, of the
tourists were American. Fiji's gross income from tourism from January to November
2010 totaled $399.9 million extra than the collective revenues of the country’s top five
exports. Gross income from tourism continue to be Fiji's major source of foreign
currency.
25
Socio-cultural
Most of the Fiji's population lives on VitiLevu's coasts, either in Suva or in minor urban
centers. The heart of VitiLevu is lightly populated due to its rough land. local Fijians are
a mixture of Melanesian and Polyanesian. The Indo-Fijian population grow Fastly from
the 60,000 indentured workers bring from India between 1879 and 1916 to work in the
sugarcane fields.
Thousands of Indians migrated voluntarily in the year 1920s and 1930s and formed the
core of Fiji's business class. Native Fijians live all through the country, while Indo-Fijians
exist in primarily near the urban centers and in the cane-producing areas of the two
main islands. Nearly all of local Fijians are Christian and more than three-quarters are
Methodist.
Technology
FIT university is based on Fiji. It covers 4 campuses in Suva, Ba, Nadi and Labasa. It
was established in the year 1963 to provide Technical and professional education. The
main aim of this university to provide training to the students in technical disciplines to
meet the engineering human resource needs of Fiji. To providing education to cater for
the total human resource needs of Fiji and the South Pacific.
Today, technical, Professional and academic certificate courses at diploma, advanced
diploma and degree levels are being offered by FIT university through the Hospitality,
Faculty of Commerce, and Tourism Studies. The Faculty of Humanities,
Communications and Creative Arts. FIT have, 1000 students enrolled in over 120
26
programmes on all 4 campuses. The Faculty of Applied Science and Engineering and
Maritime Studies and It is one of the biggest face-to-face deliverer of tertiary education
in the South Pacific.
In the year 2009, FIT established three research centre’s - aimed at increased research
centers that are relevant to Fiji and the Pacific.
The Applied Economic Research centre to carry out applied research in all the areas
related to economic development of Fiji.
The Sustainable Technology and Development centre - aimed to develop research and
development work in all the areas of technology for development.
The Drama and Creative Arts centre to develop all aspects of drama and visual &
creative arts.
Ecological
Fiji is one of the developing countries. There are less limits and planning estates for
building estates. It has less strict controls on pollution than there are in Western Europe
countries and is less strict. It has reduced cost for looking after pollution.
27
Legislative
Bicameral Parliament consists of the governing body including 14 members selected by
the president on the advice of the Great Council of Chiefs, 32 seats,, 9 president
appointed by the advice of the Prime Minister and 8 on the advice of the opposition
leader, and 1 appointed on the advice of the council of Rotuma and the House of
Representatives includes 71 seats, 23 members reserved for national Fijians, 3
reserved for other ethnic groups, 19 reserved for national Indians, 1 reserved for the
council of Rotuma constituency encompassing the whole of Fiji, and 25 open seats
members serve five-year terms.
FIJI ISLANDS
28
Supreme Court
The final appalled court in civil and criminal matters.
Has restricted jurisdiction to hear and settle on appeals from all final judgments of the
Court of Appeal, with leave of Supreme Court or the Court of Appeal.
Appeals stretch out as of right from final decisions involving any legal question; and
From final decisions in proceedings involves more than.F$20,000.
The President of the cabinet may advice; refer questions as to the effect of the
Constitution to the Supreme Court for an opinion.
High court
It has command, to hear and determine appeals from judgments of the High Court.
The Appeals from final judgments of civil claims lie down of right.
Final actions involving interpretation of the Judicature Act 1988.
Final actions given in the exercise of original control under the fundamental rights and
provisions of the Constitution, including deprivation of property.
29
Magistrates’ court
The protective division of magistrates’ courts is limited to the division in which they are
situated.
The Magistrates have civil power to hear.
The Claims in contract or tort where the amount up to F$15,000.
The Proceedings between property-owner and renter where annual rental does not
exceed F$2,000.
All suits relating trespass or recovery of land.
30
SWOT Analysis
31
Strengths
Fiji country having Productive Lands and well established industries. Fiji has several
industries such as processing and growing cash crops. It means that the economy is not
dependent on just one source of income.
A full series of accommodations are offered from hostel to 5 star resorts.
Strict alertness of Fiji around the world.
Fiji countries have educated population and literacy levels are high compared to other
competitor islands in the South Pacific and also one of the Educational center for the
Pacific.
Well placed on route to North Asia and America on being the “crossroads” of the Pacific.
The Strong local culture-indigenous Fijians have done a good job at keeping their
culture.
32
Weakness
Fiji having one of the important Weaknesses is Political insecurity. Fiji rates a poor 3 out
of 5 in the UN political and security scale.
Health Problems and Risks: Dengue Fever and Malaria are still fear in the South
Pacific. Currently there was a measles outburst on one of the islands.
Infrastructure is one of the main weaknesses is the road infrastructure. Many of them
are in worst condition and traffic is much overloaded.
Fiji means more vehicles so it creates more pollution. A large amount of vehicles are
old, there are no system on relic fuel emissions.
The mountains and sticky weather does cause smog in tourism areas such as Nadi;
therefore, this does effect to overall experience.
Weather typhoons and cyclones are universal yearly occurrences. Most of the activities
are centered on island excursions by boats. Boats can’t sail during bad weather.
33
Opportunities
The Tourism industry product diversified into new markets. It includes culinary tourism
(schools and tours) and nature tourism such as bird watching.
Other activities include local village home stay or colonial tourism (sugar plantations).
Activities include both Indians and Fijians. raise the “stop over” market , travelship
markets and also Rasingwith Japan.
The sponsorship of Fiji to the expatriate Indian market.
Taking advantage of approved target status with the Chinese markets.
Incentives Provided for the film and television industry for revenue and promotion.
“Survivor Fiji” was a very good example of this.
The Heritage and colonial tourism.
Many undiscovered areas of Fiji still remain such as Kadavu Island. Has a product that
could be more ecotourism orientated.
The Niche markets such as MICE and business traveler.
Packaging with other countries in the South Pacific and regional branching. Community
based cultural tourism.
Other accessible markets such as Taiwan and Korea. economical real estate by
Western standards is available to resort developers.
34
Threats
The sharp air travel security will make flying a less enjoyable experience. Other
promising destinations could make Fiji less desirable in the future.
Fiji is still reliant on foreign support for basic services for healthcare.
35
PART – II
INDUSTRY/SECTOR/COMPANY/PRODUCT/
SERVICE/NEW VENTURE FIJI COUNTRY
36
CHAPTER-4 Policies and Norms of Selected
Country
37
Content
Sr No Particulars Page No
1 Policies and Norms of export and Imports in Fiji 39
2 Competitive Taxation for Investors 43
3 Policies and Norms of export and Imports in India 44
4 Taxation Policies 49
5 Indirect Tax Proposal in Automobile Products 50
6 Present Trade Barriers for Import Export of Goods 51
38
Policies and Norms Of Export and Import in Fiji
Trade
Fiji's most important trading parties are New Zealand, Australia, and the US with Pacific
Island neighbors Papua New Guinea, Samoa and Vanuatu also having essential trading
links. Exports are predicted to rise by a marginal 0.4 percent in this year.
The positive performance from gold, garment, and mineral water are likely to be offset
partly by the uncertain contributions from sugar and fish. In the year 2006, exports will
be driven by gold industry, timber industry, fruits and vegetables, coconut oil, mineral
water and fish.
Other significant contributors in the year 2006 include re-export of petroleum products
and other domestic exports such as biscuits and paper products. In contrast, molasses,
footwear, textiles industry and garments industry are expected to contribute negatively.
Growth in mineral water exports is expected to contribute widely over the medium term.
In the year 2004, exports of mineral water totaled $52.3 million, a significant increase
from $1.1 million in the year 1997 when it was first exported. Over the last 5 years
imports have better at a steady pace.
Import levels in the year 2004 show an increase of 9.5 per cent over the year 2003,
reflecting growth in consumption items such as food items, beverages and tobacco and
investment items, general industrial and electricity machinery, and telecommunications
equipment.
39
Trade Policy
International Trade has gradually more become a supporting determinant of economic
prosperity in most countries of the world. External trading relations increasingly
determine the growth and development of the country, and these influence only
increases with worldwide moves to free trade and globalization. In line with most rising
countries, the last decade has seen Fiji accept an export oriented, outward looking
approach to trade relations.
Import limits have been mainly lifted in favor of export promotion, and as such Fiji now
has a more open economy with better volumes of both exports and imports. Fiji is a
member to a number of bilateral agreement, regional agreement and multilateral trading
agreements.
The government is taking full benefit of mutual relations in attracting investment that
brings in new technology to Fiji, particularly to the export sector, to boost our policy on
export direction. This is being done with the help of the diplomatic existence, for
instance, in India, China, and Malaysia. It will discover possible trade, investment and
development assistance from other Asian countries.
40
Free Import
The following matter can be imported tax free into the country by any travelers
aged 17 or over.
250 cigarettes
250g cigars
250g tobacco
Combination of above items that does not exceed 250g
225 liters of liquor
4.5 liters of wine
4.5 liters of beer
Items of clothing, toiletries, personal computers and other personnel effects are
also free import.
Travelers may import other personal goods providing the total value does not
exceed FH$400.
Prohibited
All species of Birds
41
Restricted
All armed forces hardware including knives, firearms, swords and explosives will require
a police permit before being allowed entry.
Food, Plants or parts, camping tools and biological specimens will all require a special
permission from the Ministry of Agriculture and Forestry and Fisheries before entering
the country. The import of dairy products and beef and is not at present acceptable
from Tasmania.
Dogs, Cats, and other domestic pets can only be frankly imported by air into the country
from New Zealand, Australia and Hawaii. Travelers wishing to imports pets into Fiji will
need to send their pets to one of these countries and fulfilling those countries customs
necessities before exporting it to Fiji from there. Travelers will also be required to fill out
an “APPLICATION TO IMPORT LIVE ANIMALS INTO FIJI” form from the office of the
Director of Animal Health and Production along with proof of Rabies vaccination before
being allowed entry into the country.
Export
Prohibited
Illegal drugs
Pornographic material
Weapons, Explosives and ammunition – unless permission has
been obtained beforehand
Soil, Sand and rocks
Dairy Products
42
Competitive Taxation for Investors
Fiji offers a highly spirited taxation package, with attractive taxation rules for private
investors. The following are core elements of Fiji’s competitive taxation rule:
1) Corporate and income tax of 29%; and is scheduled for further reduction to 28%
under a Government policy initiative.
2) Tax holidays for a period of 13 years for New investments in the tax free regions.
3) Exemptions of custom duty on equipments.
4) Export Income Deduction of 50%.
5) Investment Allowances;
6) Industry specific incentives (tourism, mining, audio visual, ship building, fishing,
agriculture, bio fuel production, and the bus industry);
7) Dividend exemption scheme – corporate dividends are taxed only once, avoiding the
duplication involved with taxing both corporate profits and shareholder incomes.
8) Generous loss-carried forward – a generous eight-year period is offered for business
loss carried forward.
9) Double taxation agreements – Fiji has concluded double taxation agreements with
major trading partners, including Australia, Japan, Malaysia, New Zealand, Papua New
Guinea, the Republic of Korea and the United Kingdom. Double tax agreements with
Australia, Japan, New Zealand and the United Kingdom contain specific guarantees that
tax incentives and concessions granted by the Fiji Islands will not be by the other party’s
taxation. All the investors are required to lodge an application for a tax identification
number to the Chief Executive Officer, Fiji Island Revenue and Customs Authority. This
provides the basis for investors to pay taxes on their business earnings, pay as you
earn tax on behalf of their employees and value added tax on the products and services
it sells in the country.
43
Policies and Norms Of Export and Import in India
The Indian Automobile Industry plays a main role in the economic circumstances of the
country. The automobile sector in India, record sales of more than one million
passenger cars per year. The percentage of automobile exports has risen significantly
during the last few years. The government policies on Indian automobile industry have
been framed in order to aid in the growth of the automobiles sector in India.
During the early stages, the automobile manufacturing was not accorded much
significance by the Indian Government. However, the attitude changed during the year
1990's. A number of reforms were initiated in the year 1991. Liberal policies affected
during this period, proved to be beneficial to the automobile manufacturing. The fiscal
measures, tax reliefs and reforms in equity policy and foreign exchange led to important
growth in the automobile sector. A reduction in the percentage of tariffs imposed on
exports and a change in the banking policies was instrumental in the increase and
growth of the banking sector.
previous to the mid 1990's, the Indian automobile sector comprised of original
companies. The automobile market in India was however, opened up to foreign
investors in the year 1996. International names like Ford, Hyundai, Toyota, Volvo,
Daimler Chrysler and General Motors Honda were thus, able to make their expedition
into the Indian automobile sector. Furthermore, the auto discharge rules issued by the
government in recent years ensured that the vehicles manufactured in India, catered to
international standards. At present, the automobiles sector contributes 4 % to the Gross
Domestic Products. About 9.7 million automobiles were manufactured in the year 2005
to 2006. Export figures had crossed the magic figure of one billion during the year 2003-
2004.
44
A decrease in the duty compulsory on car exports has been affected by the Indian
government. There has also been a exclusion of the minimum capital investment
necessary from new investors. The new procedure is favor of decrease in excise duty
for small automobiles and low discharge and multi utility cars. The tariff rule is to be
reviewed on a regular basis in order to affect a balance between home industry and
international trade. There has also been a offer for tax reduction on investment of more
than Rs. 500 Crore.
The government has currently planned for an infrastructure that will provide one stop
clearance for any kind of offer for foreign direct investment in the automobile sector.
There are also plans for striking a 100 % tax deduction on export profits. The
government has also projected for a compromise in import duty for the establishment of
new industrialized units and industrial holdings.
The Indian government is arguments that the state governments to ensure constant
power supply to the automotive manufacturing units as well as granting them with the
preferred plots of land. Captive Generation for the automobile sector has also been
projected. The automobile policy of the Indian government also includes the promotion
of vehicles which are run on choice energy resources. Talks are also on for broad
research, development and designing facilities that would affect renewal in the
automobile sector.
The policies adopted by the Indian government for the expansion and development of
the automotive sector, has lead to a big number of foreign investments. It has given
increase to an increased sales rate for two wheelers. India is also attractive the final
outsourcing purpose for global automobile companies like Hyundai, Ford, Mitsubishi,
Toyota, etc.
45
Unless otherwise specifically provided, import/ export will be valid from/ to any country
except Iraq. However, there shall be no ban on the export of items to Iraq in case where
the prior approval of the concerned sanctions committee of the United Nation’s Security
Council has been obtained.
Under sub-section (d) of section 111 and sub-section (d) of Section 113, any goods
which are imported or attempted to be imported and exported or attempted to be
exported, contrary to any prohibition imposed by or under the Customs Act or any other
law for the time being in force shall be liable to confiscation. Section 112 of the Customs
Act provides for penalty for improper importation and Section 114 of the Customs Act
provides for penalty for attempt to export goods improperly. In respect of prohibited
goods the Adjudicating Officer may impose penalty up to 5 times the value of the goods.
It is, therefore, absolutely necessary for the trade to know what are the prohibitions or
restrictions in force before they contemplate to import or export any goods. The terms
"Prohibited Goods" have been defined in sub-section 33 of Section 2 of the Customs
Act as meaning "any goods the import or export of which is subject to any prohibition
under the Customs Act or any other law for the time being in force"
46
Principles of Restriction
Protection of public principles.
Protection of human, animal or plant life or health.
Protection of patents, trademarks and copyrights and the prevention of deceptive
practices.
Prevention of prison labor.
Protection of national treasures of artistic, historic or archaeological value.
Conservation of exhaustible natural resources.
Protection of trade of fissionable material or material from which they are derived;
and
Prevention of traffic in arms, ammunition and implements of war.
Terms and Conditions of a License / Certificate / Permission
Every license/certificate/permission shall be valid for the period of validity specified in
the license/ certificate/ permission and shall contain such terms and conditions as may
be specified by the licensing authority which may include:
The quantity, description and value of the goods;
Actual User condition;
Export obligation;
The value addition to be achieved; and
The minimum export price.
47
License / Certificate/ Permission not a Right:
No person may claim a license/ certificate/ permission as a right and the Director
General of Foreign Trade or the licensing authority shall have the power to refuse to
grant or renew a license/ certificate/ permission in accordance with the provisions of the
act and the rules made thereunder.
Penalty:
If a license/ certificate/ permission holder violates any condition of the license/
certificate/ permission or fails to fulfill the export obligation, he shall be liable for action
in accordance with the Act, the Rules and Orders made there under, the Policy and any
other law for time being in forces.
48
Taxation policy
• Increase in MAT rate from 18% to 18.5%
• Surcharge rate reduced from 7.5% to 5% for domestic companies and from 2.5%
to 2% for foreign companies having a turnover of more than 1 crore
• Dividends received from a foreign subsidiary proposed to be taxed at 15% (plus
applicable surcharge and cess) in the Hands of resident corporate taxpayers.
Expenditure in relation to such income is not allowed to be deducted
• Contributions to approved scientific research programmes such as National
Laboratories, Universities, and Institutes of Technology for Scientific Research,
to get a weighted deduction of 200% as against 175%
49
Indirect tax proposals in automobile products
There has been no increase in duty as expected. The Central Excise Auto industry has
always been subject to different rates of customs and excise duty on its inputs and Final
product. The recent budget is no exception. It is expected that the much expected
Goods and Service Tax would;
• Duty rates remain unchanged
• Excise duty is decreased to 5% from 10% on kits for conversion of fossil fuel
vehicles to hybrid vehicles (including parts of such kits) Rationalize the recent
duty structure.
• Concessional rate of duty @ 10% is prescribed for
• The following changes have been proposed in the current budget hydrogen
vehicles based on fuel cell technology
• Concessional rate of excise duty @10% is being increased to factory built
ambulances.
50
Present Trade Barriers for Import Export of Goods
Under sub-section (d) of section 111 and sub-section (d) of Section 113, any goods
which are imported or attempted to be imported and exported or attempted to be
exported, contrary to any prohibition imposed by or under the Customs Act or any other
law for the time being in force shall be liable to confiscation. Section 112 of the Customs
Act provides for penalty for improper importation and Section 114 of the Customs Act
provides for penalty for attempt to export goods improperly. In respect of prohibited
goods the Adjudicating Officer may impose penalty upto 5 times the value of the goods.
It is, therefore, absolutely useful for the trade to know what are the prohibitions or
restrictions in force before they consider to trade any goods. The terms "Prohibited
Goods" have been defined in sub-section 33 of Section 2 of the Customs Act as
meaning "any goods the import or export of which is subject to any prohibition under the
Customs Act or any other law for the time being in force".
Under section 11 of the Customs Act, the Central Government has the power to issue
Notification under which export or import of any goods can be declared as prohibited.
The prohibition can either be absolute or conditional. The specified purposes for which a
notification under section 11 can be issued are maintenance of the security of India,
prevention and shortage of goods in the country, conservation of Foreign Exchange,
safeguarding balance of payments etc. The Central Govt. has issued many notifications
to prohibit import of sensitive goods such as obscene books, coins, armored guard,
printed waste paper containing pages of any holy books, explosives, fictitious stamps,
rock salt, narcotic drugs, saccharine.
51
Under Export and Import Policy, laid down by the Director General Foreign Trade, in the
Ministry of Commerce, certain goods are placed under restricted categories for trade.
Under section 3 and 5 of the Foreign Trade (Development and Regulation) Act, 1992,
the Central Government can make provisions for prohibiting, restricting or otherwise
regulating the trade of the goods. As for example, import of second hand goods and
second hand capital goods is restricted. Some of the goods are absolutely prohibited for
trade whereas some goods can be imported or exported against a license. For example
export of human skeleton is absolutely prohibited whereas export of cattle is allowed
against an export license.
Another example is provided by Notification No.44 (RE-2000) 1997 dated 24.11.2000 in
terms of which all packaged products which are subject to provisions of the Standards
of Weights and Measures (Packaged Commodities) Rules, 1997, when
produced/packed/sold in domestic market, shall be subject to compliance of all the
provisions of the said Rules, when imported into India. All packaged commodities
imported into India shall carry the name and address of the importer, net quantity in
terms of standard unit of weights measures, month and year of packing and maximum
retail sale price including other taxes, local or otherwise. In case any of the conditions is
not fulfilled, the import of packaged products shall be held as prohibited, rendering such
goods liable to confiscation. Another restriction under the aforesaid Notification issued
by the Ministry of Commerce is that the import of a large number of products, presently
numbering 133, is required to comply with the mandatory Indian Quality Standards
(IQS) and for this purpose exporters of these products to India are required to register
themselves with Bureau of Indian Standards (BIS).
Non-fulfillment of the above requirement shall render such goods prohibited for import.
Import and export of some specified goods may be restricted /prohibited under other
laws such as Environment Protection Act, Wild Life Act, Indian Trade and Merchandise
Marks Act, Arms Act, etc. Prohibition under those acts will also apply to the penal
52
provisions of the Customs Act, rendering such goods liable to confiscation under section
111(d) of the Customs Act (for import) and 113 (d) of the Customs Act (for export).
Any Importer or Exporter for being knowingly concerned in any fraudulent evasion or
attempted evasion of any prohibition under the Customs Act or any other law for the
time being in force in respect to any import or export of goods, shall be liable to
punishment with imprisonment for a maximum term of three years (seven years in
respect of notified goods) under section 135 of the Customs Act. Any person who is
reasonably believed to be guilty of an offence, punishable under section 135, may be
arrested under the provisions of section 104 of the Customs Act.
Keeping in view the above penal provisions in the Customs Act to deal with any
deliberate evasion of prohibition/restriction of import of export of specified goods, it is
advisable for the Trade to be well conversant with the provisions of EXIM Policy, the
Customs Act, as also other allied Acts. They must make sure that before any imports
are effected or export planned, they are aware of any prohibition/restrictions and
requirements subject to which alone goods can be imported/exported, so that they do
not get penalized and goods do not get involved in confiscation etc. proceedings at the
hands of Customs authorities.
53
Biblography
www.Google.com
www.wikipedia.com
www.fiji.com
www.toyota.com
www.vibrantGujarat.com
54
References
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http://rsb.info.nih.gov/ij/, 1997-2009."
FENNER, D. 2006. Coral diversity survey: Mamanuca Islands and Coral Coast, Fiji,
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For Coral Cay Conservation and the University of the South Pacific Institute of Applied
Science Technical Report No. 2005/10
FENNER, D. 2007. Coral diversity survey: Volivoli Beach, Viti Levu and Dravuni and
Great Astrolabe Reef, Fiji, 2006. The University of the South Pacific Institute of Applied
Sciences Technical Report No. 2007/03.
LAMBERTS, A.E. 1983. An Annotated check list of corals of American Samoa. Atoll
Research Bulletin, 264 1-19.
LADD, H.S. & HOFFMEISTER, J.E. 1945. Geology of Lau, Fiji: Bernice P. Bishop
Museum Bulletin, 81; 171: 8(2), 70-159; 298-311
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