GCR Chintan

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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FENNER, D. 2006. Coral diversity survey: Mamanuca Islands and Coral Coast, Fiji,

2005

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

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LAMBERTS, A.E. 1983. An Annotated check list of corals of American Samoa. Atoll

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