EXPORTING TO NORWAY

India and Norway have had cordial and friendly relations since the year 1947.
The two countries respect each other for commonly shared values such as
democracy, human rights and rule of law. They also share a common
understanding that there is a need for effective international cooperation.
India is one of the key trading partners for Norway in Asia. In 2008, the
countries bilateral trade crossed the $1 billion mark. The total trade between
India and Norway has largely grown due to increased partnership in areas like
Oil and Gas, Food and beverage Industries, Maritime industries. In addition,
there has been an increase in collaboration in the fields of renewable energy
production, offshore projects and service sectors.
Today India is one of the most exciting and complex of all emerging markets,
it has a huge potential, a large domestic market, a growing middle class,
strong GDP growth and lot of skilled youngsters. These factors make it
attractive for foreign companies. But it is also a challenge doing business here
despite the strengths and great potential in the Indian market.
Exporting should be a natural step for any successful business. It not only
abates trust on your indigenous customers, but also allows for greater market
reach and profit. But, as with most things in business, the theory is easier than
the practical. Exporting can pose an entirely different set of problems than
your business is used to.
Entering a new arena without any relative knowledge can often lead to
expensive errors. Fundamental to success, then, is a comprehensive analysis
and research of the intended market. And its not just the basic relocation
issues and protocol one has to consider. Indeed, it's pragmatics such as your
route to market, logistics, regulation, barriers, tariffs and suppliers too. Many
will differ vastly to ones accustomed practices.
Planning & Preparation

In preparing to export ones goods or services, one must not just assess, but
scrutinise ones potential, and prepare for the worst. This doesn't mean one has
to negate all optimism; one should not get consumed by it.
These are the market essentialities to examine:

Structure of industry

Demand for product or service

Competition and how ones company will forge itself alongside it

Adaptation - alterations ones company, product or service may have to adapt

to
Next is the process of market entry. Ones main considerations would be:

A market strategy that, if needed, acknowledges international trade

development

Financial resources and backing

People, and how they can help develop your product for export / a new
market

Erudition in local requirements: packaging, pricing, labelling, etc

Again, learning, but in the costs and payment procedures of exporting

Some of these factors alone may establish unsuitability for the intended
market, so research them thoroughly.
Next, is product cut-out for export.

The standards and regulations of products in the overseas market

The fees involved with altering the product, service and company for a foreign
market

Trade picture
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Norway belongs to the leading group of the richest countries in the world
measured by GDP per capita. Norwegian public finances are boosted by
significant revenues from the petroleum sector. Traditional economic activities
are shipping (fourth largest fleet in the world), fisheries and fish farming.

Norway Trade: Imports Commodities

Capital goods

Fuels

Industrial supplies

Machinery

Transportation

Food items

Metals

Chemicals

The Norwegian market has been faced with regular product shortages over the
last few years such as Butter Scarcity and Beef Shortages that have offered
temporary export opportunities.
Exporters that are interested in the Norwegian market can identify the level of
import tariffs applied to their product on the Norwegian custom website.
Norway is a politically stable, modern and highly developed country with a small
population and a very strong economy. The Norwegian economy is characterized
by being open and mixed, with a combination of private and public ownership.
INVESTMENT OPPORTUNITIES
Norway is a safe and relatively easy country in which to do business. There are
about 5500 foreign-owned limited companies in Norway, with several thousand
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additional branch offices. The total value of the Foreign Direct Investment (FDI)stock in Norway is about 1100 billion NOK (app. 130 bill Euro), and the biggest
sector receiving FDI is the offshore (oil and gas) sector. Norway had a strong
growth of foreign investments during the last decade, compared to many other
countries.
Norway is not a member of the European Union, but through the EEA
agreement, Norway is part of the inner market, hence Norwegian companies
have equal opportunities as those with EU membership.
Strong Economy
Norway has a very strong economy. GDP PER Capita is the second highest in
Europe. The forecast for the coming years shows continuous growth through
2015. At the same time, the unemployment rate is expected to be around 3,5 %.
The Norwegian State owns the worlds biggest investment fund, The
Government Pension Fund Global, with about 5.000 billion NOK/600 billion Euro.
(Value as of march 2014). The strong economy makes Norway an interesting
market despite the market size.
Some World-Class Industries
Norway has developed some world-class industries that aspire to be global
knowledge hubs. First and foremost, these are oil and gas, maritime and the
marine (seafood) sector. In addition to the three global industries, you will find
three important complementary knowledge industries: the finance industry, the
ICT industry and knowledge-based services. Lastly, you will find some potent
and still emerging industries in Norway, like medtech, cleantech and
biotechnology.

Country of Choice for R&D Activities

The close collaboration between industry and R&D institutions is one of the
reasons why Norway is very well suited for R&D activities. In addition, the
country provides an open, attractive and excellent research and innovation
system, global knowledge hubs and government support schemes. The costs of
setting up R&D activities are internationally competitive, and there is a welldeveloped system to protect intellectual property rights. Norway participates fully
in all EU research programmes and activities.
Productive and Competitive
The Norwegian productivity is much higher than the average of the European
Union. There are several reasons for this. One is the use of advanced
technology and a constant focus on productivity due to high labour costs.
Another is of course the extra value from the petroleum sector. It could also be
argued that trust, the flat structures and open communication at the work place
play a vital part in enhancing innovation. According to the World Competitiveness
Scoreboard from IMD in 2013, Norway was the sixth most competitive country in
the world.
Competitive Values and Structures in Work-Life
The values of the Norwegian work life stimulate productivity and innovation.
Some key elements are little hierarchy, flat structures, open communication and
cooperation. There is a high degree of trust between employer and employee
and people feel empowered. Gender equality is stimulated and the participation
of women in the work life is one of the highest in the world. Finally, it is possible
to both have a balance between work and private life in Norway.

Rich in Resources
Much of Norway's economy depends on the use of its natural resource base. For
this reason, Norway is dependent on governmental regulation in order to balance
economic and environmental interests. The country is rich in natural resources,
including oil and gas, hydropower, fish, forests and some minerals. The
development of the hydroelectric energy sector at the beginning of the 20th
century triggered industrial growth, particularly within the aluminium and
ferroalloy industry, and fertilizer production. The discovery of large reserves of oil
and gas in the late 1960s, gave further boost to the economy. Norway is the third
largest shipping nation in the world, and aquaculture is the second largest export
industry. Other important sectors include oceanic fisheries and forestry.
A Great Place to Live
According to the annual ranking from the UNDP, the Human Development Index
2013, Norway is the best place to live in. Norway is a well-developed welfare
state with a high degree of social security. Norway is also green and is a real
gem for nature lovers. Given the established work- private life balance, you will
also have the time and opportunity to take advantage of the Norwegian nature.

Network of Airports
Norway is thinly populated, and due to this and the topography, you will not find
excellent infrastructure everywhere. On the other hand, the challenges have
been solved by an excellent network of airports. More than 50 airports have
regular traffic.
INWARD INVESTMENT IN INDIA
INVESTMENTS
Around 70 Norwegian companies are engaged in India either through joint
ventures with Indian partners or through wholly owned subsidiaries. Over 100
Norwegian companies have shown interest in possible business prospects in
areas such as ship building, petroleum related services, food and beverages,
marine/subsea drilling equipment, hydropower, clean energy, and IT services.
ONGC and Reliance Industries have tie ups with Norwegian companies in the
petroleum and energy sector. There has also been a trend of Norwegian IT
companies to either offshore their business to India or acquire shares in Indian
companies. Indian IT majors like Tata Consultancy Services, Infosys, ITC
Infotech, Larsen & Toubro Infotech and Wipro have increased their presence in
Norway over the last few years due to the existing potential of IT outsourcing
contracts in the country.
Norwegian investment in India has been by their largest paint manufacturer,
Jotun. Indian companies have also invested in Norway over the last few years.
One of the largest investments was by Chennai-based Aban Offshore which took
over Norwegian drilling company Sinvest in early 2007, in a deal worth around
$1.3 billion.
Norwegian investments in India are estimated at US $ 5.611 billion as of June
2011, including equity and fixed income investments of US $ 3.311 billion across
266 Indian stocks made by Norges Bank (Norwegian Central Bank) as part of
Norways Pension Fund Global. Indian investments in Norway are estimated at
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US $ 1.833 billion. The overall bilateral economic engagement is estimated at

over US$ 15 billion.
Punjab National Bank inaugurated its Representative office in Oslo in January
2009, while DNB Nor, the largest Norwegian Bank opened its Representative
Office in Mumbai in February 2009. The process is underway to upgrade PNBs
representative office in Oslo to that of a Branch.

INDO-NORWEGIAN MATCHMAKING PROGRAM

This Norad funded project was started in 2003 with an aim of promoting private
sector development in India. This program facilitates development of commercial
relationship between Norwegian and Indian commercial enterprises. In addition
to partner identification, this program provides a travel and a pre-feasibility study
grant. The program is handled by Innovation Norway in Norway and Applied
Technology Services in India.
As per April 2004, 25 Norwegian companies participate in the program seeking
Indian partners. As a consequence of this more than 50 Indian companies have
been identified and contacted to discuss potential business opportunities.

Why they have select India for investment?

As we know that India is a one kind of developing country, and its growth rate is
4.7% (fourth quarter of 2013) and GDP annual growth rate in India averaged
5.8% from 1951 until 2013, reaching and all time high of 11.4% in the first quarter
of 2010 and a record low of -5.20% in the fourth quarter of 1979. There are many
reasons for investment in India by Norway, which are the followings:

R&D base for 100 of Fortune 500 companies;

GEs largest R & D Centre outside US;

Large pool of World class scientific and technical manpower;

Indian Institutes of Technology;

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Indian Institutes of Management.

Among the only three Asian countries with supercomputing competence

Strong base for manufacturing

Most major MNCs like Volvo, GM, GE, Chrysler, Ford, Toyota, Unilever,
Clariant, Cummins, Delphi and many more sourcing high quality components
and hardware from India

Precision Automation & Robotics India has 20 Fortune 500 clients

Skilled knowledge workforce

Indias competitive edge is its manpower

Over 380 universities (11200 colleges)

1500 research institutions

Over 200,000 engineering graduates

Over 300,000 post graduates from non-engineering colleges

2,100,000 other graduates

Around 9,000 PhDs

Long term Growth Forecast-Dreaming with BRICs: The Path to 2050-by

Goldman Sachs

BRICs (Brazil, Russia, India & China) economies could be larger than G-6 in
less than 40 years;

India has potential to growth rate higher than 5% over the next 30 years and
close to 5% as late as 2050;

Only India among BRICs to have growth rates significantly above 3% by

2050; Indian economy can overtake Italy by around 2015, Germany by
around 2025 and Japan by 2032;
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Indian has the potential to raise its per capita by capita by 35 times in US$
terms by 2050.

India: FDI Outlook

Best technology licensing regime by World Economic Reforms Global
Competitiveness Report;
Rated among the most favourite investment destinations (UNCTAD, JETRO,
JBIC, Deutsche Bank, EIU, etc.)
Major destination for foreign venture capital funds (Far Eastern Economic
Review) Sixth most attractive investment destination-A T KEARNEY
Business Confidence Index, 2013
Also among the top 10 Tourist Destinations.
(Source: Ministry of Commerce, Govt of India)

On offer from India

The largest democracy in the world with political consensus on reforms and
stable democratic environment in over 50 years of independence
Abundant availability of untapped natural resources, rich mineral base and
agricultural self-sufficiency.
Access to regional/international markets through membership of regional
integration frameworks such as SAARC.
Large and expanding consumer market with increasing purchasing power up
to 300 million people constitute the market for branded consumer products.
Large manufacturing capability, spanning almost all areas of manufacturing
activates. Unskilled, semi-skilled and skilled labour at competitive wages.
Low inflation rates
Special investment and tax incentives for export in certain sectors such as
power, electronics, software, BPO and food processing.

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 Current foreign investment environment that provide freedom of entry,

investment, location, choice of technology, production, repatriation of capital,
dividends, etc. which is specifically aimed at enhancing the flow of Foreign
Direct Investment (FDI).
POLICIES AND NORMS OF INDIA FOR IMPORT EXPORT WITH NORWAY
For doing an import and export of goods with Norway, any organization has to
followed a EXIM policy and Trade Policy. Export Import Policy or better known as
EXIM Policy or Foreign Trade Policy is a set of guidelines and instructions
related to the import and export of goods.
Indias exports and imports are governed by:
(1)

Foreign Trade (Development & Regulation) Act, 1992

(2)

Foreign Trade (Regulation) Rules 1993

(3)

Foreign Trade (Exemption) Order 1993

(4)

Export and Import Policy - now called Foreign Trade Policy

(5)

Handbook of Procedures Vol. I

(6)

Handbook of Procedures Vol. II incorporating the Standard Input Output

Norms (SION)
(7)

ITC (HS) Classification of Import and Export Policy,

(8)

Foreign Trade (Development & Regulation) Act, 1992

Import Policy
The economic needs of the country, effective use of foreign exchange and
industrial as well as consumer requirements are the basic factors which influence
India's import policy. On the import side the policy has three objectives: to make
necessary imported goods more easily available, including essential capital
goods for modernizing and upgrading technology; to simplify and streamline

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procedures for import licensing; to promote efficient import substitution and selfreliance.
There are only 4 prohibited goods: tallow fat, animal rennet, wild animals and
unprocessed ivory. There is a restricted list, but most of the restrictions are on
grounds of security, health and environmental protection or because the goods
are reserved for production by small and tiny enterprises, which are home-based
or village-based and which require low skills and employ a large number of
people. But the policy of restricting import of consumer goods is changing.
The Indian government's clearly laid down policy is to achieve, through a series
of progressive steps, the average tariff levels prevalent in the ASEAN region. The
basic customs tariff rate now ranges from 0 to 40% plus additional duty of 2%;
the average rate is about 30%.
Imports are allowed free of duty for export production under a duty exemption
scheme. Input-output norms have been specified for more than 4200 items.
These norms specify the amount of duty-free import of inputs allowed for
specified products to be exported.
There are no quantitative restrictions on imports of capital goods and
intermediates. Import of second-hand capital goods is permitted provided they
have a minimum residual life of 5 years. There is an Export Promotion Capital
Goods (EPCG) Scheme under which exporters are allowed to import capital
goods (including computer systems) at concessionary customs duty, subject to
fulfillment of specified export obligations. Service industries enjoy the facility of
zero import duty under the EPCG Scheme. Likewise, hospitals, air cargo, hotels
and other tourism-related industries.
Software units can use data communication network to export their products.
Export Policy
Exports are the major focus of India's trade policy and a thrust area is exports
involving higher value additions. Most items can be freely exported from India. A

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few items are subject to export control in order to avoid shortages in the
domestic market, to conserve national resources and to protect the environment.
Export profits are exempt from income tax. Higher royalty payments of 8% (net of
taxes) are permitted on export sales as compared to 5% on domestic sales.
Export commissions up to 10% are also permissible.
Inputs required to be imported for export production are exempted from the basic
customs duty. Export Oriented Units (EOUs) and Export Processing Zones
(EPZs) enjoy special incentives such as duty free import of capital goods and
raw materials for the purpose of export production.
A Brand Equity Fund has been set up to popularize high quality India brands in
the world market. The corpus of the fund of Rs 5 billion (US $156 million) will
receive equal contributions from the government and industry.
Objectives of EXIM Policy are to facilitate sustained growth in exports from
India and import in India, to stimulate sustained economic growth by providing
access to essential raw materials, intermediates, components, consumables and
capital goods scheme required for augmenting production and providing
services, to enhance the technological strength and efficiency of Industry
Agriculture industry and services, thereby improving their competitive strength
while generating new employment opportunities, and to encourage the
attainment of internationally accepted standards of quality, To provide clients with
high-quality goods and services at globally competitive rates.
An outward looking and liberal trade policy is one of the main features of Indias
economic reforms. The policy is characterized by rationalized tariff levels and
removal of Quantitative Restrictions. The import-export growth has been
targeted at 11.9% for the next 5 years to reach a figure of 80 billion US dollars
representing a near doubling of total exports in the medium term.
Foreign Trade (Regulation) Rules, 1993

13

These Rules are made under the Rule making powers vested with Central Govt.
under Section 19 of the Foreign Trade (Development and Regulation) Act, 1992.
The salient features are:
(1) Rule 3: Enables the Director General of Foreign Trade to issue Special
Licences to persons whose
Importer Exporter Code Numbers have been suspended or cancelled.
(2) Rule 5: Specifies the scale of fees to be paid towards applications for
licences and categories which are exempt from payment of fees
(3) Rule 6: Details the general conditions applicable to licences and Import
Certificates issued under the Indo-US Memorandum of Understanding
(4) Rule 7: Specifies the circumstances under which a licence can be refused
Hand Book on Foreign Trade Policy and Guide to Export & Import.
(5) Rule 8: Enables the licensing authority to amend a licence
(6) Rule 9: Deals with suspension of licences
(7) Rule 10: Deals with cancellation of licences
(8) Rule 13: Indicates the manner of utilization of goods allotted by STC etc. and
of the goods imported against a licence
(9) Rule 15: Provides for search, seizure etc.
(10) Rule 16: Provides for settlement
(11) Rule 17 & 18: Provide for confiscation and redemption of goods and
conveyances.
Importer-Exporter Code (IEC)
When we want to import or export with Norway country, we will require an import
export code, or IEC. No export or import shall be made by any person without an
Importer-Exporter Code (IEC) Number unless specifically exempted. An
Importer/Exporter Code (IEC) number shall be granted on application to the
competent authority. Before commencing business, you need to register with the
Directorate General of Foreign Trade (DGFT) and obtain Importer Exporter Code
Number. IE Code is unique 10-digit code issued by DGFT to Indian Companies.
14

This is a mandatory requirement to carry out import from or export to India.

Exporters also have to obtain PAN based Business Identification Number (BIN)
from the Directorate General of Foreign Trade prior to filing of shipping bill for
clearance of export goods.
Steps to get the IEC

Covering letter on your companys letter head for issue of new Import Export
Code.

Two copies of the application > Application form Import Export Code India.
This information is required in the import export code application form:
o Contact Details of IEC applicant
o Details of the import export code applicant firm o Company structure /
nature of concern (PLC, PVT LTD, Partnership, etc.)

Type of exporter o
Bank account details
Pan details
IEC Applicants fee details

Certificate from the banker of the company >Import Export Code Banks
Certificate

Declaration/Undertaking > Import Export Code Declaration In case of a nonIndian company (foreign direct investment in India)> a copy of Form-FC-GPR
along with Unique Identification Number issued by the Reserve Bank of India
in respect of shares allotted to parent company

Self-certified copy of Permanent Account Number (PAN) issuing letter or PAN

Card issued by Income Tax Authority in the name of the company. This can
be certified by any of the directors of the company under its companys
stamp.

Two copies of passport size photographs of the applicant of the import export
code duly attested by the banker of the applicant. A photograph of Managing
Director or any other authorised person will need to be given.

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Certified copy of board resolution granting approval for submitting application

for IEC > Import Export Code Board Resolution.

A copy of Certificate of Incorporation, Memorandum and Articles of

Association; duly certified by a director under companys stamp.
If there is any change in directors from the date of incorporation, then a copy
of form 32 filed with the registrar of companies will need to be submitted. This
also needs to be certified by a director of the company under companys
stamp.

Self-addressed envelope with INR 25/- postal stamp for delivery of IEC
certificate by registered post or bank draft of INR 100/- for speed post.

For Exporter
Preliminary Actions
Market Survey
The first step for an exporter is to carry out a survey of the International market
to identify suitable markets for the goods he wants to export. Alternatively, he
could study a specific market to identify the goods suitable for export to that
particular market. He should also study the present competition and future
prospects. The following are some sources of data / information can be tapped
for carrying out such studies:

Export Import Data Bank of Ministry of Commerce

Foreign Trade Performance Analysis

Directorate General of Commercial Intelligence and Statistics

India Trade Journal

Directory of Indian Exporters

Exim Bulletins

Familiarization with Policies, Procedures and Agreements

It is very important to be familiar with all the policies, regulations and procedures
governing foreign trade, as well as foreign trade agreements between India and
16

other countries and international trade organizations, before embarking on a

venture. Assistance of Indian Commercial Missions abroad can be sought to
gain desired information about the regulations, standards and trade data of the
countries of interest.
Exporters must also be aware of Non-Tariff Measures (NTM), which are all
measures other than normal tariffs namely trade related procedures, regulations,
standards, licensing systems and even trade defence measures such as antidumping duties etc. which have the effect of restricting trade between nations.
With the lowering of tariffs across the globe, NTMs have come into prominence
with Members using these measures to erect entry barriers for goods and
services. Database of country wise and product wise NTMs.
Registration
Before commencing business, you need to register with the Directorate General
of Foreign Trade (DGFT) and obtain Importer Exporter Code Number. IE Code is
unique 10-digit code issued by DGFT to Indian Companies. This is a mandatory
requirement to carry out import from or export to India. Exporters also have to
obtain PAN based Business Identification Number (BIN) from the Directorate
General of Foreign Trade prior to filing of shipping bill for clearance of export
goods.
Exploring Export Opportunities
The Government actively assists exporters by through Trade Promotion
Programmes and Schemes and by providing Trade Promotion Assistance.
These include programmes for enhancing bilateral trade by entering into
agreements with countries or trade blocks such as the CIS and ASEAN. While
selecting the goods to export, it is important to ascertain that it meets the quality
and other specifications laid down in the chosen country / countries. It must meet
the standards laid down by Bureau of Indian Standards or Agmark as applicable,
besides other International certification bodies.

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Export Procedures
Export License for exporters in India
Majority of goods are allowed to be exported without obtaining a license. Export
licenses are only required for items listed in the Schedule 2 of ITC (HS)
Classifications of Export and Import items. An application for grant of Export
License for such items must be submitted to the Director General of Foreign
Trade (DGFT). The Export Licensing Committee under the Chairmanship of
Export Commissioner considers such applications on merits for issue of export
licenses.
Export of Special Chemicals, Organisms, Materials, Equipment and Technologies
(SCOMET) items are also permitted under a licence or prohibited altogether.
An export license is a document issued by the appropriate licensing agency after
which an exporter is allowed to transport his product in a foreign market.
The license is only issued after a careful review of the facts surrounding the
given export transaction.
Export license depends on the nature of goods to be transported as well as the
destination port.
So, being an exporter it is necessary to determine whether the product or good
to be exported requires an export license or not.

Canalization
Canalization is an important feature of Export License under which certain goods
can be imported only by designated agencies. For an example, an item like gold,
in bulk, can be imported only by specified banks like SBI and some foreign
banks or designated agencies.

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Exports Free Unless Regulated

The Director General of Foreign Trade (DGFT) specifies through a public notice
according to which any goods, not included in the ITC (HS) Classifications of
Export and Import items may be exported without a license. Such terms and
conditions may include Minimum Export Price (MEP), registration with specified
authorities, quantitative ceilings and compliance with other laws, rules,
regulations.

Export of Samples
Export of samples up to specified limits are allowed free. The exporter is
required to be registered with the appropriate Export Promotion Council to avail
of this benefit. Samples with permanent marking as "sample not for sale" are
allowed freely for export without any limit.
For importer
Preliminary Actions
Market Survey
The first step for an importer is to do a market survey to decide on the goods or
commodities that he wants to import. He needs to study the domestic market for
items that are in demand, or for which a demand is likely to arise. These could
include finished goods for the consumer or secondary market, or ancillaries for
other industries. He should also study the present competition and future
prospects. The following are some sources of data/information can be tapped for
carrying out such studies:

Export Import Data Bank of Ministry of Commerce

Foreign Trade Performance Analysis

Directorate General of Commercial Intelligence and Statistics

India Trade Journal

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Directory of Indian Importers

Exim Bulletins

Familiarization with Policies, Procedures and Agreements

It is very important to be familiar with all the policies, regulations and procedures
governing foreign trade, as well as foreign trade agreements between India and
other countries and international trade organizations, before embarking on a
venture.
Registration and license
Before commencing business, you need to register with the Directorate General
of Foreign Trade (DGFT) and obtain Importer Exporter Code Number. IEC Code
is unique 10-digit code issued by DGFT to Indian Companies. This is a
mandatory requirement to carry out import from or export to India.
Identification of Source
Having identified the possible items to import, the source has to be identified. It
is imperative to ascertain the legal implications of trading in the selected items in
both the countries as well as the credibility of the overseas suppliers. Assistance
for this is provided by the Indian Commercial Missions abroad and the
International Trade Promotion Organization (ITPO) through various exhibitions
and trade fairs organized in India and abroad. It is important to keep abreast with
Important Notifications by DGFT related to imports. Care must also be taken to
remain updated on applicability of standards laid down by Bureau of Indian
Standards for specific items to be imported.
Categories of Items
Items that can be imported fall under four categories:

Freely importable: Majority of the goods come under this category. These do not
require import licenses.

Licensed Items: There are number of goods, which can only be importer under
an import license. These include some consumer goods; precious and
20

semiprecious stones; products related to safety and security; seeds, plants and
animals; some insecticides, pharmaceuticals and chemicals; some electronically
items; several items reserved for production by the small-scale sector. Licence
for import of these items is issued by the Directorate General of Foreign Trade.

Canalised Items: These can only be imported by specified channels or

government agencies.

Prohibited items: Tallow fat, animal rennet, wild animals and unprocessed ivory
are prohibited to be imported.
Import of Samples
Commercial samples are specimens of goods that may be imported by the
traders in India, to know its characteristics and usage and to assess its
marketability in India. The bona fide trade samples can be imported provided the
said goods have been supplied free of charge. Samples in respect of Prohibited
items mentioned above cannot be imported. Further details about importing
samples can be found.

Import Procedures

Import Duties
The government levies import duties on most of the items imported for trade
purposes. These are of different types including Basic Duty, Additional Customs
Duty, True Countervailing Duty, Anti-Dumping or Safeguard Duty and Education
Cess. Details about these can be viewed.
Payment of Duty

Provisional Deposit Account with Bank: Facilities are available to debit duty
amounts directly from the Banks nominated by Customs. This facility reduces
delays in receipt of customs duties from Importers and also payment of
interest after 2 days. Importers are required to open a deposit account with
the nominated Bank and maintain a minimum balance as per the Banks

21

guidelines. On completion of assessment of the Entries, the importer can

authorize debit of the duty amount against authorization slips.

Payment by Draft/Bankers Cheque: RBI has issued new guidelines to the

nominated banks for acceptance of payments against instruments from
nationalized banks only.

Interest: Interest is charged on duties not paid within 2 days.

Bill of Entry
It is a document certifying that the goods of specified description and value are
entering into the country from abroad.
If the goods are cleared through the Electronic Data Interchange (EDI) System
no formal Bill of Entry is filed as it is generated in the computer system, but the
importer is required to file a cargo declaration having prescribed particulars
required for processing of the entry for customs clearance.
The Bill of entry, where filed, is to be submitted in set, different copies meant for
different purposes and also given different colour scheme. Bills of Entry are of
three types:

Bill of Entry for home consumption

Bill of Entry for Warehouses

Bill of Entry for Ex-Bond Clearance

Green Channel facility

Some major importers have been given the green channel clearance facility. It
means clearance of goods is done without routine examination of the goods.
They have to make a declaration in the declaration form at the time of filing of bill
of entry. The appraisement is done as per normal procedure except that there
would be no physical examination of the goods. Only marks and number are to
be checked in such cases. However, in rare cases, if there are specific doubts
regarding description or quantity of the goods, physical examination may be
ordered.
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This facility can be claimed by the Importers who have been approved by the
Customs as eligible for claiming the facility. Importers having a clean record can
apply to the Customs (EDI) with a request for Green Channel facility against a
covering letter and enclosing copy of Balance Sheet showing proof of Duty paid
in a year.
Dumping
Dumping is said to have taken place when an exporter sells a product to India at
a price less than the price prevailing in its domestic market. However, the
phenomenon of dumping is per se not condemnable as it is recognized that
producers sell their goods at different prices to different market. However, where
dumping causes or threatens to cause material injury to the domestic industry of
India, the Designated Authority initiates necessary action for investigations and
subsequent imposition of anti-dumping duties.
Anti-Dumping Guidelines issued by the Government of India must be understood
and complied with while carrying out import of goods.

Taxation:
The government of the kingdom of Norway and the government republic of India,
desiring to conclude an agreement for the avoidance of double taxation and the
prevention of physical evasion with respect to taxes on income and on capital
and with a view to promoting economic corporation between the two countries.
Customs Duty (Export and Import Duty)
Customs Duty is a type of indirect tax levied on goods imported into India as well
as on goods exported from India. Taxable event is import into or export from
India. Import of goods means bringing into India of goods from a place outside
India. India includes the territorial waters of India which extend up to 12 nautical

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miles into the sea to the coast of India. Export of goods means taking goods out
of India to a place outside India.
In India, the basic law for levy and collection of customs duty is Customs Act,
1962. It provides for levy and collection of duty on imports and exports,
import/export procedures, prohibitions on importation and exportation of goods,
penalties, offences, etc. The Constitutional provisions have given to the Union,
the right to legislate and collect duties on imports and exports. The Central
Board of Excise & Customs (CBEC) is the apex body for customs matters. It is a
part of the Department of Revenue under the Ministry of Finance, Government of
India. It deals with the task of formulation of policy concerning levy and collection
of customs duties, prevention of smuggling and evasion of duties and all
administrative matters relating to customs formations. The Board discharges the
various tasks assigned to it, with the help of its field organizations namely
Customs (preventive) and Central Excise zones, Commissionerate of Customs,
Central Revenues Control Laboratory and Directorates. It also ensures that
taxes on foreign and inland travel are administered as per law and the collection
agencies deposit the taxes collected to the public exchequer promptly.
Import duties are generally of the following types:

Basic Duty: - it may be at the standard rate or, in the case of import from
some other countries, at the preferential rate.

Additional customs duty: - equal to central excise duty liveable on like

goods produced or manufactured in India. Additional duty is commonly
referred to as Countervailing duty or C.V.D. It is payable only if the imported
article is such as, if produced in India, its process of production would amount
to 'manufacture' as per the definition in Central Excise Act, 1944. Exemption
from excise duty has the effect of exempting additional duty of customs.

True Countervailing duty or additional duty of customs: - is levied to

offset the disadvantage to like Indian goods due to high excise duty on their
inputs. It is levied to provide a level playing field to indigenous goods which
have to bear various internal taxes. Value base for this additional duty would
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be as in the case of C.V.D, under Customs Tariff Act,1975 minus the retail
sale price provision. This additional duty will not be included in the
assessable value for levy of education cess on imported goods.
Manufacturers will be able to take credit of this additional duty for payment of
excise duty on their finished products.

Anti-dumping Duty/ Safeguard Duty: - for import of specified goods with a

view to protecting domestic industry from unfair injury. It would not apply to
goods imported by a 100% EOU (Export Oriented Units) and units in FTZ
(Free Trade Zones) and SEZ (Special Economic Zones). On export of goods,
antidumping duty is rebatable only by way of a special brand rate of
drawback. Safeguard duties do not require the finding of unfair trade practice
such as dumping or subsidy on the part of exporting countries but they must
not discriminate between imports from different countries. Safeguard action is
resorted to only if it has been established that a sudden increase in imports
has caused or threatens to cause serious injury to the domestic industry.

Education cess: - at the prescribed rate is levied as a percentage of

aggregate duties of customs. If goods are fully exempted from duty or are
chargeable to nil duty or are cleared without payment of duty under
prescribed procedure such as clearance under bond, no cess would be
levied.
All goods must be classified into groups and sub-groups in order to levy the
customs duty. The Customs Tariff Act 1975 gives the classification of goods
and accordingly specifies the rate of duty.

In addition, the Customs Tariff Act makes provisions for duties like additional duty
(CVD), preferential duty, anti-dumping duty, protective duties, etc.

Import - export duty & taxes when importing and exporting into India
Overview
Import duty and taxes are due when importing goods into India whether by a
private individual or a commercial entity. The valuation method is CIF (Cost,
25

Insurance and Freight), which means that the import duty and taxes payable are
calculated on the complete shipping value, which includes the cost of the
imported goods, the cost of freight, and the cost of insurance. Duty in particular
is calculated on the sum of the CIF value and landing charges (explained below).
Some duties are also based on quantity measurements. In addition to duty,
imports are subject to other taxes and charges such as landing charges,
countervailing duty, CESS, and education CESS.
Duty Rates
Duty rates in India can be ad valorem (as a percentage of value) or specific
(rupees per unit). Duty rates vary from 0% to 150%, with an average duty rate of
11.9%. Some goods are not subject to duty (e.g. laptops and other electronic
products).
Sales Tax
There is no sales tax in India for imported goods.
Minimum thresholds
There is no minimum threshold in India, i.e. all imports regardless of their value
are subject to duty and taxes.
Other taxes and custom fee

Landing charges: (1% CIF)

Countervailing duty (CVD): (0%, 6% or 12% (CIFD + Landing charges)

CESS (Education + Higher Education): 3% (Duty + Countervailing duty)

Additional CVD: 4% (CIFD + Landing charges + Countervailing duty + CESS)

26

COMPANY FORMATION IN NORWAY

Company formation in Norway follows this 6-stage process:
1) Deposit capital in a company bank account. This takes one day.
2) Have a certified auditor examine the balance sheet, which takes one day and
costs approximately 4000 NOK.
3) No later than 3 months after the memorandum has been signed, registration
needs to be completed with the Register of Business Enterprises. This takes
3 days and costs approximately 6000 NOK.
4) Register for VAT with the regional tax office - this takes one day.
5) Register for employees' injury insurance. This takes one day and can be done
at the same time as stage 4.
6) Register for pension plans for employees. This takes 3 days and can be done
whilst stage 5 is being completed.
The contractual agreement should enter between MTR FOODS PVT LTD. and
local entity of Norway. This agreement should include:
The name of the joint venture partner
The name and place of residence of the partners
The goal/purpose of the joint venture
The municipality of the head office of the joint venture
Whether the partners will make contribute capital to the joint venture firm, and
the
Value of any assets

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