India maze of duties a challenge for QNET

Bangalore-based QNET India, part of Malaysia’s QI group of companies headquartered in Petaling Jaya, says that India’s complex maze of import duties and inter-city octroi tax system can be very challenging but that India, as a market, is too important to be ignored.

QNET, a worldwide direct selling online company specialising in the development, marketing and distribution of exclusive lifestyle products to customers around the world, offers a diverse product portfolio, which includes personal care lines, a range of nutritional supplements, energy products, home care, telecommunications, holiday packages and memberships, and luxury and collectible items.

The group, which maintains logistics hubs in Hong Kong and Malaysia, contends that India’s huge consumer market with a growing and cash-flushed middle class is increasingly shopping on line.

“India is, of course, a very interesting market for us but one has to be familiar with the local conditions and regulations. Imports into the country can be time-consuming though exports are easy and quick,” explained Suresh Thimiri, chief executive officer of QNet India at a recent conference organised by India in New York.

Besides the complex import duty structure, India’s states lack a uniform character in terms of import laws.

“India’s import regulations may appear to the outsider as frustrating. However, India needs to sensitize its bureaucrats, particularly at the lower level, in regard to the implementation and correct interpretation of overall policies formulated by the Central Government,” Thimiri said.

They have their interstate and even inter-city octroi levies that can be frustrating for many logistics and importing companies distributing and moving products from one state to another or from one city to another within a state. This complex situation can result in delays, which are not uncommon in India.

“To minimise delays, we are trying to create a local hub in each state,’’ said Thimiri. “We have already created four hubs in the state of Maharashtra on the west coast of India and are building so-called octroi zones. We have hubs in other states such as Uttar Pradesh and Karnataka. We also plan to establish warehouses in the eastern part of the country. Our goal is to provide delivery within 72 hours.”

QNET is collaborating with DIESL (Drive India Enterprise Solutions Ltd.), a TATA group company and provider of integrated logistics solutions with over 165 warehouses connecting 7,000 towns across India.

“We also work directly with courier companies in India,” Thimiri said.

QNET, which has a strategic cooperation arrangement with Dubai-based logistics company Aramex, has moved into a number of important markets in Asia and Africa.

Kuna Senathirajah, managing director at QNET’s parent QI group in Petaling Jaya, who also attended the New York conference, said that because of the nature of its business, the customers wanted quick delivery of the products ordered by them.

“We are trying to cut down delivery time and are targeting a maximum of 72 hours,” he told Cargonews Asia.

While the group’s Indian subsidiary handles between 4,000 to 5,000 shipments a month, the group’s total shipments range from 25,000 to 30,000 a month.

“Most of the products shipped by the group are sourced from Europe, particularly Germany and Switzerland, from companies that are sub-contracted,’’ he said. These products are re-packed and shipped to Africa, the MENA (Middle East and North Africa) region, Indonesia, Australia and Russia,” he added.

The Middle East turbulence has benefited QI, Senathirajah said, “Many of the distributors in these countries experience shortages and approach us directly for products they cannot find in their own countries.”

The QI group has also benefited from the boom in a number of former Soviet states in Central Asia such as Kazakhstan, Azarbaijan and Turkmenistan.

Link to original article: http://www.cargonewsasia.com/secured/print_view.aspx?article=29725&issue=2012-11-05