India is on a resolute path to becoming a global manufacturing hub, with international business and economic policies strongly advocating the "Make in India" initiative. The success of any manufacturing economy hinges on minimizing transaction costs and overall manufacturing expenses, ensuring that elements of taxation do not inflate the costs of exports. This is where the concept of "ease of doing business" becomes crucial.
In alignment with the "Make in India" vision and the imperative of reducing transaction costs, the Indian Government has introduced a groundbreaking legislation known as Manufacturing and Other Operations in Warehouse Regulations No. 2, 2019 (MOOWR).
Under MOOWR, manufacturing facilities have the unique opportunity to transform into custom bonded warehouses in accordance with customs laws. This transformative shift allows for the importation of all goods, including capital goods, raw materials, components, parts, and accessories, without the imposition of any import duties.
MOOWR factories are empowered to utilize these imported goods for the manufacturing of products intended for both the local Domestic Tariff Area (DTA) market and exports. Importantly, when imported goods are used in the manufacturing of exported products, duties are exempted. For imported goods utilized in manufacturing for the DTA market, import duties are payable only on the imported contents actually used.
One of the unique aspects of MOOWR is that these factories are authorized to engage in trade with each other. This arrangement allows for the transfer of liability for accounting import duties, ensuring that the cascading burden of import duties is not borne by the buyers who are exporters.
Siddhartha Logistics offers a specialized service tailored to clients interested in establishing MOOWR factories in India. Our comprehensive support includes specialized software solutions and outsourced warehouse keeper services, designed to streamline and simplify the setup and operation of MOOWR facilities.