Export of Trifluoro Acetic Anhydride (TFAA) from India

Introduction:

Trifluoro Acetic Anhydride (TFAA) is a chemical compound primarily used in organic synthesis, especially in the pharmaceutical and agrochemical industries. It is a key reagent in the synthesis of various fluorinated compounds. TFAA plays a significant role in the production of pharmaceuticals, pesticides, and other fine chemicals.

Legal, Statutory, and Regulatory Framework:

The export of TFAA from India is governed by various regulations set by Indian authorities to ensure safe and legal trade. Key regulatory bodies involved are:

1. Directorate General of Foreign Trade (DGFT): The DGFT sets the guidelines for export policies, including licensing requirements.
2. Central Drugs Standard Control Organization (CDSCO): Regulates chemicals that might have potential use in the pharmaceutical industry.
3. Central Bureau of Narcotics (CBN): Oversees substances that could have potential misuse in illicit drug manufacturing.

HSN Code:

The HSN Code for Trifluoro Acetic Anhydride is typically classified under:

• HSN Code 2929 (Organic Chemicals).

This classification helps to identify and track the export/import of the substance.

Manufacturers in India:

Several companies in India manufacture Trifluoro Acetic Anhydride (TFAA) for domestic and international markets. Some major manufacturers include:

• SRF Limited
• Navin Fluorine International Ltd.
• GFL Limited (Gujarat Fluorochemicals Ltd.)

These companies provide TFAA in bulk quantities for various applications in the pharmaceutical and agrochemical sectors.

Chemical Composition and Formula:

• Chemical Formula: C4HF5O3
• Chemical Composition: TFAA is composed of trifluoroacetyl group (C2HF3O) attached to an acetic anhydride (C4H6O3) moiety. The molecule contains carbon (C), fluorine (F), hydrogen (H), and oxygen (O) atoms.

Manufacturing Process:

TFAA is typically synthesized through a reaction of trifluoroacetic acid (TFA) with acetic anhydride (Ac2O). This reaction produces Trifluoro Acetic Anhydride and acetic acid as a byproduct. The process involves careful handling due to the reactivity of the chemicals involved, requiring a controlled environment and safety precautions.

Industrial and End-Use Applications:

1. Pharmaceutical Industry: TFAA is used to produce fluorinated compounds, which are used in the development of various drugs and medicines.
2. Agrochemical Industry: It is used in the synthesis of fluorine-based pesticides and herbicides.
3. Chemical Synthesis: It is a reagent used in organic synthesis, particularly in the preparation of intermediates in the production of specialty chemicals.
4. Material Science: TFAA is used in the preparation of fluorinated polymers and coatings with high resistance to heat and chemical corrosion.

DGFT Export Policy:

According to the Directorate General of Foreign Trade (DGFT), the export of Trifluoro Acetic Anhydride falls under Free categories due to its potential use in pharmaceutical and chemical formulations. Specific licensing may be required, depending on the end-use of the substance.

Export Destinations:

TFAA is widely exported to countries with a high demand for pharmaceuticals, agrochemicals, and specialty chemicals, including:

• United States
• Germany
• China
• Japan
• South Korea
• European Union Countries

These regions rely on the import of TFAA for their chemical synthesis and drug manufacturing industries.

Export Performance:

The export performance of TFAA from India has been steadily increasing, driven by its demand in the pharmaceutical and agrochemical sectors. India is a key supplier of specialty chemicals to global markets, with its ability to produce high-quality chemicals at competitive prices contributing to its growing export volume.

Export Incentives:

The Government of India provides several incentives for the export of chemicals, including TFAA, under schemes such as:

1. RODTEP (Remission of Duties and Taxes on Export Products): RODTEP is a scheme introduced by the Indian government to replace the MEIS (Merchandise Exports from India Scheme). It aims to remit the taxes and duties that are not refunded through other schemes, thereby reducing the cost of exported products. The scheme covers various sectors like agriculture, manufacturing, and services. It helps enhance India's export competitiveness by ensuring that exporters don't bear extra costs that affect their pricing. RODTEP is expected to boost exports and ensure a level playing field for Indian products in the global market.
2. Advance Authorization: The Advance Authorization Scheme allows exporters to import raw materials and components duty-free, under the condition that the final products will be exported. It helps reduce costs for exporters by exempting them from paying customs duties on imported materials used in the production of export goods. This scheme is designed to promote export-oriented production while ensuring that goods produced are only used for export. The authorization is issued based on the requirement of the exporter and ensures compliance with the Export Promotion Capital Goods (EPCG) scheme. Exporters must fulfill export obligations within a specified period.
3. EPCG (Export Promotion Capital Goods Scheme): The EPCG Scheme allows exporters to import capital goods duty-free for the purpose of manufacturing export products. The primary objective is to promote the modernization and expansion of production facilities to enhance export performance. Under this scheme, exporters are required to export goods equal to or greater than the value of the imported capital goods over a defined period. It helps in boosting exports by facilitating access to high-quality machinery at reduced costs. The scheme also ensures that capital goods are used for export production and compliance with export obligations.
4. MAI (Market Access Initiative Scheme): The MAI Scheme is designed to assist Indian exporters in accessing new international markets by providing financial support for market research, promotion activities, and participation in international trade fairs. It encourages the development of new export markets for Indian products and services by providing funds for various promotional activities. The scheme targets both existing exporters and new exporters who wish to explore untapped markets. It helps improve India’s global trade position by enhancing market outreach and visibility. Through the MAI, the Indian government seeks to support long-term market expansion for Indian goods and services.
5. Interest Equalization Scheme (IES): The Interest Equalization Scheme is a government initiative that aims to provide financial support to Indian exporters by offering a subsidy on the interest rate for pre and post-shipment credit. This scheme makes export financing more affordable by equalizing the interest rates for export credit, ensuring that Indian exporters are not disadvantaged in terms of financing costs compared to their international competitors. The scheme is designed to enhance export competitiveness by reducing the burden of high interest rates, especially in the case of small and medium-sized enterprises (SMEs). It encourages exporters to avail of credit facilities at a lower cost, thereby boosting overall export performance. The scheme is available to a wide range of sectors, including agriculture, manufacturing, and services.
6. Duty Drawback Scheme: The Duty Drawback Scheme is a government policy that provides a refund of customs duties paid on imported raw materials or components used in the manufacturing of export products. Under this scheme, exporters can claim a refund for the duties and taxes paid on materials that are eventually exported, which reduces the cost of production and enhances export competitiveness. The scheme applies to both duty-paid imports as well as domestic materials used in export production. It is intended to make exports more cost-effective and to encourage international trade. The Duty Drawback Scheme ensures that Indian goods remain competitively priced in global markets by minimizing the impact of duties on export costs.

These incentives help boost India's chemical exports and make Indian manufacturers competitive on the global stage.

Controlled Substance and CBN Registration:

Trifluoro Acetic Anhydride is not directly classified as a controlled substance due to its chemical composition. However, because of the similarity in structure to Acetic Anhydride, which is regulated by the Central Bureau of Narcotics (CBN) due to its potential misuse in the production of illegal drugs, the CBN registration and No Objection Certificate (NOC) may be required for its export, depending on the end-use and destination country.

• Acetic Anhydride is regulated under the Narcotic Drugs and Psychotropic Substances Act (NDPS), and since TFAA shares certain chemical characteristics, CBN clearance might be necessary.

Export Promotion Councils:

Several organizations help in promoting the export of chemicals such as TFAA, including:

• Chemexcil (Chemical Export Promotion Council of India): A government body that supports the export of chemicals and intermediates from India.
• FIEO (Federation of Indian Export Organisations): Provides exporters with resources, policy advocacy, and trade facilitation services.

Governing Body and Trade Associations:

• Pharmaceutical Export Promotion Council (Pharmexcil): Focuses on promoting pharmaceutical exports and regulating trade policies for the pharmaceutical sector.
• Indian Chemical Council (ICC): A trade association that represents the chemical industry and supports its growth and export activities.

Government Initiatives:

The Indian government has launched various initiatives to promote the export of chemicals and pharmaceutical products:

• 'Make in India' initiative: Encourages manufacturing in India, particularly in the chemical and pharmaceutical sectors.
• National Chemical Policy: Focuses on improving the chemical sector's global competitiveness.

Challenges:

1. Regulatory Complexity: Navigating through the multiple regulatory frameworks, including CBN, and ensuring compliance with export regulations can be challenging.
2. Logistical Issues: The export of chemicals like TFAA may require specialized handling and packaging to meet international shipping standards.
3. International Tariffs: High import duties in some destination countries may affect the competitiveness of Indian exports.

Reefer Containers' Requirement for Export Shipment:

Due to the chemical nature of TFAA and its reactivity, its export may require reefer containers (temperature-controlled shipping containers) to ensure stability and safety during transit. This is particularly important for long-distance shipments, ensuring that TFAA does not undergo unwanted reactions that could compromise its integrity.

Way Forward:

To improve the export performance of TFAA, Indian manufacturers should focus on:

• Enhancing product quality and compliance with international standards.
• Strengthening regulatory processes to streamline export clearances.
• Expanding into emerging markets with growing pharmaceutical and agrochemical industries.

Relevant Website Links:

• Directorate General of Foreign Trade (DGFT): https://www.dgft.gov.in
• Chemexcil: https://chemexcil.in
• Pharmexcil: https://www.pharmexcil.com
• Central Bureau of Narcotics (CBN): https://www.cbn.nic.in

Conclusion:

The export of Trifluoro Acetic Anhydride (TFAA) from India plays an essential role in the global chemical supply chain, particularly in the pharmaceutical and agrochemical industries. The regulatory landscape, while complex, ensures that TFAA is safely traded while preventing misuse. India's competitive manufacturing costs, coupled with strong export incentives, position it as a leading exporter of this specialty chemical. To overcome challenges, a focus on improving logistics, regulatory compliance, and expanding market access will be critical for further success in the global market.