INDIA TO GAIN FROM TRADE FACILITATION

          Estimates of gains from trade facilitation suggest magnitudes equivalent to those brought by tariff liberalization, although estimates vary depending on the definition of trade facilitation used (i.e., the extent to which it included broader factors such as transport costs). Such gains are likely to be significant for small and medium enterprises which tend to suffer most from current poor trade facilitation. However, the study carried out by UNCTAD shows that large firms are likely to see higher reduction in costs through improved trade facilitation. Transaction costs of trade tend to be higher for the poorest developing countries, which generally have the worst current trade facilitation practices.  

          During the Seminar the wide-ranging reforms of customs procedures were highlighted. These included facilities for advanced filing of manifest before the arrival of means of transport, using the internet for round the clock filing of import declarations through the ICEGATE system, facilitate clearance of goods from port first and complete procedures later, allow clearance of goods in disputed cases after taking adequate security; mechanism for regular consultation with trade and other stakeholders; transparency in clearance through e-tracking of documents under process.  

          At the same time, like other developing countries India also needs to exercise caution that commitments should not be too onerous to implement in terms of human, financial and institutional burdens, the Seminar said.  

          Developing countries, including India, would require technical assistance and financial resources from various sources to develop adequate infrastructure and technical capability to implement some of the commitments that may arise from the negotiations. In meeting the needs for capacity building, technical assistance and financial resources, inter-governmental organisations would have an important role to play during and after the negotiations on trade facilitation.  

          High transaction costs for border clearance of goods is a significant constraint to exports and imports. The current conditions of trade facilitation in the world suggest strong handicaps for developing countries. For instance, customs clearance for sea cargo takes an average of 2.1 days in developed countries and 4.8 in East Asia and the Pacific.  But traders in Latin America and the Caribbean must wait up to 9 days, and those in Africa and South Asia, 10 days.   

          The issues relating to trade facilitation were discussed intensively with a wide cross section of participants at the Seminar and some issues were identified broadly for possible proposals. These included issues like harmonization of standards for clearance of agriculture and food products in a customs union, adopting fair testing methods by taking account of specific product features, improved transparency of rapid alert system and reduce their potential as a trade barrier.  

Press Information Bureau
Government of India
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INPUT-OUTPUT NORMS FOR 17 NEW EXPORT ITEMS NOTIFIED 

Press Information Bureau
Government of India
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WTO NEGOTIATIONS ON TRADE FACILITATION MUST ADDRESS CONCERNS OF EXPORTERS IN DEVELOPING
COUNTRIES: KAMAL NATH
NATIONAL SEMINAR ON TRADE FACILITATION

 New Delhi: August 18, 2005

            The ongoing negotiations in the World Trade Organisation (WTO) on Trade Facilitation must address the concerns of exporters in developing countries, Shri Kamal Nath, Union Minister of Commerce & Industry, has said in a message at the National Seminar on Trade Facilitation here today.  Trade Facilitation refers to facilitation of movement of trade across borders by easing cumbersome and inefficient border clearance system which add to the transaction cost of trade and industry, making exports uncompetitive and imports more expensive. Stating that reduced transaction costs at borders would give a competitive edge to industry and also improve the country’s attractiveness as a FDI destination, Shri Kamal Nath said: “We look upon these negotiations as an opportunity to review our domestic procedures and bring about autonomous improvements, wherever necessary. We are an active participant in the trade facilitation negotiations. We have in fact recently filed a joint paper with US in an area of high concern to us – namely to evolve an effective cooperation mechanism between customs administration to deal with issues concerning violation of customs laws.   Yet we need to be cautious. While we must relentlessly reform ourselves, we cannot afford to take any commitments in WTO that have the potential to adversely affect the core functions of safeguarding revenue and security. Similarly we need to be cautious that commitments should not be such that they put unsustainable additional resource burden on us”. 

            Shri S.N. Menon, Commerce Secretary, inaugurated the one-day Seminar which has been jointly organised by the Ministry of Commerce & Industry (Department of Commerce), Ministry of Finance (Department of Revenue) and the United Nations Conference on Trade & Development (UNCTAD), as part of a series of stakeholder consultations in the context of the Ministerial Meeting of the WTO scheduled to held in Hong Kong in December 2005.  

            Shri Kamal Nath in his message said the Seminar was very timely.  “It has given us a chance to reflect on the proposals made till date during the on-going negotiations on trade facilitation and to also deliberate upon the problems faced by our exporters in the destination countries. These issues primarily deal with import and export formalities, documentary requirements, transparency of laws, appeal procedures and transit issues”, he said.    The Department of Commerce and the Department of Revenue would have to cooperate closely in the ongoing negotiations and other relevant Ministries were also been consulted, he said, adding that “our hope and endeavour would be that the final outcome of these negotiations should be a win-win for India and for the world trading system as a whole. This would essentially need to strike a right balance between facilitation and control, between efficiency and resource constraints; and the net result should be a substantial reduction in the transaction cost”. 

            Recalling the Trade Facilitation was one of the four Singapore issues, Shri Kamal Nath noted that India opposed inclusion of Singapore issues in the WTO not because of serious opposition to trade facilitation but because of the other three contentious issues viz., Investment, Competition and Government Procurement.   “Once these issues were off the table, our comfort level improve considerably and we are willing to negotiation on trade facilitation.   We ensured that the portion of the July Framework relating to Trade Facilitation was a balanced one which gave adequate emphasis to Technical Assistance, Capacity Building and Special and Differential Treatment”, he said.    

            Shri Menon in his speech supplemented this point by stressing that India from the very beginning was of the view that trade facilitation being part of the WTO negotiations would be good for the country, as it was imperative to have an agreement which would enable to put in place a system that would bring transparency and reduce transaction cost, thereby facilitating exporters, importers and all others engaged in international trade.     

            The current conditions of trade facilitation in the world suggest strong handicaps for developing countries.  For instance, customs clearance for sea cargo takes an average of 2.1 days in developed countries and 4.8 in East Asia and the Pacific.  But traders in Latin America and the Caribbean must wait up to 9 days, and those in Africa and South Asia, 10 days.   

            A study conducted by Ace Global under the Ministry of Commerce –UNCTAD-DFID Project has highlighted a large number of problems faced by exporters in various destination countries. In the US, the problems included substantial cost of compliance to traders to deal with new security concerns. In the EU, the biggest problem related to health and sanitary concerns particularly on account of overlap of jurisdictions between member states internal regulations and the common EU legislation covering the same subject. The system of lifting of rapid alerts was onerous. The procedures for inspection, and testing were not well laid out.  For Japan and South East Asia, the problems were fewer and mostly related to lack of English translation of regulations.  The sector specific problems were mostly in the area of agriculture, meat and food products.   

            The Study also revealed that the larger issues in trade facilitation are domestic and not international. More than 65% perceived that problems inside India were greater compared to those in the export destinations. The costs associated with inter state transit of goods, excessive documentation, frequent changes in regulations and notifications, pre-shipment certification, queuing time at customs, speed money payments for getting minor amendments, delays / harassment for obtaining export incentives such as duty drawback are much more significant than problems encountered after the export of goods. India’s ability to leverage in the on-going negotiations would depend largely on internal preparations and domestic reforms in this area”, it said. 

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Press Information Bureau
Government of India
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N.K. MATHUR JOINS STC BOARD

 New Delhi: August 17, 2005

           Shri N.K. Mathur has joined the Board of State Trading Corporation of India as Director, (Marketing). Shri Mathur, a Mechanical Engineer by training from the Indian Institute of Technology (IIT) Delhi brings to STC a wealth of experience in the field of Engineering and Management. Prior to joining STC, he was Chief General Manager in the state owned Minerals and Metals Trading Corporation of India (MMTC) and has also worked in Engineers India Ltd (EIL) in various capacities. Shri Mathur, a renowned figure in International trading and Project management joins the STC when it has entered the Golden Jubilee year of its operation.

          Shri Mathur’s skills in International trade and Management will be particularly useful when the Corporation has diversified its domestic trading activities to function increasingly as an instrument of the trade policy of the Government of India. STC has recently made forays into many diversified areas of international trade such as import of hydrocarbons, minerals and metals, fertilizers, petroleum, IT products, and export of iron ore, chemicals and drugs. STC is an autonomous organisation functioning under the Ministry of Commerce and Industry.

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Press Information Bureau
Government of India
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EXPORT PROCESSING ZONES

 New Delhi: August 17, 2005

 All the eight Export processing Zones set up at kandla and Surat (Gujarat) Santa Cruz (Maharashtra) Cochin (Kerala), Chennai (Tamil Nadu), Vishakhapatnam (Andhra Pradesh), Falta (West Bengal), Noida (UP), have been converted into Special Economic Zones (SEZs). In addition, 3 new Special Economic Zones at Salt Lake- Manikanchan (West Bengal), Jaipur (Rajasthan) and Indore (MP) have become operational in 2004-05. The major incentives offered to units in Special Economic Zones to promote exports include duty free import /domestic procurement of goods, exemption from Central Sales Tax on supplies made from Domestic Tariff Area, exemption from Service Tax and 100 % income tax exemption for the first 5 years, 50% for the next 2 years and not exceeding 50% of the ploughed back profits for the next 3 years.  

The Special Economic Zone scheme does not envisage any Central assistance for setting up of new Zones and they are being encouraged to be set up in the private sector or joint sector in association with the State government or by the State governments themselves. Proposals recently received through the State governments/Union territories for setting up SEZs at Mangalore, Bangalore, Hassan, (Karnataka), Shastri Park (New Delhi), Ghaziabad(UP), Mohali, Amritsar (Punjab), Nagpur (Maharashtra), and Trivandrum (Kerala) are under the consideration of the Government and the final decisions are expected soon.

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 Press Information Bureau
Government of India
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REMOVAL OF CESS TO IMPROVE COMPETITIVENESS OF INDIA’S AGRI EXPORTS 

New Delhi: August 17 2005 

          Shri Kamal Nath, Union Minister of Commerce and Industry, has said that the removal of the cess on exports will enhance the global competitiveness of India’s agricultural exports.    Almost Rs.100 crore worth of cess presently levied on export of several agricultural products under different enactments is proposed to be abolished and a Bill to this effect was introduced in Parliament by Shri Kamal Nath yesterday.     

          The Cabinet recently approved abolition of cess on exports of agricultural products either through repealing of the concerned Cess Acts or through suitable amendments to the concerned Acts.  The cess is levied on different agricultural products under the following Acts: 

1.      Agricultural Produce Cess Act 1940

2.      Produce Cess Act 1966

3.      Agricultural & Processed Food Products Export Development Authority (APEDA) Cess Act 1985

4.      Tobacco Cess Act 1975

5.      Spices Cess Act 1986

6.      Marine Products Export Development Authority (MPEDA) Act 1975

7.      Coffee Act 1952 

          In recent years, international trade in agricultural goods has become extremely challenging for India with the emergence of new competitors.    Some of these competitors have a negligible domestic demand and can export almost their entire produce at very cheap rates, thus displacing the conventional demand for Indian products in the international market.  From a policy perspective, the Ministry of Commerce & Industry has also taken the consistent stand that taxes and duties ought not to be exported. The cess levied under all the Acts referred to above is unambiguously an export tax, which reduces competitiveness of agricultural exports and is not justified. Further,  this is especially significant in the global context today where many developed countries provide huge subsidies to support their domestic agriculture. 

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 Press Information Bureau
Government of India
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ANTI-DUMPING CASES AGAINST 35 COUNTRIES INITIATED

New Delhi: August 17, 2005 

        India has so far initiated anti-dumping investigations into 185 cases involving 35 countries/territories (considering 25 EC countries as a single territory).  The major product categories on which anti-dumping duty has been levied are chemicals & petrochemicals, pharmaceuticals, fibres/yarns, steel and other metals and consumer goods.  In these 185 cases, final findings have been issued in 163 cases and preliminary findings in two cases.   Investigations are in progress in 11 cases for issue of preliminary/final findings.  Nine cases have been closed after initiation for want of adequate justification.  Out of the 163 final findings issued, definitive duties were recommended in 152 cases.  As of now, 95 anti-dumping measures are in force.  The remaining have either expired after completion of 5 years or not imposed by Ministry of Finance or removed after conducting reviews.    

        During the calendar year 2005, till date, Directorate General of Anti-Dumping & Allied Duties (DGAD) has initiated 8 anti-dumping investigations.    All the 8 cases are under investigations for issue of preliminary/final findings.  

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Press Information Bureau
Government of India
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EXPORTS UP BY RECORD 26% IN JULY 2005 
INDIA’S FOREIGN TRADE DATA – APRIL-JULY 2005-06

New Delhi: August 16 2005 

            India’s merchandise exports during July 2005 are valued at US $ 7234.41 million (i.e. $ 7.2 billion) which is a record 26.80% higher than the level of US $ 5705.22 million (i.e. $ 5.7 billion) during July 2004. In rupee terms, the exports were Rs.31,495.81 crore which is 19.90% higher than the value of exports during July 2004.   

India’s exports during April-July 2005-06 are valued at US $ 28134.72 million (i.e. $ 28.1 billion) which is 21.33% higher than the level of US $ 23188.47 million (i.e. $ 23.1 billion) during April-July 2004-05. In rupee terms, the exports were Rs.122622.01 crore, during April-July 2005-06 which is 17.01% higher than the value of exports during April-July 2004-05. Shri Kamal Nath, Union Minister of Commerce and Industry, while indicating the foreign trade data here today, said that all efforts would be made to accelerate exports so as to reach and even cross the target of US $ 92 billion set for the year 2005-06. 

            As per quick estimates provided by DGCI&S for the month of July 2005, the commodities/sectors that have performed well are iron ore (81%); petroleum products (41%); marine products (41%); plastics & linoleum (40%); rice (37%); ready-made garments of all textiles (35%); basic chemicals (30%); engineering goods (25%); and gems & jewellery (17%). 

India’s imports during April-July 2005-06 are valued at US $ 42109.47 million representing an increase of 36.36% over the level of imports valued at US $ 30880.86 million in April-July 2004-05.  In rupee terms, the imports increased by 31.44%. 

Oil imports during April-July 2005-06 are valued at US $ 12543.23 million which is 32.33% higher than oil imports valued at US $ 9478.45 million in the corresponding period last year.  Non-oil imports during April-July 2005-06 are estimated at US $ 29566.24 million which is 38.14% higher than the level of such imports valued at US $ 21402.41 million in April-July 2004-05. 

Imports during July 2005 are valued at US $ 9904.22 million representing an increase of 33.21% over the level of imports valued at US $ 7435.16 million in July 2004.    In rupee terms the imports increased by 25.96%. 

The trade deficit for April-July 2005-06 is estimated at US $ 13974.75 million which is higher than the deficit at US $ 7692.39 million during April-July, 2004-05.

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Press Information Bureau
Government of India
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CESS ON EXPORTS TO BE ABOLISHED: KAMAL NATH

New Delhi: August 16 2005

          In a further bid to boost India’s exports, the government proposes to discontinue almost Rs.100 crore of cess on exports.  Indicating this at a news conference today, Shri Kamal Nath, Minister of Commerce and Industry, said: “This will make our exports more competitive.  We cannot subsidise exports like the developed countries, but at least let us not tax them”.

          The cesses on exports sought to be abolished are:  

·        APEDA Cess: Rs. 50 crore per year

·        MPEDA Cess: Rs. 20 crore per year

·        Coffee Cess:   Rs. 12 crore per year

·        Spices Cess :  Rs. 7 crore per year

·        Tobacco Cess:  Rs. 3 crore per year 

(APEDA: Agricultural and Processed Foods Export Development Authority

MPEDA: Marine products Export Development Authority) 

          At present, the export of several agricultural products is subject to levy of a cess under different enactments. 

Meanwhile, India’s merchandise exports during April-July of the current financial year 2004-05 are estimated to have increased by 21.33% to reach a level of US $ 28.1 billion from US $ 23.1 billion during the corresponding period of the previous financial year 2003-04.

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Press Information Bureau
Government of India
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POSITIVE TREND IN EXPORTS AND MANUFACTURING
FDI INFLOWS UP BY 50%
TEXT OF KAMAL NATH’s STATEMENT AT PRESS BRIEFING ON 16 AUGUST

New Delhi: August 16 2005

ª              “I am happy to announce that India’s merchandise exports during the month of July 2005 have registered a record increase of almost 27 % in dollar terms compared to July 2004.   

ª              With this, India’s exports during April-July 2005-06 have gone up to US $ 28.1 billion, which is 21.4 % higher than the level of US $ 23.1 billion during April-July 2004-05. 

ª              As per quick estimates sectors that have performed well in July are iron ore (81%); petroleum products (41%); marine products (41%); plastics & linoleum (40%); rice (37%); ready-made garments of all textiles (35%); basic chemicals (30%); engineering goods (25%); and gems & jewellery (17%). 

ª              With this trend in exports and our concerted efforts to sustain it, I am confident that we will reach and even surpass the export target of US $ 92 billion, which has been set for this fiscal.   

ª              In a further bid to boost our exports, we propose to discontinue almost Rs.100 crore of cess on exports.  This will make our exports more competitive.  We cannot subsidise exports like the developed countries, but at least let us not tax them!   The cesses on exports sought to be abolished are:  

·        APEDA Cess: Rs. 50 crore per year

·        MPEDA Cess: Rs. 20 crore per year

·        Coffee Cess:   Rs. 12 crore per year

·        Spices Cess :  Rs. 7 crore per year

·        Tobacco Cess:  Rs. 3 crore per year 

ª              Last year, as you are aware, our exports reached US $ 80 billion and our imports were US $ 105 billion. 

ª              Thus, our economic engagement with the world last year was US $ 185 billion. This year it should be 250 billion dollars.  Within three years, we plan to take this economic engagement (exports and imports) to US $ 500 billion. 

ª              But dollars are only a means of measuring our achievements.    What is important is not the dollars earned by these exports, but the employment generated, the economic activity that this stimulates in the Indian economy. It is only by stimulating economic activity that we can leap forward.     

ª              The preliminary findings of a study by the Research & Information System for Developing Countries (RIS) commissioned by us to analyse the relationship between exports and job creation have shown that 10 to 12 lakh jobs were generated in 2004-05 incrementally over the previous year as a result of the increase in merchandise exports   I expect that the increase in merchandise exports during the current year will lead to a similar incremental direct employment in the country.   (In the same study, the total number of persons associated with export activity during 2004-05 was estimated at 1 crore of which 86 lakh persons were directly employed in the export sector, and 17 lakh persons were indirectly employed in the logistics and related sectors). 

ª              There has been an increase in both oil and non-oil imports, as will be seen from the data.   Non-oil imports have increased but it is noteworthy that the bulk of import growth is in capital goods, raw materials and intermediate goods, and not so much in consumer goods sectors. It is a happy augury that there has been a significant growth in manufacturing sector, alongside the increase in exports.     

ª              Thus, as per the quick estimates released by CSO, the overall growth in India’s industrial production shot up 11.7% in June 2005 against 7.3% in June 2004.  The quarterly growth rate in the first quarter of 2005-06 thus stood at 10.3% against 7.7% in the same quarter of 2004-05.  The manufacturing sector, which accounts for 79% of the index of industrial production increased by 12.5% in June 2005 against 8% in June 2004.   

ª              In fact, the sustained increase in the productivity of the Indian manufacturing sector (which accounts for around 78% of our total exports) has contributed significantly to the continuing growth of Indian exports.  India is now the 10^th largest industrial economy in the world and is fast establishing itself as a global manufacturing hub.    

ª              Contributing to close to a fourth of the GDP, India’s manufacturing sector has a diversified base of world-class facilities, using the state of the art technology. 

ª              My Ministry has been taking steps to reduce transaction cost through simplification of procedures etc., and a number of concrete measures were announced in the supplement to the Foreign Trade Policy to further enhance the competitiveness of the manufacturing sector in India. 

ª              Another important initiative is the setting up of 6 Free Trade and warehousing Zones through MMTC Limited. Six locations tentatively identified for Free Trade & Warehousing Zones are Kandla, NOIDA, Mumbai, Haldia, Kochi and Ennore, to be set up in phases. The estimated investment for each warehouse would be Rs.100 crore approximately. It envisages creation of world-class infrastructure for trading and warehousing of various products. 

ª              We are looking at a new initiative towards an Economic Cooperation Agreement with the Gulf Cooperation Council (GCC) member countries so as to bring the economies of the Gulf closer to India on a mutually beneficial basis. 

ª              The Foreign Direct Investment (FDI) inflows for the first quarter of the financial year 2005-06 (up to June 2005) are US $ 1.173 billion as compared to the inflows during the corresponding period of the previous year 2004-05 at US $ 0.797 billion. The inflows during the current financial year has been 47% higher than the previous year.  This represents only the equity component of FDI.   Cumulative FDI inflows into India since August 1991 are US $ 34.52 billion”.

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 Press Information Bureau
Government of India
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ANTI-DUMPING CASES AGAINST 35 COUNTRIES INITIATED

New Delhi: August 17, 2005 

        India has so far initiated anti-dumping investigations into 185 cases involving 35 countries/territories (considering 25 EC countries as a single territory).  The major product categories on which anti-dumping duty has been levied are chemicals & petrochemicals, pharmaceuticals, fibres/yarns, steel and other metals and consumer goods.  In these 185 cases, final findings have been issued in 163 cases and preliminary findings in two cases.   Investigations are in progress in 11 cases for issue of preliminary/final findings.  Nine cases have been closed after initiation for want of adequate justification.  Out of the 163 final findings issued, definitive duties were recommended in 152 cases.  As of now, 95 anti-dumping measures are in force.  The remaining have either expired after completion of 5 years or not imposed by Ministry of Finance or removed after conducting reviews.    

        During the calendar year 2005, till date, Directorate General of Anti-Dumping & Allied Duties (DGAD) has initiated 8 anti-dumping investigations.    All the 8 cases are under investigations for issue of preliminary/final findings.  

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Press Information Bureau
Government of India
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 INDIA FILES REVISED OFFERS ON SERVICES TO WTO

 New Delhi: August 12, 2005 

India has filed its revised offer on Services to the WTO (World Trade Organisation) on the 12^th August 2005. This further builds on India’s initial offer on Services.  

All the fresh commitments and/ or improvements in the offers are in line with the autonomous liberalisation already undertaken by India and the country is seeking to bind them in WTO in exchange for reciprocal commitments by our trading partners in the areas of interest to India.  

This has offered commitments in a number of new sectors/sub sectors in mode 3 including architectural, integrated engineering and urban planning and landscape services; veterinary services; parts of distribution services; (excluding retail trade); additional sub sectors in construction and related engineering services and in tourism services; parts of educational services; life insurance services; services auxiliary to insurance,; asset management services; part of recreational cultural and sporting services and part of air transport services. New commitments have also been offered in cross border supply in other business services; professional services; research and development services; rental and leasing services; real estate services etc.  

At the same time, improvements have been made in the existing mode 3 commitments by enhancing the foreign equity limit in engineering services; computer and related services (commitments have been proposed at the two digit level); research and development services; basic telecommunications; value added telecommunications; construction and related engineering services etc. In banking services, wholly owned subsidiaries have been allowed as a legal entity while in the case of non-banking financial activities, the foreign equity limits have been enhanced in the case of factoring, venture capital and financial leasing.  

India had already made a substantial mode 4 offer in its initial offer by including all the categories of natural persons that it has been presenting multilaterally like contractual service suppliers and independent professionals. Further improvements have been made in the sectoral coverage of both the contractual service suppliers and independent professionals and the definition and parameters of these categories also brought in line with the common categories paper floated multilaterally by a large number of developing countries as well as some developed ones.

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Press Information Bureau
Government of India
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INDIA READY TO SHARE DEVELOPMENT EXPERIENCE WITH CARICOM: ELANGOVAN
 FOUR KEY AREAS FOR CLOSER COOPERATION IDENTIFIED
INDIA-CARICOM ECONOMIC FORUM INAUGURATED

 New Delhi: August 11, 2005 

The Minister of State for Commerce and Industry, Shri EVKS Elangovan has said that in the interest of South-South cooperation, India was ready to share its developmental experience with CARICOM (Caribbean Community) member states.(CARICOM member states include Jamaica, Barbados, Trinidad & Tobago, Guyana, Suriname, The Bahamas, Belize, Dominica and Antigua& Barbuda).  He was speaking after inaugurating the first ever India- CARICOM Economic Forum in the island state of Trinidad and Tobago recently. He said that the scope of the ITEC (Indian Technical and Economic Cooperation) programme would be further expanded to give a boost to economic cooperation. ITEC is an ongoing programme through which India renders assistance to Caribbean governments in capacity building - human resources development, undertake project related studies, depute experts, etc.   

The Minister said that to facilitate sourcing of Indian goods and services and project exports, India has placed credit lines in Trinidad and Tobago, Suriname and Guyana.  “We will be happy to increase the quantum of these credit lines and offer new credit lines to other Member States of the CARICOM too”, he said.  

Shri Elangovan emphasized the benefits that would accrue by promoting direct business linkages as both India and Caricom states are producing goods and services that are of mutual export interest. India produces and exports most of the goods and services that the CARICOM Member States import today.  Similarly, India imports several items, including energy products that Caricom states have to offer.  “Presently, we are trading in various goods and services, most of it through third countries. It is my conviction that by promoting direct business linkages, we could bring home the fruits of cooperation, for the benefit of our peoples on both sides, by bringing down the costs of goods and services traded” he said.  

The Minister said that apart from bilateral trade, there was vast potential for economic cooperation in manufacturing and services sector. “Consequently, we have identified four areas of special interest, namely, ICT, Small and medium Enterprises (SMEs), Tourism and Healthcare/Pharmaceuticals for closer cooperation between CARICOM and India.  Separate workshops on each of these areas are being organized as part of this Economic Forum for focused deliberations” he noted.  

Shri Elangovan observed that computerization project of CARICOM Secretariat, Construction of a Cricket Stadium in Guyana, Construction of transmission lines in Suriname, setting up of steel plant in Trinidad and Tobago, close cooperation to enhance the competitiveness of Jamaican sugar industry are some of the prestigious developmental initiatives undertaken by India in the CARICOM region. Apart from this India’s efforts to supply emergency medical assistance to Grenada when it was hit by hurricane Ivan last year was particularly commented by the Caribbean Ministers.  

The CARICOM ministers appreciated India’s initiative in organizing the Economic Forum and wanted to institutionalize the Forum for further broadening and deepening the economic cooperation with India.  

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Press Information Bureau
Government of India
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SCOPE FOR FURTHER INCREASE IN INDO-PAK BILATERAL TRADE
TEXT OF JOINT STATEMENT

New Delhi: August 10, 2005 

The Second Round of India – Pakistan talks on Economic and Commercial Cooperation within the framework of the Composite Dialogue was held here on August 9-10,2005.  The Indian Delegation was led by Commerce Secretary Shri S. N. Menon.  The Pakistan delegation was led by the Acting Secretary Ministry of Commerce, Syed Asif Shah. 

The discussions were held in a cordial and constructive atmosphere.  The two sides recognized the scope for further increase in bilateral trade and discussed further measures to enhance mutually beneficial economic and commercial cooperation.  

The two sides agreed on the following:  

·         Aeronautical talks would be held in Pakistan in September 2005 to review the existing Air Services Agreement. 

·        A bilateral meeting to review the Shipping Protocol of 1975 would be held in Pakistan in September 2005. 

·        The Second Meeting of the Joint Study Group (JSG) would be convened at an early date in Islamabad.  The JSG meeting would be preceded by the meeting of the Sub-Groups on Non-Tariff Barriers (NTBs) and Customs Cooperation and Trade Facilitation to formulate recommendations for consideration by the JSG.   

The two sides recalled the decision taken during the visit of the Prime Minister of Pakistan to India in November 2004 to open branches of scheduled banks in each other’s country and agreed that requests for opening of bank branches in both the countries would be processed expeditiously to facilitate bilateral trade relations. 

Both sides also noted the progress achieved in concluding a Memorandum of Understanding (MoU) between the Securities and Exchange Board of India (SEBI) and Securities and Exchange Commission of Pakistan (SECP) to benefit from each other’s experiences. 

Both sides expressed the hope that Fibre Optic link between Amritsar and Lahore would be established and operationalized at the earliest.

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 Press Information Bureau
Government of India 

INDIA SHOULD PURSUE GATS VISA PROPOSAL IN WTO
STAKEHOLDER CONSULTATION ON SERVICES

 New Delhi, 10^th August, 2005

 India should pursue its proposal for a special visa for its professionals – called the GATS visa – to facilitate movement of natural persons  in the ongoing negotiations in the World Trade Organisation (WTO) for liberalisation of  world trade in services under the General Agreement on Trade in Services (GATS), according to UNCTAD. India’s proposal also addresses the issues of recognition, including facilitating the participation of developing countries in mutual recognition agreements (MRAs) and evolving multilateral norms for such recognition. Articulating UNCTAD’s perspective at the stakeholder consultation workshop which concluded here yesterday, Ms. Lakshmi Puri, Director in the Division of International Trade in Goods and Services and Commodities/UNCTAD, said that this was particularly important as the going was tough in respect of both the modes of services delivery of interest to  India i.e., Modes 4 ( movement of natural persons) and 1 ( cross border supply which also covers BPO services ), in the wake of  heightened security concerns, political sensitivities and rising job-related protectionist sentiments in the major developed country markets.

The ongoing GATS negotiations both on market access and on rules are important to ensure that the kind of  comparative advantage in services that India is currently enjoying in world markets is not restricted and in fact, is further secured and expanded through multilateral commitments in the WTO by its major trading partners. This is specially true in the case of Mode 1 and Mode 4 where markets and global enterprises demand and use Indian services and service providers and are way ahead of inter-governmental, multilateral and even bilateral commitments. “ Indian services providers have become indispensable  through the rapid growth of the ’24-hour knowledge factories’ leading to efficiency and welfare gains for the world economy”, UNCTAD says.

 There is much at stake for India in the world services regime becoming more open, predictable, rule-based and equitable. The sectors of export interest to India on which it has made requests to its trading partners in the WTO include business services (mainly computer-related services, engineering services, medical and dental and R& D services), telecoms, tourism, health and social services. 

SB/MRS 

Press Information Bureau
Government of India
*****

INDIA-PAKISTAN TALKS ON ECONOMIC AND COMMERCIAL COOPERATION BEGINS

New Delhi: August 9, 2002

The two day India-Pakistan talks on economic and commercial cooperation began here today as part of the ongoing Composite Dialogue between the two countries. Shri S.N.Menon, Commerce Secretary, Government of India, is leading the Indian delegation at the Secretary level talks, while the Pakistan delegation is headed by Mr. Syed Asif Shah, Acting Secretary, Ministry of Commerce, Government of Pakistan. 

In his welcome address, Shri Menon said that under the Composite Dialogue, both sides would explore cooperation in the areas of mutual benefit like Civil Aviation, Shipping, Banking, and Petroleum & Natural gas. The exchange of technology and skills between the two countries would help enhance the quality of goods at relatively cheaper prices, he said. He welcomed the move of the Government of Pakistan to open the Wagah- Attari Land Route.  “The Wagah- Attari LCS was notified by India in 1994 on the permanent basis for movement of goods by road and rail. We hope that Pakistan would consider opening of the same on permanent basis for a larger number of commodities. This has the potential for the creation of jobs by increasing ancilliary activities along these routes” Shri S.N. Menon said.  

Mr. Syed Asif Shah noted that the two countries had initiated a process of de-escalating tension with a view to normalising bilateral relations and stressed that the Composite Dialogue of which the talks on economic and commercial Cooperation were an integral part, was an important step in this direction. He said Pakistan had consistently being exploring ways to increase its trade with India, as this would be beneficial for people of both the countries. In recent weeks, he said that Pakistan took the important decision to allow the import of onions, potatoes, tomatoes, garlic, live animals and halal meat from India via the land route of Wagah, which was followed by the inclusion of vaccines and medicines for the treatment of AIDS and Cancer in the list of items importable from India. The latest addition to this list had been the import of raw and refined sugar fro India through the land route, which was allowed last week.  

Both the sides noted the quantum increase in the volume of trade between the two countries, which has reached the level of US $ 600.77 million in 2004-05. 

The agenda of the two-day talks includes discussion on goods (expansion of positive list and transit routes); discussion on services (air, shipping, road and rail services as also financial services including insurance and banking); and roadmap for the Joint Study Group (JSG). The decision to constitute the JSG at Commerce Secretary level was taken at a bilateral meeting between Shri Kamal Nath, the Indian Minister of Commerce and Industry and Mr. Humayun Akhtar Khan, the Commerce Minister of Pakistan in Islamabad in November 2004. 

Press Information Bureau
Government of India  

INDIA CAN GAIN $ 50 BILLION IN EXPORTS FROM LIBERALISATION OF TRADE IN SERVICES -  GLOBAL AND
SECTOR-SPECIFIC STRATEGIES VITAL
CONCLUSIONS OF PRE-HONG KONG STAKEHOLDER CONSULTATION WORKSHOP ON  GATS NEGOTIATIONS

New Delhi, 9^th August, 2005

India is likely to gain US $ 50 billion per year in exports of services from a mere 3 % increase in quota of temporary workers by the developed countries of the Organisation for Economic Cooperation and Development (OECD)  under Mode 4  in the WTO negotiations. Further UNCTAD estimates that India can gain as much as US $ 40-60 billion annually in exports from the global outsourcing boom, that is in the Mode 1 covering business process outsourcing  (BPO)  etc. This is among the many conclusions that emerged from the two-day deliberations of the stakeholder consultation workshop titled “ Pre-Hong Kong Ministerial Meeting Consultation: GATS Negotiations”, that was jointly organised here by the Ministry of Commerce and Industry and UNCTAD on 8^th and 9^th August, 2005 in the backdrop of the forthcoming WTO Ministerial Conference in Hong Kong, which is expected to be a milestone in the Doha Development Agenda of the current WTO round of multilateral trade negotiations. The conclusions of the workshop were released at a news conference here today by Ms. Lakshmi Puri, Director, Division of International Trade in Goods and Services and Commodities, UNCTAD and Shri R. Gopalan, Joint Secretary in the Trade Policy Division, Ministry of Commerce and Industry. 

The emergence of India as one of the fastest growing economies in the world is attributable in significant part to the rapid growth of its services sector. India’s earning through services exports are estimated at $51 billion in 2004-05 which is a quantum leap from $ 25 billion in 2003-04. Between 1996 to 2000 the revealed comparative advantage index for services increased by 74 percent while that of good declined by 15 percent. India’s own perspective on services trade negotiations seems to be based on a mixture of “buoyant self-belief” and recognition of the many developmental deficits and challenges which could impede the full realization of the services sector potential. 

GATS (General Agreement on Trade in Services) negotiations offer scope to India to leverage and lock in autonomous domestic policy reforms and advantage should be taken for obtaining reciprocal concessions from developed countries in sectors and modes of interest to India.  For this, both global as well as sector specific strategies will need to be worked out, the workshop concluded. 

While India has clearly defined interests in Mode 1 and Mode 4, it would also need to put into place effective regulatory framework for benefiting from liberalization in the other two modes of delivery of services viz, Mode 2 ( consumption abroad) and Mode 3 (commercial presence which includes FDI).  Demographic changes in the global economy will also generate demand for mode 4 which would generate opportunities for India. It is important that autonomous liberalisation in mode 4 by the US and others are bound. The bilateral and unilateral route has also been used for the movement of unskilled labour which is of importance and should be used to push liberalization in this sector. Stress should be placed on the temporariness in the movement of natural persons, and on improvement of sectoral coverage as well as categories delinked from commercial presence..   India has special interests in contractual service providers and independent  suppliers who are de-linked from mode 3. Barriers such as qualifications, ENT, absolute wage parity, and transparency in visa and administrative procedures,  need to be addressed. 

Under Mode 1 the important issues are locking in of autonomous liberalization, preempting protectionism and capturing newer activities under mode 1. While classification issues are of importance they should not be used as an excuse to postpone liberalization. Modes 1 and 2 should both be liberalized if classification under either is a problem. 

 The demands on India are in mode 3, so these need to be traded with opening of modes 1 and 4 given that autonomously many service sectors in Mode 3 are already open.  Appropriate sequencing of effective regulatory frameworks and market access commitments that India might take in health, education and social sectors during the on-going negotiations, would be crucial. Conditions on transfer of technology and participation of local industry as well as transfer of skills may be a precondition to liberalization. Industry has to strengthen their competitiveness and benchmarks will be set on the minimum degree of liberalization.    

As far as professional services are concerned, given the large size of firms in developed countries and lack of viable mutual recognition agreements, there is an inherent asymmetry between the capacity of foreign and domestic firms to supply services. The possibility of domestic suppliers of professional services in the developing countries being crowded out by foreign service suppliers need to be averted. The architects association of India pointed to resolution of the International Union of Architects recommending the joint participation of local and foreign architects in delivery of services. The inclusion of local architects would need to be made mandatory in the design, documentation and contract administrative services, involving foreign architects in Indian jurisdiction.  

Professional services are one of the fastest growth sectors in economies worldwide, achieving double-digit growth rates and increasing internationalization. However, a number of professional services in India, namely legal services are newcomers to the international trade. Legal profession has been liberalized only in 1991. With this limited experience, legal profession is seeking answers on what would be the possible effects of opening up this sector to foreign participation. Different views have emerged within the profession itself where some felt that drastic liberalization without adequate regulatory and legal adjustment may be detrimental to the profession. On the other hand, foreign law firms would not be likely to enter those segments of the market where the great majority of Indian law firms are operating today.   

Addressing internal regulatory and legal barriers, for example restriction on advertising or sharing of fees with non-lawyers that impede growth and development of domestic law firms should be a priority. As it stands today, domestic firms would be at a serious competitive disadvantage with respect to foreign providers if these regulations is not adapted to the needs and the dynamism of the markets and access to investment capital  is not provided. And most importantly, legal community of 11 million lawyers needs to be educated and engaged in the open debate on the possible impact that foreign entry could entail in India.  

As far as the telecommunication sector was concerned, 1994 was recognized as a watershed, as private participation was invited. The policy initiatives taken by the government had led to increased competition, decline in concentration, decline in tariffs, steady  increase in user of fixed lines and exponential increase in mobile subscribers. The applicable domestic regime was more liberal  than the commitments made by India  in its Reference Paper to the WTO. During the on-going negotiations India could consider binding its autonomous liberalization in case it obtains concessions in other sectors and modes of interest to it. This approach was predicated on the fact that Indian service providers of telecommunication services may not be able to compete with foreign service providers abroad. 

While, this consultation provided useful inputs for the negotiations, the officials from the Department of Commerce urged the stakeholders to come forth with their detailed proposals, in the next three months, highlighting the strengths and areas of concerns for their industry. This would facilitate better preparedness for the meeting in December, they said.  

SB/MRS

Press Information Bureau
Government of India 

INDIA, MAURITIUS HOLD TALKS ON A COMPREHENSIVE ECONOMIC COOPERATION PARTNERSHIP AGREEMENT 

New Delhi, 9^th August 2005

 India and Mauritius held the first round of talks on a Comprehensive Economic Cooperation and Partnership Agreement (CECPA) here yesterday. The meeting took place between Empowered Committees of the two sides in keeping with the decision taken during the official visit of the Prime Minister of India to Mauritius in March-April, 2005. The Indian delegation at the talks was headed by Shri S.N.Menon, Commerce Secretary and comprised senior officials of the concerned Ministries, while the Mauritian delegation was headed by Mr. Anand Prijay Neewoor, Secretary of Foreign Affairs, Republic of Mauritius, who was assisted by a high powered team.  

According to a joint statement issued by the two sides after the meeting, relations between India and Mauritius have traditionally been very close and warm, based on common cultural heritage and ties of kinship and India attaches great importance to its relationship with Mauritius which is reciprocated fully by the Mauritian side. In order to further strengthen and consolidate their bonds and to promote cooperation between the two countries in the economic, commercial and other fields, it was decided at the highest political level to formulate a Comprehensive Economic Cooperation and Partnership Agreement between the two countries in an expeditious manner.  

During the meeting, both sides discussed the modalities of implementing this decision. Both recognised that investment and economic cooperation would be a key plank of the CECPA. It was noted that though Indian investments in Mauritius had been increasing in the recent past, these continued to be well below their potential. Mauritius highlighted that, in view of its core competencies, strategic location and trade agreements at multilateral and regional levels, it could serve as a hub for Indian investors not only for the Mauritius market but also to access other markets through its various trade agreements.  

The study commissioned by the Government of Mauritius with the EXIM Bank of India identified several areas of investment by the Indian corporate sector. These include tourism, health, education and knowledge, financial services and ICT in addition to small and medium enterprises  (SMEs) development, specific areas of manufacturing and capacity building. It was noted that a key objective of Mauritius was to transform itself into a Centre of Excellence to meet its own needs and those of the region.  

CECPA would lay down the road map as well as modalities for encouraging Indian investments in Mauritius and joint India-Mauritius investments into the region. CECPA would provide the institutional and facilitative framework to incentivise Indian investments and achieve this objective.  

The Mauritian side looked forward to increased flow of Indian investment and transfer of technology and know-how, which should accelerate the process of economic development. The Indian side expressed its keenness to foster and promote relations with Mauritius in diverse areas.  

At the end of the discussions, both sides recognised that ample opportunities existed for further enhancing the cooperation between the two countries in a mutually beneficial manner within the framework of the proposed CECPA.  

The Mauritian side agreed to host the next meeting for the CECPA in Mauritius in the near future.

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SB

Press Information Bureau
Government of India 

 $50 BILLION FOR INDIA IN SERVICES IF DEVELOPED COUNTRIES LIBERALISE MODES 1 & 4 
STAKEHOLDER CONSULTATION ON SERVICES NEGOTIATIONS IN WTO BEGIN

New Delhi, 8^th August, 2005 

India can gain as much as US $ 50 billion annually from a mere 3 %  increase by the developed countries of the Organisation of Economic cooperation (OECD) increase their quota of temporary workers ( i.e., in respect of Mode 4 ) in the Services negotiations in the World Trade Organisation (WTO). Similarly, India can gain a market share of US $ 40- US $ 60 billion per year in exports from the global outsourcing boom ( i.e., Mode 1) as the BPO and the information technology-enabled services  market is expected to grow from $ 774 billion to $ 1049 billion between 2002-2006, according to UNCTAD (United Nations Conference on Trade and Development). This was indicated by Ms. Lakshmi Puri, Director, Division of International Trade in Goods and Services and Commodities, UNCTAD, in her inaugural address at the Pre-Hong Kong Ministerial Stakeholder Consultation Workshop on the Services Negotiations in the World Trade Organisation (WTO) under the General Agreement on Trade in Services (GATS) here today. Shri R. Gopalan, Joint Secretary, Ministry of Commerce and Industry, Dr Veena Jha, UNCTAD India Programme Coordinator and Dr. Amit Mitra, Secretary General of the Federation of Indian Chambers of Commerce and Industry (FICCI) also addressed the two-day Workshop which has been jointly organised by the Ministry of Commerce and Industry and UNCTAD under the aegis of the Ministry of Commerce-UNCTAD-DFID project on the strategies and preparedness for trade and globalisation in India.  

Shri Gopalan said India’s primary interests were in  Mode 4 (movement of natural persons) and Mode 1 (Cross-border supply of services covering BPO etc). Issues acting as roadblocks in Mode 4 related to Economic Needs Tests, grant of visa, labour market requirements and so on. In Mode 1, most countries had liberal regimes, but there were issues to be looked into – e.g., with the progress of technology, new services were coming up and how these could be adequately captured in the negotiations. In respect of Mode 3 relating to commercial presence and investment, he said, countries like India were liberalising autonomously and commitments to be undertaken in the Wto would be decided only in consultation with the industry. He indicated that India had tabled its initial offers in the WTO in early 2004 and was about to make its revised offers as part of the request-offer process. He reiterated that the US and EU revised offers were unsatisfactory, adding that the US offer did not, in fact, move much beyond the Uruguay Round. Dr. Mitra mentioned how qualification criteria and wage requirements were being used by developed countries to undermine possibilities in Mode 4.  

Ms Puri stated that UNCTAD had evolved development benchmarks to help developing countries to assess requests and formulate offers in the services negotiations. These include increasing services exports of developing countries, competitiveness of developing countries, scope and openness of services economy  to exports from developing countries and trade in services and social indicators such as contribution to poverty eradication, gender imbalance, employment etc. Dr Mitra welcomed the UNCTAD benchmarks and said these needed to be looked into for leveraging  in the WTO negotiations.  

Industry representatives, experts, policy makers, consumers organisations and representatives of civil society participated in today’s deliberations, which focussed on the state of play in the ongoing WTO negotiations in the area of services and how India’s objectives could be furthered in the negotiations.  

SB/MRS 

Press Information Bureau
Government of India
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 INDIA -INDONESIAN TRADE AT $4 BILLION A GOOD EXAMPLE OF SOUTH-SOUTH
COOPERATION:  KAMAL NATH – INDONESIA ANNOUNCES VISA ON ARRIVAL FOR INDIANS AT
INDIA -INDONESIA JBC

New Delhi, 8^th August, 2005 

The two-way trade of US $ 4 billion between India and Indonesia  in 2004-05 showing an increase of 35 % over the previous year is a marvellous example of South-South cooperation, Shri Kamal Nath, Minister of Commerce and Industry, said here today while addressing the inaugural session of the India-Indonesia Joint Business Council, organised by the Federation of Indian Chambers of Commerce and Industry (FICCI). Underlining the importance of Indonesia as India’s second largest export market in the ASEAN (after Singapore),and as  India’s bridge to the ASEAN, he called for taking the economic engagement between the two countries to an even higher trajectory. Indian companies are estimated to have invested more than two billion dollars in Indonesia, he said. The Minister of Trade of Indonesia, Ms. Mari Elka Pangestu, in her address announced that Indonesia would introduce visa on arrival for Indians very shortly and stressed her country’s keenness to forge a strategic economic partnership with India.  

Earlier, during a bilateral meeting here, the two Ministers decided to set up a Study Group to explore the possibilities of greater  trade  and investment cooperation between India and Indonesia, while discussing various bilateral trade issues. 

Stressing the need to diversify the trade basket,  Shri Kamal Nath told the JBC: “ The pharmaceutical sector, the IT sector, the two and three-wheeler sectors and rail transportation offer excellent scope for both trade and investment”. He mentioned that IRCON, India’s premier railway construction company, was ready to participate in upcoming  railway projects in Indonesia, including supplying locomotives to Indonesian Railways on a wet-lease basis. Responding to Ms. Pangestu’s proposal for bilateral cooperation in IT including animation, Shri Kamal Nath said  India was ready to cooperate in the development of Information Technology in Indonesia.

SB

Press Information Bureau
Government of India
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ALTERNATIVE TO DEPB SCHEME SOON- OVERLAP PERIOD LIKELY TO ENSURE SMOOTH TRANSITION:
KAMAL NATH

New Delhi: August 5, 2005

 Shri Kamal Nath, Union Minister of Commerce and Industry, has said that the Government is in the process of finalising an alternative to the Duty Entitlement Pass Book (DEPB) Scheme and that government would come out with the new scheme soon. Addressing the 169^th Annual General Meeting of the Madras Chamber of Commerce and Industry (MCCI) in Chennai today, the Minister also indicated that there could be an ‘overlap’ period so that the switchover to the new scheme could be smooth for the exporting community. He further said that the challenge was to devise a scheme that would truly neutralize all the levies- not only customs and excise duties, but also State levies and at the same time be WTO compatible.

He sought suggestions from the Trade and Industry to make the Special Economic Zones (SEZs) a success, emphasizing that the SEZ Act recently passed by parliament would now have to be moved from the Statute books into reality. Similarly, the Free trade and Warehousing Zones(FTWZ) must be made operational so as to tap the unexplored advantages to be gained from making India a global trading hub.

  “The actual growth of merchandise trade in the very first year of the policy was 24%, which far surpassed the target we set for ourselves.  India’s merchandise exports almost touched 80 billion dollars last year.  This growth was achieved despite the appreciating value of the rupee against the dollar, the rising oil prices and bottlenecks in infrastructure facilities.  This growth has been unprecedented in India’s economic history, and if we can maintain the momentum, I am confident that we will cross the 150 billion dollar milestone within three years.  The export performance of April-June 2005, shows a growth of 19% over the already high base of last year, and so is quite satisfying” the Minister said. 

 “The second objective of the Foreign Trade Policy (FTP) was providing thrust to employment generation particularly in semi-urban and rural areas. A study commissioned by the Ministry reveals that exports generated an incremental direct employment of 10 lakh jobs in the last financial year.  The total employment currently being sustained due to export activity is 1 crore jobs – (86 lakhs of direct employment, and 14 lakhs of indirect employment in the logistics, transport and related sectors).  The study further reveals that if we achieve our target of 150 dollars over the next four years, we shall be adding a further 1 crore jobs: 85% of it direct employment, and 15% indirectly associated jobs” Shri Kamal Nath said.

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SB/SS/MRS

Press Information Bureau
Government of India
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KAMAL NATH CALLS FOR REMOVAL OF NON-TARIFF BARRIERS TO TRADE
NATIONAL CONFERENCE ON NTBs

 New Delhi: August 4, 2005 

          Shri Kamal Nath, Union Minister of Commerce & Industry, today called for removal of non-tariff barriers (NTBs) to trade and said that in view of the vulnerability of developing countries to NTBs, standards and conditionalities applied to exports of developing countries should be reasonable, transparent and fair.   Addressing the National Conference on “Non-Tariff Barriers for Indian Exports: Critical Inputs for the WTO Negotiations” organised by the Confederation of Indian Industry (CII) in association of Ministry of Commerce & Industry, here this evening, Shri Kamal Nath said: “I am not advocating complete abandonment of standards and conditions.  These are necessary.  Even India uses them.  All I am saying is that these be transparently and openly arrived at and fairly and justly implemented”. 

          Stating that with the steady increase in tariffs the world over, NTBs had become the chief instrument of regulating trade, he observed that developed countries used sophisticated methods while less developed countries had more straightforward NTBs but the common objective of all these was to limit imports. “A certain level of conditionalities, particularly when they relate to public health and consumer choice, is certainly tolerable.  What is intolerable is when these measures place unreasonable demands on traders which they cannot meet, or when they drive up costs of products with the specific aim to make them uncompetitive in the importing markets”, he said. 

          Apart from sanitary and phyto-sanitary (SPS) requirements, there were a host of other NTBs, the Minister said, such as standards, testing, destruction of allegedly contaminated or damaged consignments and other more innovative forms of NTBs.  “In US Ports, for example, the Customs authorities have begun demanding that Indian shrimp exporters provide Bank guarantees against the possible imposition of anti-dumping duties.  This is preposterous!  Even if there is no anti-dumping duty yet imposed, the poor exporter has to bear the added cost of providing a Bank guarantee against even the possibility of an anti-dumping duty!  This makes his product more expensive”, Shri Kamal Nath said.    He also referred to issues of labelling and registration as well as barriers imposed in the guise of environmental management system and social accountability.   Further, NTBs were imposed not only by government, but even by importing firms.     

          Shri Kamal Nath urged participants to give him feedback on NTBs faced by Indian products in other countries and also sought improved feedback from them “on our own NTB regime”. “On the domestic front, I believe that NTBs can be a legitimate tool in ensuring that industry at home is on the same footing as a foreign supplier.  There is a view that these are critical tools for stimulating development especially for countries like India. We need to identify a list of sensitive products which are employment intensive, cater to vulnerable sections of our populations, have thriving domestic presence and contribute significantly to the country’s economic growth.  In these sectors we will have to review what conditionalities we have imposed apart from tariffs, and if these conditions are inadequate then we should consider appropriate measures. Of course, everything we do should be WTO-compatible and meet the test of scrutiny from every angle”, he said. 

          The Conference was organised to: (a) apprise business and industries on the status of the WTO negotiations in agriculture and non-agricultural products as well as their implications for different business sectors in India; and (b) to discuss specific NTB issues being faced by business and industry and suggest effective solutions.  

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SB/MRS

Press Information Bureau
Government of India
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INDUSTRIAL PRODUCTION UP BY 12%

New Delhi: August 4, 2005

          Industrial production in India during the first quarter of the current financial year (April-June 2005) is estimated to have gone up by 12% compared to the same period of the previous financial year.    

          Indicating this, Shri Kamal Nath, Union Minister of Commerce & Industry, has said: “During the month of June 2005, the industrial production on 209 item groups which are monitored by the Department of Industrial Policy & Promotion grew by 12.8%. In May 2005, the growth rate was 12.7% and in April 2005 it was 10.4%.  Thus, during the first quarter of the year the industrial production has grown by 12% as compared to 10.9% last year”. 

           The government has initiated several steps to hasten the pace of industrial growth, including rationalisation in duty rates of customs and central excise. Measures to promote manufacturing and the requisite physical infrastructure such as the Industrial Infrastructure Upgradation Scheme (IIUS) to enhance productivity-competitiveness of the domestic industry by providing quality infrastructure in functional clusters and the Industrial Park Scheme have been initiated. Special incentives are being given to promote industrialisation in the North East Region and in the special category states. 

          As per the CSO (Central Statistical Organisation) figures, the overall annual growth rate of the industrial sector in 2004-05 was 8.3% as against 7% in 2003-04.    

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SB/MRS

 Press Information Bureau
Government of India
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 SEZ FOR PUNJAB SOON: KAMAL NATH

New Delhi: August 03, 2005

          Shri Kamal Nath, Union Minister of Commerce & Industry, has said that the proposal for setting up a Special Economic Zone (SEZ) in Amritsar (Punjab) is likely to be approved soon.  In a statement in the Lok Sabha this morning in response to a calling attention motion on “Situation arising out of non-setting up of a Special Economic Zone in Amritsar (Punjab) as announced by Prime Minister and steps taken by the government in this regard”, the Minister said that the proposal received from the Government of Punjab had already been recommended for grant of “in principle” approval, and once the specific product group of the proposed SEZ was identified by the State Government, the proposal would be processed for grant of necessary clearance.  

          The following is the full text of Shri Kamal Nath’s statement:  

“The Prime Minister during his interaction with the State Government on his visit to Amritsar on 1/9/2004 had conveyed that the Government of India would extend all necessary help to the Government of Punjab to set up a Special Economic Zone (SEZ) at Amritsar.   

The policy of the Central Government is to encourage and facilitate Zones being set up in the private sector or joint sector in association with the State Government or by the State Governments themselves. The minimum area requirement for a multi-product SEZ is 1000 hectares and above.  There is, however, no such area requirement for product specific or port/airport based SEZs.   

The Government of Punjab was therefore requested to send a suitable proposal for consideration.  In response, a proposal for setting up of a Special Economic Zone at Sri Harigobindpur Road (Mehta Road) adjoining the existing Industrial Focal Point in Amritsar by Punjab Small Industries and Export Corporation Ltd. (PSIEC) was received in January 2005 through the State Government. This proposal was placed before the Board of Approval, which is an Inter-Ministerial Committee, for consideration in its meeting held in March 2005.  During the Board meeting, the representative of the Government of Punjab indicated that since there is difficulty in obtaining 1000 hectares for setting up of a multi-product SEZ in Amritsar as land is fragmented and expensive, they now intend to set up a sector specific SEZ.  Specific product group to be promoted by the zone is to be finalized by the implementing agency.    

The proposal has been recommended for grant of “in-principle” approval.   Once the Government of Punjab identifies the specific product group of the proposed SEZ, the proposal will be processed for grant of necessary approval”.  

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SB/SS/MRS

 Press Information Bureau
Government of India
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ISSUES TO BE RAISED BY INDIA IN WTO CONFERENCE AT HONG KONG

New Delhi: August 03, 2005           

          The government maintains an active dialogue with various stakeholders to develop India’s positions on issues under negotiations at the WTO.  To achieve its negotiating objectives, India has been making concerted efforts to develop common positions with other WTO members sharing similar concerns and interests. 

          The sixth Ministerial Conference of the WTO scheduled to be held in Hong Kong, China from 13-18 December 2005 would, among other things, review the progress of ongoing negotiations launched under the Doha Work Programme and take appropriate decisions. The Doha Work Programme covers mainly negotiations in Agriculture, Services, Non-Agricultural Market Access (NAMA), Trade Facilitation and Development Issues.  

          The formal agenda of the Ministerial Conference at Hong Kong, China remains to be finalised.   However, it has been proposed by the Chairman of the WTO Trade Negotiations Committee that the Conference should aim to achieve substantial breakthrough on: modalities in Agriculture and Non-agricultural Market Access (NAMA), a critical mass of market opening offers in services, substantial progress in Rules and Trade Facilitation; and a proper reflection of development dimension in the negotiations. 

          India’s approach and priorities in the Doha Work Programme are dictated by its national interest. In the agriculture negotiations, the concerns of the large Indian farming community remain paramount, particularly their food and livelihood security concerns and rural development needs, as also our objective of achieving effective market access in goods and services of our export interests, addressing non-tariff barriers that impede our market access, and fully realizing the development dimension in the negotiations. 

          Negotiating objectives in agriculture, and strategies to achieve them, have been developed based on analytical work by research institutions such as the National Council of Applied Economic Research (NCAER), Indian Institute of Foreign Trade (IIFT) and the Centre for WTO Studies.    An Expert Group on Agriculture consisting of eminent agro-economists has been meeting from time to time to provide guidance in the agriculture negotiations.    Consultations are also held with Governments of States and Union Territories at officials and/or Ministerial levels.   These processes are intensified depending on the exigencies of WTO negotiations.  The government also works closely with other like-minded countries to build issue based coalitions, such as the G-20 on agriculture and the G-33 on Special Products and Special Safeguard Mechanism.     

          This was stated by Shri EVKS Elangovan, Minister of State for Commerce and Industry, in a written reply in the Rajya Sabha today. 

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SB/MRS

 Press Information Bureau
Government of India
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BOOST TO AGRI EXPORTS – APPLICATIONS BEING RECEIVED FOR BENEFITS UNDER VISHESH KRISHI UPAJ
YOJANA

 New Delhi: August 03, 2005 

        Vishesh Krishi Upaj Yojana has been notified with an objective to promote export of fruits, vegetables, flowers, minor forest produce, dairy, poultry and their value added products by incentivising export of such products.  The exporters of such products are entitled for duty credit scrip equivalent to 5% of FOB value of exports for each licensing year commencing from 1^st April, 2004.  However, dairy, poultry and their value added products shall qualify for benefits in respect of exports made on or after 1^st April, 2005. The scrip and the items imported against it are freely transferable.  The details of the scheme are given in the Book titled “Foreign Trade Policy 2004-09 updated as on 31-3-2005”. The scheme is in operation for exports effected in 2004-05 onwards. 

        Currently, applications are being received for awarding benefits under Vishesh Krishi Upaj Yojana and the last date for exports of 2004-05, is 31^st December, 2005. 

        This was stated by Shri E.V.K.S. Elangovan, Minister of State for Commerce & Industry, in a written reply in the Rajya Sabha today. 

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SB/MRS

 Press Information Bureau
Government of India
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POLICY MEASURES TO ATTRACT FDI IN SEZ 

New Delhi: August 03, 2005           

            Some of the policy measures taken to attract foreign direct investment (FDI) in Special Economic Zones (SEZs) include:

(i)                FDI upto 100% under automatic route for all manufacturing activities except arms and ammunition, explosives and allied items of defence equipments, defence aircraft and warships, atomic substances, narcotics and psychotropic substances and hazardous chemicals, distillation and brewing of alcoholic drinks and cigarettes/cigars and manufactured tobacco substitutes. 

(ii)              100% FDI allowed for development of townships including housing, commercial and recreational facilities on a case-to-case basis. 

(iii)            Facility to foreign companies to set up manufacturing units in SEZs as branch operation on standalone basis without approval from RBI.  

        This was stated by Shri E.V.K.S. Elangovan, Minister of State for Commerce & Industry, in a written reply in the Rajya Sabha today. 

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SB/MRS

  Press Information Bureau
Government of India
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RETAIL SECTOR IN INDIA GROWING AT 7% PER ANNUM: KAMAL NATH

New Delhi: August 03, 2005

          On an average, the retail sector in India has been growing at 7% per annum (based on 1999-2002 figures). Retail sector in India is predominantly unorganised, having one of the highest density of retail outlets per capita in the world and lowest per capita retail space.  Only 2% of the Indian retail sector is organised while this has been 20%, 80% and 70% in case of China, United States of America (USA) and United Kingdom (UK) respectively.  The contribution of the Indian retail sector to the total employment has been 7% as compared to 6%, 11.7% and 11% in case of china, USA and UK respectively.  As per the existing policy of the government, foreign direct investment (FDI) is not allowed in retail trade in any form whereas this has been allowed in many other countries with or without restrictions.  This was stated by Shri Kamal Nath, Union Minister of Commerce & Industry, in reply to a question in the Rajya Sabha today. 

          As per study commissioned to Indian Council for Research on International Relations (ICRIER) by the Department of Consumer Affairs, the size of Indian retail market has been estimated as Rs.7,40,000 crore in 2002.  

          Facts relating to global retail market are as follows: 

Ø    Retailing is one of the biggest private industries in the world and total sales exceeded US $ 8 trillion in 2002.

Ø    It accounts more than 10% of GDP in western countries and India and 8% in China.

Ø    High incidence of female employment and part time employment.

Ø    Food and grocery constitute the largest segment of retailing

Ø    Rapid urbanization, income growth, increased participation of women in labour force and improvements in infrastructure in 1980s and 1990s led to organised retailing.

Ø    Most countries liberalised policies for opening of FDI in retailing.

Ø    FDI allowed in China (1992), Brazil, Mexico, Argentina (1994), South Korea (1996), Thailand (1997) and Indonesia (1998).

Ø    Total procurement by global retail chains from India is estimated to be below US $ 3 billion out of which 1 billion by Wal-Mart alone.

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SB/MRS

 Press Information Bureau
Government of India
***

BILATERAL TRADE WITH BIMST COUNTRIES  

New Delhi: August 3, 2005 

The Framework Agreement on Bay of Bengal Initiative for Multi- Sectoral Technical and Economic Cooperation (BIMSTEC) Free Trade Agreement (FTA) was signed in February 2004. The Framework Agreement includes provision for negotiation of FTA on goods amongst the member countries, viz. Bhutan, Bangladesh, India, Myanmar, Nepal, Sri Lanka, and Thailand. As per the schedule given in the Agreement, the tariff liberalization programme shall commence on 1^st July, 2006. 

Member countries of BIMSTEC have constituted the Trade Negotiating Committee (TNC) to carry forward the programme, as stipulated in the Framework Agreement and the TNC is undertaking the negotiations as per schedule.  

This was stated by Shri EVKS Elangovan, Minister of State for Commerce & Industry, in a written reply in the Rajya Sabha today

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SB/SS

 Press Information Bureau
Government of India
***

AGRICULTURAL EXPORTS TOUCH US $ 8 BILLION 

New Delhi: August 3, 2005 

The value of export of agri products (including marine products, tea, coffee, castor oil, shellac, cotton incl. waste) during the year 2004-05 was US $ 8001.7 million (i.e. US $ 8 billion) as against US $ 7532.24 million ( US $ 7.5 billion) during the corresponding period of last year. A growth of 6.23 % has been achieved.  

The value of export of marine products during the year 2004-05 was at US $ 1478.48 (US $ 1.4 billion) as against US $ 1330.76 million (US $ 1.3 billion) in 2003-04. The export has grown by 11.10%.  

The government, on an ongoing basis, for promotion of export of agricultural products is conducting publicity campaigns, sending delegations abroad, participating in international  trade fairs, invitging potential buyers and providing financial assistance to exporters for improving quality, packaging, brand promotion of products and for conducting market survey.

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Press Information Bureau
Government of India
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FUNDS FOR EXPORT ORIENTED INDUSTRIES OF KERALA

 New Delhi: August 3, 2005 

          The Central Government has allocated an amount of Rs. 10.69 crore for Kerala under the State component of the Assistance to States for development of Export Infrastructure & Allied Activities (ASIDE) Scheme.  

          The allocation of the State component of the ASIDE scheme to the States/ Union Territories is made, inter alia, on the basis of the State-wise data for merchandise exports compiled by the DGCI&S. Demands for additional funds by the State Governments under the State component of the ASIDE Scheme are not considered.  

          This was stated by Shri EVKS Elangovan, Minister of State for Commerce & Industry, in a written reply in the Rajya Sabha today.

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Press Information Bureau
Government of India
***

FREE TRADE AGREEMENT WITH THAILAND
DOMESTIC INDUSTRY TO BE PROTECTED

 New Delhi: August 2, 2005

          A Framework Agreement for establishing Free Trade between India and Thailand was signed by the Commerce Ministers of the two sides on 9^th October, 2003 in Bangkok, Thailand. It provides for an Early Harvest Scheme (EHS) under which 82 common items of export interest to the sides have been agreed for elimination of tariff on a fast track basis w.e.f. 1.9.2004.  The items in the EHS list were finalised in consultation with the apex Chambers and Ministries /Departments concerned and the domestic stakeholders. The EHS list has been finalised through negotiations based on full reciprocity in items of trade value between India and Thailand.  

          To protect the vulnerable sections of domestic industry, the Framework Agreement provides for each country to maintain a negative /sensitive list of items on which no tariff concessions shall be granted under the FTA.  In addition, the Agreement provides for trade defence measures which an importing country can take recourse to.  In case of a surge in imports and injury to the domestic industry, a country is allowed to take measures such as antidumping and safeguards, Minister of State for Commerce and Industry, Shri EVKS Elangovan informed the Lok Sabha here today.

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 Press Information Bureau
Government of India
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INCREASE IN TEXTILE EXPORTS TO US 

New Delhi: August 2, 2005

           The Directorate of Commercial Intelligence and Statistics’ (DGCI&S) provisional export data and the import data of US authorities show increase in India’s textile exports to the US in the post quota period, i.e. after 1.1.2005. While DGCIS’s data shows that India’s textile exports to US during the period January- March, 2005 were 1.33% higher thatn the corresponding period of previous year, the US trade data shows a growth of 8.24% in import of textiles products from India during the period January – March, 2005 vis a vis corresponding period of last year. However, certain exporters have expressed that there is an underestimation of export figures given in the DGCI&S data.

          This was stated by Shri EVKS Elangovan, Minister of State for Commerce & Industry, in a written reply in the Lok Sabha today. 

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Press Information Bureau
Government of India
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INDIA HAS TRADE RELATIONS WITH 200 COUNTRIES  

New Delhi: August 2, 2005 

          India has export and import trade with about 200 countries.   The trade details are as follows: 

           India exported a variety of commodity basket consisting of engineering goods, gems & jewellery, chemical & related products, textiles, etc., and imported cereals, pearls, precious stones, electronic goods and gold and silver etc.  The names of the countries, values of import/export year-wise, commodity-wise are given in the publication ‘Monthly statistics of Foreign Trade of India Vol.II (imports) and Monthly statistics of foreign Trade of India VolI (Exports) of 2003, 2004, and 2005 published by Directorate General of Commercial Intelligence & Statistics (DGCI&S).  

          Strengthening of the trade relations with countries and groups of countries is continuous and ongoing process.    Efforts are regularly being made to expand and diversify trade through various activities such as trade market research, information dissemination, buyer-seller meets, participation in important trade fairs, meeting of the Joint Commissions/ Councils to help identify potential areas/sectors for promoting trade.

          This was stated by Shri EVKS Elangovan, Minister of State for Commerce & Industry, in a written reply in the Lok Sabha today.

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Press Information Bureau
Government of India
***

 ROLE OF DGFT

 New Delhi: August 2, 2005

         The primary role of Directorate General of Foreign Trade (DGFT) is promotion of India’s foreign trade by implementing various export promotion schemes.  Before 1991, Directorate General of Foreign Trade worked more as a regulator but in the post WTO liberalized economic scenario, Directorate General of Foreign Trade is required to play a more effective and wide ranging role as a trade facilitator.    DGFT is required to act as a resource centre for trade information, as a monitoring agency for imports and exports and as a support organisation for WTO negotiations. 

        This was stated by Shri EVKS Elangovan, Minister of State for Commerce & Industry, in a written reply in the Lok Sabha today. 

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SB/MRS

Press Information Bureau
Government of India
***

KAMAL NATH TO ADDRESS NATIONAL CONFERENCE ON NON-TARIFF BARRIERS FOR INDIAN EXPORTS ON
AUGUST 4

 New Delhi: August 2, 2005

          Shri Kamal Nath, Union Minister of Commerce & Industry, will address the National Conference on “Non-Tariff Barriers (NTBs) for Indian Exports – Critical inputs for the WTO negotiations”, here on 4^th August, 2005.   The one-day Conference is being organised by the Confederation of Indian Industry (CII) in association with the Ministry of Commerce & Industry. 

          The objectives of the Conference are to: (a) apprise business and industries on the status of the WTO negotiations in agriculture and non-agricultural products as well as their implications for different business sectors in India; and (b) discuss specific NTB issues being faced by business and industry and suggest effective solutions. 

          The Conference is structured to comprise a general briefing session on the status of the WTO negotiations with special reference to NTBs, parallel sectoral round tables and sectoral presentations to the Minister and Ministry of Commerce & Industry officials on critical issues and specific suggestions for solutions. 

          The key outcome of the Conference will be sector-wise suggestions from Indian industry and businesses to facilitate the Government of India in its negotiation process in WTO.

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