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 KAMAL NATH MEETS JAPANESE MINISTER – GURGAON INCIDENT DISCUSSED
ISOLATED INCIDENT AND NOT THE NORM, MINISTER TELLS JAPAN
JAPANESE INVESTMENT NOT TO BE AFFECTED, SAYS NAKAGAWA

 New Delhi: July 29, 2005

                        Shri Kamal Nath, Union Minister of Commerce & Industry, had a long bilateral meeting this morning in Geneva with Mr. Shoichi Nakagawa, Minister of Economy, Trade and Industry (METI), Japan on the sidelines of the meeting of the WTO General Council, during which bilateral issues were reviewed and the Gurgaon incident also came up for discussion.  Shri Kamal Nath assured the Japanese Minister that the Gurgaon incident was an isolated one and certainly not the norm. He explained the circumstances of the unfortunate incident as well as the follow up action taken by the government to contain and resolve the issue.

             The Japanese Minister agreed with Mr. Kamal Nath that the incident was indeed an isolated one and assured him that this would not affect Japanese investment in India. In this context, Mr. Nakagawa emphasised that Japanese companies were investing in West Bengal in big way.   

             Shri Kamal Nath also referred to the Special Economic Zone (SEZ) Act passed recently by Parliament and requested the Japanese government to encourage their enterprises to invest in these Zones. 

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WTO STALEMATE A WAKE-UP CALL – BENEFIT TO FARMERS, THE POOR AND JOBLESS SOLE CRITERIA FOR JUDGING SUCCESS OF DOHA ROUND: KAMAL NATH  

New Delhi: July 29, 2005

                    Shri Kamal Nath, Union Minister of Commerce & Industry, has termed the current stalemate in the WTO trade talks as a wake-up call and underlined that the world trading system must be equitable and fair, especially for the poor and vulnerable economies of the developing world if the process of multilateral trade negotiations is to move forward.   “If there is a stalemate, it should not be seen as a failure.  It only means that certain issues have so far not been adequately addressed and further negotiations are required to address these issues”, he said.

           “The success of the current Doha Round of the World Trade Organisation (WTO) talks will be judged not by tariffs and formulae but by (a) how many jobs it can create in developing countries; (b) how much the income of farmers in developing countries has risen; and (c) how many poor people have been extricated from poverty”, Shri Kamal Nath told the Director General of WTO, Dr. Supachai Panitchpakdi; the EU Trade Commissioner, Mr. Peter Mandelson; and the Japanese Minister of Economy, Trade and Industry, Mr. Shoichi Nakagawa during his interactions with them in Geneva last evening and today.  He said that in the name of “ambition” (in the results to be achieved in the Round) the WTO should not lose sight of the crucial development dimension which was of critical importance to millions of poor people around the world.     

          Shri Kamal Nath also emphasised the need to urgently address the issues of non-tariff barriers (NTBs), sanitary & phyto-sanitary (SPS) measures and the lack of clarity in WTO anti-dumping rules which adversely affected exports from developing countries.   

          During his talks with Mr. Peter Mandelson, it was indicated that India and the European Union would cooperate in making a submission to WTO to bring about greater clarity and disciplines in the area of anti-dumping.

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KAMAL NATH CALLS FOR AMENDMENT TO TRIPS AGREEMENT TO PROTECT BIODIVERSITY

New Delhi: July 29, 2005

                    Shri Kamal Nath, Union Minister of Commerce & Industry, has called for amendment to the WTO TRIPs (Trade-related Intellectual Property Rights) Agreement in order to protect traditional knowledge and bio-diversity. In a letter recently addressed by him to 31 Trade Ministers, Shri Kamal Nath has emphasised the need to develop a sharper and more aggressive strategy on this issue as it has a strong bearing on large sections of people who are holders of traditional knowledge and are poor or disadvantaged. “We need to form a common position before Hong Kong for taking the process towards a logical outcome”, he has proposed.

           “While insisting on an amendment to the TRIPs Agreement in line with our consistent policy, we could also think of a parallel line of action, similar to what we did on public health issues during the Doha Ministerial Meeting, namely, getting a Ministerial Declaration on TRIPs and Biological Diversity, Traditional Knowledge and Folklore. If we are able to achieve this at Hong Kong, it would strengthen our hands in getting an eventual amendment to the TRIPs Agreement”, the letter says.

           Doha Ministerial Declaration of 2001 had instructed the Council on TRIPs in the WTO to examine the relationship between the TRIPs Agreement and the Convention on Biological Diversity (CBD) for the protection of traditional knowledge and folklore. This issue was included in the negotiating mandate after several negotiating countries found that TRIPs obligations were not supportive of the commitments they had undertaken under the CBD, which provided for the conservation and sustainable use of bio-diversity with a view to meeting the food, health and other needs of the growing world population.  CBD also encourages equitable sharing of benefits arising from utilisation of such knowledge.     

          “Finding a solution for implementing the TRIPs Agreement and the CBD in a mutually consistent manner has been at the core of discussions in the TRIPs Council for the last four years. India, along with other countries having significant biological diversity, have made their submissions to bring about a mutually supportive resolution to the objectives of the TRIPs and the CBD”, Shri Kamal Nath has said, adding that so far not much progress has been made towards achieving this.

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CHINA OPENS UP FOR INDIAN MANGOES

 New Delhi: July 27, 2005

         China has opened its market for import of Indian mangoes including the ‘alphanso’ variety.   Following a pest risk analysis, China has agreed to open its market for Indian grapes and bitter gourds.   As a part of this process, the Chinese concerns relating to other fruits and vegetables are also being addressed to enable their export.     

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

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 GURGAON AN ISOLATED INCIDENT – INVESTOR CONFIDENCE NOT TO BE AFFECTED: KAMAL NATH

 New Delhi: July 27, 2005

           Shri Kamal Nath, Union Minister of Commerce & Industry, today said that the incident in Gurgaon would not in any way affect investor confidence, as this was an isolated and local incident.   At a news conference here today, he expressed anguish over the labour-police confrontation in Gurgaon, near Delhi and said that this incident was being inquired into by a judicial commission and would be dealt with as per the provisions of law. He assured the investors, both existing and potential, that India continues to be a safe and investor – friendly country with tremendous potential for growth.

          Talking about Japanese investment in India, Shri Kamal Nath recalled that India and Japan have longstanding trade and investment relations.  Japan is the fourth largest investor in India, with US$ 2 billion equity investment made in India since 1991.  250 Japanese companies are present in about 300 locations, all over India and are engaged in a variety of economic activities.  There are many joint ventures in India between leading Japanese and Indian companies. Suzuki’s joint venture with Maruti, located in Haryana, is one such example of a very successful Indo-Japanese collaboration.

           India offers a very attractive investment climate.  This has been highlighted by a number of studies undertaken by reputed international organizations. AT Kearney’s FDI Confidence Index 2004 rated India as the 3^rd most attractive investment destination.  Another survey by UNCTAD last year found India along with USA and China to be the top three ‘investment hot spots’.  A World Bank study had placed India among the top 10 reformers in 2003. A recent survey conducted by FICCI had found that 77% of the foreign companies were making profits and another 9% were breaking even. This is reflective of the attractive Indian investment climate.  

Industrial relations in India have traditionally been very cordial and instances of disputes are far and few.  The number of strikes and lockouts has been consistently coming down and declined by 15% in 2004 compared to the previous year.  In fact, the mandays lost due to strikes and lockouts declined sharply by over 50% in 2004 compared to 2003. One isolated incident, though most unfortunate, should not be a yardstick for assessment of industrial relations in India.   

          Shri Kamal Nath emphasised that to resolve labour – management differences, India has an elaborate reconciliation machinery and   special labour courts and tribunals expeditiously look into disputes where reconciliation has not been possible.  This arrangement has stood the test of time and resulted in cordial industrial relations in the country.

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 117% INCREASE IN FDI INFLOWS IN APRIL-MAY: KAMAL NATH

New Delhi: July 27, 2005

          Inflows of foreign direct investment (FDI) into India (equity component only) have shown an increase of 117% during April-May 2005-06, having reached a figure of US $ 912 million as against US $ 421 million during April-May of the previous financial year 2004-05.    This was indicated by Shri Kamal Nath, Union Minister of Commerce & Industry, at a news conference here today. 

          FDI inflows (equity component only) into India during the financial year 2004-05 stood at US $ 3.75 billion, a growth of 42% over 2003-04. Shri Kamal Nath said that FDI inflows during the current financial 2005-06 were expected to be in excess of US $ 6 to 7 billion (equity component only). 

          The major investing countries in India are USA, Netherlands, Japan, the UK and Mauritius. 

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 INPUT-OUTPUT NORMS FOR 18 NEW EXPORT ITEMS NOTIFIED

 PRESS NOTE

         The Directorate General of Foreign Trade (DGFT) has issued Public Notice No.32 dated 26/07/2005 notifying additional standard input-output norms for 18 new export items and amendments/corrections/deletions in the standard input-output norms for 30 existing export items.  Out of the 18 new norms, 10 norms relate to the chemicals & allied products and three relate to the engineering products and 6 relate to the miscellaneous products.   Fixation of standard input-output norms will facilitate issue of advance licences for above additional items to the exporters.

 Directorate General of Foreign Trade, Ministry of Commerce & Industry

New Delhi, 27^th July, 2005

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GOVERNMENT HELPS TEA INDUSTRY

 New Delhi: July 26, 2005

          The government has taken a number of measures to help the tea industry. The additional duty excise of Re. 1 per kg on tea has been withdrawn in the Union Budget for 2005-06. Government has also recently sanctioned two schemes i.e. subsidy for the production of orthodox teas and assistance to the two tea Research and Development Institutions from special fund created with collections of additional duty of excise on tea. A Special Tea Term Loan (STTL) for the tea sector was announced which envisages restructuring/ rephrasing of irregular portion of outstanding term/working capital loans in the tea sector with repayment over 5 to 7 years and a moratorium of 1 year to small tea growers and bought leaf factories, which is extended on a case to case basis for large tea growers. The STTL also provides for working capital upto Rs 2 lakhs at a rate not exceeding 9 % to small growers. The other measures taken to help the tea industry include the implementation of a price sharing formula between small tea growers and manufacturers of tea w.e.f. 1.4.2004, implementation of a price subsidy scheme for small tea growers for a four month period from February to May 2004, reduction in the import duty on items of machinery used to improve productivity and quality of tea, including value addition to an inclusive rate of 5 % etc. Besides, a number of developmental schemes arte also being implemented by the Tea Board during the 10^th Five year Plan for enhancing productivity, quality and marketability of tea produced in the country.

           A stakeholder’s conference on tea was convened by Shri Kamal Nath, Commerce and Industry Minister on 16^th and 17^th September 2004 where the most important recommendations pertained to rejuvenation and replantation of old tea bushes with a view to raise productivity. Detailed costing and modalities of funding this large programme are under the consideration of the Government. In order to sustain the domestic market, various promotional activities are being undertaken by the Tea Board in addition to the marketing efforts made by the tea industry. This includes issuance of regular advertisements of generic nature in various domestic publications on health and lifestyle aspects of tea, participation in various important fairs and exhibitions all over the country. Steps taken to increase exports of tea include implementation of a medium term export strategy encouraging production of quality teas specially orthodox type of teas, participation in major trade fairs/ exhibitions abroad, lending promotional support to Indian exporters in marketing Indian brands, field sampling at speciality stores and in principal markets, exchange of tea delegations, launching media campaigns to increase consumer awareness etc. in order to maintain quality and retain brand equity of Indian teas, Government has issued a new Tea (Distribution and Export) Control Order, 2005 on 01.04.2205.

           This was informed by the Minister of State for Commerce and Industry Shri EVKS Elangovan in the Lok Sabha here today.

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CECA AND FREE TRADE AGREEMENTS

 New Delhi: July 26, 2005

          A Comprehensive Economic Cooperation Agreement (CECA) between India and Singapore has been signed on the 29^th June in New Delhi by the Prime Ministers of two countries. The CECA is structured as an integrated package of several agreements concerning Trade in Goods, Trade in Services, Investments and Economic Cooperation and a revised Double Taxation Avoidance Agreement. The CECA, which comes into effect from 1^st August 2005, is expected to benefit both the countries in the form of increased bilateral trade, investment and economic cooperation as a whole.

           Negotiations for the establishment of an FTA are going on with a number of countries which include (i) Bay of Bengal Initiative for Multisectoral Technical and Economic Cooperation (BIMSTEC) comprising Bangladesh, Bhutan, India, Myanmar, Nepal, Sri Lanka, and Thailand; (ii) ASEAN and (iii) Thailand under the respective Framework Agreements signed on 8^th February, 2004, 8^th October 2003, and 9^th October 2003 respectively. Negotiations with Sri Lanka and Mauritius are also at different stages for similar arrangements. With Sri Lanka, India already has a FTA, but the proposal is to have a Comprehensive Economic Partnership Agreement. Negotiations for the operationalisation of the South Asia Free trade Agreement (SAFTA) signed at the last SAARC Summit are also going on. Negotiations are also going on with Chile to have a Preferential Trade Agreement under the Framework Agreement signed on January 20, 2005. Besides these, feasibility studies of having Comprehensive Economic Cooperation Agreement/ Free Trade Agreement/ Preferential Trade Agreement with a number of other countries are at different stages of examination.

           This was informed by the Minister of State for Commerce and Industry Shri EVKS Elangovan in the Lok Sabha here today.

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42 NEW SEZs APPROVED

 New Delhi: July 26, 2005

           Approval has so far been given for setting up of 42 new Special Economic Zones (SEZs) at Navi Mumbai, Kopta (Maharashtra), Mundra, Positra, Dahej, Hazira, Icchapor (Surat – Gujarat), Hassan, Baikampady (Karnataka), Moradabad, Bhadohi, Kanpur, Greater Noida, NOIDA (UP), Kakinada, Vishakapatnam (Andhra Pradesh), Jodhpur (Rajasthan), Kolkatta, Kulpi (West Bengal), Vallarpadam, Kakkancherry, Kalamassery (Kerala), Nanguneri, Ennore, Mahindra City (Near Chennai), Sriperumbudur (Tamil nadu), Paradeep, Gopalpur (Orissa), Gurgaon (Haryana), Sedarpet-Karasur (Pondicherry), Adityapur, Ranchi (Jharkhand) and Chandigarh.

           Proposals recently received through the state governments/union territory for setting up SEZs at Mangalore, Bangalore, Hassan (Karnataka), Shastri Park (New Delhi), Ghaziabad (UP), Mohali, Amritsar (Punjab), Ahmedabad (Gujarat), Nagpur (Maharashtra), Trivandrum (Kerala) and Gurgaon (Haryana) are under the consideration of the Government and final decisions are expected shortly.

           11 SEZs are in operation at present at Kandla and Surat (Gujarat), Santa Cruz (Maharashtra), Cochin (Kerala), Chennai (Tamil Nadu), Vishakapatnam (Andhra Pradesh), Falta and Salt Lake – Manikanchan (West Bengal), Noida (UP), Indore (Madhya Pradesh) and Jaipur (Rajasthan).

           The purpose and objectives of SEZs include promotion of exports of goods and services, generation of additional economic activity, promotion of investments from domestic and foreign resources, creation of employment opportunities and development of infrastructure facilities.  

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

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DETAILS OF EXPORT PROMOTION SCHEMES

 New Delhi: July 26, 2005

Details of schemes in operation are:

 I.   Duty Exemption and Remission Schemes 

1.       Advance Licence Scheme to allow duty free import of inputs, which are physically incorporated in the export product (making normal allowance for wastage) with a specific export obligation in terms of value and quantity.

2.       Export Promotion Capital Goods (EPCG) Scheme to allow import of capital goods for pre-production, production and post-production (including CKD/SKD thereof as well as computer software systems) at 5% customs duty subject to an export obligation equivalent to 8 times of duty saved on capital goods imported under the Scheme to be fulfilled over a period 8 years reckoned from the date of issuance of licence.   Relaxation in export obligation has been allowed for specific categories such as Units pertaining to agro, SSI, BIFR etc.

3.       Duty Free Replenishment Certificate (DFRC) is issued for import of inputs used in the manufacture of goods without payment of basic customs duty after completion of exports.

4.       Duty Entitlement Passbook (DEPB) Scheme to neutralise the incidence of customs duty on the import content of the export product and the exporter is entitled for a duty credit as a specified percentage of FOB value of exports, made in freely convertible currency.

5.       Schemes related to Gems & Jewellery sector such as Replenishment Licence, Advance Licence, Diamond Imprest Licence etc.

6.       Deemed Export Duty Drawback and Terminal Excise Duty Refund Scheme for those transactions in which the goods supplied to specific categories of beneficiary, do not leave the country and the payment for such supplies is received either in Indian Rupees or in Free Foreign Exchange.

II.  Special Economic Zone is a specifically delinked duty free enclave and are deemed to be foreign territory for the purposes of Trade Operations and duties and tariffs wherein these units can import/procure from the DTA all types of goods and services without payment of duty.

III.  Export Oriented Unit (EOU) Scheme, Electronics Hardware Technology Park (EHTP) Scheme, Software Technology Park Scheme or Bio-Technology Park Scheme to operate under duty-free regime for import/procurement of all types of goods including capital goods without payment of duty for manufacture of goods for export.

 IV. Free Trade and Warehousing Zone (FTWZ) Scheme to create trade related infrastructure to facilitate the import and export of goods and services with freedom to carry out trade transaction in free currency.  

 V.  Served from India Scheme to allow duty free import of capital goods including spares, office equipment and professional equipment, office furniture and consumables related to the main line of business against exports of services.  

VI.   Target Plus Scheme for the status certificate holder to allow duty free credit based on incremental exports to import any inputs, capital goods including spares, office equipment, professional equipment and office furniture. 

 VII.  Vishesh Krishi Upaj Yojana Scheme to allow duty free import of inputs or goods including capital goods (as notified) against export of certain agricultural and their value added products. 

 VIII. Assistance to States for Infrastructure Development of Exports to encourage the state government to participate in promoting exports from their respective states for developing infrastructure etc.

 IX.   The Market Access Initiative (MAI) Scheme to provide financial assistance for a whole range of activities as a Medium Term Export Promotion efforts with a sharp focus on a country and product.

 X. The Marketing Development Assistance (MDA) Scheme to provide financial assistance for a range of export promotion activities such as participation in trade fairs and buyer seller needs abroad or in India, export promotion seminars etc

 XI.  Other schemes to promote activities such as Brand Promotion and Quality Improvement etc. 

           All these schemes can be accessed from the website www.nic.in/eximpol

 (Source: Written reply in Lok Sabha by Shri EVKS Elangovan, Minister of State for Commerce & Industry on 26/7/05)

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 SERVICES OFFERS – CABINET COMMITTEE ON WTO MEETS
INDIA, A DEMANDEUR IN WTO SERVICES NEGOTIATIONS: KAMAL NATH

 New Delhi: July 25, 2005

           The July Framework Agreement adopted by the World Trade Organisation (WTO) on 1^st August, 2004 laid down the broad principles and guidelines for further negotiations in the Doha Round and reaffirmed that all WTO Members should strive for submitting high quality offers in sectors and modes of supply of interest to developing countries by May, 2005.  

           The Cabinet Committee on WTO matters (CCWTO) met today to take stock of the follow-up action taken by the Ministry of Commerce and Industry consequent to the last meeting of the CCWTO on 30^th May 2005, in which Department of Commerce had been directed to have effective inter-ministerial consultations. In particular, Department of Commerce had been directed to consult Ministry of Information Broadcasting, Department of Telecommunication and Ministry of Finance. Such consultations were held by the Department of Commerce and the details have been reported to the CCWTO. The suggestion made by various Departments/Ministries in these consultations have been accepted by the Department of Commerce and appropriately incorporated in the Revised Offers. The CCWTO has now given directions to the Department of Commerce to make these Revised Offers to the WTO in July/August, 2005 as part of the services negotiations under the Doha Round.

           The Cabinet Committee on WTO matters also reiterated that the Commerce Ministry has the flexibility to move forward in the services negotiations within the limits of its autonomous liberalisation.  While making the Revised Offer, India will also be guided by the range and depth of the improved Offers that would be made by the developed countries in the Modes and sectors of interest to India.   (What it means is that the offers are conditional.   In other words, a member country can also withdraw its offers if it does not in turn get satisfactory offers from other member countries).

           India’s major trading partners such as USA, EC, Japan, Canada, Australia etc., have already submitted their Revised Offers. An analysis of these Revised Offers has revealed that they have fallen short of India’s expectations. Accordingly, the Revised Offer will be calibrated appropriately keeping the best interests of India in mind. However, India still expects that other countries would respond favourably to its requests of increased market access, especially in Modes 1 & 4 in various sectors of importance to India.

           In keeping with the July Framework Agreement, India will be making its Revised Offers shortly in sectors which include those in which commitments were made in the Uruguay Round or in which Initial Offers were made in the ongoing Doha Round of WTO negotiations. A few other sectors will also be included in the Revised Offer. The sectors thus covered include business services, construction and related engineering services, health related and social services, tourism and travel related services, maritime services and transport services.

           On the importance of services negotiations for India, Shri Kamal Nath, Union Minister of Commerce & Industry, has said:  “Given its strengths in this area, India is a demandeur in the WTO negotiations for liberalisation of trade in services. Currently, India’s earnings through services exports are estimated at US $ 51 billion in 2004-05. This is a quantum jump from US $ 25 billion in 2003-04. The bulk of the increase has expectedly come from Miscellaneous and Software Services (Miscellaneous Services include services such as Communication, Financial, Construction, Management, Other Business Services etc.). According to the Boston Consulting Group, this has the potential to increase to US $ 200 billion by 2020, if the developed countries provide better access to their markets, especially through improved offers in respect of Mode 1 (cross-border supply which covers BPO) and Mode 4 (movement of natural persons)”.

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 TEXT OF ADDRESS BY KAMAL NATH ON “INDIA IS THE FUTURE: CHALLENGES AND OPPORTUNITIES” AT IIPA

 New Delhi: July 22, 2005

           “I am delighted to be here at the Indian Institute of Public Administration this evening.  The IIPA is an Institute of international repute, a power house for research and a crucible of ideas and best practices in governance, public policy and administration.  It is a privilege to be interacting with an audience of your calibre.   

          I have been asked to speak to you on ‘India is the future’ – this is quite different from speaking on the ‘future of India’ – which would require a fortune-teller or an astrologer!  I am neither.  I am a politician.  We politicians generally have to talk a lot – to our constituents in rural areas, to audiences abroad, to colleagues in Parliament and to the media.  We talk on all kinds of subjects and to all kinds of audiences.  In the process, it almost seems as though we have speeches on tap, as if it was fast food! 

          But today’s talk for me is more in the nature of a well-savoured banquet.  The issue on which that I speak to you all today does not require too much conjecture.  It is merely and simply a statement – the statement that the future is indeed India.  I have repeatedly said that we are living in such fast changing times,  that the past cannot be merely projected into the future.  The past has to be used to simulate the future, so that we can speak of it with authority – so that we can, in fact, mould it, fashion it to our purposes. 

          I was in Australia a couple of months ago, addressing the Lowy Institute, which has come to be known as one of the most prestigious think tanks in Australia.  You will be surprised to know that the very first paper produced by the Lowy Institute was “India: The Next Economic Giant”.  What impressed me was that this phrase had no question mark attached to it!  Clearly, recent developments have shown that the confidence expressed by the author was not misplaced! 

          The Indian economy today is poised for the kind of leap that none of us has even imagined – leave alone witnessed – before.  Ever since we began our liberalization programme 14 years ago, when our current Prime Minister Dr. Manmohan Singh was our Finance Minister, we have experienced tremendous change; and yet I say that the kind of growth that we are today poised to accomplish is far greater.  Who would have thought 14 years ago (when we had to pawn the gold from our treasury in order to service our international debt) that today we would have foreign exchange reserves of 140 billion dollars?  Who would have thought 14 years ago, (when economists had almost made a theory of what they called the ‘Hindu rate of growth’ of 2 and 3 per cent) that today we would see a sustained and constant growth of 6 to 8 per cent?  Who would have thought that in the last year we would get 8 billion dollars in the form of FII, and that the sensex would zoom past 7000 points? 

          When the Congress government, supported by Left Parties, took office in India a year ago, many people in India and abroad were skeptical.  Given the pressures of coalition politics, doubts were expressed about whether we could sustain the economic reforms – economic reforms which, incidentally, we ourselves had started in 1991 and which, fortunately, successor governments did not abandon.  Our reform process has been a calibrated yet sustained one.  But a reform process alone is not enough; it has to be part of a grand vision – a vision of the future, a vision for the future.   

          When I became the Commerce & Industry Minister I decided that the first thing to do was to frame a coherent Foreign Trade Policy.  I dispensed with the old method of tinkering with export and import rules every year and publishing an annual Exim Policy.  I felt that we must have an integrated vision for our exports.  No longer were we required to only generate dollars.  What was more important was to generate employment.  And it is this objective that guided the formulation of the first ever Foreign Trade Policy which we announced last year.  As a target we declared our intention to double our share in world trade within five years.  

          We are well on our way to this.  Last year our exports were 80 billion dollars, which was 24% higher than the previous year.  Our imports were 105 billion dollars.  Thus our economic engagement with the world was 185 billion dollars.  Within three years we shall take this economic engagement (exports & imports) to 500 billion dollars.  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.   

          As a country we have often been pilloried for our economic policy.  We have been told we are too bureaucratic; we have been told that we are poor cousins to China, and we have been told that our policies restrict growth rather than promote it.   We have also been told that our infrastructure puts foreigners off.  Some of this is true to an extent.  I would be less than truthful if I did not admit it.  But not all of it.  For those of you who still think this way, I would like to share the findings of the annual research survey conducted by the global consulting firm AT Kearney.  The study polled CEOs and top decision-makers of the world’s largest 1000 firms.  In 2002, India was the 15^th most attractive FDI destination worldwide.  In 2003, India moved up to the 6^th spot.  In 2004 we moved to number 3.  In the not too distant future, I am confident we shall be number 1. 

          In fact, India has a rather liberal FDI policy. Practically all sectors are open for FDI.  Where equity caps exist, these are being reviewed and our attempt is to do away with them completely, except in a few sensitive areas where we will have to adopt a policy of gradualism.  Recently we have opened up the construction-development sector; and even the retail sector – till now regarded as a holy cow – is under examination for constructing an India-specific model, a model that creates new job opportunities rather than one which displaces our mom-and-pop stores.  In FDI we are looking for greenfield investment – investment that creates employment, investment that brings in technology, and not just investment that replaces Indian capital. 

          A sound infrastructure base is crucial for both industry and trade.  We estimate that about 150 billion dollars are required to be invested in infrastructure in the next 10 years.   Infrastructure projects involve large capital outlays, long gestation periods and high leverage ratios.  To achieve the targeted 8 per cent GDP growth, infrastructure bottlenecks are required to be removed – roads, ports, electricity, water, all require a massive infusion of capital.  While completing the Golden Quadrilateral highway project, Prime Minister Dr. Manmohan Singh has spelled out a vision for a parallel railway track connecting the four metros dedicated solely to trade and the movement of goods traffic.  This, in turn, would push the economy into a higher growth trajectory. 

          I want here to once and for all correct the misconception that India is poor in manufacturing.  This implication is conveyed as a backhanded compliment which goes something like this:  ‘India is the Back Office of the world, while China is the world’s Factory’.  While complimenting us on our expertise in Services, the implication is that we are poor in manufacturing.  This is far from the truth.  Of course, we are good in Services & Business Process Outsourcing, but that does not mean that we lag behind in manufacturing skills.  In sectors like auto-components, chemicals, apparels, pharmaceuticals and jewellery we can match the best in the world.  We have the skills, we have the positive environment and attitude.  All we want is investment & better technology.  Today few other countries have embraced foreign technology and management best-practices with as much enthusiasm as has India. 

          I would not like to compare India with China.  Comparisons are always invidious.  I would only speak about India’s unique strengths – our positive points and why I think the future belongs to us.   In India it is our institutional strengths that we are proud of.  We are a democracy and wear it on our sleeve.  We do not see democracy as a hindrance or a luxury, but a necessary and desirable way of life, part and parcel of the Indian ethos.  And along with this ethos comes the Rule of Law, a vibrantly free Press, a fiercely independent judiciary and administrative transparency.  These may slow things down a bit, but only in the short term.  What is more important is that India has an open system with social and political safety valves, and a regulatory environment that provides comfort, long-term stability and security to the foreign investor and Indian entrepreneur alike.   

          In India, our one billion people are our greatest strength.  We have got around the population problem, and now our demographic growth rate is less than 2%.  We have a literacy rate of 70% (up from a mere 15% at Independence).  We have engineering and management institutes which can hold their own against the best in the world.  (And, of course, we also have the English language!)  Our objective is how to leverage our social strengths into economic gains.  We want to bring economic prosperity to our people, and bring it fast.  We no longer dream of a better life for our grandchildren or children – we want a better life for ourselves.  Rapid economic development within our own lifetime is what we seek. 

          India is a Great Democracy – no doubt about it.  The question is, can we now make it a Great Power?  In 1947 India commanded the world’s sympathy, as a nation that had just freed itself from the yoke of colonialism.  Less than six decades down the line we command the world’s awe and respect.  But awe and respect can be fleeting if they are not anchored to a solid economic base.  I believe that we have already laid the foundations of that solid economic base.  If we build upon it correctly and swiftly, no power on earth can snatch away the future from India – India will indeed be the future. 

          Thank you.”

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SB/MRS

 Press Information Bureau
Government of India
***  

KAMAL NATH CALLS FOR RAISING INDIA’S LEATHER EXPORTS TO US $ 7 BILLION BY 2010 TO GENERATE
OVER ONE MILLION ADDITIONAL JOBS
LEATHER INDUSTRY INTERACTS WITH COMMERCE & INDUSTRY MINISTER

 New Delhi: July 22, 2005

           Shri Kamal Nath, Union Minister of Commerce & Industry, has called upon  the leather industry to increase India’s leather exports to US $ 7 billion by the year 2010 from the present level of US $ 2.3 billion and to boost production in the leather sector to US $ 14 billion within the next five years.  Participating in an interactive meeting with the leather industry, organised by the Council for Leather Exports (CLE) here this afternoon, Shri Kamal Nath said the effort should be to occupy at least 5% of world trade in leather within the next five years, as this would generate over one million additional jobs in the country.    

           “We have identified the leather industry as a ‘Thrust Sector’ in view of significant export growth prospects and enormous employment potential, particularly in semi-urban and rural areas. The Department of Industrial Policy & Promotion has a special Integrated Leather Development Programme for the leather industry, in order to modernise and upgrade it.  We have sanctioned Rs.290 crore for this”, the Minister said.  A sum of Rs.71 crore had also been provided in last one year alone by the government to support industry initiatives for specific infrastructure development and environmental safeguard measures in different leather clusters across the country, he added.    

          Value-added leather products today constitute nearly 80% of India’s leather exports, with footwear alone (both leather and non-leather) accounting for 36%, marking the transition of India from an exporter of raw hides and skins to a reliable source of value-added leather products.  However, the Minister also noted that global leather trade was valued at US $ 100 billion whereas India’s of this was unsatisfactory at a meager two-and-a-half percent.  “We must enlarge our share, given India’s raw material strength and availability of skilled manpower and competitive wage levels”, he said, while calling for adequate emphasis on design and technology; quality & innovation; and economies of scale. 

          In a presentation, the Chairman/CLE, Shri Rafeeque Ahmed said that recognising leather as a thrust sector in the Common Minimum Programme (CMP) and the policy support being extended by the union government was a major boost to the industry. The government’s latest approval of the Rs.290 crore modernisation and technology upgradation programme would help the sector achieve global competitiveness.      

          The export performance of US $ 2380 million or $ 2.3 billion (Rs.10691 crore) during 2004-05 was the highest so far which exceeded the target of US $ 2284 million or $ 2.2 billion (Rs.10263 crore). This is closely followed by previous year’s export growth of 18%.  The positive export growth continues in the current year also as the export in April and May 2005-06 has been Rs.1480 crore as against Rs.1428 crore in the same period last year.     

          The sector is positioning itself to achieve higher growth through the required support measures. The most important of these are large investments, right sizing of production capacities, upgradation of technology, strengthening leather industry specific infrastructure etc.  The US and Europe continue to be the leading markets for Indian leather products accounting for 75% of the export growth. The CLE has also drawn up a plan to promote overseas markets with appropriate strategies.  

          “Some of the major European producers are finding it difficult to sustain their manufacturing in the face of increasing costs particularly the wages.   This gives an opportunity to the Indian manufacturing to substitute the gradual drop in Europe’s production.  For this purpose, serious efforts are on to partner with the European manufacturers and increase the production base in India.  There have been at least three manufacturing joint ventures in the leather sector in the last 2-3 years which includes the latest of Conceria Virginia, Italy, in tanning.  Earlier, two sole manufacturing units from Italy namely Suolificio and Mondial Spa, partnered with Indian companies and started production.   This apart, a major Spanish company namely Zahonero is in the process of establishing a manufacturing unit for shoe components with its own equity in Delhi”, CLE said.

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Press Information Bureau
Government of India
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 SB/SS/MRS

Press Information Bureau
Government of India
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KAMAL NATH ATTENDS G-33 MEET ON SPECIAL PRODUCTS, SPECIAL SAFEGUARD MECHANISM IN DALIAN

New Delhi: July 13, 2005

 Mr. Kamal Nath, Minister of Commerce and Industry, participated in a meeting of G-33, an alliance of developing countries on Special Products (SP) and Special Safeguard Mechanism (SSM) in agriculture in Dalian in China today, ahead of the WTO mini ministerial which opened later in the afternoon. The meeting chaired by Indonesia and attended by Kenya, Zambia, Barbados, Jamaica, Benin, Korea, Pakistan and India, underlined the importance of the provision for SP and SSM in the current Doha round of negotiations in safeguarding the food security, livelihood and rural development needs of farmers in developing countries and reiterated the political commitment of the G-33 to work for operationalisation of SPs and SSM based on these three criteria by instructing their negotiators to further intensify the technical work on the operational indicators in this regard.

 (Special Products are those products in agriculture with either minimal or no tariff reduction commitments, while SSM is a safeguard against import surges).

 G-33 is committed to maintaining its unity, solidarity and coherence in the ongoing negotiations in the months leading up to the Hong Kong Ministerial and beyond. They have further agreed to enhance cooperation with other developing country groupings such as the ACP, LDCs, the Africa Group and the G-20.  to pursue the common objective of defending the interests of developing countries in agriculture.

 The Ministers of G-33 also urged that the concerns of developing countries regarding de minimis support be allayed as de minimis is a primary component of policies to address the food security and livelihood and rural development needs of developing countries.

 SB/MRS

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Government of India
***

EU SUPPORTS G-20 MARKET ACCESS PROPOSAL IN AGRICULTURE – US CONCEDES G-20 PROPOSAL A POSITIVE
CONTRIBUTION IN DOHA ROUND TALKS
KAMAL NATH REITERATES CALL FOR DEVELOPMENT AUDIT OF WTO

New Delhi: July 13, 2005

The European Union (EU) and the United States (US) have expressed support for the G-20 proposal on market access in agriculture in the ongoing Doha Round of multilateral trade negotiations. Ms. Marianne Boll Fischer, the EU Agriculture Commissioner, while speaking at the inaugural session of the informal World Trade Organisation (WTO) ministerial meeting – mini ministerial – in Dalian in China last evening, said: “ We are willing to develop the structure of an agricultural market access formula using the G-20 proposal as a starting point”. The US, a votary of the Swiss formula which had been strongly opposed by the G-20 and the developing countries, conceded that the G-20 proposal was a “positive contribution”. The expression of support by the EU Ms Fischer and the US Trade Representative Mr. Rob Portman came soon after Mr. Celso Amorim, Foreign Minister of Brazil and Mr. Kamal Nath, Minister of Commerce and Industry, gave their views at the mini ministerial opening session on agriculture. Earlier, the G-20 ministers present in Dalian had held a meeting to discuss issues in the agriculture negotiations.

Participating in the mini ministerial session, Mr. Kamal Nath reiterated his call to have a development audit of the WTO to assess how far the development promise of the Uruguay Round in the last decade or so had been fulfilled and also to suggest what would be required in the key areas like agriculture to deliver on development. He further suggested that the first development audit report should be prepared before the ministerial conference of the WTO in Hong Kong scheduled to be held in December, 2005. He emphasized that development audit he had mooted at the mini ministerial in Paris six weeks ago was not meant to be restricted to the so-called Implementation Issues. “ It is an intrinsic part of every aspect of the WTO negotiations  - whether it is agriculture, non-agricultural market access (NAMA), or Services”, he said.

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Press Information Bureau
Government of India
***

 POLICY SPACE IN NAMA VITAL: KAMAL NATH TELLS WTO IN DALIAN

New Delhi: July 13, 2005

           Developed countries must respect the requirement of policy space for developing countries, which are still in the process of industrialisation, Shri Kamal Nath, Minister of Commerce and Industry, said today while speaking at the session on non-agricultural market access (NAMA) at the World Trade Organisation (WTO) informal ministerial meeting –mini ministerial – in Dalian (China). India and other developing countries made it clear that they would resist steep tariff cuts and reiterated their call for policy space in the negotiations. Shri Nath said “India categorically rejects a ‘simple’ Swiss formula with almost similar coefficients for both the developed and developing countries. By trying to keep coefficients ‘within sight of each other’, we actually end up losing sight of the development content of the Doha Round”. Harmonisation of tariffs across countries was not the mandate of the July Framework for NAMA, he added.

           The Minister said the July Framework, which laid down the principles and guidelines for further negotiations for modalities in the WTO, was crystal clear that whatever the formula – whether in agriculture or NAMA – it would apply only on the bound tariff rates and not the actual applied rates. “ Several developing countries have been reducing their tariffs unilaterally and autonomously. We should be applauding and rewarding these efforts, not penalising them”. Referring to the ABI (Argentina, Brazil, India) proposal on NAMA, he said it was equitable as it provided for less than full reciprocity and proportionality for developing countries in respect of tariff reduction commitments and dealt with the problem of tariff peaks and tariff escalations in developed country markets.

           Addressing the issue of development, Shri Kamal Nath made a forceful plea for the poor, saying that development must permeate all decision-making in the WTO. Citing facts and figures on poverty in the developing world, he said:  “25 % of the world’s poor live in the least developed countries (LDCs) and India is fully sensitive to the needs of LDCs and is doing its bit to support them in the area of market access. At the same time, 75 % of the world’s poor live in other developing countries and four of them – India, China, Indonesia and the Philippines – account for almost three-fourths of the world’s poor. India itself has 300 million people with income of less than one dollar a day. Hence, the talk of ‘advanced developed countries’ is a matter of concern. About 88 development-related proposals were submitted at the WTO in Geneva two years ago, of which 26 were found to be workable. However, no progress has been made on this. Non-engagement of developed countries in pursuing these resulted in all the 26 proposals not moving at all. Directions should now be given to negotiators to work on these proposals”. The Minister also urged immediate action on proposals relating to protection of bio-diversity and Traditional Knowledge. He reiterated the need to address the issue of non-tariff barriers (NTBs) and abuse of anti-dumping which was restricting global trade as well as for a development audit of the Uruguay Round in the last one decade.

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Press Information Bureau
Government of India
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INDIA, CHINA TO WORK TOGETHER IN WTO DOHA ROUND – CHINESE COMMERCE MINISTER DISCUSSES WTO
ISSUES WITH KAMAL NATH

New Delhi: July 12, 2005

          India and China will work together in the current Doha Round of world trade talks based on their shared interests and concerns in many areas of the ongoing negotiations in the World Trade Organisation (WTO) including agriculture, non-agricultural market access (NAMA) and in rules. This was highlighted at a meeting the Chinese Commerce Minister Mr. Bo Xilai had with the Commerce and Industry Minister, Mr. Kamal Nath last night on the eve of the 2-day informal ministerial meeting of the WTO – mini ministerial – which is being hosted by China at Dalian on 12^th and 13^th July 2005. Both sides expressed their resolve to resist what the Chinese Minister called attempts at “ sub-classification of developing countries” by the developed countries into advanced developing countries, developing countries and the least developed countries (LDCs). Developing countries should be treated as one whole entity and be accorded effective Special and Differential (S & D) treatment, as mandated in the Doha agenda, they said. Mr. Kamal Nath indicated that developing countries including LDCs would intensify their interactions in the coming weeks and months in the run up to the Hong Kong Ministerial. Development issues must be addressed upfront as the Doha agenda was meant essentially to be a development round and not just a market access round, he said.

          Other points flagged by the two ministers were that export subsidies should be eliminated by 2010, domestic support in agriculture be brought down and there should be a level playing field for developing countries before they are asked to open their markets. “ In the past, India and China have paid a price for unfair trade… Developed countries should take the lead in making commitments in the WTO. India and China share many points of convergence and therefore, China looks forward to closer cooperation with India in the next two days”, Mr. Bo Xilai said.

 SB/MRS

Press Information Bureau
Government of India
***   

KAMAL NATH PUSHES NTBs INTO G-20 AGENDA
STATEMENT BY G-20 MINISTERS IN DALIAN

New Delhi: July 12, 2005

          Agriculture lies at the centre of the Doha Round of the WTO negotiations and as the area with the greatest distortions maintained by developed countries and where developing countries enjoy sizeable comparative advantages, meaningful results in agriculture are essential to lead the Doha Development Round to a successful conclusion by 2006, the G-20 said in a press statement after a meeting of the G-20 ministers present in Dalian in China this morning ahead of the important informal WTO ministerial meeting – mini ministerial - scheduled to begin later today. Mr. Kamal Nath, Minister of Commerce and Industry, participated in the meeting, which was chaired by Mr. Celso Amorim of Brazil.

          The statement says that the G-20 is prepared to work towards assuring positive results in July. But the G-20 expects responses to its proposals by the major players, who are yet to indicate their political will to implement commitments in line with what is set out in the Doha mandate. G-20 has presented concrete proposals recently on all the three pillars of the agricultural negotiations in the World Trade Organisation (WTO) – viz., domestic support, export competition and market access. Following Mr. Kamal Nath’s intervention on the need to address non-tariff barriers (NTBs) facing exports from developing countries, the issue of NTBs has also been included in the G-20 agenda.

The main points in the G-20 proposals in respect of the three pillars are as follows:

·         Domestic support: An agreed structure for reductions in overall support and the aggregate measure of support (AMS). New disciplines on Blue Box and Green Box will ensure that the Blue Box will be less trade distorting than the AMS and that Green Box policies indeed remain no or minimally trade or production distorting. G-20 also reaffirms that developing countries without AMS should not be subject to any cut in de minimis support for agriculture.

·         Export competition: An immediate standstill commitment on all forms of export subsidies should give effect to the spirit of the July Framework which laid down the principles and guidelines for further negotiations. Moreover, all forms of export subsidies should be eliminated in a period not longer than five years.

·         Market access: Agreement on the nature of the formula (for tariff reduction) is the central element of the structure in this pillar. G-20 members believe that linear cuts within bands is the best alternative to move forward the negotiations.

          On NTBs, it says that if any meaningful market access is to be gained by developing countries into the developed country markets, then the issue of non-tariff barriers to trade have to be effectively addressed. Developed countries would have to do something concrete to show that they are willing to dismantle the NTBs they have erected.

The G-20 is determined to make operational the provisions in the Framework on special and differential treatment for developing countries so as to safeguard food security and address the rural development and livelihood concerns of millions of people, the statement says. The G-20 also believes that the concerns of cotton producing developing countries should receive expeditious attention on both the trade and development fronts, it says. “G-20 reaffirms its commitment to progress in agricultural negotiations in order to levelling the playing field by eliminating subsidies and opening up markets in developed countries. These measures will help developing countries to combat poverty and inequality and increase their integration into the international economy”, it concluded.

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STC UNVEILS MAJOR PLANS FOR DIVERSIFICATION
RECORDS HIGHEST EVER TURNOVER OF Rs.9700 CRORE
CELEBRATES GOLDEN JUBILEE YEAR

 New Delhi: July 11, 2005

           The State Trading Corporation of India (STC) has unveiled a host of new initiatives and diversification plans to achieve higher turnover and profitability in its Golden Jubilee Year.   Import of FMCG goods, non-ferrous metals, taking mining capacity on lease and entering into joint ventures with reputed Indian companies for mining are some of the measures already pursued by the Corporation this year.  Apart from this, the Corporation will commence the import of IT products shortly.   

           In one of the landmark achievements in the year 2004-05, the Corporation recorded an all time high turnover of Rs.9700 crore as against Rs.6750 crore set in the target for the year. In the export front, the Corporation has made highest ever export of chemicals, drugs & pharmaceuticals items amounting to Rs.227 crore compared to negligible figures to the previous years.  The Corporation has also made headway in the export of iron ore by successfully effecting shipments worth Rs.8.5 crore.  In another pioneering initiative, the Corporation earned Rs.11 crore last year by the export of teak wood.   The Corporation plays a facilitative role to exporters by providing technical, marketing and financial assistance.    Arranging import of machinery and raw material for export production, setting up design centres, providing testing laboratories, taking products of small manufacturers to overseas markets by organising their consortia, participation in exhibitions and trade fairs both within India and abroad give the much needed fillip to the small and medium entrepreneurs.   

           During 2004-05, STC was nominated by the Government of Uzbekistan as a nodal agency for imports from and exports to India.   The Corporation has also been planning to set up operations in the areas of pharmaceuticals and textiles in Uzbekistan jointly with local entrepreneurs.   In another significant development, the Corporation has entered into overseas steel operation in Philippines under which the STC would supply raw materials from third countries to a steel plant set up by an Indian company in Philippines.   

           Over the years, the Corporation has catered to the socio-economic objectives of the country by ensuing remunerative prices to growers of certain agricultural products like rubber, tobacco, shellac, lemon grass oil and sticklac through price support operations undertaken from time to time.   These operations always had a salutary impact on the prices. The infrastructure and the expertise developed by the Corporation has equipped it to handle wide variety of trade transactions.  Of particular significance is the “offshore trade” undertaken by STC.  In one such transaction, the Corporation realised money under Government of India’s debt repayment plan by procuring rice from Vietnam and exporting it to Singapore.

           Established in the year 1956, primarily with a view to undertake trade with East European countries and to supplement the efforts private trade and industry in developing the exports from the country, the STC has built a network of Rs.306 crore and contributed a sum of Rs.775 crore till date to the public exchequer by way of payment of dividends and taxes.   

           Serving as an arm of the government not only to regulate the foreign trade but also for intervention in domestic market, the Corporation commends a reputed image in the global market, according to various surveys of India’s Fortune 500 companies.    

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Press Information Bureau
Government of India
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KAMAL NATH TO ATTEND WTO MINI MINISTERIAL IN CHINA

 New Delhi: July 10, 2005

 Shri Kamal Nath, Union Minister of Commerce & Industry, will participate in the WTO informal ministerial meeting – also known as mini-ministerial – scheduled to be held in China (at Dalian) on 12^th and 13^th July, 2005.  Trade Ministers from around 30 member countries of the World Trade Organisation (WTO) are expected to participate in the meeting, which has been convened by China, including Australia, Argentina, Brazil, Canada, Japan, Indonesia, Malaysia, Pakistan, Kenya, South Africa, the US and the European Communities (EC).

 The ongoing WTO negotiations of the current Doha Round (launched at Doha in Qatar in 2001) have entered an active phase in the light of the main Ministerial Conference of the WTO to be held in Hong Kong in December this year.   The Doha Ministerial Declaration along with the “July Framework” decision (of 2004) provides the elements and principles to guide the ongoing WTO negotiations.  

 As stated by Shri Kamal Nath at the recent meeting of the Consultative Committee of his Ministry, India has engaged in these negotiations to ensure that its core concerns and interests continue to be adequately addressed.

 A series of WTO mini ministerial meetings have been held this year – in Davos (Switzerland); Mombasa (Kenya); and in Paris last May with a view to moving these negotiations forward. The Minister is also expected to have bilateral meetings with his counterparts during the mini ministerial in China. 

 India’s negotiating objectives and the strategies to achieve them have been developed based on detailed analytical work and intensive consultations which are underway with relevant stakeholders in the country.

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Press Information Bureau
Government of India
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BOARD OF TRADE WORKING GROUPS CONSTITUTED
TO FURTHER BOOST EXPORTS

 New Delhi: July 07, 2005

           In pursuance of the meeting of the Board of Trade on 17^th June, 2005 which was inaugurated by Shri Kamal Nath, Union Minister of Commerce and Industry and chaired by Shri Kumaramangalam Birla who heads the Board, the Ministry of Commerce & industry, have constituted 5 Working Groups and 3 Special Study Groups on specific areas of Indian exports in order to further boost the country’s exports so as to reach the target of raising India’s share of world trade.

           The Working Group on “Evaluation of Different Export Promotion Schemes” will be headed by Shri Rakesh Shah and will have as members: Shri R.L. Toshniwal, Synthetic, Rayon & Textile Export Promotion Council (SRTEPC); Shri D.B. Modi, Pharma Export Promotion Council (Pharmexcil); and Shri M. Rafeeque Ahmed, Council for Leather Exports (CLE).  The terms of reference of this group will be: (i) evaluating the performance and effectiveness of different schemes in meeting the objectives; (ii) global best practices in Export Promotion (EP) Schemes followed by developed and developing countries; (iii) study of cess, tax, duties and levies paid by the exporter and mechanism for rebate under the existing EP schemes; (iv) best possible way to neutralise all such levies; and (v) use of Agreement on Subsidies and Countervailing Measures (ASCM) as a tool for adding WTO compatible features in the existing schemes.

           The Working Group on “Trade Facilitation” will be headed by Shri Omkar S Kanwar, President, Federation of Indian Chamber of Commerce & Industry (FICCI) and will comprise the following:  Shri Sharad Jaipuria, Export Promotion Council for Export Oriented Units (EPC for EOUs); Shri Nalin Kohli, Electronic & Software Export Promotion Council (ESC); and Shri B.K. Patodia, Cotton Textile Export Promotion Council (Texprocil).   The Working Group will analyse the recommendation of studies already completed, benchmarking trade facilitation parameters of India with other countries and setting achievable goals.    

          The Working Group on “Manufacturing Sector” will be headed by Shri Prashant Ruia, Essar Group with Shri Ishaat Hussain, Tata Sons and Shri Baba Kalyani, Bharat Forge, as members. The terms of reference will be to analyse the recommendation of studies already completed; benchmarking manufacturing sector in terms of export competitiveness with other Low Cost Countries (LCCs); and study the constraints faced by the manufacturing sector in India and suggest specific measures to alleviate them.    

          The Working Group on “Identifying specific sectors and strategies having comparative advantage” is to be headed by Shri Ishaat Hussain, Tata Sons with the following members: Shri Y. C. Deveshwar, CII and Shri Irfan Allana, Allana Sons.  Shri Kumaramangalam  Birla will assist the Group.    The terms of reference will be: (i) Defining parameters for identifying comparative advantage for specific goods and services sectors; (ii) industry attractiveness and SWOT analysis for chosen sector; and (iii) specific plan of action for each sector and setting achievable goals.   

          The Working Group on “SEZs and EOUs” will be headed by Shri Ravi Raheja, Shoppers Stop and will have Shri Sharad Jaipuria and Shri Rafeeque Ahmed as members.   The terms of reference will be: (i) constraints faced by the sectors; (ii) benchmarking with other countries; and (iii) setting achievable goals.  

          Outside experts may be co-opted in the Working Groups. 

          All the 5 Working Groups are scheduled to submit their Report to the Chairman of the Board of Trade by the middle of August 2005. 

          Besides, the 5 Working Groups, 3 Special Groups constituted for sectoral studies are:  Study Group for Sectoral Study on Textiles to be done jointly by AEPC/SRTEPC/Texprocil and headed by Chairman Apparel Export Promotion Council (AEPC); Study Group on Sectoral Study on Pharmaceuticals to be headed by Chairman/Pharmexcil; and Study Group to study the impact of Regional Trade Agreements (RTAs)/Free Trade Agreements (FTAs) on industry/exports to be done by FICCI. The Study Groups will also submit their reports to the Chairman by the middle of August, 2005. 

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Government of India
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 KAMAL NATH WELCOMES US DECISION TO RESTORE GSP – SAYS THE DECISION A FILLIP TO BILATERAL TRADE
AND INVESTMENT

 New Delhi: July 05, 2005

             Shri Kamal Nath, Minister of Commerce & Industry, has welcomed the decision of the United States (US) to restore the benefits of the Generalised System of Preferences (GSP) for certain Indian export products, which had been withdrawn in 1992. He has stated that this decision will further consolidate the strong ties between the two countries and give a fillip to bilateral trade and investments. Shri Kamal Nath had raised this issue during his recent visit to the US, and earlier during his meeting in Paris in May with Mr. Rob Portman, the new United States Trade Representative (USTR). He expressed his satisfaction at the outcome, which was a culmination of the measures taken by India to fulfil its WTO commitments on protection of Intellectual Property Rights.

            The U.S. Generalised System of Preferences (GSP) provides preferential duty-free entry for more than 4,650 products from approximately140 designated beneficiary countries and territories. The GSP programme was instituted on January 1, 1976 and is valid up to 30^th September 2006 and can be further extended with a Proclamation.

             In 1992, the USA had suspended GSP benefits for a large number of products exported by India to the US, due to a perceived inadequacy of protection to intellectual property rights in India. As a result, 785 agro-chemicals and pharmaceutical products that were otherwise eligible for GSP, continued to be denied GSP benefits since 1992. The restoration of the GSP benefits would provide immediate benefits to the exports of agro-chemicals and pharmaceuticals from India.

             The Presidential proclamation signed by the US President on the subject on 29 June states as follows:

 “11. After a review of the current situation in India and taking into account the factors set out in section 502 of the 1974 Act, in particular section 502(c)(5), I have determined that India has made progress in providing adequate and effective protection of intellectual property rights. Accordingly, I have determined to terminate the suspension of India’s duty-free treatment for certain articles under the GSP”

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 SOME ISSUES IN WTO NON-NEGOTIABLE FOR INDIA, SAYS KAMAL NATH
DEFENCE OF AGRICULTURE OF PRIME IMPORTANCE
CONSULTATIVE COMMITTEE OF COMMERCE & INDUSTRY MEETS

 New Delhi: July 04, 2005

Shri Kamal Nath, Union Minister of Commerce & Industry, has today made it clear that certain issues in the ongoing World Trade Organisation (WTO) negotiations are non-negotiable for India.   In agriculture, there is no question of accepting any kind of Swiss formula for tariff reduction, in whatever garb and in non-agricultural market access (NAMA), India will resist proposals for reduction from the applied rates. Tariff reduction commitments by developing countries should provide for adequate policy space and reflect their development needs, Shri Kamal Nath said while presiding over the Parliamentary Consultative Committee of the Ministry of Commerce and Industry here this morning.  “Developed countries subsidise their agriculture to the extent of one billion dollars a day and about 25 to 50% is the subsidy component in the agricultural exports of many developed countries. We cannot allow this... Safeguarding our interests especially in sensitive sectors such as agriculture and small and medium enterprises (SMEs) will be our main concern”, he said. In services, he said India would calibrate its offers with the quality of offers from its major trading partners in sectors and modes of interest to India.

India would also strongly resist attempts to divide developing countries by differentiating the so-called advanced or large developing countries from others, he said.

The Minister said it was at the same time extremely important for India to remain actively engaged in the WTO process which was all about framing the rules of world trade and not leave rule making to a handful of countries as had happened in the GATT. “India should actively participate in framing world trade rules which should be not only equitable to India but to the entire developing world”, he said, adding that the real challenge would be to harmonise India’s offensive and defensive interests in different areas of WTO negotiations.     

Members who participated were: S/Shri Sudhangshu Seal, Sharad Anantrao Joshi, Sarvey Sathyanarayana, Basangouda Patil, Harin Pathak, K.C. Palanisamy, Ram Singh Kaswan, Shyama Charan Gupta, S. Rama Muni Reddy and Rajeev Shukla.  Shri E.V.K.S. Elangovan, Minister of State for Commerce & Industry, also attended.  

Responding to issues raised by Shri Sharad Joshi, Shri Kamal Nath explained that member countries meeting in groups to discuss issues was not compatmentalisation and would not in any way disturb the multilateral negotiating process.  He agreed with the member on concerns relating to Blue Box and Amber Box and said that India was fighting for greater discipline in the Boxes for domestic subsidies so as to ensure that farmers were protected from heavily subsidised imports from the West.  In this context, he recalled that India had fought hard for the inclusion of Special Products or SP (which would have no tariff reduction or minimal tariff reduction) and Special Safeguard Mechanism (SSM), which provided for safeguards in case of import surge in agriculture both in terms of volume and price to protect farmers’ interests.             

Shri Kamal Nath said India was actively engaged in consensus building or coalitions – as it was in India’s interest to avert isolation – through issue-based alliances such as G-20 on agriculture; G-33 on SP & SSM; ABI (Argentina, Brazil, India) alliance on NAMA; Friends of Mode 4, and others in Services; and Friends of GIs (Geographical Indications). He said that government would further intensify domestic stakeholder consultations with political parties, industry & farmers association, labour unions & civil society and states & union territories on WTO issues in the next 6 months, in the run up to the Hong Kong Ministerial Conference in December, 2005.  He urged members to interact with him and provide their inputs and suggestions.                

Replying to Shri Harin Pathak, the Minister informed that India was actively pursuing the issue of harmonising TRIPs (Trade related Intellectual Property Rights) with the Convention on Bio-Diversity (CBD) with a view to protecting Traditional Knowledge which was an important concern for India. In response to Shri Sudhangshu Seal, who had raised the issue of fruits and vegetable exports, the Minister said the government was looking at the issue of transport subsidy for agricultural products as a whole and hoped that problems in the area would be resolved soon in consultation with the Ministry of Agriculture. Shri Kamal Nath said that he would also announce a package of rejuvenation for tea industry within six weeks. 

Earlier, in a presentation before the Committee, Shri G.K. Pillai, Additional Secretary, Ministry of Commerce and Industry, indicated that the major areas of negotiations in the current Doha Round were: Doha Work Programme, Market Access (agriculture, industrial tariffs or non-agricultural market access (NAMA), services); Development Issues (Implementation, Special & Differential Treatment); Rules (Anti-dumping, Subsidies, RTAs); and Other issues (Singapore issues of which only trade facilitation remains, environment, TRIPs related issues and Dispute Settlement Understanding).

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SB/MRS

Press Information Bureau
Government of India
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AGRI EXPORTS FROM INDIA REACH Rs.27,000 CRORE
ACROSS THE BOARD RISE IN AL MAJOR SECTORS

 New Delhi: July 03, 2005

          Exports of agricultural and allied products from India have increased to Rs.27,111.41 crore (US $ 6.03 billion) during the financial year 2004-05 from Rs.24,844.48 crore (US $ 5.4 billion) during 2003-04, thereby registering an increase of over 11% in US dollar terms and over 9% in rupee terms.   Agri and allied products showing a substantial increase in exports were rice, pulses, tobacco, spices, nuts and seeds, cashew, guar gum meal, castor oil and processed food items.  Dairy and poultry products showed a record increase of over 65% in US dollar terms in 2004-05 compared to the previous fiscal. 

          Gems & jewellery exports increased by over 29% to reach a level of US $ 13.7 billion in 2004-05 compared to US $ 10 billion in 2003-04. 

          Exports of chemicals and related products also showed an impressive growth of over 27% having gone up from US $ 9.9 billion in 2003-04 to US $ 12.6 billion in 2004-05. 

          India emerged as a major exporter of petroleum products in 2004-05 with exports reaching a record high of US $ 6.7 billion, up by over 90% from US $ 3.5 billion achieved in 2003-04. 

          Engineering goods exports increased from US $ 10 billion in 2003-04 to US $ 14.5 billion in 2004-05, showing a growth of over 38%.  There has been  an across the board increase in exports of all engineering items from India including machine tools; machinery & instruments; transport equipments; iron & steel; manufactures of metals and residual engineering items.   

          India’s exports have been on a high growth path.  India’s merchandise exports reached $ 79.2 billion in 2004-05 recording a growth of 24.1% in dollar terms which was the highest since 1974-75.  India’s share in world exports increased from 0.66% in 2000 to 0.82% in 2004. Export target set for 2004-05 at 16% was exceeded by 50%.

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SB/MRS

Press Information Bureau
Government of India
***  

DRAFT OF PATENTS RULES 2005 NOTIFIED – DIPP INVITES SUGGESTIONS / COMMENTS

 New Delhi: July 01, 2005

         The Department of Industrial Policy & Promotion, Ministry of Commerce and Industry, has notified Draft Patents Rules 2005 which was published in the Gazette of India Extraordinary, Part II, Section III, Sub-Section (ii) vide S.O. No. 864 (E) dated 20/6/2005 following passage of the Patent (Amendment) Bill 2005 in Parliament in March 2005.   

         The notification containing the proposed amendments to the rules is available on sale with the Department of Publications and also on the website of the Office of the Controller General of Patents, Designs and Trademarks at www.ipindia.nic.in The rules which are essentially procedural are prepared to make required changes consequent to the amendment to the Patents Act, 1970 by the Patents (Amendment) Act, 2005.  The draft rules have been published for the information of all persons concerned and likely to be affected thereby and to invite suggestions / comments which will be taken into consideration before finalisation and notification. The normal period for furnishing suggestions / comments being 30 days, the last date for receipt will be 23^rd July, 2005.

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SB/MRS

 Press Information Bureau
Government of India
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FLORICULTURE EXPORTS CROSS Rs.250 CRORE – 60 AGRI EXPORT ZONES INCLUDING FLORICULTURE
APPROVED: KAMAL NATH

 New Delhi: July 01, 2005

             Floriculture exports from India have surpassed Rs.250 crore, as against less than Rs.20 crore a decade back, Shri Kamal Nath, Union Minister of Commerce & Industry, said while speaking at the Flora Expo 2005 – International Exhibition and Conference, in Bangalore today.  Pointing out that despite its outstanding competitive strengths in floriculture, India’s share in the US $ 80 billion world floriculture market is a miniscule half a percent, he said “a lot more needs to be done in this field, as our flower industry has the potential to be a ‘blooming’ business”.

             Outlining the efforts being made by the government to catalyse the development of common infrastructure for floriculture and related sectors, Shri Kamal Nath said that a flower auction centre in Bangalore was nearing completion, while auction centres and wholesale markets were also coming up in Mumbai and NOIDA.  Besides this, “60 Agri Export Zones (AEZs) have already approved by the government.  Out of these, 6 are for floriculture, two in Tamil Nadu and one each in Maharashtra, Karnataka, Uttaranchal and Sikkim. Uttaranchal Floriculture AEZ is already a success story. Large-scale multiplication of flower bulbs in technical collaboration with Holland has enabled availability of good quality planting material to small growers in the AEZ at half the price as compared to imported bulbs, the Minister said.

             Earlier, in his address at the meeting of Karnataka Chamber of Commerce & Industry in Bangalore, Shri Kamal Nath said that a cardinal feature of his policies would be to rid trade of transaction costs.  He sought inputs from industry which would help the government to finalise the alternative to the Duty Entitlement Pass Book (DEPB) scheme.

  The Minister also inaugurated the New Import Cargo Facility at the Bangalore Air Cargo Complex today.  He said his Ministry had been actively promoting systemic and procedural changes to upgrade the airport infrastructure as around 40% of India’s trade by value takes place by air. “With the assistance of APEDA, state-of-the-art centers for perishable cargo have been set up at Chennai, Hyderabad, Delhi, Mumbai, Bangalore and Trivandrum at a considerable cost. Creation of similar facility at Ahmedabad, Kolkata and Amritsar is likely to be completed soon. Walk in type cold rooms have also been set up at Coimbatore, Ahmedabad and Lucknow”, he said.

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SB/MRS