Press Information Bureau

In a major boost to expand the trade relations between India and Sri Lanka, the Export Inspection Council of India (EIC) has signed an agreement with the Sri Lanka Standards Institution (SLSI). EIC would sign similar type of agreements with other countries very soon. This was indicated by Shri L.V.Saptharishi, Chairman, EIC and Additional Secretary, Ministry of Commerce & Industry and said that this agreement was a major development for increasing the bilateral trade between the two countries. Shri Saptharishi presented the signed documents of the Agreement to Mr. Magala Moonesinghe, Sri Lanka’s High Commissioner in India here yesterday evening. Shri M.V.P.C. Sastry, Joint Secretary, Ministry of Commerce & Industry and Mrs. Shashi Sareen, Director, EIC were present in the function along with representatives of trade & industry.

Under this agreement SLSI will recognise EIC’s export inspection and certification for the purpose of its Import Inspection Scheme. It would provide for reduced level of inspection of consignments on arrival paving the way for easier access to Indian goods and facilitating exports from India. The Agreement covers 84 commodities comprising items like Milk products, Vegetable Oils, Confectioneries, Fruit and Vegetable Products, Household Electrical Appliances, Cement etc. Mrs. Sareen highlighted the benefits to Indian exporters through this agreement which includes reduced level of inspection and testing by Sri Lankan authorities and consequent reduction in costs; minimal risk of rejection and elimination of costs of reprocessing/recall/destruction; relief from hassles and cost involved in consignment wise inspection ensuring timely shipment; avoiding delays in customs clearance at Sri Lanka and providing a forum for exporters for representing to SLSI in case of any problems in exporting to Sri Lanka.

Shri Saptharishi asked exporters to take advantage of this agreement and said that this certification facility should be used extensively by the exporters to satisfy the consumers. Under this Agreement both EIC and SLSI will cooperate and communicate to the fullest practicable extent their requirements that may be relevant to the other party. Information will also be exchanged on any adverse findings in Sri Lanka’s random verification including disposal of implicated products and evidence of any falsification of EIC’s certification. Earlier, EIC has signed similar agreements with Australia, European Commission and USFDA. EIC is the official export inspection and certification agency of India under the Ministry of Commerce & Industry.

India and Spain have agreed that further initiatives and better market access are necessary conditions to expand bilateral trade flows between the two countries which are at present well below their potential. This is indicated in the Agreed Minutes of the 7^th Meeting of the Indo-Spanish Joint Commission which was held in Madrid recently (January 20-21, 2003). The Indian delegation to the Meeting was led by the Commerce Secretary, Shri Dipak Chatterjee and the Spanish delegation by their Secretary General of Trade, Mr. Francisco Ultera Mora. The two sides exchanged views on bilateral trade which is currently to a large extent in favour of India, the growth in Spanish imports from India during the last few years and the market advantages and entrepreneurial initiatives in both the countries. While congratulating the Indian government for steps taken in the liberalisation of the Indian economy, such as foreign investment policy reforms, elimination of quantitative restrictions, simplification of procedures etc., the Spanish side hoped that the reforms would result in increased opportunities for Spanish exports to the Indian market as well.

With regard to EU-India commercial relations, the Spanish side noted the Indian dissatisfaction with the GSP in force for India, when compared to those for Pakistan. The Indian delegation also expressed concern at the adverse impact on India’s trade of clothing and made-up products covered under Chapter 61 to 63 of the Customs tariff due to certain discriminatory concessions extended to Pakistan under the "drug-regime" under the revised GSP Scheme. This discriminatory concession made the exports of clothing and made-up products originating from Pakistan cheaper by 10% making the Indian imports uncompetitive and resulting in a trade loss of about US $ 250 million annually. However, the Spanish side clarified that the case was a consequence of the special inclusion of Pakistan in the GSP for combating drugs trafficking. The Spanish side remarked that for textile items (chapters 50 to 60 of the Customs Tariff) the custom treatment in the GSP is the same for India and Pakistan.

The Indian delegation drew attention to the repeated recourse to anti-dumping and anti-subsidy investigations by the EU against the import of textiles from India and expressed its disappointment with the slow pace of integration of textile items so far undertaken by the EU under the WTO’s Agreement on Textiles and Clothing as also the considerable time taken to process India’s request for the use of exceptional flexibilities. Both sides expressed concerns regarding anti-dumping and anti-subsidy investigations initiated against products of their respective countries and agreed to study carefully requests made by either side and accommodate them, if possible. Both sides further noted the importance of the current WTO negotiations and the need to clarify many aspects of the actual anti-dumping and anti-subsidy agreements with a view to avoiding the current abuses.

On the issue of market access for Indian products in Spain, the Indian side suggested that an MOU could be entered into between the Export Inspection Council of India and its counterpart to tackle difficulties faced by Indian products (including fish and fish products) in Spain and to improve market access, especially for Indian marine products.

Both sides agreed to constitute Joint Working Groups in tourism and food processing industries under the aegis of Joint Business Council which will include a representative of their respective Ministries along with members of their business communities. Both sides have also agreed to expedite decisions on the proposal for Techno Economic Feasibility Study for Mumbai-Ahmedabad High Speed Rail Corridor and to identify products to be funded by the US $ 400 million credit line offered by Spain. Recognising India’s strength in the Information Technology (IT) sector, the Spanish side indicated IT as a highly promising area of bilateral cooperation. Both sides expressed the hope that the proposed MOU in this sector would be signed at the earliest.

Noting that FDI from Spain in India was still below its potential, both sides agreed to work towards facilitating greater investment by Spanish companies in India.

The Export Inspection Council of India (EIC) would sign an agreement with the Sri Lanka Standards Institution (SLSI) on January 27, 2003, for acceptance of EIC’s export inspection and certification for the purpose of Sri Lanka’s Import Inspection Scheme. The scheme prescribes that as many 84 products, as notified by Sri Lanka, have to conform to the corresponding Sri Lankan standards to be allowed for imports into Sri Lanka. Now, EIC will be the Certifying Agent for these products to be exported to Sri Lanka. It is expected that this would benefit the exporting community immensely in smooth passage of their products to Sri Lanka. Earlier, EIC has signed a similar agreement with Australia. EIC is the official certifying agency for the Government of India.

Shri Dipak Chatterjee, Commerce Secretary, would be the Chief Guest of the function. Shri L.V. Saptharishi, Chairman, EIC & Additional Secretary, Department of Commerce and the representatives from High Commission of Sri Lanka will also be present at the signing ceremony.

With the issuance of Certificate of Registration by the Registrar of Societies, the Export Promotion Council for Export Oriented Units (EOUs) has been finally set up and come into force. Shri R. Veeramani, Chairman, EPC for EOUs and Shri Sharad Jaipuria, Vice-Chairman, EPC for EOUs on behalf of all EOUs and units in SEZs have welcomed the formation of EPC for EOUs as their long felt need of the EOUs for a separate Export Promotion Council has finally been fulfilled and the Council has started functioning with immediate effect.

Shri Veeramani said the EPC for EOUs would specifically cater to the needs of EOU/SEZ Sector which has over 2300 operational EOUs/SEZ units spreading all over the country providing direct employment to over 7 lakhs people and has a credible achievement of 13% share in the national exports. The export earnings of this sector in 2001-02 was Rs. 28,000 crores registering a growth of 14.66% over the previous year and compares very favourably with the national export growth of only 2.1% in the same period. The EOUs/SEZ units cover major industrial sectors, like textiles, garments & yarn; food & agro products, electronics & software, chemicals, engineering, minerals, granites etc. The Council with the help of this sector and export of high value added and manufactured products will do its every effort to bring name and fame to the country. Shri Veeramani added that the EOU sector has shown a double-digit continuous growth much more than that of the national exports. This sector has proved its uniqueness and the future direction of this country in exporting manufacturing goods through value addition using state-of-the art technology.

The Council with the support of EOUs/SEZ Sector has an ambitious road map to achieve and contribute 25% of the national export through manufacturing exports by the year 2007. In the next couple of years this sector is looking for achieving 10 billion US dollars exports. Shri Veeramani said that this sector fully deserved an EPC because of its performance, vast membership, regional and sectoral spread and employment provided. We are happy that after two decades of operation of the EOU Scheme, finally the EPC for EOUs has started functioning.

The Council has plans to organise Seminars on issues pertaining to EOUs in different states. To start with, the Council plans to organise such Seminars at Hyderabad, Jaipur and Delhi. Shri Veeramani has thanked the Union Commerce & Industry Minister, Shri Arun Shourie; Minister of State for Commerce & Industry, Shri Rajiv Pratap Rudy; Commerce Secretary, Shri Dipak Chatterjee; and the Director General of Foreign Trade (DGFT), Shri Lalit Mansingh and other senior officials of the Ministry of Commerce for all the help and cooperation in the formation of the Council. Shri Veeramani also assured the EOUs and SEZs that this Council will take care of all their problems with total dedication in a time bound manner.

The Directorate General of Foreign Trade (DGFT) has issued Public Notice allowing incidence of special additional duty (SAD) on the inputs to be taken into account for calculation of DEPB (Duty Entitlement Pass Book) rates. The revised DEPB rates shall be notified shortly and shall cover the shipments where the date of order of "Let exports" is on or after 1/4/2002. This will benefit the exporters exporting under DEPB Scheme.

Directorate General of Foreign Trade, Ministry of Commerce and Industry, New Delhi, dated 22^nd January, 2003

India’s emergence as the hub of Information Technology along with a huge domestic market offers her as one of the best locations for the relocation of manufacturing base/sub-contracting by engineering multinationals as also in the areas of Technical Services to the European Industry. This was indicated by Shri S.N. Menon, Additional Secretary, Ministry of Commerce & Industry, here today while inaugurating Euro-India Conference on Sub-Contracting Collaboration, which was organised by the Engineering Export Promotion Council (EEPC). Shri Satish Dhanda, Chairman, EEPC was present at the function along with several European and Indian delegates.

Shri Menon said that EU accounts for more than 21% of India’s total engineering products with UK, Germany and Italy constituting more than 65% share of it. India’s bilateral trade with Europe is around US$ 25 billion, which is more than 27% of India’s total foreign trade. He mentioned various outward looking policy initiatives taken by the government viz. a liberal import policy, low tariff regime on capital goods and raw materials, an attractive foreign investment and technology regime and added that it had a very positive effect in strengthening the Indian manufacturing and subcontracting sectors.

The European market for sub-contracting is estimated to be around Euro 400 billion per annum. Shri Menon asked Indian sub-contractors to take advantage of this enormous market. To realise this potential there is a need to adopt a Macro-Level Promotional Strategy for creating a positive environment of trust in the Indian engineering industry as a reliable partner for relocation of manufacturing base, he added.

Trade is hereby informed that Customs has vide its notifications no. 55/2000- Customs, dated 30-6-2000; no. 67/2000- Customs, dated 17-8-2000; no. 22/2001- Customs, dated 17-4-2001, allowed the facility of congregation/ assimilation of LCL cargo at the inland ICDs / CFSs, movement of this cargo from ICDs / CFSs to Hub points for further reworking and exports to destination ports.

In case of any hurdles faced by trade, they are requested to contact the Department of Commerce on e-mail ngbiswas@ub.delhi.nic.in

Department of Commerce, Ministry of Commerce and Industry, New Delhi, dated 21^st January, 2003

Trade is hereby informed that Customs, Custodians and Banking working hours at Delhi, Mumbai, Chennai, Kolkata, Bangalore and Hyderabad Air Cargo complexes (ACCs) have been extended as per table given below.

	Delhi	Mumbai	Chennai	Kolkata	Bangalore	Hyderabad
Customs	1000-2200	1000-2200	1000-2200	1000-2200	1000-2200	1000-2200
Custodians	1000-2000	1000-2000	1000-2000	1000-2000	1000-2000	1000-2000
Banks	1000-2000	1000-2000	1000-2000	1000-2000	1000-2000	1000-2000

In case of any hurdles faced by trade they are requested to contact the Department of Commerce on e-mail ngbiswas@ub.delhi.nic.in

Department of Commerce, Ministry of Commerce and Industry, New Delhi, dated 21^st January, 2003

The Government has decided to remove Quantitative Restrictions (QRs) on import of Garlic with immediate effect as per Notification No. 25/2002-07 dated 17.01.2003 issued by the Directorate General of Foreign Trade (DGFT), Department of Commerce, Ministry of Commerce & Industry. Earlier the imports of Garlic was Restricted and import licences were required for such imports. These licences were being granted after approval by the designated Committee as per the provisions of Exim Policy. Keeping in view the requests received from various sources, the Government has placed the Garlic under Free category for Imports. The Government, however, in order to safeguard the interests of the domestic producers, have decided to simultaneously undertake requisite steps as available in the Tariff and Non-Tariff mechanisms. The department of Revenue (Central Board of Customs & Central Excise) have recently notified raising of import duty on Garlic from 35% to 100%.

Directorate General of Foreign Trade, Ministry of Commerce and Industry, New Delhi, dated 17^th January, 2003

India has a potential for multiplying her food exports manifold provided the exporters understand the complexity of food safety mechanisms put in place by India’s trading partners like USA. This was stated by Shri L.V. Saptharishi, Additional Secretary, Ministry of Commerce & Industry who chaired the session. While WTO Agreements, specifically the SPS Agreement, have laid down rules for international trade in the food sector, it is the responsibility of all countries to ensure safety of foods exported to other countries since human health was involved, he added.

The rules for export of food products to USA are set to change by the end of year 2003 in the light of the enactment of Bio-terrorism Act and all exporters would have to comply with these rules to be able to export to USA. This was informed by US officials during interactive session for Indian exporters with representatives of US food regulatory bodies organised by the Export Inspection Council of India (EIC) in Delhi today.

Nearly 100 exporters and organisations related with Indian exports like commodity boards, export promotion councils and industry associations participated in the session which had a team of US officials from US Food and Drug Administration (USFDA) and US Department of Agriculture (USDA), two of USA’s official regulatory import control bodies, led by Mr. Chad R. Russell, Agricultural Counselor from American Embassy in India while the Indian side comprised Shri A. K. Thakur, Joint Secretary in-charge of agricultural exports in Ministry of Commerce and Ms. Shashi Sareen, Director, EIC.

Ms. Sareen informed the audience during the session that EIC has initiated a dialogue with USFDA for recognition of EIC’s certification for various food and agricultural products regulated by them so that such products exported from India and accompanied by EIC’s certificates are allowed entry into USA without further inspection and testing on arrival. It may be added that under an agreement between USA and India in 1988, USFDA already recognises EIC’s certification for Black Pepper exported to its market.

US officials informed that imports of meat and poultry meat products in USA are subject to stringent phytosanitary measures and that USDA has a system of assessing equivalence of inspection systems of the exporting countries with its own systems for which any request from India would be duly considered.

Meat products are already under compulsory export inspection and certification and poultry meat and poultry meat products have been recently brought under the ambit of compulsory export certification of EIC by the Central Government under Export (Quality Control and Inspection) Act.

The exporters highlighted the need for taking up recognition of EIC’s certification for products like poultry meat products, basmati rice, spices etc. on an urgent basis.

During the session, Indian exporters raised various problems relating to exports to USA like detention of goods, destruction of consignments after testing, lack of direct access for exporters to deal with USFDA in case of any problems and lack of information on USFDA’s requirements for individual products. They also requested that there should be a body responsible for providing information on regulatory requirements of importing countries and also taking up quality and safety related issues with their regulatory bodies. Shri Thakur assured the exporting community that Ministry of Commerce would take up all such problems raised during the session for resolving them to mutual satisfaction.

The total import of 300 sensitive tariff lines for the period April-November 2002 has been Rs. 8605 crore against Rs. 7663 crore for the corresponding period of last year thereby showing a growth of 12%. However this growth is almost entirely due to significant increase in the import of crude palm oil, but for which import of all other sensitive items shows negative growth.

Imports of cotton & silk, alcoholic beverages, food grains and poultry have shown a decline at broad group level during the period. Imports of edible oil, fruits & vegetables, automobiles, milk & milk products and SSI products have shown increase during the period under reference.

In the edible oil segment, the imports have increased from Rs. 4657 crore last year to Rs. 5280 crore for the corresponding period this year. However, significant feature of edible oil import is that while import of crude palm oil has gone up, that of refined palm oil has gone down leading to better utilisation of processing capacity in the country. Import of Sunflower oil, both crude & refined, has gone down.

Imports from Indonesia, Malaysia, Guinea Bisu, Czech Republic & Ivory Coast etc. have shown some increase while those from Argentina, Australia, Thailand, Paraguay, Benin & Iran etc. have shown some decrease.

IMPORT OF SENSITIVE ITEMS- PROVISIONAL ESTIMATE
Value (Rs. Crore)
Sl.No.	COMMODITY GROUP	No.of Tariff lines	IMPORT
Sl.No.	COMMODITY GROUP	No.of Tariff lines	April-Nov-01	April-Nov-02
1	Milk & Milk Products	22	9.77	31.18
2	Fruits & Vegetables	48	582.30	1109.78
3	Poultry	13	0.26	0.03
4	Food Grains	12	2.90	1.42
5	Edible Oil	27	4657.27	5280.39
6	Alcoholic beverages	8	20.24	16.35
7	Cotton & Silk	6	1947.60	1417.71
8	Automobiles	32	43.86	234.51
9	Products of concern to SSI (toys, writing instruments, tiles, glassware etc.)	20	71.89	90.08
10	Others	112	327.13	423.09
	Total	300	7663.22	8604.54

Directorate General of Foreign Trade, Ministry of Commerce and
Industry, New Delhi, dated 17^th January, 2003

The first Indian Monument Stone Fair is being organised by Indian Monument Manufacturers Association (IMMA) in Chennai from 23 to 26 January, 2003 – an organisation, which had spearheaded the fight against anti-dumping investigations by the European Union (EU) against import of Indian monuments into the EU region.

India is a major exporter of natural stone and granite, which is the second largest foreign exchange earner for India besides iron ore in minerals category. The export of granite in 2001-02 was around Rs. 2600 crore as against Rs. 2100 crore in the previous year. The share of granite monuments in total granite exports is around Rs. 800 crore. India is also the largest exporter of monuments and commenced as far back as 1935 when hand punched monuments were exported to UK. The EOU scheme, which was introduced in 1980, helped the industry to modernise as it opened a window to usher in latest technologies for stone processing. Over the last two decades Indian industry has modernised to global standards and Indian monuments are exported to about 15 countries in different granites, in different thickness and in different sculptured workmanship involving very delicate workmanship and such pieces are normally exported in containers from the factories. With its highly skilled manpower and stone technology, India has contributed to the world with many prestigious monument projects such as Holocaust Museum in Washington; Vietnam War Memorial in Washington; Hiroshima Atom Bomb Memorial in Japan; Stillborn Child Memorial in New Zealand; Heath Spa Memorial in the Black Forest of Germany; Sun Clock in Japan; and Apollo Disaster Memorial in USA.

Monuments are predominately made up of granite and the entire monument industry is based in Southern India. The majority of factories are in Tamil Nadu. The main markets are the EU (which includes UK, Germany and France), USA, Canada, Australia, New Zealand, Japan and Korea, which used to be the main buyers in the late eighties and in early nineties, China took over the market completely. Incidentally, China has emerged as the largest player in stone industry surpassing even Italy form the first position. With the threat to the Indian industry by China and few other East European countries, like Poland, Romania, Hungary and South Africa and the latest Vietnam, the Association have decided to strategically hold the exhibition and Fair to give India the focus which is very urgent and timely and will help to keep and maintain the image and the distinct identity of the Indian monuments and to reinforce the dominant position of India as the main supplier of highest quality of granite monuments in the world market.

This Exhibition is co-sponsored by CAPEXIL and other State Governments and will be visited by over hundred overseas visitors including participants. It will give a boost to the local industry and help it to upgrade itself besides getting fresh orders, offer opportunities for buyers and sellers of monuments, machinery’s accessories, tools and handling equipment etc., as also to display their wares and skills. The Fair is product-focussed on the needs and offerings of the monument industry at Chennai Trade centre, which is the largest and the most prestigious Modern Trade Fair Complex in Southern India with well over 7000 square meter of air-conditioned covered space and 15,000 square meter of outside space.

The Chief Minister of Tamil Nadu is expected to inaugurate the Indian Monument Stone Fair. Shri Arun Shourie, Minister for Disinvestment and Commerce & Industry, is scheduled to visit the Fair and address at the valedictory session.

The need for strengthening bilateral trade and economic relations between India and Japan was stressed here today when Mr. Tadakatsu Sano, Vice Minister for International Affairs, Ministry of Economy, Trade & Industry of Japan, accompanied by the Japanese Ambassador to India called on Shri Arun Shourie, Minister for Disinvestment and Commerce & Industry. Shri Shourie stressed the need for building up bilateral ties, which, he said, would facilitate cooperation between the two countries in the multilateral forum as well.

Mr. Sano, who is here in connection with the 3^rd India-Japan Investment Dialogue, said that Japan was looking forward to the participation of India in the WTO mini ministerial meeting scheduled to be held in Tokyo on 15 & 16 February 2003. While the agenda of the Tokyo meet would be finalised in consultation with the participating member countries at the meeting, Mr. Sano indicated that the agenda being contemplated would include market access in agriculture and services, rules, anti-dumping and the Singapore issues such as investment and competition policy. Expressing Japan’s disappointment with the lack of progress in the WTO on the TRIPs and Public Health issues, he said the agenda of the Tokyo mini ministerial would be aimed at ensuring the success of the Cancun Conference and the success of the Doha Round.

Stating that it would be in the mutual interest of both India and Japan to foster closer ties, Shri Shourie said "for us Japan is a by-word for quality, excellence and reliability… We must work together as much more can be done and not just by way of Japanese assistance to India" so as to tap more fully the existing trade and investment opportunities. On the post-Doha negotiations, Shri Shourie pointed out that "unless there is progress in areas of concern to us, it would be difficult for the developing countries to make adjustments that are required in the process of multilateral trade negotiations".

Mr. Sano indicated that his team had a useful dialogue on investment lasting for over four hours with the Indian delegation, earlier in the day which was headed by Shri V. Govindarajan, Secretary (Industrial Policy & Promotion). The Japanese delegation also expressed satisfaction at the successful launch of the metro rail in Delhi and hailed it as a symbol of Indo-Japanese cooperation.

Indian merchandise exports to US = $ 12.0 billion ($ 9.7 billion)
US merchandise exports to India = $ 4.0 billion ($ 3.8 billion)
India-US merchandise trade (1+2) = $ 16.0 billion ($ 13.5 billion)
Indian IT/software exports to US = $ 5.7 billion ($ 4.8 billion)
Total Indian exports to USA (1+4) = $ 17.7 billion ($ 14.5 billion)
[Merchandise + IT/Software exports}
US services exports to India = $ 3.1 billion ($ 2.8 billion)
Total US exports to India (2+6) = $ 7.1 billion ($ 6.6. billion)
{Merchandise + Services}
Total India-US trade (5+7) = $ 24.8 billion ($ 21.1 billion)
{Merchandise + Indian IT/Software exports + US Service exports}
9. Merchandise trade gap (1-2) = + $ 8.0 billion (+$5.9 billion)
(in India’s favour)
Total trade gap (5-7) = +$ 10.6 billion (+$7.9 billion)
(in India’s favour)
{Source: US Department of Commerce latest trade data}

The Directorate General of Foreign Trade (DGFT) has issued Public Notice No. 54 dated 3/1/2003 notifying additional standard input-output norms for 37 new export items and amendments/ corrections/deletions in the standard input-output norms for 37 existing export items. Out of the 37 new norms, 16 norms relate to the chemicals & allied products, 17 norms relate to engineering products, one norm relates to food products and 3 norms relate to plastic products. Fixation of standard input-output norms will facilitate issue of advance licenses for above additional items to the exporters of above items without any need for referring the same to the Headquarter office of DGFT on repeat basis.

Directorate General of Foreign Trade, Ministry of Commerce and Industry, New Delhi, dated 8^th January, 2003

Ms. Patricia Hewitt, the British Secretary for Trade & Industry, accompanied by a business delegation from the United Kingdom (UK) met Shri Arun Shourie, Minister for Disinvestment and Commerce & Industry, here this afternoon and during the discussions underlined that the UK was keen to cooperate with India, notably on issues pertaining to the World Trade Organisation (WTO) so as to carry forward the Doha agenda. She emphasised in particular the need to find a way out of the current stalemate on the issue of TRIPs and Public Health, because "if we allow this to fail, we won’t make progress on a whole range of other issues". "The West cannot preach free trade and keep practising protectionism", she said

Shri Shourie said that substantial progress would have to be made on issues of real substance from the timetable that was set at Doha, particularly on implementation issues, special & differential treatment, market access and the issue of access to medicines. India would work in consultation with like-minded countries including China, Brazil and the Africa group on the issue of TRIPs and Public Health, he said. He agreed with Ms. Hewitt on the importance of sharing knowledge and experience in the area of trade policy both at the government and non-governmental levels in order to build up the expertise required for taking advantage of the multilateral trading system. Shri Dipak Chatterjee, Commerce Secretary; Shri V. Govindarajan, Secretary (Industrial Policy & Promotion) and Shri S.N. Menon, Additional Secretary, Department of Commerce, were present at the meeting.

Apart from WTO matters, the UK side also raised some specific bilateral issues, such as lowering of tariff on imported whisky, the issue of certification for allowing imports of roughs in the context of conflict diamonds and a proposal for increasing the capacity of UK-India air services by way of additional flights in order to address the additional requirements of trade and industry. The UK side also highlighted the scope for joint venture cooperation between the two countries in the food sector, while pointing out the rationalisation of tariffs in the wake of the removal of QRs would in fact lead to increase in revenue by curtailing grey market operations.

The UK today is the second largest trading partner of India and the largest in the European Union. Indo-UK bilateral trade in the year 2000-01 exceeded US $ 5 billion. The UK is the largest cumulative foreign investor in India and the third largest since 1991. Total FDI approvals from the UK during the period 1991 to April 2002 amounted to US $ 5.65 billion, which is a little over 9% of the global FDI approvals during the same period.

India’s exports have been on a high growth trajectory throughout the year 2002. In fact, the country’s export growth during the first half of the current fiscal (April-September 2002) touched 19% and what is particularly noteworthy is that against the export target of 12% set for the whose fiscal year, the growth of India’s exports during the first 8 months (April-November 2002) has been over 15%. Thus, the double-digit export growth momentum was sustained throughout the year 2002.

The new Export-Import (EXIM) Policy unveiled by the government on March 31, 2002 for the five-year span zeroed in on export market diversification as one of its policy planks with special focus on hitherto untapped regions like sub-Saharan Africa and the Commonwealth of Independent States (CIS). The Policy contained several far-reaching components to take India’s exports on a steady growth trajectory. These include, among others, removal of all import curbs or quantitative restrictions (QRs), save a few sensitive items reserved for exports through state trading enterprises, a farm-to-port approach for exports of agricultural products, special thrust on cottage sectors and handicrafts and beefed up Assistance to States for Infrastructural Development for Exports (ASIDE).

Agri Export Zones (AEZs) which were introduced in the previous year Exim Policy had really taken off by now with an aggregate outlay of Rs. 1025 crore being forecast during the next three to five years in the 40 AEZs sanctioned in as many as 17 States. What is of significance is that the private investment in these zones over the last one year was of the order of Rs. 95 crore while total exports from these zones during the period October 2001 to October 2002 fetched Rs. 148.43 crore. It is to be noted that the products covered by the AEZs include pineapples, gherkins, litchis, mangoes, vegetables, potatoes, apples, onion, garlic, basmati rice, walnut, besides non-traditional ones like ginger, turmeric, orchids and cherry pepper. Alongside the sprouting of these AEZs, modern perishable cargo handling facility and auction centres for flowers have also been coming up, giving a decisive push to exports of these items from India.

Yet another milestone in 2002 made by the authorities in their consistent quest for pushing export products of heritage value was the enhancement of export capabilities of the small scale sector, which accounts for about 50 per cent of the country’s exports. These capabilities were strengthened through a programme for "Special Focus on Cottage Sector and Handicrafts" including promotion of cotton sector exports under Khadi & Village Industries commission, access to funds from Market Access Initiative (MAI) for units in the handicrafts sector and benefits of export house status at a lower average export performance. Analogous spurs would be extended to industrial cluster towns with export potential like Tirupur (hosiery), Panipat (woollen blankets) and Ludhiana (woolen knitwear).

As the country has realised that successful export effort lays in fostering exclusive export enclaves such as Special Economic Zones (SEZs) modelled after the ones in China, though not at that gigantic scale, the Exim Policy unveiled additional incentives to SEZs. These include, inter-alia, income tax concessions, exemption from Central Sales Tax (CST) on supplies from Domestic Tariff Area (DTA), drawback/duty entitlement passbook (DEPB) to DTA suppliers, freedom to make overseas investment and carry out commodity hedging. For the first time, Overseas Banking Units (OBUs), free from such obligations like credit reserve ratio and statutory liquidity ratio, would be set up in SEZs to provide access to external finance at international rates. This was followed up by a post-Budget announcement by which 100 per cent deduction of export profit was allowed to all SEZs starting production on or after April 1, 2002 for a period of five years and thereafter at 50 per cent for the next two years. The export performance of SEZs or units in Export Processing Zones (EPZs) during the period April to November 2002 was Rs. 5380.97 crore, as compared to Rs. 4936.42 crore in the comparable months of 2001.

Alongside specific spurs to traditional export items like gems & jewellery, exports of agri & allied product, additional fillip to SEZs, the Exim Policy also accorded impetus to the hardware sector as the Electronic Hardware Technology Park (EHTP) scheme was modified to enable the sector to avail of the zero duty regime under the Information Technology Agreement (ITA-I).

Apart from these specific booster measures, the government also rationalised and simplified procedures in respect of various export promotion schemes with a view to cutting down unwanted hassles and minimise the interface between the bureaucrats who administer these schemes and the genuine exporters with a view to bringing down the transaction cost to industry and trade tangibly. The 2002-03 Union Budget too take due care of exporters and major changes in this policy include reduction in the peak rate of customs duty from 35 per cent to 30 per cent and the customs duty on dairy products was hiked to the WTO bound rate of 40 per cent.

In order to provide a level playing field for domestic industry and exporters who are faced with cheap imports threatening their viability, the Designated Authority in the Anti-Dumping & Allied Duties was proactive, providing the much-needed breather to domestic industry by its dispassionate and logical probe into dumping, establishing linkage between dumping and injury.

The year 2002 also saw finalisation of the report of the Committee on the Operational Modalities of the Rs. 500 crore Price Stabilisation Fund for Commodities as the government was seriously concerned over the problems plaguing growers of coffee, tea, rubber and tobacco due to prevalent poor prices for these commodities. The scheme to be operational for ten years would commence from April 2003 and would seek to effect price stabilisation for each of the commodities without resorting to the costly practice of procurement operations.

The Medium Term Export Strategy (MTES) was announced by the government in January 2002. The strategy aimed at augmenting the country’s share in world trade to one per cent by 2006-07 from the extant of 0.67 per cent which implies doubling exports from the present level. The MTES incorporates product (as many as 220 commodities) and market identification for exports and indicative sector-wise strategies for identified potential sectors.

In the post-Doha developments, India continues to play a proactive role by taking active part in all negotiations for which modalities have to be firmed up before March 31, 2003 and final negotiations to be sealed by 2005. On the General Agreement on Trade in Services (GATS), India continues to focus on seeking enhanced market access for developing countries in future negotiations. India has time and again urged that the Work Programme on Implementation Issues should be given the highest priority. Greater attention needs to be devoted to issues about Sanitary & Phyto-sanitary standards and technical barriers to trade so as to fully realise gains in agricultural trade liberalisation. India also stuck to its contention that the trade-related intellectual property rights (TRIPs) agenda should reflect the concerns of developing world. India’s viewpoints on all these issues were forcibly articulated at the mini-ministerial held in Sydney, Australia, in the middle of November, 2002.

India’s exports during April-November, 2002-2003 are valued at US $ 32865.10 million which is 15.65% higher than the level of US $ 28418.08 million during April- November, 2001-2002. In rupee terms, the exports were Rs. 159916.85 crores, during April- November, 2002-2003 which is 18.87% higher than the value of exports during April- November, 2001-2002.

Exports during November, 2002 are valued at US $ 4135.09 million which is 15.62% higher than the level of US $ 3576.32 million during November, 2001. In rupee terms, the exports were Rs. 19953.68 crores, which is 16.25% higher than the value of exports during November, 2001.

India’s imports during April- November, 2002-2003 are valued at US $ 39112.75 million representing an increase of 14.25% over the level of imports valued at US $ 34233.01 million in April-November, 2001-2002. In Rupee terms the imports increased by 17.47% during April- November, 2002-2003.

Oil imports during April- November, 2002-2003 are valued at US $ 11728.86 million which is 21.09% higher than oil imports valued at US $ 9686.26 million in the corresponding period of last year. Non-oil imports during April-November, 2002-2003 are estimated at US $ 27383.89 million which is 11.56% higher than the level of such imports valued at US $ 24546.75 million in April- November, 2001-2002.

Imports during November, 2002 are valued at US $ 5361.50 million registering an increase of 28.95% over the level of imports valued at US $ 4157.88 million in November, 2001. In Rupee terms the imports increased by 29.65% during November, 2002-2003.

The trade deficit for April- November, 2002-2003 is estimated at US $ 6247.65 million which is higher than the deficit at US $ 5814.93 million during April- November , 2001-2002.

Tables giving details of exports, imports and trade balance, according to the provisional estimates of Directorate General of Commercial Intelligence & Statistics (DGCI&S), are attached.

IMPORTS & EXPORTS : (PROVISIONAL)
(Unadjusted for late returns)
(US $ Million)
	November	April-November
EXPORTS
2001-2002*	3576.32	28418.08
2002-2003	4135.09	32865.10
%Grw 2002-2003/2001-2002	15.62	15.65
IMPORTS
2001-2002*	4157.88	34233.01
2002-2003	5361.50	39112.75
%Grw 2002-2003/2001-2002	28.95	14.25
TRADE BALANCE
2001-2002	-581.56	-5814.93
2002-2003	-1226.41	-6247.65
*Final figures as given by DGCI&S

IMPORTS & EXPORTS : (PROVISIONAL)
(Unadjusted for late returns)
(Rs Crores)
	November	April-November
EXPORTS
2001-2002*	17164.45	134536.46
2002-2003	19953.68	159916.85
%Grw 2002-2003/2001-2002	16.25	18.87
IMPORTS
2001-2002*	19955.61	161976.07
2002-2003	25871.64	190267.89
%Grw 2002-2003/2001-2002	29.65	17.47
TRADE BALANCE
2001-2002	-2791.16	-27439.61
2002-2003	-5917.96	-30351.04
*Final figures as given by DGCI&S