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Press releases July,2006

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Press Releases
July, 2006

Press Information Bureau
Government of India
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   Date                                                                                                                           

31st July 2006

 

MMTC PRESENTS DIVIDEND CHEQUE TO KAMAL NATH
PAYS 50% DIVIDEND FOR 2005-06

New Delhi, 31 July, 2006 

Shri S.D. Kapoor, Chairman & Managing Director, MMTC, presented a cheque of Rs.12.42 crore to Shri Kamal Nath, Minister for Commerce & Industry, towards final dividend for the year 2005-06.   Based on buoyant business results for the fiscal year 2005-06, MMTC, the largest international trading company of India, had declared final dividend of 50% including interim dividend of 25% paid on 24/02/2006 in the Annual General Meeting held recently.   With this payment, MMTC has so far, since its inception, paid a total dividend of Rs.353.70 crore to the Government of India besides issue of bonus shares worth Rs.47 crore. 

During the year, MMTC achieved business volumes of Rs.16362 crores recording highest ever level achieved by the company since inception in 1963.  Record turnover of MMTC includes export business of Rs.2925 crores and import transactions totaling Rs.11786 crores.  MMTC’s domestic trade also reached a new high at Rs.1651 crores registering growth of 56% over corresponding level last year. 

The net profits earned by the company reached a new peak of Rs.108.29 crores during the year.  Highest ever profits, despite pressure on margin, was realized through diversification in new areas, better fund management and prudent tax planning.  With this, the company has realized best ever earning per share of Rs.21.66 on a face value of Rs.10.  The company has taken several strategic initiatives during the year to improve logistics, service quality and other aspects of operational efficiency so as to provide long-term sustainability to the future operations. 

MMTC has set out ambitious plans to promote many new projects in future with total capital outlays of about Rs.20,000 crores.  In identifying areas of investment, MMTC has maintained its focus on its role as a trade organizer and trade facilitator.  The company has already embarked upon setting up free trade warehousing zones in the country and has decided to invest in development of resources abroad for items imported perennially in India to meet the national demand/supply gap besides entering into long term strategic alliances/joint ventures for energy inputs.  The company is likely to get allocation of coal block in Jharkhand.  MMTC would thus be making its maiden entry into coal mining to supplement supply of coal to domestic users. 

With investment of about Rs.70 crores in Wind Energy Farm during the current year to be set up in Karnataka, MMTC will be enlarging its activities in the power sector.  MMTC promoted NINL plant is already supplying power surplus to its captive demand to the national grid. 

With long term contracts for export of iron ore with Japan and South Korea signed recently the company would increase its exports activities in coming quarters.  MMTC has successfully exported sugar to Pakistan and is exploring more opportunities to add new products and market to its portfolio.

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28th July 2006

 

INDIA-BHUTAN AGREEMENT ON TRADE AND TRANSIT SIGNED

 New Delhi, 28 July, 2006 

Shri Kamal Nath, Union Minister of Commerce and Industry, Government of India and Mr. Lyonpo Yeshey Zimba, Minister of Trade, Industry and Power of Royal Government of Bhutan signed here today, the new Agreement between India and Bhutan on ‘Trade, Commerce and Transit’ in place of the current Agreement on ‘Trade and Commerce’ which was signed on 28th February 1995.   

 The Protocol to the new Agreement provides for four more exit / entry points in India for the imports into and exports from Bhutan in place of the twelve-exit/entry points in the Protocol to the current Agreement.  The new exit/entry points in India are two road routes, namely, Phulbari and Dawki and two sea and air routes, namely, Mumbai and Chennai.  The import/export procedure prescribed in the protocol to the current agreement has also been simplified. In place of the existing format for Bill of entry for transit goods of Bhutan the new protocol provides for a letter of guarantee from the Government of Bhutan against diversion of transit goods pertaining to Bhutan en route in India. 

The new protocol also provides for movement of goods from one part of Bhutan to another through the Indian territory by giving a transit declaration in the prescribed form, and in case such consignment consists of third country origin there has to be an undertaking by the Government of Bhutan that the same is meant for consumption in Bhutan.    

The new Agreement, along with its Protocol, would be valid for a period of ten years.

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28th July 2006

 

KAMAL NATH INAUGURATES ONLINE FACILITY FOR ISSUE OF IMPORT
EXPORT CODE NUMBERS  -- MAJOR E-INITIATIVE TO BOOST EXPORTS

 New Delhi:  July 28, 2006 

          In another major initiative to boost exports by reducing transaction cost, Shri Kamal Nath, Union Minister of Commerce & Industry, inaugurated online facility for issue of Importer-Exporter Code (IEC) Number at the review meeting on export performance and export targets here last evening.   Importer-Exporter Code Number is the first export related registration that an exporter is required to obtain.  During April 2005 and March 2006 more than 54000 IECs have been issued by DGFT.  During the period of April-July 2006 alone more than 17500 IECs have been issued and transmitted to customs successfully. 

          The new system relies on a much simpler form and an optional on-line application module for issuance of IEC No:  It seeks only essential details for the applicant; and it introduces an optional facility of advance on-line submission of application.  

          An applicant may now choose one of the two options for application submission:   

  • File an online application and submit a physical copy of the application by taking a printout of the online application.

  • Submit a physical copy of the application directly at the regional DGFT office. 

          The documents to be submitted along with the prescribed application form will be: (1) Fee could be paid through the Bank Receipt /Demand Draft evidencing payment of application fee of Rs. 1000/-. DD should be in favor of regional office of DGFT or through Electronic Fund Transfer (EFT).   (2) Certificate from the Banker of the applicant firm in the format given in the online application form.  (3) Self certified copy of Permanent Account Number (PAN) issued by Income Tax Authorities.  (4) Two copies of passport size photographs of the applicant. Photograph on the banker’s certificate should be attested by the banker of the applicant. (5) Self addressed envelope duly stamped for Rs.30/- and (6) These documents may kept securely in a file cover.  

          The above documents may be sent by post or hand delivered at the concerned regional DGFT office.  

          Process of online application: This facility is optional for the applicant who can submit physical copy of the application without filing an online application.  

i)            Applicants can file an on-line application at the DGFT web-site http://dgft.gov.in.  On-line form has been designed to ensure feeding of all the required information by prompting user wherever a field is left blank. Applicant has to submit scanned copies of PAN and bank certificate along with their application.   

ii)            There are 2 options for payment of fee. (A)If fee is paid by Demand Draft, IEC will be generated only after receipt of the physical copy of the application.  (B) If IEC application fee is paid through Electronic Fund Transfer facility, IEC number will be generated by the licensing office automatically and the number can be viewed online by the applicant.  

iii)           On the receipt of physical copy of the application, the same IEC will be printed in 24 hours time and dispatched to the firm.   

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28th July 2006

 

FAQ ON IMPORT-EXPORT CODE NUMBERS

 

New Delhi:  July 28, 2006

 

Q. What is IEC Number?

 

A. IEC Stands for IMPORTER EXPORTER CODE. No export or import shall be made by any person without an Importer-Exporter Code (IEC) number unless specifically exempted.

 

Q. Where to obtain an IEC?

 

A. An application for grant of IEC number shall be made by the Registered/Head Office of the applicant to the licensing authority under whose jurisdiction, the registered office in case of company and Head office in case of others, falls. Option of filing an online application followed by submission of physical copy of application can also be exercised to avoid delay caused by deficient applications.

 

Q. Is PAN Number/PAN card essential / what are the alternatives?

 

A. Yes, PAN is mandatory. Photocopy of PAN card has to be submitted along the application. If PAN card not issued to the applicant then a copy of PAN allotment letter from I.T. Department will also be accepted.

 

Q. Can 2 IEC be issued against one PAN?

 

A.  No

 

Q. How much time does it take to get an IEC?

 

A. IEC is normally dispatched within two working days of receipt of application. The applicants who file online application and pay fee by EFT can view their IEC within hours. IEC in such cases is dispatched within one working day from the receipt of physical copy of application.

 

Q. Can IEC be hand delivered/Over the counter?

 

A. No, IEC is dispatched through Speed Post.

 

Q. How many days are required to send the data to customs?

 

A. The data is automatically transmitted electronically on the day of issue of IEC.

 

Q. Is IEC used by Custom department?

 

A. Yes

 

Q. Can one check their IEC status at Customs on line?

 

A. Yes. Click on http://dgft.gov.in/iecstatus.html   to know the status at customs

 

Q. What are the documents required for issue of Duplicate IEC ?

 

A. Duly filled application form along with application fee of Rs.200/- ,

    a copy of FIR and an affidavit on stamp paper of Rs.10/- duly notarized.

 

Q. Can we apply online for issue of duplicate IEC?

 

A. No.

 

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28th July 2006

 

UNION BANK OF INDIA LAUNCHES ELECTRONIC FUNDS TRANSFER
FACILITY FOR EXPORTERS

 

New Delhi, 28 July, 2006

 

The Union Bank of India launched its Electronic Funds Transfer Facility  for exporters here yesterday, becoming the 8th bank in the country to  provide this facility to exporters. The Facility, based on the module  developed by the Directorate General of Foreign Trade (DGFT), was launched  in the presence of Shri S.N. Menon, Commerce Secretary, Shri K. T. Chacko,  DGFT, Shri M.V. Nair, Chairman and Managing Director of the Union Bank of > India (UBI) and other senior officials as well as representatives of the > exporting community.  Shri Menon, who was the Chief Guest, also > felicitated the Export Award Winners on the occasion.

 

Noting that UBI now joins the company of SBI, PNB, Bank of India (BOI) and  private banks like ICICI, IDBI, UTI and HDFC, both Shri Menon and Shri  Chacko underlined that this initiative would bring more business for the > bank and also bring down transaction costs for the exporters in the bank.  

 

Following the announcement of the Foreign Trade Policy, DGFT has introduced a number of facilities to enhance transparency and cut down the  processing time for applications by moving towards paperless transactions. The key initiatives include (a) Acceptance of digitally signed >applications with electronic fund transfer, under which DGFT accepts > web-based digitally signed applications along with electronic fund > transfer for obtaining import/export authorisations or licences and > payment of licence fee is made electronically through designated banks. Such applications are processed by the licensing authorities electronically and a physical import/export licence then generated, making >DGFT the first large government organisation to introduce this facility, which is operational in all the DGFT regional port offices.   And (b)  Message exchange whereby, DGFT exchanges Advance Licence and DEPB licences  with Customs, with plans to extend this to all export promotion schemes.  Message exchange obviates the need to produce physical copies of import  licences to the Customs for verification and subsequent import/export,  thereby reducing transaction costs of the trading community and minimizing  frauds. 

 

All the speakers highlighted the role of banks in facilitating foreign > trade. Most of the export promotion schemes such as DEPB rely on bank  realisation certificates. Shri V.K. Dhingra, General Manager, UBI, and Mr. Bhaskar Sen, General Manager (International Banking Division), UBI also  addressed the meeting, which was attended by representatives of many  Export Promotion Councils (EPCs), Federation of Indian Export  Organisations (FIEO), Export Credit and Guarantee Corporation (ECGC) and  the Reserve Bank of India (RBI).

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27th July 2006

 

INDIA, JAPAN TO HAVE COMPREHENSIVE ECONOMIC COOPERATION AGREEMENT BY
YEAR END
JAPANESE MINISTER CALLS ON KAMAL NATH

 New Delhi, 27 July, 2006

         A Comprehensive Economic Cooperation Agreement (CECA) between India and Japan is expected to be finalised by the end of this year. This was indicated by Shri Kamal Nath, Minister of Commerce and Industry, when Mr. Yasuhisa Shiozaki, Senior Vice Minister for Foreign Affairs of Japan, called on him here last evening.  

        A Joint Study Group (JSG) in its report submitted recently has recommended that India and Japan should work towards the establishment of a CECA. 

        The JSG was established to undertake a comprehensive review of economic and commercial relations between India and Japan and give its recommendations on upgrading those linkages in various fields.  

        Two-way trade between India and Japan amounted to around US $ 5 billion in 2004-05.  Japan’s total global trade is US $ 1019 billion but Japan’s imports from India as a percentage of Japan’s total imports are less than half-a-percent (i.e. 0.44%)! 

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27th July 2006

 

KAMAL NATH REVIEWS EXPORT TARGETS AND EXPORT
PERFORMANCE WITH EPCs AND COMMODITY BOARDS – URGES
EXPORTERS TO TARGET US $ 125 BILLION EXPORTS THIS FISCAL

 New Delhi, 27 July, 2006 

          Shri Kamal Nath, Union Minister of Commerce & Industry, today urged exporters to aim at achieving of US $ 125 billion exports during the current financial year 2006-07, thereby almost doubling India’s merchandise exports in three years – from a level of US $ 63 billion in 2003-04.  Chairing a review meeting convened by him with all Export Promotion Councils (EPCs) and Commodity Boards on Export Targets and Export Performance here this evening, he assured that the government would extend all support to enable exporters to cross the target of US $ 120 billion set for the year 2006-07, which envisaged a growth of 16.8%.      

          “With the sustained 20% plus export growth witnessed in the last couple of years, I am confident that US $ 150 billion merchandise exports will be achieved well before the target date of 2009, enabling India to increase its share of world trade to at least 1%”, Shri Kamal Nath said.    

          Noting that some of the Councils such as gems & jewellery and chemicals & allied products were projecting growth rates lower than 16.8% projected for exports as a whole, Shri Kamal Nath urged them to suitably revise their targets upwards, while assuring them that constraints impeding faster growth in specific sectors would be addressed on a priority basis. 

          Shri Jairam Ramesh, Minister of State for Commerce; Shri S.N. Menon, Commerce Secretary; Shri G.K. Pillai, Special Secretary; Shri K.T. Chacko, Director General of Foreign Trade; and other senior officials participated in the interaction along with representatives of the EPCs and Commodity Boards covering India’s key export sectors such as engineering, gems & jewellery, chemicals & related products, textiles (including silk, synthetic & rayon, wool & woollens, handlooms and handicrafts), sports goods, leather, processed foods, coffee, tea, tobacco, cashew and coir besides the Federation of Indian Export Organisations (FIEO). 

          Shri Kamal Nath interacted with exporters on their experience of implementation of various initiatives taken in the Foreign Trade Policy, in particular the Focus Products and Focus Area Approach, Vishesh Krishi Upaj and Gram Udyog Yojana etc., as also their feedback on schemes initiated to promote employment intensive export activities. 

          The Councils and Commodity Boards raised several sector-specific issues ranging from creation of corpus of Rs.1000 crore for focus export promotion in the Handicraft sector (EPCH) to reduction of duty on imported diamonds from 5% to 0% (gems & jewellery council) and for devising a mechanism to save exporters from heavy incidence of fringe benefit tax (EEPC).   FIEO made many suggestions including reintroduction of Target Plus scheme and extending benefit under the Focus Market scheme to all countries in Latin America and Africa.   

Addl. Info

  •  Indian exports have been growing at more than 20% in the last 4 years, i.e., since 2002-03.   Against an export target of 92 billion US dollars fixed for the year 2005-06, the achievement was 102.7 billion US dollars recording a growth rate of about 23% over the export performance of 2004-05.

  • Imports during 2005-06 were valued at 142.4 billion US dollars as compared to 111.5 billion US dollars in 2004-05 recording a growth rate of 27.7%.   The high growth of imports was mainly on account of demand for manufacturing sector for raw materials, intermediate goods & capital goods and increase in oil prices.   Excluding oil imports, India has a favourable trade balance signifying growing strength of the economy.

  • For the year 2006-07, a target of exports of 120 billion US dollars has been fixed, assuming a growth rate of 16.8% over current year’s performance.   During the first quarter, the growth in exports has been very encouraging; recording a growth of 32.4% over the corresponding period of the previous year (on the basis of comparing provisional figures for the two periods).

  • Top 5 countries of export destination are USA, UAE, China, Singapore and UK whereas the top 5 countries of import are China, USA, Switzerland, Germany and Belgium.   Top 5 commodities of export are gems & jewellery, petroleum products; RMG of cotton including accessories; drugs, pharmaceuticals, fine chemicals and machinery & instruments.

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27th July 2006

 

UNION BANK OF INDIA LAUNCHES ELECTRONIC FUNDS TRANSFER
FACILITY FOR EXPORTERS
 ONLINE ISSUE OF IEC NUMBERS ON THE ANVIL

 New Delhi, 27 July, 2006

The Union Bank of India launched its Electronic Funds Transfer Facility for exporters here today, becoming the 8th bank in the country to provide this facility to exporters. The Facility, based on the module developed by the Directorate General of Foreign Trade (DGFT), was launched in the presence of Shri S.N. Menon, Commerce Secretary, Shri K. T. Chacko, DGFT, Shri M.V. Nair, Chairman and Managing Director of the Union Bank of India (UBI) and other senior officials as well as representatives of the exporting community.  Shri Menon, who was the Chief Guest, also felicitated the Export Award Winners on the occasion.  

Noting that UBI now joins the company of SBI, PNB, Bank of India (BOI) and private banks like ICICI, IDBI, UTI and HDFC, both Shri Menon and Shri Chacko underlined that this initiative would bring more business for the bank and also bring down transaction costs for the exporters in the bank.  

Following the announcement of the Foreign Trade Policy, DGFT has introduced a number of facilities to enhance transparency and cut down the processing time for applications by moving towards paperless transactions. The key initiatives include (a) Acceptance of digitally signed applications with electronic fund transfer, under which DGFT accepts web-based digitally signed applications along with electronic fund transfer for obtaining import/export authorisations or licences and payment of licence fee is made electronically through designated banks. Such applications are processed by the licensing authorities electronically and a physical import/export licence then generated, making DGFT the first large government organisation to introduce this facility, which is operational in all the DGFT regional port offices.   And (b) Message exchange whereby, DGFT exchanges Advance Licence and DEPB licences with Customs, with plans to extend this to all export promotion schemes. Message exchange obviates the need to produce physical copies of import licences to the Customs for verification and subsequent import/export, thereby reducing transaction costs of the trading community and minimizing frauds. 

Shri Chacko indicated that issue of IEC numbers online was on the anvil. He mentioned that over 80% of the more than 2 lakh applications received by DGFT is now through the EDI mode. 

All the speakers highlighted the role of banks in facilitating foreign trade. Most of the export promotion schemes such as DEPB rely on bank realisation certificates. Shri V.K. Dhingra, General Manager, UBI, delivered the welcome address at the inaugural meeting, which was attended by representatives of many Export Promotion Councils (EPCs), Federation of Indian Export Organisations (FIEO), Export Credit and Guarantee Corporation (ECGC) and the Reserve Bank of India (RBI).

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26th July 2006

 

BORDER TRADE WITH CHINA THROUGH NATHULA 

New Delhi: July 26, 2006 

Border trade is overland trade and exchange of commodities by the residents along the border.  As per the agreed list of commodities for border trade between India and China, 29 items can be exported from India to China and 15 items can be imported into India from China.   M/s. RITES Ltd., has been commissioned to do a study on long-term infrastructure development of the border trade mart at Sherathang.   The report of the study is likely to be submitted by end August 2006.    This was stated by Shri Jairam Ramesh, Minister of State for Commerce, in a written reply in the Rajya Sabha today.

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26th July 2006

 

SINGLE WINDOW CLEARANCE MECHANISM FOR
MANUFACTURING UNITS: ASHWANI KUMAR

 

New Delhi: July 26, 2006 

          Manufacturing sector in India has grown at a rate of 9% for the last three years with 17% share in the GDP, Government recognises the need for increasing the growth rate of the manufacturing sector to 12-14% in order to enhance its share in the economic growth and expand employment opportunity in the country. Setting up of the Manufacturing Investment Regions (MIRs) in the country is one of the initiatives towards providing quality infrastructure and efficient and transparent regulatory systems in order to encourage manufacturing growth. The contours of the policy and legal framework in respect of the scope and establishment of such regions is under consultation with stakeholders including the State Governments. 

          This was stated by Dr. Ashwani Kumar, Minister of State for Industry, in a written reply in the Rajya Sabha today.

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26th July 2006

 

PAK STAND ON TARIFF RELIEF TO INDIAN ITEMS 

New Delhi: July 26, 2006

          The notification issued by the Government of Pakistan to give effect to SAFTA Tariff Liberalisation Programme from 1st July 2006 has a rider which states that it would be subject to their import policy order under which there is a list of importable items from India which at present has 773 items. 

          The Government of India has conveyed to the SAARC Secretariat that the notification with the said rider is against the letter and spirit of the Agreement on South Asian Free Trade Area (SAFTA) which has been ratified by all member states, including Pakistan, without any reservations.    India has consequently requested SAARC for an urgent meeting of the SAFTA Ministerial Council (SMC).   SMC is the highest decision making body of SAFTA and under Article 10 of SAFTA, SMC shall be responsible for the administration and implementation of SAFTA Agreement and all decisions and arrangements made within its legal framework. 

          This was stated by Shri Jairam Ramesh, Minister of State for Commerce, in a written reply in the Rajya Sabha today.  

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26th July 2006

 

PROMOTION OF EXPORTS

 

New Delhi: July 26, 2006

 

          There is no specific scheme to promote the exporting firms in the country.    However, some assistance is provided to exporters under Marketing Development Assistance (MDA) Scheme and Market Access Initiative (MAI) Scheme.    Other schemes for export promotion include Duty Neutralisation Schemes like DEPB, Advance Licence, duty concession schemes like EPCG and Reward Schemes like Served from India, Vishesh Krishi and Gram Udyog Yojana, Focus Market Scheme and Focus Product Scheme.

 

          Funds allocated under MDA and MAI Schemes during the last three years are as follows:

(Rs. In crore)

Year

MDA Scheme

MAI Scheme

2003-04

52.00

30.00

2004-05

55.00

5.00

2005-06

55.00

18.00

 

          There is no state-wise allocation of funds under MDA and MAI Schemes.  Other schemes operate through issue of scrips/authorisation and no cash payments are made.

 

          These schemes are reviewed periodically and necessary corrective measures are taken.

 

          This was stated by Shri Jairam Ramesh, Minister of State for Commerce, in a written reply in the Rajya Sabha today.

 

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25th July 2006

 

NO COMPROMISE ON INTERESTS OF FARMERS AND INFANT INDUSTRY,
SAYS KAMAL NATH
DEVELOPING COUNTRIES URGE REAL CUTS IN TRADE DISTORTING
SUBSIDIES OF DEVELOPED COUNTRIES –NEGOTIAITONS SUSPENDED 

New Delhi: July 25, 2006 

            Shri Kamal Nath, Union Minister of Commerce & Industry, has said that there can be no compromise on the interests of farmers or infant industry in the current Doha Round of multilateral trade negotiations, adding that trade should be looked at through the prism of development.    Briefing newsmen here today on his return from Geneva, the Minister underlined that at recent meetings of the WTO, India and other developing countries had stressed the need to have substantial and effective cuts in trade distorting domestic support of the developed countries.  

            “To address India’s core concerns and interests, including protecting the interests of farmers, we have formed alliances with like-minded developing countries, which include the G-20 on agriculture and the G-33 on special products and the special safeguard mechanism, and the NAMA-11 on industrial tariffs.  Specific and detailed proposals have been made by these groups in the negotiations.  India has also been playing a key role in further strengthening the developing country coalitions by bringing together G-20, G-33, African group, ACP countries and the LDCs to reinforce each other’ position on issues of mutual interest”, Shri Kamal Nath said in a statement in response to a question in Lok Sabha today.

            A meeting of the G-6 Ministers was held at Geneva on 23rd and 24th July 2006 and there was no convergence on the core issues of substantial reduction of trade distorting support and other development issues.   It has, therefore, been decided to suspend negotiations, he said. 

In NAMA (non-agricultural market access) developing countries are being asked to reduce their duties to levels which would threaten their infant industries. “We cannot agree to reduction of duties on industrial goods without adequate safeguards”, he said.

“This Round is not about the perpetuation of the structural flaws in global trade especially in agriculture. This Round is not about developing countries opening their markets for developed countries for their subsidised agricultural products. This Round is not about negotiating livelihood security and subsistence of hundreds of millions of farmers. This Round is not about preventing the emergence of industries in developing countries.  This Round is about opening new markets for developing countries especially in developed countries”, he had said last evening in a statement to the WTO

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24th July 2006

 

INDIA STICKS TO ITS GUNS IN WTO TALKS
KAMAL NATH SAYS TRADE INEQUALITIES UNACCEPTABLE

New Delhi: July 24, 2006 

            India stuck to its guns in the World Trade Organisation (WTO) talks held in Geneva over the weekend.  Shri Kamal Nath, Union Minister of Commerce and Industry, who participated in the talks, reiterated his position in a statement to the informal Trade Negotiations Committee (TNC) of the WTO earlier today, wherein he has stated that developing countries cannot permit their subsistence farmers to lose their livelihood and food security to provide market access to subsidised agricultural products from developed countries. 

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

I speak with sadness and a sense of loss. The developments in the G-6 meeting yesterday have highlighted what has been clear to many for quite some time – that there is little ground for convergence on the core issues in the Doha Round negotiations as of now. 

The Doha Round was premised on the centrality of development and the elimination of the structural flaws in agricultural trade which is of crucial importance to developing countries. The distortions in agricultural trade arise mainly because of the huge subsidies being paid by developed countries to their farmers and due to the formidable non-tariff barriers to the market access aspirations of developing countries. 

Developing countries cannot allow their subsistence farmers to lose their livelihood security and food security to provide market access to agricultural products from developed countries. That is the rationale for Special Products and Special Safeguard Mechanism for which the G-33 has been negotiating.  The overwhelming majority of poor farmers in the world are represented in the G-20 and the G-33 which have been in the forefront in the struggle for equity in the agricultural trading system. 

The G-20 and G-33 represent 90% of the world’s farmers. But we have to contend with the question of how between them, the US and EU account for over 50% of the world’s share in trade in agriculture with only 2% of their population in farming. The answer is simple. Huge subsidies enable this trade at the cost of millions of developing country farmers. 

The substantial reduction in trade distorting subsidies in developed countries and the protection of the livelihood interest of subsistence farmers in developing countries is the main component of the development dimension of this Round. Subsidised exports by developed countries not only pose a threat to food and livelihood security in developing countries, but also expose farmers of developing countries to unfair trade competition in their exports. Unfortunately, one member is unable to make any effective reduction in trade distorting subsidies but, at the same time, is insisting that developing countries open up their markets to provide access to their subsidised products. Insistence by some developed countries to perpetuate the skewed agricultural trade do not provide the basis for a fair outcome. 

Some developed countries are attempting to convert this Round into a Market Access Round for their products into developing country markets, thereby inverting the core development dimension. Developing countries are being asked to pay a price for the removal of structural distortions by developed countries. 

India has always stood by other developing countries including LDCs to ensure the centrality of the development dimension in the negotiations and to strengthen the multilateral system. It is possible to negotiate trade issues but it is not possible to negotiate the subsistence and livelihood security of poor farmers in developing countries.  

In NAMA developing countries are being asked to reduce their duties to levels which would threaten their infant industries. We cannot agree to reduction of duties on industrial goods without adequate safeguards. 

This Round is not about the perpetuation of the structural flaws in global trade especially in agriculture. This Round is not about developing countries opening their markets for developed countries for their subsidised agricultural products. This Round is not about negotiating livelihood security and subsistence of hundreds of millions of farmers. This Round is not about preventing the emergence of industries in developing countries. 

 This Round is about opening new markets for developing countries especially in developed countries. This Round is about creating new opportunities and economic growth for developing countries in all sectors including Industries and Services. This Round is about extracting LDCs and vulnerable economies from the stranglehold of poverty. 

This is what we have failed to do so far in these negotiations. We can achieve a fair and sustainable outcome only when we recognise these central developmental issues, and look at trade through the prism of development. 

            India attaches utmost importance to the rules-based multilateral trading system of which the WTO is the core. This system has to be sustained by the commitment of all members. The current impasse in the negotiations poses a serious threat to the system. In the interest of the multilateral trading system, it is important that we continue to strive for ending this impasse”.

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21st July 2006

 

JETRO LAUNCHES BUSINESS SUPPORT CENTRE IN
INDIA TO PROMOTE COOPERATION BETWEEN SMEs
OF INDIA AND JAPAN

 New Delhi: July 21, 2006

Asadha 30, 1928

 Shri Kamal Nath, Minister of Commerce & Industry inaugurated the  Japan External Trade Organization’s (JETRO) Business Support Centre in India (BSCI) here today. On this occasion, Shri Kamal Nath said that the BSCI will help Japanese SMEs to launch their business in India and provide necessary information and other support to them.  

BSCI will help Japanese SMEs by providing them rental office space, free consultation by experienced advisors and access to a wealth of business information. BSCI will be providing information on the specific needs of Japanese SMEs in respect of industrial structures, market shares and business practices in India viz. procurement of raw materials, product sales etc. It will not only provide the information on the regulations and incentives from Central and State Governments but also information on procedural requirements for establishing a business such as company registration, tax procedures, and labor procedures. It can also help SMEs to find a location for Office or Manufacturing Base through utilizing nationwide network of real estate companies. 

The Minister also expressed the hope that an increasing number of Japanese SMEs would find opportunities in the large Indian market  and noted areas such as chemicals, textiles, R&D, biotechnology and food processing for the same. He said “the technology and innovation of Japan has to be synergised with India’s workforce and BSCI would help achieve that in many ways”. Shri Kamal Nath also offered his Ministry’s full support including providing necessary premises and accommodation,  for setting of another such centre in Bangalore.   

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19th July 2006

Index of Six Infrastructure Industries (Base: 1993-94=100) May 2006

The Index of Six core-infrastructure industries having a combined weight of 26.7 per cent in the Index of Industrial Production (IIP) with base 1993-94 stood at 210.4 (provisional) in May 2006 and registered a growth of 5.1% (provisional) compared to growth of 8.1 % in May 2005.  During April-May 2006-07, six core-infrastructure industries registered a growth of 5.9%(provisional) as against 7.1% during the corresponding period of the previous year.

Crude Petroleum

Crude petroleum production (weight of 4.17% in the IIP) registered a growth of 1.0% (provisional) in May 2006 compared to (-) 1.9% in May 2005.  The Crude petroleum production registered a negative growth of 0.4% (provisional) during April-May 2006-07 compared to (-) 1.2% in the same period of 2005-06.

Petroleum Ref. Products

Petroleum refinery production  (weight of 2.00% in the IIP) registered a growth of 11.9% (provisional) in May 2006 compared to a negative growth of 6.0% in May 2005. The Petroleum refinery production registered a growth of 12.5% (provisional) during April-May 2006-07 compared to (-) 6.8% in the same period of 2005-06.

Coal

Coal production (weight of 3.22% in the IIP) registered a growth of 0.0% (provisional) in May 2006 compared to 11.2% in May 2005. Coal production grew by 1.6% (provisional) during April-May 2006-07 compared to increase of 9.7% in the same period of 2005-06. 

Electricity

Electricity generation (weight of 10.17% in the IIP) registered a growth of 4.7% (provisional) in May 2006 compared to 10.3% in May 2005. Electricity generation grew by 5.3% (provisional) during April-May 2006-07 compared to increase of 6.7% in the same period of 2005-06.

Cement

Cement production (weight of 1.99% in the IIP) registered a growth of 6.3% (provisional) in May 2006 compared to 15.3% in May 2005. Cement Production grew by 8.9% (provisional) during April-May 2006-07 compared to increase of 12.6% in the same period of 2005-06.  .

Finished (carbon) steel

Finished (carbon) Steel production (weight of 5.13% in the IIP) registered a growth of 6.4% (provisional) in May 2006 compared to 11.1% (estimated) in May 2005. Finished (carbon) Steel production grew by 7.5% (provisional) during April-May 2006-07 compared to increase of 13.9% in the same period of 2005-06. 

N.B: Data are provisional. Revision has been made where revised data were obtained from the sources.

PERFORMANCE OF SIX INFRASTRUCTURE INDUSTRIES

May 2006

(Weight in IIP: 26.68 %)

Base Year: 1993-94

 

 

Sector-wise Growth Rate (%) in Production

Sector                 

Weight (%)

 May 2005

May 2006

Apr-May 2005-06

Apr-May 2006-07

Crude Petroleum

4.17

-1.9

1.0

-1.2

-0.4

Petroleum Ref. Products

2.00

-6.0

11.9

-6.8

12.5

Coal                  

3.22

11.2

0.0

9.7

1.6

Electricity            

10.17

10.3

4.7

6.7

5.3

Cement                  

1.99

15.3

6.3

12.6

8.9

Finished steel (carbon)         

5.13

11.1

6.4

13.9

7.5

Overall                     

26.68

8.1

5.1

7.1

5.9

 

 

 

 

 

 

 

 

 

    Source of data: Concerned Ministries/Departments/Organization(s)

 

Month

INDEX

Growth Rates (%)

 

2004-05

2005-06

2006-07

2005-06

2006-07

April

182.8

193.7

206.6

6.0

6.7

May

185.2

200.2

210.4

8.1

5.1

June

180.8

192.7

 

6.6

 

July

189.5

193.3

 

2.0

 

August

184.9

195.4

 

5.7

 

September

187.0

191.4

 

2.4

 

October

207.2

217.5

 

5.0

 

November

191.3

197.0

 

3.0

 

December

199.9

209.3

 

4.7

 

January

202.8

209.9

 

3.5

 

February

188.1

198.7

 

5.6

 

March

216.3

235.2

 

8.7

 

Apr -May

184.0

197.0

 

7.1

5.9

 N.B: Indices and Growth rates are provisional

 

CRUDE PETROLEUM PRODUCTION

Weight: 4.17%

Month

 

Production (in Thousand tonnes)

Growth Rates (%)

2004-05

2005-06

2006-07

2005-06

2006-07

April

2814

2802

2752

-0.4

-1.8

May

2886

2830

2858

-1.9

1.0

June

2783

2792

 

0.3

 

July

2864

2751

 

-3.9

 

August

2874

2411

 

-16.1

 

September

2777

2572

 

-7.4

 

October

2881

2676

 

-7.1

 

November

2801

2562

 

-8.5

 

December

2876

2642

 

-8.1

 

January

2913

2774

 

-4.8

 

February

2596

2542

 

-2.1

 

March

2917

2845

 

-2.5

 

April-May

5700

5632

5610

-1.2

-0.4

Note : 1. Cumulative total may not tally with monthly total ;

           2. Production data and Growth rates are provisional.

Source : Ministry of Petroleum & Natural Gas    

  

OUTPUT OF PETROLEUM REFINERY PRODUCTS

Weight: 2.00%

Month

 

Output (in Thousand Tonnes)

Growth Rates (%)

2004-05

2005-06

2006-07

2005-06

2006-07

April

9694

8947

10118

-7.7

13.1

May

10234

9624

10771

-6.0

11.9

June

10002

9896

 

-1.1

 

July

9745

10097

 

3.6

 

August

9797

10042

 

2.5

 

September

9317

9776

 

4.9

 

October

9958

9719

 

-2.4

 

November

9708

9853

 

1.5

 

December

9846

10754

 

9.2

 

January

10295

10857

 

5.5

 

February

9484

10098

 

6.5

 

March

10136

11089

 

9.4

 

 April-May

19928

18570

20890

-6.8

12.5

Note : 1. Cumulative total may not tally with monthly total

          2. Output and Growth rates are provisional.

3.   The figure are estimated on the basis of data on refinery production (in terms of crude throughput)

Source:Ministry of Petroleum & Natural Gas

 

           

  

COAL PRODUCTION

Weight: 3.22%

Month

 

Production (in Million tones)

Growth Rates (%)

2004-05

2005-06

2006-07

2005-06

2006-07

April

28.2

30.5

31.5

8.2

3.4

May

27.6

30.7

30.7

11.2

0.0

June

27.6

28.5

 

3.2

 

July

28.6

28.3

 

-0.9

 

August

26.2

29.1

 

10.9

 

September

28.2

29.5

 

4.6

 

October

31.1

32.9

 

5.8

 

November

32.5

34.8

 

7.1

 

December

36.0

38.4

 

6.6

 

January

35.4

39.1

 

10.5

 

February

34.5

37.8

 

9.3

 

March

40.8

43.8

 

7.2

 

Cumulative Total (Apr-May)

55.8

61.2

62.2

9.7

1.6

Note : 1. Cumulative total may not tally with monthly total

           2. Production data and Growth rates are provisional.

Source : Department of Coal

           

  

ELECTRICITY GENERATION

WEIGHT: 10.17%

Month

 

Generation (in Million Kwh)

Growth Rates(%)

2004-05

2005-06

2006-07

2005-06

2006-07

April

48930.0

50413.2

53220.7

3.0

5.6

May

47981.0

52942.6

55422.7

10.3

4.7

June

46570.0

50948.9

 

9.4

 

July

50283.0

49781.1

 

-1.0

 

August

48325.0

52145.2

 

7.9

 

September

49050.0

48732.3

 

-0.6

 

October

48484.0

52072.0

 

7.4

 

November

47792.0

49060.2

 

2.7

 

December

50543.0

52021.3

 

2.9

 

January

50529.0

53460.5

 

5.8

 

February

46015.8

50137.1

 

9.0

 

March

52923.5

54591.6

 

3.2

 

April-May

96911.0

103355.8

108810.0

6.7

5.3

Note : 1. Cumulative total may not tally with monthly total;

           2. Generation and Growth rates are provisional.

          3. Electricity generation data includes also imports from Bhutan

 

Source: Ministry of Power

  

CEMENT PRODUCTION

Weight:1.99%

Month

 

Production( Thousand Tonnes)

Growth Rates(%)

2004-05

2005-06

2006-07

2005-06

2006-07

April

11140

12240

13665

9.9

11.6

May

10950

12630

13426

15.3

6.3

June

10300

12010

 

16.6

 

July

10768

11160

 

3.6

 

August

9355

11160

 

19.3

 

September

10340

10845

 

4.9

 

October

11253

12218

 

8.6

 

November

10764

11599

 

7.8

 

December

11433

12968

 

13.4

 

January

11760

13571

 

15.4

 

February

10971

12757

 

16.3

 

March

12525

14648

 

17.0

 

April-May

22090

24870

27091

12.6

8.9

Note : 1. Cumulative total may not tally with monthly total;

           2. Production and Growth rates are provisional 

Source : Department of Industrial Policy & Promotion

  

FINISHED   (CARBON)  STEEL PRODUCTION

Weight : 5.13%

Month

 

Production ( in Thousand Tonnes)

Growth Rates (%)

2005-06

2006-07

2006-06

2005-06

2006-07

April

2803

3277

3558

16.9

8.6

May

2992

3325

3538

11.1

6.4

June

2975

3151

 

5.9

 

July

3110

3389

 

9.0

 

August

3218

3440

 

6.9

 

September

3210

3468

 

8.0

 

October

4269

4568

 

7.0

 

November

3343

3519

 

5.3

 

December

3399

3627

 

6.7

 

January

3510

3375

 

-3.8

 

February

3317

3280

 

-1.1

 

March

3909

4579

 

17.1

 

April-May

5795

6602

7096

13.9

7.5

Note : 1. Cumulative total May not tally with monthly total;

2.      Production Data and Growth rates are provisional.  

Source: Ministry of Steel

 Department of Industrial Policy & Promotion, Ministry of Commerce & Industry

New Delhi, dated 19th July, 2006

 

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17th July 2006

INDIA AND FRANCE SIGN  MOU ON IPR ISSUES

New Delhi: July 17, 2006

Asadha 26, 1928 

Dr. Ashwani Kumar, Minister of Industry and Mr. François Loos, French Minister of  Industry signed an MoU in Paris on 15th July, 2006 for  cooperation in the field of intellectual property. This gives concrete expression to the commitments made by the two governments for co-operation in this field during the visit of the President of the French Republic to India on 20th February 2006.  

Considering the imperatives of effective protection of intellectual property rights in a global economy and the commitment of the two countries in that area, this signing of MoU presents a major step forward in bilateral co-operation. The MoU seeks to achieve this cooperation through training of personnel, exchange of information and experts between intellectual property institutes, sensitization of the target audiences, computerization of facilities dealing with intellectual property and the development of intellectual property database, conducting joint studies in specific cases and a dialogue on international questions regarding intellectual property.  

The implementation of actions of cooperation in the MoU would be entrusted to competent institutions i.e. the Institut National de la Propriété Industrielle (INPI), for the French side, and the Department of Industrial Policy and Promotion (DIPP), for the Indian side.  

On the occasion Dr. Kumar said “the signing of this MoU is a concrete manifestation of the  government’s desire to strengthen international bilateral cooperation in the field of intellectual property and to ensure protection of intellectual property rights of foreign investors and domestic industry.” 

On this occasion,  Dr Ashwani Kumar invited Mr. Francois Loos, his French counterpart to visit India to carry forward the relation on bilateral co-operation in this area. 

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16th July 2006

INDIA’S EXPORTS SURGE ACROSS MANY PRODUCTS AND DESTINATIONS 

New Delhi: July 16 2006 

          India’s merchandise exports surged to record levels across all major commodity groups and destinations during 2005-06 and the trend is continuing during the current year (April-June 2006).   

          Exports are estimated to have reached a record figure of US $ 102.7 billion during the financial year 2005-06. 

          The commodities which witnessed very high growth cutting across diverse sectors and destinations during 2005-06 were project goods (79%); petroleum products (64%); transport equipment (61%); engineering goods as a group (24.61%); basic chemicals, pharmaceuticals & cosmetics (25%) -- chemicals and related products as a group showed a growth of over 17%; coffee (49%); oil meals (54%); processed food (22%); carpets (30%); raw cotton (570%); textiles as a group (over 17%); and spices (over 19%).  Exports of agricultural & allied products as a group increased by over 17%. 

          India’s top 10 export destinations based on their percentage share of India’s total merchandise exports during 2005-06 were (1) USA (with a share of 16.75%); (2) United Arab Emirates (UAE) – 8.36%; (3) People’s Republic of China (6.54%); (4) Singapore (5.42%); (5) the United Kingdom (UK) – 5.01%; (6) Hong Kong (4.34%); (7) Germany (3.42%); (8) Belgium (2.78%); (9) Luxembourg and Japan (share of 2.39% each); and (10) Republic of Korea (share of 1.77%). 

          The export and employment figures indicate that new policy initiatives by the government in the foreign trade sector are providing to be effective in meeting the objectives of the Foreign Trade Policy announced by Shri Kamal Nath, Minister of Commerce & Industry.  Thus, exports grew at the rate of 23% and crossed 100 billion dollar during 2005-06 and are expected to cross $ 120 billion by the end of 2006-07.  On the employment front, according to the RIS study on employment, an additional 21 million jobs are expected to be created between 2004-05 and 2009-10 as a result of export growth.

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14th July 2006

INDIA’S EXPORTS AT RECORD HIGH – GROWTH AT 40% IN JUNE
AND OVER 30% CUMULATIVELY IN FIRST QUARTER OF THIS FISCAL
WITH SUSTAINED RECORD GROWTH, EXPORTS TO HIT US $ 126
BILLION THIS YEAR, DOUBLE THE 2003-04 FIGURE: KAMAL NATH
FOREIGN TRADE DATA FOR APRIL-JUNE 2006-07

 New Delhi: July 14, 2006 

          In a continuing surge, India’s merchandise exports during June 2006 have shown an unprecedented growth of 40.17%, having increased to US $ 9967.08 million ($ 9.9 billion) from the level of US $ 7110.96 million ($ 7.1 billion) during June 2005, according to provisional data available for the first quarter April-June of the current financial year 2006-07.     

          Exports during April-June 2006 are valued at US $ 27671.93 million ($ 27.6 billion) which is 32.40% higher than the level of US  $ 20900.31 million ($ 20.9 billion) during April-June 2005. 

          Commenting on the latest export trends, Shri Kamal Nath, Union Minister of Commerce & Industry has said: “The sustained buoyancy of India’s merchandise exports and in particular the record growth achieved in the first quarter of this fiscal reflects the effectiveness of various policy measures taken by the government and the growing global competitiveness of Indian enterprises, especially in the manufacturing sector which accounts for over 75% of India’s exports.   The increase has taken place across the board covering diverse products and destinations.  At this rate, I am confident that India’s merchandise exports will hit US $ 126 billion this year, representing a doubling of exports within just 3 years – something unprecedented anywhere else”. 

(NB: Quick estimates of selected major commodities indicate a substantial increase in exports of engineering products, petroleum products, basic chemicals, electronic goods, cotton yarn/fabrics/made-ups etc., spices, coffee, tobacco, carpets; and mica, coal and other minerals, including processed minerals, during June 2006). 

          In rupee terms, the exports during April-June were Rs.125914.98 crore which is 38.18% higher than the level of Rs.91126.20 crore during April-June 2005. 

          (The revised figure of exports for April-June 2005 is US $ 23676.12 million/Rs.103232.70 crore). 

          India’s imports during June 2006 are valued at US $ 13763.86 million representing an increase of 23.98% over the level of imports valued at US $ 11101.23 million in June 2005. 

          In rupee terms, the imports were Rs.63390.96 crore which is 31.02% higher than the level of Rs.48383.16 crore during June 2005. 

          (The revised figure of imports for June 2005 is US $ 11242.42 million/Rs.48998.51 crore). 

          Total imports during April-June 2006 are valued at US $ 40281.28 million which is 24.48% higher than the level of US $ 32360.13 million during April-June 2005. 

          In rupee terms, the imports were Rs.183222.61 crore which is 29.86% higher than the level of Rs.141093.43 crore during April-June 2005.  

          (The revised figure of imports for April-June 2005 is US $ 34214.14 million/Rs.149171.59 crore). 

          Oil imports during June 2006 are valued at US $ 4817.6 million which is 55.59% higher than oil imports valued at US $ 3096 million in the corresponding period last year. 

          Oil imports during April-June 2006 are valued at US $ 13128.07 million which is 38.99% higher than oil imports valued at US $ 9445.34 million in the corresponding period last year. 

          Non-oil imports during June 2006 are estimated at US $ 8946.25 million which is 9.82% higher than the level of such imports valued at US $ 8146.07 million in June 2005. 

          Non-oil imports during April-June 2006 are estimated at US $ 27153.22 million which is 9.63% higher than the level of such imports valued at US $ 24768.80 million in April-June 2005. 

          The trade deficit for April-June 2006 is estimated at US $ -12609.35 million which is higher than the deficit of US $ -11459.82 million during April-June 2005. 

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14th July 2006

ASHWANI KUMAR ATTENDS SESSION OF INDIA-BELARUSSIAN
INTER-GOVERNMENTAL COMMISSION
INDIA OFFERS HELP IN IT, PHARMA & POWER SECTOR

 New Delhi: July 14, 2006

 Dr. Ashwani Kumar, Minister of State for Industry, co-chaired the Third Session of the Indo-Belarusian Intergovernmental Commission for Economic, Trade, Industrial, Scientific, Technological and Cultural Cooperation in Minsk (July 12-14, 2006) along with Mr. Anatoly Rusetsky, the Belarus Minister of Industry. Wide range of issues including bilateral trade and investments, cooperation in industrial, scientific fields and cultural exchanges between the two countries were taken up during the session. 

Dr. Kumar offered India’s help in developing Information Technology and Pharmaceuticals industry in Belarus, through joint ventures between suitable partners identified by the two sides.   He offered a line of credit to Belarus to enable BHEL to upgrade the thermal power station in Minsk.  Dr. Kumar also evinced interest in assembling Belarusian heavy duty Dumpers in India. 

Belarus will show case its industrial capabilities in the India International Trade Fair, in November 2007 while FICCI will be organizing a similar road show in Minsk in September this year. Both sides will facilitate frequent exchange of business delegations and interactions between the captains of industry from the two countries to help in creating mutually beneficial partnerships particularly in automobiles, pharmaceuticals, tractors, machine tools and earth moving machinery fields. After the conclusion of the Session, a Protocol was signed by the two Ministers accompanying a wide range of issues agreed by the two sides for cooperation between them. 

In a separate engagement, Dr. Kumar called on the Belarusian Prime Minister, Mr. Sergei Sirdorsky who assured the support of Belarus for the candidature of Shashi Tharoor for the post of the Secretary General of the UN. He condemned terrorists attacks in Mumbai and reiterated his Government’s solidarity with the people and Government of India.  Dr. Kumar also met with the Belarusian Foreign Minister, Mr. Sergei Martinov

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12th July 2006

NMCC AND INVESTMENT COMMISSION TO CO-ORDINATE THEIR WORK
RATAN TATA MEETS CHAIRMAN/NMCC

 

New Delhi: July 12, 2006

 Mr. Ratan Tata, Chairman, Investment Commission, along with his colleagues in the Investment Commission Shri Ashok S. Ganguly and Shri Deepak S. Parekh called on the Chairman, National Manufacturing Competitiveness Council (NMCC), Dr. V. Krishnamurthy here recently to identify the areas and sectors in which synergy could be brought in between the work of the NMCC and the Investment Commission for investment and growth of the Manufacturing sector.    They have agreed to coordinate their work in the identified areas.   

Dr. Krishnamurthy appreciated the work done by the Investment Commission in bringing out an excellent report and said that NMCC would like to be benefited by the experience gained by Investment Commission in identifying the areas for investment having immediate potential for growth and employment generation.  He extended full support to the Commission in its efforts to increase the level of investments both domestic as well as foreign in India.  He said that robust growth of manufacturing sector was essential for the balanced growth of the economy and generation of the needed employment. 

Mr. Ratan Tata in his presentation touched upon the thrust areas identified by the Commission that require huge investments, the impediments being faced by the various sectors in the economy and recommendations made by Investment Commission for the removal of bottlenecks in way of attracting investment etc. The areas identified by the Commission include energy, textile and garments, automobiles and auto-components, food and agro-processing etc. The State Governments have a big role to play in improving the availability of power and other infrastructure.  According to the Investment Commission, the total investments required in the manufacturing sector in the next five years would be of the order of US $ 110 billion.  Labour flexibility was another issue that needed to be looked into.  He said that an effective mechanism for implementing various recommendations of Investment Commission was needed. 

Shri V. Govindarajan, Member Secretary, NMCC, stated that in so far as the implementation of the National Strategy for the Manufacturing was concerned, a High Level Committee on Manufacturing (HLCM) was recently formed for the purpose of dealing with issues concerning manufacturing sector by the Prime Minister under his Chairmanship and this forum would consider such proposals.  The HLCM consists of the Finance Minister, Commerce and Industry Minister, Deputy Chairman, Planning Commission, Chairman, Economic Advisory Council, the concerned Sectoral Minister, Chairman, NMCC and the Principal Secretary to the Prime Minister.   

Dr. Krishnamurthy welcomed the suggestion made by the Investment Commission to work together with the NMCC in the specific sectors that have immediate potential for growth and employment generation.  In this connection, the Textiles and Garments, and Food and Agro Processing sectors were identified to start with.  In addition, it was felt that among infrastructure sectors, Power sector required extra attention.  It was agreed that the NMCC and the Investment Commission would continue to coordinate their work through periodic discussions for ensuring the growth of investment in manufacturing sector.

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12th July 2006

INTRODUCTION OF FLEXIBLE COMPLEMENTING SCHEME IN COFFEE / RUBBER / SPICES BOARDS

 New Delhi: July 12, 2006

           Government has approved extension of Flexible Complementing Scheme (FCS) to the scientists of Coffee Board, Rubber Board and Spices Board.  The scheme would be implemented by the respective Commodity Boards in conformity with the guidelines/ conditions of the scheme.  In coffee board, FCS would be introduced upto the level of Scientists D and in Spices and Rubber Boards, this would be introduced upto the level of Scientists C.  The scheme has come into effect from the date of issue of these orders, i.e. 6th July, 2006. 

          The introduction of this scheme has been a long and persistent demand of the Boards for over two decades. After taking over charge, Minister of State for Commerce Shri Jairam Ramesh initiated extensive interaction with these Boards on this subject as well as Ministry of Finance and Department of Personnel & Training.  The existing scheme was one of the recommendations of the Fifth Central Pay Commission and after examination, the Government had decided that Flexible Complementing Scheme be made applicable only to scientists and technologists holding scientific posts in scientific and technology departments and who are engaged in scientific activities and services.  The scientists employed at the above three boards fall under this category.  It is expected that around 54 scientists in Rubber Board, 24 scientists in Coffee Board and 19 in Spices Board would immediately benefit from this scheme.   

          The expenditure involved in the implementation of the scheme will be met by the respective Boards out of its approved budget and no additional funds would be provided for this purpose. 

          Shri Ramesh stated today that with the scheme in place, the scientific efforts of the Boards will get a boost and they will be in a far better position to attract and retain scientific and technological personnel.

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12th July 2006

FDI POLICY: A CLARIFICATION

 PRESS NOTE 

Government has rationalized the FDI policy vide Press Note 4 (2006 series) dated 10.2.2006.  It has now been brought to the notice of the Government that the policy on FDI in Agriculture and Real estate requires further clarification.  

          It is hereby clarified that the existing policy with regard to Agriculture and Plantation sector is as under: 

a)                            FDI up to 100% is permitted under the automatic route in the under-mentioned activities viz., floriculture, horticulture, development of seeds; animal husbandry; pisciculture; aqua-culture; cultivation of vegetables; mushrooms under controlled conditions and services related to agro and allied sectors. 

b)                           FDI up to 100% with prior Government approval is permitted in Tea plantation subject to the conditions of divestment of 26% equity of the company in favour of an Indian partner/ Indian public within a period of five years; and prior approval of the State Government concerned in case of any future land use change. 

c)                            Besides the above two, FDI is not allowed in any other agricultural sector/activity. 

          It is further clarified that that apart from the permitted activities indicated at Sl.No.11 of Section IV of the Annex to Press Note 4 (2006), FDI is not permitted in any other activity in the Real estate sector. 

Department of Industrial Policy & Promotion, Ministry of Commerce & Industry, New Delhi, 12th July, 2006 

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11th July 2006

MEASURES TO FURTHER STEP UP MANUFACTURING GROWTH TO 12%

 New Delhi: July 11, 2006 

          Shri Kamal Nath, Union Minister for Commerce & Industry, has said that the government’s aim is to take a share of manufacturing from 16-17% of GDP to 24% by 2012 and 30% by 2020.    This calls for stepping up the rate of growth first to 12% and thereafter to 14%.   A number of steps are being taken to ensure that this is achieved.    Some of these are: 

1.           Manufacturing Investment Regions: These will be specialised areas of over 100 sq. kms. where world-class infrastructure, both external and internal will be provided through Central and State efforts and the internal development, as per a Master Plan by the private developers.   Single Window clearance and flexibility in labour laws within these investment regions are also being explored, though these would require legal backing of State Laws. 

2.           A massive programme of National Skill Development already mentioned by the Prime Minister being worked out, so that the 6500 ITIs in the country start producing skills which are more contemporary and in large numbers.   Industry would also be involved in this skill development programme to a much larger scale than hitherto. 

3.           A National Offset Policy is being considered for procurement by Government Departments and Government Agencies, so that technology import incorporation both in SMEs and in larger industries becomes easier.   Imports of goods from outside need to be linked up with import of first-class technology. 

4.           To reduce the Inspector Raj, a system of self-certification by various Departments of the Government is being evolved based on a Committee of experts, which looked into it.

 

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11th July 2006

INDIA WITNESSES MANUFACTURING REVIVAL
MANUFACTURING INVESTMENT REGIONS ON THE ANVIL – POLICY
INITIATIVES TO FURTHER PROPEL MANUFACTURING GROWTH:
KAMAL NATH
 

New Delhi: July 11, 2006 

          The manufacturing sector in India is witnessing a major revival, with a significant turnaround in performance which is reflected in the increase in manufacturing growth rate from 5% in 2000-01 to over 9% in 2005-06. Manufacturing growth during the current financial year (April 2006) is estimated at 10.4%.  Further, foreign direct investment (FDI) equity inflows into manufacturing sector have gone up from a meagre US $ 671.47 million in 2003-04 to over US $ 2 billion in 2005-06, registering a record growth of 75%. Indicating this at a press conference here today, Shri Kamal Nath, Union Minister of Commerce and Industry, underlined the importance of the manufacturing sector as a prime driving force for the country’s economic development, especially employment generation and announced that further initiatives were under way to increase the share of manufacturing in GDP from the current level of around 17% to 25% by 2012 by stepping up the growth rate to 12 to 14%. 

          It is estimated that India would have to achieve a long-term GDP growth rate of 8 to 10% to substantially improve the living conditions of its masses, which means that industry as a whole would have to grow on a sustained basis at about 10% and the manufacturing component of industrial growth should be 12% annually.   (Manufacturing refers to all industrial activities except power, water supply and mining). 

          Announcing new initiatives to further encourage manufacturing growth, Shri Kamal Nath has said that the government is formulating a policy framework for Manufacturing Investment Regions (MIRs) and Petroleum and Petrochemicals Investment Regions (PCPIR).    

          “The initiative on Manufacturing Investment Regions is being coordinated by Department of Industrial Policy & Promotion (DIPP).   The MIRs are proposed to cover around 100 sq. kms being larger than Special Economic Zones (SEZs).   These Regions may include SEZs, industrial clusters, IT parks, Export Oriented Units (EOUs) and other such established schemes.  The units located within these Regions would get the benefit of world-class infrastructure but no specific fiscal initiatives.  MIRs would set up for specific industries where India has a distinct advantage such as electronic & telecom hardware, automobile and auto-component; leather processing, footwear and leather goods; food processing etc., multi-product MIRs could also be considered”, Shri Kamal Nath said. 

          The government has already announced the implementation of a 10 year National Manufacturing Initiative and the contours of this initiative are being finalised in consultation with the stakeholders.  A High Level Committee headed by the Prime Minister and comprising Commerce & Industry Minister, Finance Minister, Deputy Chairman/Planning Commission, Chairman/National Manufacturing Competitiveness Council (NMCC) and concerned Secretaries has been constituted to deal with policy level issues that may arise in the implementation of this Initiative. 

          The other salient measures taken by the government for improving competitiveness of the Indian industry in general and manufacturing in particular include technology upgradation schemes for various sectors such as small scale industries, textiles, food processing etc.; industrial infrastructure upgradation programmes on cluster basis; easier access to inputs at competitive prices; encouragement to foreign technology collaborations; liberalisation of FDI in manufacturing activities; and rationalisation and reduction in duty rates.  

          “Due to supportive policy initiatives and the inherent strengths of its human resource capital, with proven skills in product design and manufacturing at a low cost, India is fast developing into a manufacturing hub for global corporations”, Shri Kamal Nath said.  

          According to McKinsey, multinational manufacturers are setting shop in India particularly in skill intensive industries requiring advance technical expertise such as auto components and engineering (Cummins, Toyota, Daimler Chrysler), specialty chemicals (Degussa, Rohm and Haas) and electrical and electronics products (ABB, Honeywell, Siemens).   “The next wave of global outsourcing in manufacturing will take place in these kinds of industries”, McKinsey Research adds. 

          Referring to progress of the Industrial Infrastructure Upgradation scheme (IIUS), which aims at enhancing the competitiveness of industry by providing quality infrastructure through public-private partnership in functional clusters with central assistance upto 75% of the project cost subject to a ceiling of Rs.50 crore for each project, Shri Kamal Nath said that so far 26 proposals envisaging total investment of Rs.1766 crore and involving central grant of Rs.952 crore had been sanctioned under the scheme.    Out of these 26 projects, 5 are for Tamil Nadu; 4 for Gujarat; 3 for West Bengal and 2 each for Andhra Pradesh, Maharashtra and Karnataka, covering sectors like auto components, textiles, chemicals, foundries, leather and rubber, which are at different stages of implementation. 

          An Integrated Leather Development Scheme had also been launched in November 2005 for comprehensive modernisation and technology upgradation in all segments of leather industry with an outlay of Rs.290 crore. 

           It may be recalled that the National Strategy for Manufacturing prepared by NMCC has identified the following 20 sectors as having immediate potential for growth and employment in the country:  (1) textiles & garments; (2) leather & leather goods; (3) auto-components; (4) drugs & pharmaceuticals; (5) food processing; (6) telecom equipment; (7) gems & jewellery; (8) handlooms & handicrafts; (9) chemicals & petrochemicals; (10) IT hardware / electronics; (11) skill development; (12) ports & shipping industry; (13) capital goods industry; (14) paper industry; (15) biotechnology; (16) cement; (17) fertilisers; (18) minerals & metals; (19) steel; and (20) small & medium enterprises (SMEs) – financial & venture capital.  

Background  

ð             Manufacturing forms 16 to 17% of India’s GDP, contributes 75% of exports, over 50% of FDI and employs 11% of the workforce.

ð             Total value of output from manufacturing sector is about US $ 450 billion.   Process based manufacturing industries such as chemicals, basic metals, textiles, rubber and petroleum, etc. forms a significant share of this.  Food, beverages, tobacco and chemicals comprise 32% of manufacturing output.

ð             Indian manufacturing sector is providing opportunities for leading MNCs – India is a design house, a tooling centre, a components base and a manufacturing hub.

(Source: Boston Consultancy Group)  

ð             High skill sectors account for almost 40% of manufacturing output of India.   India offers abundant engineering and technical talent – every year it produces 400,000 graduate engineers.  

ð             Companies are attracted to India by the increasing availability of reliable suppliers, the chance to escape unrelenting price pressures at home and the size of the domestic market.  

(Source: McKinsey Research)

 

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11th July 2006

ASHWANI KUMAR LEADS HIGH LEVEL DELEGATION TO BELARUS

 New Delhi: July 11, 2006

           Dr. Ashwani Kumar, Minister of State for Industry left for Minsk, the capital of Belarus, last evening for participating in the Indo-Belarusian Intergovernmental Joint Commission on cooperation in the fields of economy, trade, industry, science & technologies and culture.  

Dr. Kumar is leading a high-level delegation comprising Joint Secretaries of Department of Industrial Policy and Promotion, Fertilizers and Coal.  The Minister would have wide ranging consultations   with the host country’s Ministers of Industry, Foreign Affairs and will call on the Prime Minister of Belarus. 

The two sides are likely to discuss possibilities of cooperation in banking, road construction and a joint venture plant for the manufacture of tractors in Belarus. Cooperation between Export Credit and Guarantee Corporation and its counterpart 'BELEXIMGARANT' will also be explored.  India is an importer of potash from Belarus while there is substantial opportunity for exports from India to Belarus including BHEL’s turbines for its power sector.  

It may be recalled that Belarus has supported the Indian position on the restructuring of the United Nations Security Council and had also condemned terrorist attacks on   Parliament and in Kashmir.  

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10th July 2006

KAMAL NATH MOOTS COMPETITIVENESS STUDY FOR PLANTATION SECTOR
NON-TARIFF BARRIERS FACING PLANTATION AND AGRI EXPORTS MUST GO
REVIEW MEETING OF PLANTATION AND AGRICULTURAL SECTOR HELD

New Delhi: July 10, 2006

           A Competitiveness Study on the plantation sector in India will be undertaken soon, the Commerce & Industry Minister, Shri Kamal Nath, said after a review meeting chaired by him on the plantation and agricultural sectors here today.  Mooting the proposal at an extensive interaction with representatives of plantation and processed food sectors, Shri Kamal Nath said that such a study was imperative in order to assess the global competitiveness of the plantation sector (tea, coffee, rubber, tobacco) and to work out long term strategies for the development of this vital sector on which many small growers in the country depend for their livelihood.   The meeting was attended by Shri S.N. Menon, Commerce Secretary; Shri Rahul Khullar, Additional Secretary and Chairmen of all Commodity Boards under the Ministry of Commerce & Industry including Tea Board, Coffee Board, Rubber Board, Tobacco Board, Spices Board and the Agricultural & Processed Food Products Export Development Authority (APEDA). 

          Shri Kamal Nath further indicated that the issue of non-tariff  barriers  (NTBs)  facing Indian exports, especially processed foods, would be taken up strongly with major trading partners.  Already, as part of the WTO ongoing negotiations, India has been pressing for removal of tariff peaks and tariff escalations in developed countries which affect exports from India, he added.  APEDA in particular flagged the problem of tariff escalations (which refer to higher tariff imposed by developed countries on imports of value-added products).   

          The Minister reiterated government’s commitment to protecting the interests of farmers and ensuring remunerative returns, especially for small growers.   Productivity in terms of yield per hectare must be improved through massive programme of rejuvenating and replanting, he said, as this would enable Indian producers to compete effectively in global markets and realise higher returns.   At the same time, he emphasised the need to maintain a balance between the requirements of domestic consumption and exports. 

          The review focussed on major issues affecting the plantation sector – viz., cyclical nature of prices which are subject to international price volatility arising out of over supply situations; low productivity in sectors like tea due to old age profile of bushes; vagaries of weather including pest and climate related risks; issues of quality, especially the need to improve production/productivity/processing, and upgradation of infrastructure as well as branding, packaging and marketing; and finally, increasing India’s market share as well as creation of new markets for these commodities.     

          Shri Kamal Nath stressed the need to evolve strategies to enhance India’s global share, especially in view of the emergence of new players. 

          The meeting noted that the share of processed foods as a percentage of India’s total agri exports had increased from 20% a couple of years ago to 36% today, with exports having crossed Rs.7000 crore during the last financial year.  

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7th July 2006

INDIAN INSTITUTE OF PACKAGING TO GET DEEMED UNIVERSITY STATUS 
RETAIL SECTOR GROWTH TO FUEL DEMAND FOR PACKAGING INDUSTRY
KAMAL NATH TO INAUGURATE INDIAPACK 2006

New Delhi: July 07, 2006

             The Ministry of Commerce & Industry is approaching the University Grants Commission (UGC) for grant of a Deemed University status to the Indian Institute of Packaging (IIP).   This was stated by Shri P.K. Dash, Joint Secretary, Ministry of Commerce & Industry, at a curtain raiser press conference in connection with INDIAPACK 2006, here last evening.  

            While presenting his views on India’s packaging industry, Shri Dash said that the growth of retail sector in India would create a huge demand for the packaging industry.   Further, this demand would generate vast job opportunities, he added. 

            According to IIP, the Indian packaging industry is currently worth Rs.900 billion with an average growth rate of 15% against the global average growth of 4 to 5%.   

            INDIAPACK 2006, an international packaging exhibition and conference, is scheduled to be inaugurated by Shri Kamal Nath, Union Minister of Commerce & Industry, in Mumbai during 11-14 December, 2006. 

            INDIAPACK 2006 is envisaged as a catalyst for the development of packaging machinery, materials, product packaging, labeling, conversion and allied sector of the packaging industry.  It will also create a platform for entrepreneurs and senior management in the packaging industry an opportunity to interact on the subject of latest packaging technologies.  Thus, INDIAPACK seeks to bring all stakeholders of this important industry under one roof. 

            The events in Mumbai will also include Asian Packaging Federation programmes and the India Star Awards distribution ceremony to facilitate the winners of the National Packaging Awards. The theme of the conference in Mumbai is “Packaging for Tomorrow” highlighting the prospects of Asian region and also the latest developments and innovations in printing, conversion, system, testing and distribution to have overall knowledge to become globally competitive. 

            INDIAPACK is organised by IIP which is a National Institute set up by the Ministry of Commerce & Industry and works with the active support of the industry. The International Packaging Exhibition & Conference and other events are organised once in two years. The last INDIAPACK 2004 was held at Mumbai and 170 companies from 7 countries exhibited their products.

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7th July 2006
ITALY SEEKS CLOSER ECONOMIC ENGAGEMENT WITH INDIA
ITALIAN FOREIGN MINISTER CALLS ON KAMAL NATH
 

New Delhi: July 07, 2006 

        Italy is keen to promote closer trade and economic engagement in India, the Italian Minister of State for Foreign Affairs, Mr. Sen Gianni Vernetti, said at a meeting with Shri Kamal Nath, Union Minister of Commerce & Industry, here last evening.   While bilateral trade between the two countries in 2005-06 was US $ 4.3 billion, showing a growth of about 18% over the previous year, both the Ministers agreed that there was potential for doing much more. With the installation of new government in Italy, there would be further deepening and broadening of bilateral relations, Mr. Vernetti said. 

        Shri Kamal Nath in particular highlighted the scope for Italian investment in infrastructure projects. Foreign Direct Investment (FDI) approved from Italy to India (1991-March 2006) amounted to US $ 1.34 billion, of which actual inflows were only US % 500 million.     

        The discussions also focussed on possibilities for cooperation between small & medium enterprises (SMEs) of the two countries.     

        Mr. Vernetti indicated that the Italian Prime Minister would be visiting India early next year, adding that the visit would provide an opportunity to carry the dialogue on bilateral trade and economic cooperation to higher levels.

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6th July 2006

KAMAL NATH TAKES UP PAK SAFTA ISSUE WITH SAARC SECRETARIAT

 New Delhi: July 06, 2006

           Shri Kamal Nath, Union Minister of Commerce & Industry, has taken up with the SAARC Secretariat the issue of restricted import of goods under the SAARC Free Trade Agreement (SAFTA) from India by Pakistan and said that the notification by the Government of Pakistan dated 1st July 2006 to this effect is against the letter and spirit of SAFTA.   “I am sure you would agree with me that SAFTA has little operational meaning if Pakistan does not apply SAFTA to all items, except those tariff lines in the sensitive list, to all member countries”, Shri Kamal Nath has said in a letter to the Secretary General of SAARC. The letter also recalls that the Government of Pakistan had earlier ratified SAFTA without any reservation.    

          The SAFTA, signed by the member states of SAARC during its 12th Summit in Islamabad in January, 2004, has came into force from 1st January 2006. Under this agreement, SAARC member countries are to implement the trade liberalisation programme as per Article 7 from 1st July, 2006.   India has accordingly notified the reduction of tariffs as per Article 7 of SAFTA Agreement on 1st July, 2006.  The notification (SRO No. 695(I)/2006) issued by the Government of Pakistan on 1st July 2006 has notified tariff concessions on import of 4872 items from SAARC member countries.   However, according to this notification, imports from India would be subject to the Pakistan import policy order of July 2005 which restricts imports of goods from India or goods of Indian origin to a positive list of only 773 items, the letter points out.    

          The Minister has urged the Secretary General of SAARC to convene the SAFTA Ministerial Council Meeting for consideration of this important matter and also requested him to convey India’s concerns to all SAARC member countries.  

[NB: Pakistan’s positive list of imports is 4872 items and 1183 items are in the Sensitive List i.e., not subject to tariff liberalisation].     

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6th July 2006

IMPORTS UNDER FTA SHOULD NOT HURT DOMESTIC INDUSTRY, BUT SHOULD BE WIN
WIN FOR BOTH SIDES, SAYS KAMAL NATH

 New Delhi: July 6, 2006

Shri Kamal Nath, Union Minister of Commerce & Industry, has said that imports under the bilateral Free Trade Agreement (FTA) should not adversely affect the domestic industry. Rather, such an engagement should be a win-win situation bringing economic benefits to both sides. The Minister said this in the context of vanaspati imports under the Indo-Sri Lanka FTA, when the issue was raised by Mr. Jayaraj Fernandopulle, Minister for Trade, Commerce, Consumer Affairs and Highways, who called on him here on Tuesday.     

        Vanaspati accounts for more than 40% of total imports coming from Sri Lanka and it has been canalized through NAFED earlier this year.  Voluntary export restraint (VER) limiting export of duty-free vanaspati from Sri Lanka to 2.5 lakh metric tonnes per annum has also been under negotiation. The Sri Lankan Minister urged rescinding of canalisation. The Indian side noted the concern of Sri Lanka and said it would look into the matter in consultation with the domestic industry.  Shri Kamal Nath also took the opportunity to convey India’s concern regarding import of pepper and marble and underlined the need to avert switch trade. 

        Both sides noted the benefits from the FTA and in particular, the fact that trade between India and Sri Lanka not only crossed the US $ 2 billion mark in 2005 but had almost quadrupled in the last 6 years, largely as a result of the FTA.

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6th July 2006

KAMAL NATH TAKES UP PAK SAFTA ISSUE WITH SAARC SECRETARIAT

 New Delhi: July 06, 2006

           Shri Kamal Nath, Union Minister of Commerce & Industry, has taken up with the SAARC Secretariat the issue of restricted import of goods under the SAARC Free Trade Agreement (SAFTA) from India by Pakistan and said that the notification by the Government of Pakistan dated 1st July 2006 to this effect is against the letter and spirit of SAFTA.   “I am sure you would agree with me that SAFTA has little operational meaning if Pakistan does not apply SAFTA to all items, except those tariff lines in the sensitive list, to all member countries”, Shri Kamal Nath has said in a letter to the Secretary General of SAARC. The letter also recalls that the Government of Pakistan had earlier ratified SAFTA without any reservation.    

          The SAFTA, signed by the member states of SAARC during its 12th Summit in Islamabad in January, 2004, has came into force from 1st January 2006. Under this agreement, SAARC member countries are to implement the trade liberalisation programme as per Article 7 from 1st July, 2006.   India has accordingly notified the reduction of tariffs as per Article 7 of SAFTA Agreement on 1st July, 2006.  The notification (SRO No. 695(I)/2006) issued by the Government of Pakistan on 1st July 2006 has notified tariff concessions on import of 4872 items from SAARC member countries.   However, according to this notification, imports from India would be subject to the Pakistan import policy order of July 2005 which restricts imports of goods from India or goods of Indian origin to a positive list of only 773 items, the letter points out.    

          The Minister has urged the Secretary General of SAARC to convene the SAFTA Ministerial Council Meeting for consideration of this important matter and also requested him to convey India’s concerns to all SAARC member countries.  

[NB: Pakistan’s positive list of imports is 4872 items and 1183 items are in the Sensitive List i.e., not subject to tariff liberalisation].     

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6th July 2006

IMPORTS UNDER FTA SHOULD NOT HURT DOMESTIC INDUSTRY, BUT SHOULD BE WIN
WIN FOR BOTH SIDES, SAYS KAMAL NATH

 New Delhi: July 6, 2006

Shri Kamal Nath, Union Minister of Commerce & Industry, has said that imports under the bilateral Free Trade Agreement (FTA) should not adversely affect the domestic industry. Rather, such an engagement should be a win-win situation bringing economic benefits to both sides. The Minister said this in the context of vanaspati imports under the Indo-Sri Lanka FTA, when the issue was raised by Mr. Jayaraj Fernandopulle, Minister for Trade, Commerce, Consumer Affairs and Highways, who called on him here on Tuesday.     

        Vanaspati accounts for more than 40% of total imports coming from Sri Lanka and it has been canalized through NAFED earlier this year.  Voluntary export restraint (VER) limiting export of duty-free vanaspati from Sri Lanka to 2.5 lakh metric tonnes per annum has also been under negotiation. The Sri Lankan Minister urged rescinding of canalisation. The Indian side noted the concern of Sri Lanka and said it would look into the matter in consultation with the domestic industry.  Shri Kamal Nath also took the opportunity to convey India’s concern regarding import of pepper and marble and underlined the need to avert switch trade. 

        Both sides noted the benefits from the FTA and in particular, the fact that trade between India and Sri Lanka not only crossed the US $ 2 billion mark in 2005 but had almost quadrupled in the last 6 years, largely as a result of the FTA.

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5th July 2006

IMPORTS UNDER FTA SHOULD NOT HURT DOMESTIC INDUSTRY, BUT SHOULD BE A
WIN-WIN FOR BOTH SIDES, SAYS KAMAL NATH
SRI LANKAN TRADE MINISTER CALLS ON COMMERCE & INDUSTRY MINISTER

 New Delhi: July 5, 2006  

          Shri Kamal Nath, Union Minister of Commerce & Industry, has said that imports under the bilateral Free Trade Agreement (FTA) should not adversely affect the domestic industry. Rather, such an engagement should be a win-win situation bringing economic benefits to both sides.  The Minister said this in the context of vanaspati imports under the Indo-Sri Lanka FTA, when the issue was raised by Mr. Jayaraj Fernandopulle, Minister for Trade, Commerce, Consumer Affairs and Highways, who called on him here last evening.     

          Vanaspati accounts for more than 40% of total imports coming from Sri Lanka and it has been canalised through NAFED earlier this year.  Voluntary export restraint (VER) limiting export of duty-free vanaspati from Sri Lanka to 2.5 lakh metric tonnes per annum has also been under negotiation. The Sri Lankan Minister urged rescinding of canalisation. The Indian side noted the concern of Sri Lanka and said it would look into the matter in consultation with the domestic industry.  Shri Kamal Nath also took the opportunity to convey India’s concern regarding import of pepper and marble and underlined the need to avert switch trade. 

          Both sides noted the benefits from the FTA and in particular, the fact that trade between India and Sri Lanka not only crossed the US $ 2 billion mark in 2005 but had almost quadrupled in the last 6 years, largely as a result of the FTA. 

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4th July 2006

ENHANCEMENT OF FDI CEILING FROM 49% TO 74% IN TELECOM SECTOR – AMENDMENT TO PRESS NOTE 5 (2005 SERIES)

 PRESS NOTE

         The government, vide Press Note 5 (2005 series) dated 3/11/2005, had notified the enhancement of Foreign Direct Investment (FDI) limits in the telecom sector subject to specified conditions.    In terms of para 4 of the said Press Note, an initial correction time of four months from the date of issue of the Press Note was allowed to the existing licensee companies for adherence of the conditions.    The correction time was extended by another four months, i.e., upto 2nd July 2006 vide Press Note 5 (2006 series dated 3/3/2006. 

      It is notified for the benefit of investors that the government has decided to further extend the time period for the telecom service provider companies to comply with the conditions set out in Press Note 5 (2005 series) by three months w.e.f. 3rd July, 2006 upto 2nd October, 2006. 

        Press Note 5 (2005 series) dated 3/11/2005 stands modified to the above extent. 

Department of Industrial Policy & Promotion (DIPP), Ministry of Commerce & Industry, New Delhi, 4th July, 2006

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1st July 2006

KAMAL NATH RAISES PITCH FOR FARMERS – SAYS ONUS FOR SUCCESS FOR DOHA ROUND RESTS ON DEVELOPED
COUNTRIES

DEVELOPING COUNTRIES STAND UNITED IN GENEVA

WTO TALKS END IN DEADLOCK

 New Delhi, 1st July, 2006

             Raising the pitch for Indian farmers, Shri Kamal Nath, Commerce & Industry Minister, has said that there is no negotiating space in the present discussions as far as developing countries are concerned and that the onus of ensuring success of Doha Round rests squarely on the developed countries, as global trade talks at the mini Ministerial meeting of the World Trade Organisation (WTO) ended in a deadlock in Geneva today. "I can negotiate commerce, but not subsistence", he said repeatedly in green room discussions at WTO last night as well as this morning, while rejecting outright attempts by developed countries to rewrite or reopen the Hong Kong Declaration and the Doha Mandate on issues relating to food security, rural development and livelihood concerns of developing countries. Our farmers should not be hostage to commercial market access considerations, he stressed.   

            "The next few weeks are a period of reflection as well as of intense consultations", he said, in a statement on behalf of India at the Trade Negotiations Committee meeting later today while reiterating India's commitment to maintaining and strengthening the structure of the multilateral trading system.  

            India played a proactive role in the three-day mini Ministerial in building on and further strengthening the solidarity of developing countries across various groupings in WTO negotiations that was witnessed at the Hong Kong Ministerial. Trade ministers of G-20, the G-33, the ACP, the LDCs, the African Group, the Small and Vulnerable Economies, the NAMA-11, the Cotton-4 and Caricom said in a joint statement issued at a press conference in Geneva which was attended by Mr. Kamal Nath that the negotiations for modalities in agriculture and non-agriculture access (NAMA) must address on a priority basis the development needs and concerns of developing countries. "The most substantial results must be achieved in the areas where the greatest distortions lie, in particular on trade-distorting subsidies, that displace developing country products, threaten the livelihoods of hundreds of millions of poor farmers and which have been prohibited for industrial goods for several decades.  Market access will be an important component of a successful Round, but market opening in the developing countries must take into account their social and economic realities", the statement said. 

            Shri Kamal Nath also outlined a six-point minimum agenda for future programme in Doha Round, suggesting: a) Substantial progress in effective reduction of trade-distorting subsidies in agriculture along with clear disciplines; b) Meaningful reduction in agricultural tariffs in developed countries, in particular in products of export interest to developing countries; c) Substantial reduction in industrial tariffs based on the principle of less than full reciprocity in reduction commitments; d) Meaningful Special and Differential (S&D) Treatment provisions for developing countries, in particular overall proportionality in commitments, Special Products, Special Safeguard Mechanism, in agriculture and para 8 flexibilities in NAMA; e) Finalization of modalities for duty-free, quota free access for least developed countries and f) Accommodation of specific concerns of small and vulnerable economies, cotton producers of Africa etc. 

            The Minister left Geneva for New Delhi later this evening.  

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1st July 2006

LIVELIHOOD, FOOD SECURITY CONCERNS NOT NEGOTIABLE - KAMAL NATH STANDS FIRM
ON FARMERS' INTERESTS IN WTO MINI MINISTERIAL

New Delhi: 1st July, 2006

 

Standing firm on India's agricultural interests on day two of the World  Trade Organisation (WTO) Mini-Ministerial Meeting in Geneva, Shri Kamal Nath, Minister of Commerce and Industry, made it clear that livelihood and food security interests of millions of India's subsistence farmers were not negotiable. "I can negotiate commerce, but not subsistence", he reiterated at each of his interactions so far, including the green room and trade negotiations committee meetings on Friday as also at the G-6 meeting on Thursday, which was attended by the US, EU, Brazil, Australia and Japan, besides India.

Hitting out at attempts to rewrite the Hong Kong Declaration, the Framework Agreement and the Doha Development Agenda itself, Shri Kamal Nath reminded developed countries that " the Doha Round is all about increasing trade flows from developing countries to the developed countries, about agricultural reform and about market access for agricultural products, not of subsidies. The mandate is essentially to accelerate the growth rate of the economies of developing countries so as to raise the living standards of the millions of the world's poor living on the edge of subsistence and not for salvaging economies of developed countries (through continuance of subsidies that distort world agricultural trade and other inequities". Reduction in trade distorting agricultural subsidies is a pre-condition for market access, he added. (Agriculture is the most distorted sector of world trade and 85% of domestic support or subsidy payments in the world are made by the developed countries. Developing countries do not have the resources to make such payments to the farmers and hence, these distortions come in the way of free and fair trade in agricultural products as farmers in developing countries are not able to compete with the artificially low prices induced by such heavy subsidies in overseas markets nor can they compete with cheap imports).

Shri Kamal Nath urged all members to bear in mind the para 24 of the Hong Kong Declaration which stated that " it is important to advance the development objectives of this Round through enhanced market access for developing countries in both Agriculture and NAMA" - i.e., non-agricultural market access or industrial tariffs.

Later at a press conference of the G-33 - a grouping of countries with defensive interests in agriculture, he joined the other ministers in demanding that the modalities for negotiations for Special Products and Special Safeguard Mechanism in agriculture must address their food security, livelihood and development needs. They said that 18 indicators for determining Special Products had already been tabled by the G-33. " The G-33 should not be expected to shoulder the cost of achieving purely mercantilist goals of a few at the expense of putting their own development paths in peril", they stressed.

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