Press Release February 2006

Dr. Kandeh K. Yumkella, Director General, UNIDO,* called on Dr. Ashwani Kumar, Minister of State for Industry, last evening and discussed ways to strengthen the presence of UNIDO and of its activities in India with a special focus on providing technical and support services to small and medium enterprises. Earlier in the day, the UNIDO/DG also called on Shri Kamal Nath, Minister of Commerce & Industry, and discussed with him the proposal for setting up of a Centre for South-South Cooperation in India, with links to similar proposed centres in China and Brazil, for dissemination of industrial know-how and technical expertise.

Dr. Kumar assured him of the fullest cooperation on behalf of the Government of India. He further expressed his appreciation for the excellent publications brought out by the UNIDO in respect of contractual documents relating inter-alia to technology transfer and its BOT Guide. He also assured the Director General of India’s support to the work of specialised agencies of the United Nations such as UNIDO.

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 198.7 (provisional) in February 2006 and registered a growth of 5.6% (provisional) compared to growth of 0.8 % in February 2005. During April- February 2005-06, the six core-infrastructure industries registered a growth rate of 4.5% (provisional) as against 5.8% in the corresponding period of the previous year.

Crude petroleum production (weight of 4.17% in the IIP) registered a negative growth of 2.0% (provisional) in February 2006 compared to negative 4.9% in February 2005. On a cumulative basis the Crude petroleum production registered a negative growth of 5.5% (provisional) during April-February 2005-06 compared to 1.9% in the same period of 2004-05.

Petroleum refinery production (weight of 2.00% in the IIP) registered a growth of 6.2% (provisional) in February 2006 compared to a negative growth of 3.5% in February 2005. On a cumulative basis the Petroleum refinery production registered a growth of 1.4% (provisional) during April-February 2005-06 compared to 5.0% increase in the same period of 2004-05.

Coal production (weight of 3.22% in the IIP) registered a growth of 9.3% (provisional) in February 2006 compared to 2.2% in February 2005. Coal production grew by 6.4% (provisional) during April-February 2005-06 compared to an increase of 7.6% in the same period of 2004-05.

Electricity generation (weight of 10.17% in the IIP) registered a growth of 9.0% (provisional) in February 2006 compared to –0.8% in February 2005. Electricity generation grew by 5.3% (provisional) during April- February 2005-06 compared to an increase of 5.4% in the same period of 2004-05.

Cement production (weight of 1.99% in the IIP) registered a double digit growth of 16.3% (provisional) in February 2006 compared to 1.3% in February 2005. On a cumulative basis, Cement production grew by 11.9% (provisional) during April- February 2005-06 compared to an increase of 6.6 % in the same period of 2004-05.

Finished (carbon) Steel production (weight of 5.13% in the IIP) registered a negative growth –1.1% (provisional) in February 2006 compared to 6.0% (estimated) in February 2005. On a cumulative basis Finished (carbon) Steel production registered a growth of 5.3% (provisional) during April- February 2005-06 compared to 7.5% in the same period of 2004-05.

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

Department of Industrial Policy & Promotion, Ministry of Commerce & Industry
New Delhi, 29^th March, 2006

Pakistan will import more tea from India, with both sides deciding that they would encourage delegations of importers and exporters of tea to visit the two respective countries so as to facilitate import of tea from India. It was also emphasised that with the proposed new Shipping Agreement coming into effect, import of tea by Pakistan form India would be facilitated further.

This was among a series of major decisions taken during the Third Round of Pakistan-India talks on Economic and Commercial Cooperation within the framework of the Composite Dialogue, which was held in Islamabad on March 28-29, 2006. The Pakistan delegation was led by Secretary, Ministry of Commerce, Syed Asif Shah and the Indian delegation was led by Commerce Secretary, Shri S.N. Menon.

The talks were held in a cordial and constructive atmosphere. The two sides recognised the satisfactory progress on the initiatives agreed during the Second round of the talks held in New Delhi on August 9-10 2005. It was emphasised that the new Shipping Agreement would be signed in the near future at New Delhi and the talks on Air Services Agreement would be concluded expeditiously.

· In line with the announcement of the Prime Minister of Pakistan on his visit to India in November 2004, to open branches of scheduled banks in each country, the central banks would process applications by banks expeditiously.

· To identify the problems of transportation of goods by train between India and Pakistan, the relevant Ministries of both sides had a meeting on the sidelines of the talks. It was decided that they would continue their dialogue.

· Pakistan and India would constitute a Working Group to discuss the issues relating to joint registration of Basmati rice as Geographical Indication (GI).

· Pakistan would consider enlarging the list of important items from India in consultation with stakeholders and after fulfilling legal and procedural requirements.

· India will provide detailed proposals for trade in IT-enabled medical services and export insurance cooperation for consideration by Pakistan.

It was noted with satisfaction that the laying of optical fibre on the Indian side would be completed in the near future.

It was also noted that the initiative on liberalisation of visa regime would be discussed in the relevant segment of the Composite Dialogue.

The Indian proposal to convene a meeting of the relevant technical level experts at the Attari-Wagah Border to draw up proposals to upgrade infrastructure to facilitate trade including export of transit cargo of Afghanistan, was noted by Pakistan.

An MOU on Assistance of Mutual Cooperation in Capital Markets has been conveyed by Pakistan SECP to their counterpart in India. It was agreed that India would communicate its response soon.

Both sides welcomed the ratification of South Asian Free Trade Agreement (SAFTA) by all SAARC Member Countries and expressed the confidence that it would enhance regional trade, according to a Joint Statement issued in Islamabad by the two sides today.

There will be an India Trade Centre in the United Arab Emirates (UAE) – on the borders of Sharjah and Dubai – soon to facilitate India’s exports to the Gulf region. This was agreed at an interaction between Shri Kamal Nath, Union Minister of Commerce & Industry and the Indian Business and Professional Council (IBPC) at a reception in Dubai last evening, which was attended by over 300 non-resident Indian (NRI) representatives of IBPC based in the Gulf region. The Trade Centre would be largely business-driven and show-case India’s products and capabilities in different fields, the Minister said.

Shri Kamal Nath, who is currently on an official visit to the UAE and Muscat, also had a very successful meeting with Sheikh Mohammed Bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE and Ruler of Dubai, this morning. During the discussions, Shri Kamal Nath conveyed to the Ruler of Dubai India’s concern over a new UAE law which stipulated that no company could have more than 34% of its personnel from any one nationality and that beyond this limit, the visa fee would be 5 times the normal fee, thereby making the company commercially unviable. Shri Kamal Nath pointed out that such a legislation impacted unfairly on India. The Ruler of Dubai appreciated the point and assured him that he would have the matter looked into in the light of India’s concern. The Minister also had a meeting with top Emarati business leaders in Dubai.

While in Abu Dhabi, Shri Kamal Nath had called on the Crown Prince of the UAE Sheikh Mohammed Bin Zayid Al Nahyan.

The UAE market is important for the opportunities it provides as a major sourcing centre for important markets such as Iran, Iraq, Africa, CIS countries etc. This emergence of UAE as a re-export centre is reflected in India’s growing trade. In 2004-05, India’s exports to the UAE crossed US $ 7 billion with a 38.48% growth rate, India’s imports from the UAE also grew by an impressive 122.46% to reach US $ 4.5 billion.

India’s trade with the Gulf Cooperation Council (GCC) countries will exceed US $ 20 billion during the current financial year 2005-06 (excluding oil imports), equaling India’s trade with Europe. This was indicated by Shri Kamal Nath, Union Minister of Commerce and Industry, in his address at the Second India-GCC Industrial Conference in Muscat today. During 2004-05, India’s exports to GCC countries were US $ 10 billion and imports were US $ 7 billion, excluding oil imports. “At the rate we are growing, I will not be surprised if in a couple of years the volume of our bilateral trade exceeds India’s trade with the USA, which is currently our largest trading partner”, he said. The GCC consists of Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and United Arab Emirates.

India and GCC have also made significant progress in pursuing the proposal for a Free Trade Agreement (FTA), Shri Kamal Nath said, while recalling that in August 2004, he had signed the Framework Agreement on Economic Cooperation with the GCC, committing both to broad-based economic cooperation and a long-term commercial partnership, as well as to specifically examining the possibility of an FTA. He noted that the outcome of the latest round of discussions three days ago in Riyadh had been very fruitful and that both sides had together resolved to finalise the FTA by early 2007.

“We have also agreed to expand the scope to include Services & Investment, thus making it a Comprehensive Economic Cooperation Agreement instead of a mere FTA”, he said.

Stressing the strategic relevance of the Gulf region for India, Shri Kamal Nath invited investors and entrepreneurs of the Gulf region to avail of the exciting new opportunities in India through joint ventures and collaborations in different sectors. “There is convergence of interests between India and GCC countries in the present global economic environment. While the GCC countries are experiencing a period of rapid growth propelled by the oil revenue windfall on account of high oil prices, in the economic reconfiguration India has emerged as a favorite investment destination. The global comparative advantages of India make her the most attractive and natural partner for the GCC countries”, he stressed.

EXTENSION OF DEPB TO HELP EXPORTERS: KAMAL NATH

The government has decided to extend the Duty Entitlement Pass Book (DEPB) scheme by one more year with effect from 1/4/2006 (i.e., up to 31^st March 2007) and to work out an acceptable alternative to the scheme during this period. Following extensive consultations with trade and industry including export promotion councils, Shri Kamal Nath, Union Minister of Commerce & Industry, had sought extension of the scheme by at least one more year instead of the piecemeal extensions being given earlier so as to inject an element of stability in export promotion and thereby, help the country’s export effort.

The DEPB scheme, introduced in 1997, neutralizes the incidence of customs duty on the import content (both actual and deemed) of export products. An estimated 30% of India’s exports in value terms is covered under the DEPB scheme and in the seven years of its operation, it has emerged as the most preferred scheme for the industry – 52% of the country’s exporters prefer this programme to the other schemes.

The Compound Average Rate of Growth (CARG) of exports of goods and services as a proportion of GDP significantly grew in the post-DEPB era. The economy not only experienced the output multiplier effect but also the associated employment multiplier effects subsequent to its introduction.

Shri Kamal Nath, Union Minister of Commerce & Industry, leaves this evening for Muscat (Oman) where he will be inaugurating the Second India-GCC Industrial Conference tomorrow, besides holding discussions with leaders of the five Gulf Cooperation Council (GCC) countries in a bid to give a major boost to India’s trade with the Gulf region.

While in Muscat, Shri Kamal Nath will also have meetings with Mr. Sayyid Fahd bin Memoud Al Said, Deputy Prime Minister and Mr. Maqbool Ali bin Sultan, Minister of Commerce & Industry.

In the UAE, Shri Kamal Nath will call on the President of the UAE and will also have a meeting with the Abu Dhabi Chamber of Commerce and Industry on the 26 of March.

En route to Dubai, Shri Kamal Nath will visit the Jebel Ali Free Trade Zone as well as the Knowledge City, besides attending a reception by non-resident Indians (NRIs) to be hosted by the Indian Business and Professional Council (IBPC) on 27^th March.

On 28^th March, Shri Kamal Nath will call on Sheikh Mohammed Bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE and Ruler of Dubai. On the same day, he will also address the Khaleej Times Interactive Forum on “India on the Fast Track” in Dubai. (UAE consists of Abu Dhabi, Dubai, Sharjah, Ajman, Umm al-Qaiwain, Ras al-Khaimah and Fujairah).

The Gulf Cooperation Council (GCC) is a customs union of six countries viz., Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and United Arab Emirates. India’s exports to this region constitute about 3-4% of her global exports and India’s imports from this region account for over 20% of her global imports. India is in the process of negotiating a Free Trade Agreement (FTA) with GCC. Trade in Services and Investment Cooperation will also be synergised with the proposed FTA.

The exports of dyes, agro chemicals, cosmetics, toiletries and castor oil from India are set to receive a big push with special focus on CIS countries. This was indicated during an interactive meet of Indian exporters and manufacturers with the commercial representatives/ Heads of Missions of seven CIS countries including Armenia, Azerbaijan, Kazakistan, Kyrgystan, Tajikistan, Turkmenistan and Uzbekistan, here today. The meet was organized by the Basic Chemicals, Pharmaceuticals & Cosmetics Export Promotion Council (CHEMEXCIL) as part of the ‘Focus CIS’ initiative of the Ministry of Commerce and Industry. The purpose of the meet was to enhance Indian entrepreneurs’ understanding of the business environment and trade opportunities in CIS countries.

Speaking on the occasion, Shri Jayant Dasgupta, Joint Secretary, Ministry of Commerce and Industry said that the meet was an excellent opportunity for India to learn more about emerging markets in CIS countries, the products that are in demand there and how to market our products in these countries. He called upon the Indian industry representatives to tap the growing preference for organic perfumeries and herbal products the world over and market India’s traditional strength in this area. Addressing the meet, Shri P.K. Mahapatra, Joint Secretary, Ministry of Commerce and Industry said that in the last two years, there had been a marked increase in India’s trade with CIS countries, especially Kazakistan. If Turkey and the United States can substantially enhance their trading activity in the CIS region, so can India especially in view of our historic ties with the people of central Asia, he stressed.

The Meet was also addressed by Mr. Kairat Umarov, Ambassador of Kzakistan in India and Shri Satish Wagh, Chairman CHEMEXCIL.

During the year 2004-05, CHEMEXCIL’s exports stood at US $ 3139.1 million, registering a growth of 13.8 per cent over the previous year.

India’s export target of US $ 92 billion set for the year 2005-06 will be exceeded, according to the Annual Report of the Ministry of Commerce & Industry (Department of Commerce) for 2005-06 which has been released here yesterday. India’s merchandise exports continued to record double-digit growth during the current financial year touching 20%. This was even more significant coming in the wake of consistently high export growth of more than 20% during the last three years. During 2004-05, India’s merchandise exports at US $ 80 billion far exceeded the export target. At a business luncheon meeting in honour of the Prime Minister of Bangladesh held here on Wednesday, the Union Minister of Commerce & Industry Minister, Shri Kamal Nath, had confirmed that the merchandise export target for the current financial year would be exceeded by a wide margin.

Referring to the Annual Supplement to the Foreign Trade Policy announced by Shri Kamal Nath in 2005, the Report says that the Policy provided for a series of new initiatives to actively engage state governments in promoting India’s international trade, besides containing a series of other measures to simplify procedures, reduce transaction costs and enhance competitiveness of Indian exports, especially in the manufacturing sector.

· Removal of Export Cess on all agricultural and plantation commodities (valued at around Rs.100 crore) is expected to make agricultural exports more competitive.

· Measures have been taken under the Export Promotion Capital Goods (EPCG) Scheme to provide a thrust to the Agricultural sector, the SSI sector, the retail sector, Port Handling services, etc. to promote exports through modernisation of plant and machinery and efficiency improvement and at the same time to facilitate further growth in overall exports.

· A National Export Insurance Account (NEIA) was approved by the government recently to ensure the availability of credit risk cover for projects and other high value exports, which are desirable from the point of view of national interest, but which ECGC is presently unable to underwrite.

· Trade facilitation measures have been instituted for service exports under the ‘Served from India’ Scheme.

· Benefits under the ‘Vishesh Krishi Upaj Yojana’ were extended to exports of poultry and dairy products in addition to export of flowers, fruits, vegetables, minor forest produce and their value added products.

· Procedural simplification and reduction of transaction costs were vigorously pursued. Time limits have been fixed for issue of various licences and all 33 DGFT offices have been computerized and networked.

As a major step forward meant to instil confidence in investors and signal the government’s commitment to a stable SEZ policy regime, a comprehensive Special Economic Zones Act 2005, was passed by Parliament in May 2005 and received Presidential assent on the 23^rd of June 2005. The SEZ Act 2005 and the rules of the SEZ which came into effect from 10^th February 2006 are expected to provide a large flow of foreign and domestic investment in SEZs, in infrastructure and manufacture, leading to generation of additional economic activity and creation of employment opportunities.

The country’s first Free Trade Warehousing Zone (FTWZ) at Haldia in West Bengal has already received in principle clearance from the Centre, as a joint venture between IL&FS and MMTC. This is likely to come into operation by the middle of 2006.

On the multilateral trade front, India played a constructive role at Hong Kong while pursuing its negotiating objectives in the negotiations. From India’s perspective, the Hong Kong outcome addresses some of the country’s core concerns and interests and provides a negotiating space for future work. The year 2006 is crucial for WTO negotiations since the Ministerial Conference has resolved to complete the ongoing negotiations in 2006, the Report states.

India’s export target of US $ 92 billion set for the year 2005-06 will be exceeded, according to the Annual Report of the Ministry of Commerce & Industry (Department of Commerce) for 2005-06 which has been released here today. India’s merchandise exports continued to record double-digit growth during the current financial year touching 20%. This was even more significant coming in the wake of consistently high export growth of more than 20% during the last three years. During 2004-05, India’s merchandise exports at US $ 80 billion far exceeded the export target. At a business luncheon meeting in honour of Prime Minister of Bangladesh yesterday, the Union Minister of Commerce & Industry Minister, Shri Kamal Nath, had also stated that the merchandise export target for the current financial year would be exceeded by a wide margin.

· Removal of Export Cess on all agricultural and plantation commodities (valued at around Rs.100 crore) is expected to make agricultural exports more competitive.

· Trade facilitation measures have been instituted for service exports under the ‘Served from India’ Scheme.

There is no real contradiction between Free Trade Agreements (FTAs) / Regional Trading Arrangements (RTAs) and the multilateral trading system of the World Trade Organisation (WTO) as RTAs and FTAs are merely building blocs in the wider architecture of multilateralism, Shri Kamal Nath, Union Minister of Commerce & Industry, said here today while addressing a meeting organised by International Market Assessment (IMA).

The number of RTAs have quadrupled since 1990 (from 50 to nearly 230). Another 60 agreements are under negotiation. On average, each country belongs to 6 RTAs; and about 40% of world trade is under preferential tariff, he said.

Referring to WTO negotiations, Shri Kamal Nath said that India was determined to make ‘development’ the objective of trade negotiations. “Our exports as a percentage of GDP have steadily risen from less than 6% when we joined the WTO, to 12% last year. Added to this is the fact that exports currently provide employment to over 11 million people in India and, at the rate we are growing, has the potential to add more than a million jobs a year. This puts into clear context what the relevance of trade is to the Indian economy. The Uruguay Round in which developing countries got the wrong end of the stick is over, and an old chapter. The entire dynamics of the WTO have changed with the on-going Doha Development Round. No one will take anything lying down now”, he said.

Shri Kamal Nath, Union Minister of Commerce & Industry, has called for a roadmap to address issues which are hindering growth of trade between India and Bangladesh. “Greater connectivity is vital. We must encourage, if not insist on, movement of goods across our land borders through sealed containers. Containerized movement of goods through the riverine route, land route and railways between India and Bangladesh will considerably reduce the existing heavy congestion at the Petrapole-Benapole station. At present, a container between Kolkata and Dhaka (via Singapore) costs 2500 dollars and takes over fifteen days, while through our common riverine transportation this will cost only 500 dollars and take just five days”, Shri Kamal Nath said while addressing a Business Lunch in honour of Prime Minister of Bangladesh Begum Khaleda Zia, organised by Confederation of Indian Industry (CII), Federation of Indian Chamber of Commerce & Industry (FICCI) and Associated Chamber of Commerce & Industry (ASSOCHAM) here today.

A bilateral Free Trade Agreement (FTA – which would be SAFTA plus) – could also substantially address the issue of trade deficit, Shri Kamal Nath suggested, while citing the success of the India-Sri Lanka FTA. “Sri Lankan exports to India in 2001 were barely 45 million dollars, which was less than those for Bangladesh during the same year. By 2004 Sri Lankan exports to India had grown to 200 million dollars. The balance of trade which favoured India 15:1 when the FTA was signed has come down to 4:1 at present. Further, India has emerged as Sri Lanka’s third largest investor. It is in the light of this experience, that the proposal for India-Bangladesh FTA should gather momentum”, the Minister said.

Referring to India’s trade with Bangladesh, Shri Kamal Nath expressed satisfaction at the remarkable growth rate of over 68% during 2004-05 in Bangladesh’s exports to India and informed that in the last 4 years, Bangladesh’s export to India had not only tripled but also outstripped Bangladesh’s overall growth rate of 14%.

Bilateral trade had almost doubled in the last five years, growing to US $ 1.6 billion in 2004-05 from less than US $ 900 million in 2000. “It is true that the balance of trade is overwhelmingly in India’s favour; yet the trend of trade suggests inter-dependence on each other. It is significant that nearly 70% of India’s exports to Bangladesh consist of commodities and raw materials such as yarn, chemicals, petroleum products and construction materials or basic items such as rice, wheat, sugar which not only fulfil the essential demands of the people of Bangladesh, but, what is more important in a commercial context, these imports by Bangladesh add to its own export and manufacturing competitiveness”, he added.

The Union Minister of State for Industry, Dr. Ashwani Kumar has said that Government would take all the necessary initiatives to revive and promote industrial activities in the State of Punjab. Addressing a meeting of representatives of leading industry associations from the border districts of Gurdaspur and Amritsar including the Batala Foundry Industries Association, the Batala Rice Mills Association, the Amritsar Industries Association, the Amritsar Printers and Processors Association, the Punjab Rice Millers & Exporters Association, the Amritsar Textile Manufacturer Association, the Amritsar Medicine Manufacturer Association, the Amritsar Textile Weavers Manufacturer Association and other Associations pertaining to the Paper, Food Processing and Light Engineering Sectors, Dr. Kumar stressed the need for enhancing the competitiveness of industrial units in the State of Punjab particularly those in the remote and border districts of the State.

This interaction, which is the first in a series of interactions planned throughout the country at the initiative of the Minister of State for Industry. is aimed at understanding the specific issues and problems being faced by industrial units in the State of Punjab and with a view to urgently resolving the same.

The Minister assured the industry representatives that he would initiate the requisite measures to ensure that the basic pre-requisites for a faster pace of industrial development in the region such as building a strong infrastructure for industry, improving the connectivity of the region, providing adequate credit and financial support, exploring new market linkages, capacity building activities, human resource development etc. are provided at the earliest. This would be done in consultation with the concerned Departments and Ministries of the Government of India and the State Government, he added.

The Minister also emphasized the pro-active role that the State Government would need to play and assured full support and cooperation from the Government of India in any initiative which the State Government may propose.

Amongst others, the meeting was attended by Shri V. Govindarajan, Member Secretary, National Manufacturing Competitiveness Council, Shri Satyanand Mishra, Additional Secretary & Development Commissioner, Department of Small Scale Industries, senior officers from the Department of Industry Policy and Promotion, Shri Subodh Aggarwal, Principal Secretary (Industries), Government of Punjab, and representatives of All India Food Processors’ Association .

Discussions at this interactive meeting were wide-ranging. Representatives of the industry associations who attended the meeting welcomed the initiative and were hopeful that the dialogue would continue in future also.

The growth of general industrial production, as per the Index of Industrial Production (base year 1993-94=100), released by the Central Statistical Organisation (CSO), was higher at 8.3% in January 2006 compared to 7.5% in January 2005. The general cumulative industrial growth rate during April-January 2005-06 stood at 8.0% compared to 8.4% during the corresponding period of the last year. The cumulative growth of manufacturing during April-January 2005-06 stood at 9.0% against 9.2% last year in the said period.

The three sectors, which comprises the Index viz., Mining (weightage 10.47%), Electricity (weightage 10.17%) and Manufacturing (79.36%) registered growth rate of 0.2%, 5.8% and 9.2% respectively in January 2006 compared to their respective growth of 2.6%, 2.4% and 8.6% in January 2005.

Basic goods sector’s growth at 6.7% in January 2006 against 4.7% in January 2005; for capital goods 26.3% against 8.0%; for intermediate goods 4.6% against 1.6%; for consumer durables 12.4% against 10.3%; and for consumer non-durables 5.7% against 16.7% during the said period. The cumulative growth during Apr-Jan, 2005-06 for basic goods stood at 6.2% against 5.8% during Apr-Jan 2004-05, for capital goods 16.8% against 13.1%, for intermediate goods 2.6% against 6.4%, for consumer durables 13.6% against 14.8%, and for consumer non-durables 11.0% against 10.8%

The manufacturing sector covers 17 groups of industries. During January, 2006, 12 groups registered growth between 3.4% (Metal products and parts) and 37% (Other manufacturing industries). Of the 17 groups, 7 groups grew at more than 10% compared to January 2005. on the other hand, the growth rates of 5 groups were negative, ranging from (-) 1.3% (basic chemicals & its products) to (-) 21.5% (leather & its products).

Sector	Growth Rate (%)		Cumulative Growth Rate (%)
	January	January	Apr-Jan	Apr-Jan
	2006	2005	2005-06	2004-05

General Industrial Growth Rate	8.3	7.5	8.0	8.4

Manufacturing (Weight 79.36%)	9.2	8.6	9.0	9.2
Mining (Weight 10.46%)	0.2	2.6	0.5	4.8
Electricity (Weight 10.16%)	5.8	2.4	4.9	6.0

Industrial growth rate (Base year 1993-94=100) at the Use-based classification

Sector	Growth Rate (%)		Cumulative Growth Rate (%)
	January	January	Apr-Jan	Apr-Jan
	2006	2005	2005-06	2004-05

Basic goods	6.7	4.7	6.2	5.8
Capital goods	26.3	8.0	16.8	13.1
Intermediate goods	4.6	1.6	2.6	6.4
Consumer durables	12.4	10.3	13.6	14.8
Consumer non-durables	5.7	16.7	11.0	10.8

SB/NSD/MRS

During the last two years, the rate of growth of India’s trade with China has been in excess of 35%. If this trend is sustained, China could become India’s largest trading partner within the next two years. This was indicated by Shri Kamal Nath, Union Minister of Commerce & Industry and Mr. Bo Xilai, the visiting Chinese Minister of Commerce, at a press briefing here today following the India-China Joint Business Forum meeting. Currently, USA is India’s largest trading partner with a total trade of US $ 21 billion while India’s trade with China is projected at around US $ 16 billion for the current financial year 2005-06.

Shri Kamal Nath and Mr. Xilai further announced that it had been decided to set up a CEOs Forum in order to facilitate in-depth exchanges between the two countries at the business levels.

Referring to the deliberations of Seventh Session of India-China Joint Economic Group (JEG) which was co-chaired by the two Ministers here earlier today, they stated that it had been decided to constitute the following mechanisms as recommended in the Report of the Joint Study Group (JSG):

· Joint Working Group between the Ministry of Agriculture and its counterpart AQSIQ of China to implement MOU of June 2002 and work towards MRAs (Mutual Recognition Agreements) in the field of agricultural products.

Mr. Xilai indicated that the draft of a Bilateral Investment Promotion and Protection Agreement had also been finalised which would contribute to increased flow of investments between the two countries.

The Union Minister of Commerce and Industry, Shri Kamal Nath today said that India and Russia are now looking beyond the traditional trade and focussing on new areas like auto-components, information technology, agro and food processing, telecom, bio-technology and management education to achieve US $ 10 billion bilateral trade by 2010, a five-fold jump from the present US $ 2 billion. “A decline in traditional items of Indian export to Russia like tea, tobacco, readymade garments etc. require attention if we are to leapfrog in bridging the deficiencies in our trade”, Shri Kamal Nath said while adding that the services sector is another field where the two countries can cooperate profitably, especially healthcare, financial services, IT and ITES. He was speaking at the Business Dinner Meeting with the visiting Prime Minister of Russia, Mr. Mikhail Fradkov, organised jointly by the Confederation of Indian Industry (CII), Federation of Indian Chamber of Commerce & Industry (FICCI) and Associated Chamber of Commerce & Industry (ASSOCHAM), here.

Speaking on the occasion, Shri Kamal Nath said that small businesses are vital aspects of India’s growth story, and therefore, greater interaction between small and medium enterprises of India and Russia needs special attention. Procurement of rough diamonds from Russia for our diamond cutting and polishing industry is an area to which we look forward, he remarked The Minister noted that the language barrier is a constraint in increasing bilateral trade and urged upon the Indian industry to initiate incentives for learning Russian language.

“The Focus-CIS programme of the government opens several possibilities and our industry should use Russia as the gateway to the CIS. A Memorandum of Understanding (MOU) on Cooperation was signed last month between India and Russia that mandates setting up of a Joint Study Group (JSG) to prepare an action plan within this year for achieving the desired increase in bilateral trade”, Shri Nath stated.

India and China are poised to achieve US $ 20 billion bilateral trade turnover by the year 2007, a year ahead of the target set earlier, Shri Kamal Nath, Union Minister of Commerce & Industry, indicated in his keynote address at the India-China Joint Business Forum here today where Mr. Bo Xilai, Minister of Commerce of the People’s Republic of China, was the Guest of Honour, along with a large business delegation from China. The two Ministers earlier co-chaired the 7^th Meeting of the India-China Joint Economic Group (JEG), which took place after a gap of six years. “That it coincides with the celebration of India-China Friendship Year is of additional significance. I also note that this is the first JEG meeting after China’s accession to the World Trade Organisation (WTO)”, Shri Kamal Nath observed. Both Mr. Xilai and Shri Kamal Nath emphasised that trade and economic cooperation held the key to strengthening the overall bilateral relationship.

“I reiterate India’s deep desire and strong commitment to continue developing a multi-faceted, mutually beneficial trading and economic relationship with China”, Shri Kamal Nath said. Mr. Xilai in turn during his bilateral with Shri Kamal Nath recalled the traditional ties between India and China dating back many centuries when the two countries together accounted for more than 20% of the world’s total trade and called for “recapturing the old glory”.

During the year 2000-01, the bilateral trade volume was barely US $ 2 billion. This increased to US $ 11.3 billion in 2004-05. “This year our bilateral trade will be in excess of US $ 15 billion”, Shri Kamal Nath said, reflecting rapidly expanding bilateral economic relationship. At the same time, he stressed the point both at the JEG Meeting as well as the Joint Business Forum that the trade basket continued to be narrow and restricted to a limited range of goods. “For instance, Indian exports are dominated by raw materials and products of natural resource based industries. If our trade is to expand exponentially it is imperative for both partners to diversify the trade basket. Between us we produce practically everything – and produce it cheaply, and with good quality. We both have export growth rates that are 25 to 30%. While our engagement with the rest of the world is galloping, we must make doubly sure that it gallops with each other”, he said.

The JEG discussions focussed on implementation of the recommendations of the Report of the Joint Study Group (JSG) which was constituted in June 2003 by Prime Minister Dr. Manmohan Singh and Premier Wen Jiabao to examine the potential complementarities between the two countries. The agenda included review of bilateral trade since 2000 and issues of bilateral trade and economic cooperation relating to market access for agricultural, industrial goods and services; non-tariff barriers; restrictive regulatory regimes etc. besides discussing the deliberations of the Joint Task Force on India-China Regional Trading Arrangement and talks on a Bilateral Investment Protection Agreement.

Shri Kamal Nath also underlined the need to decide on an early operationalisation of the border trade across the Nathu La pass.

· During the visit of Premier of the State Council of the People’s Republic of China to Republic of India in April 2005, the two countries agreed to make joint efforts to increase the bilateral trade volume to US $ 20 billion or higher by 2008.

· Since 1997-98, Indo-China trade has registered a growth of 260% i.e., average yearly growth of around 33%.

· The volume of trade with China during the last 5 years i.e., from 2000-01 to 2004-05 has increased by 224%, registering an annual average growth of around 44%.

· Since 2000-01, the highest trade growth of about 62% was registered in 2004-05.

· During 2004-05, India’s balance of trade deficit with China has almost doubled as compared to 2003-04 and amounted to US $ 2.2 billion.

· India-China border trade opened in Uttaranchal on July 15, 1993; second border trade point opened in Himachal Pradesh in 1994 and memorandum for third border trade in Sikkim in Beijing in June 2003. During 2004, the border trade amounted to Rs.1846 lakhs.

To achieve the objectives laid down under the Foreign Trade Policy 2004-09 and double India’s percentage share of global merchandise trade by the year 2009, the government is committed to providing a stimulus to exports through various export promotion schemes from time to time. Details of the existing Export Promotion Schemes are as follows:

5. Export Oriented Units (EOUs), Electronics Hardware Technology Parks (EHTPs), Software Technology Parks (STPs) scheme

The Government has formulated a number of export promotion schemes to support and promote exports. Except for Duty Drawback Scheme, the policy framework for various export promotion schemes is laid down in the Foreign Trade Policy 2004-09, whereas the procedures governing the schemes are detailed in the Handbook of Procedures, VoI-I 2004-09. The Department of Revenue has issued notifications to operationalise the scheme.

The objectives of most schemes are to neutralize the incidences of levies and duties on inputs used in export products, based on the fundamental principle that duties and levies should not be exported. Presently, the major schemes are either duty exemption or duty remission schemes. Duty exemption schemes enable duty-free import of inputs required for export production. An Advance Licence is issued as a duty exemption scheme. A Duty Remission Scheme enables post export replenishment / remission of duty on inputs used in the export product. Duty remission schemes consist of (a) DFRC; (b) DEPB Scheme and Drawback. DFRC permits duty-free replenishment of inputs used in the export product. DEPB allows drawback of import charges on inputs used in the export product. The Drawback Scheme intends to neutralize the incidence of central taxes paid on inputs used in the manufacture of export goods.

Besides, there are other schemes in operation which are basically in the nature of reward schemes to reward high performing exporters. Target Plus, Served from India and Vishesh Krishi Upaj Yojana are reward schemes. Rewards are given on the basis of incremental exports / export turnover and such rewards have no linkage whatsoever with the duties and taxes borne on export goods.

India’s merchandise exports during April-February 2005-06 are valued at US $ 88760.40 million ($ 88.7 billion) which is 26.34% higher than the level of US $ 70253.17 million ($ 70.2 billion) during April-February 2004-05. In rupee terms, the exports were Rs.393157.16 crore, during April-February 2005-06, which is 24.35% higher than the value of exports during April-February 2004-05.

Exports during February, 2006 are valued at US $ 7834.49 million ($ 7.8 billion) which is 12.31% higher than the level of US $ 6975.54 million ($ 6.9 billion) during February 2005. In rupee terms, the exports were Rs.34729.43 crore, which is 13.98% higher than the value of exports during February 2005.

India’s imports during April-February 2005-06 are valued at US $ 126336.01 million representing an increase of 33.00% over the level of imports valued at US $ 94992.84 million in April-February 2004-05. In rupee terms, the imports increased by 30.77%.

Oil imports during April-February 2005-06 are valued at US $ 39658.36 million which is 49.35% higher than oil imports valued at US $ 26554.81 million in the corresponding period last year. Non-oil imports during April-February 2005-06 are estimated at US $ 86677.65 million which is 26.65% higher than the level of such imports valued at US $ 68438.03 million in April-February 2004-05.

Imports during February, 2006 are valued at US $ 11040.09 million representing an increase of 21.38% over the level of imports valued at US $ 9095.85 million in February 2005.

The trade deficit for April-February 2005-06 is estimated at US $ 37575.61 million which is higher than the deficit at US $ 24739.67 million during April-February 2004-05.

India’s merchandise exports during the current financial year from April 2005 to February 2006 have touched almost US $ 89 billion, indicating a record growth rate of over 26%, Shri Kamal Nath, Minister of Commerce and Industry, disclosed at the Third Meeting of the Board of Trade here this afternoon. This is on the already high-base of 26% of last year, which itself was a record breaking rate of growth. “Two years ago, we spelt out a bold vision to double India’s share in world trade within five years. The current trade figures indicate that India is not only on the right path but approaching the goal at an accelerated pace”, he said.

Shri Kumaramangalam Birla, who heads the Board of Trade, chaired the meeting. Shri Jairam Ramesh, Minister of State for Commerce; Shri S.N. Menon, Commerce Secretary; Shri D.P. Singh, Secretary (Textiles); Shri N.N. Khanna, Chairman & Managing Director, India Trade Promotion Organisation (ITPO); Shri G.K. Pillai, Special Secretary; Shri K.T. Chacko, Director General of Foreign Trade (DGFT) and other members of the 39-member Board of Trade including representatives of Federation of Indian Chamber of Commerce & Industry (FICCI), Confederation of Indian Industry (CII), Associated Chamber of Commerce & Industry (ASSOCHAM), Federation of Indian Export Organisations (FIEO), NASSCOM and Chairmen of various Export Promotion Councils, representing all the major export sectors in the country, participated in the meeting.

Inviting the Board to suggest an “actionable agenda” to maximize exports through industry-specific and product-specific measures which could be incorporated in the government’s Foreign Trade Policy (FTP). Shri Kamal Nath indicated that the Annual Supplement to the Foreign Trade Policy 2004-09 was likely to be announced on 30^th March. In this context, he indicated that a number of FTP initiatives were being considered this year and his Ministry was in consultation with the Ministry of Finance and other Ministries in this regard.

Shri Kamal Nath in particular sought feedback from the industry on two important suggestions – (a) enlarging the scope of Vishesh Krishi Upaj Yojana to facilitate export of agro-based, processed food items and (b) proposal for devising a new scheme to replace the current Target Plus Scheme which would make it more focussed and effective in achieving the objectives of the FTP, including a suggestion to focus on specific products and specific markets to accelerate export growth. “These are important not only from the point of view of adding new markets for our exports but also generating substantial new employment opportunities in rural and semi-urban areas”, he said.

“Trade flows are changing, but trade winds are also changing. Therefore, we must focus both on products where quantum jumps in exports are possible and markets with vast untapped potential such as Africa and South America”, Shri Kamal Nath said.

The Minister announced that he would to release a Compendium on Foreign Direct Investment (FDI) Guidelines on the occasion of the announcement of the Annual Supplement to the FTP, in order to underscore the mutual supportiveness of Trade and Investment, consistent with the government’s integrated approach to the promotion of trade.

The discussions focussed on suggestions made by the five Working Groups and four Study Groups under the Board of Trade as well as inputs received from exporters, covering issues such as continuation of the Duty Entitlement Pass Book (DEPB) Scheme and its replacement scheme; easier access to capital goods for export production under the Export Promotion Capital Goods (EPCG) Scheme and sensitizing the State Governments to ensure an export-friendly policy environment at the state level.

Earlier, elaborating on the foreign trade data, he indicated that “non-oil imports showed a similar growth rate to reach 87 billion dollars. Oil imports amounted to 40 billion dollars. While total imports were thus 127 billion dollars, it is significant that exports have exceeded non-oil imports by 2 billion dollars”.

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The government in consultation with stakeholders throughout the country is finalising a negative list for the ASEAN-India Free Trade Agreement (FTA) in order to protect its sensitive products and sectors especially in agriculture while negotiating the FTA. Items in the negative list – also known as the Sensitive List – will be exempt from tariff reductions. Addressing the wrap-up session of domestic stakeholder consultation for finalisation of the negative list titled “India-ASEAN FTA Negotiations: Wrap up Meeting” organised by UNCTAD here this morning, Shri S.N. Menon, Commerce Secretary, stressed that while finalising the list, the sensitivity of domestic industry would have to be considered and said he was confident that longer time-frames would give comfort to the Indian industry.

The Framework Agreement on Comprehensive Economic Cooperation between India and ASEAN, signed on 8^th October, 2003, inter-alia, envisages a Free Trade Area (FTA) in goods, and conclusion of these negotiations by June, 2006. Shri Menon indicated that negotiations to cover services were also likely to be initiated shortly. Those who participated in the one-day consultation were: Shri P.K. Dash, Joint Secretary, Ministry of Commerce & Industry; Ms. Sushma Berlia, President, PHD Chamber of Commerce & Industry; Dr. Veena Jha, Project Coordinator, UNCTAD; Shri R. Ratna, Director, Ministry of Commerce; Dr. Shahid Ahmed; and Shri Abhijit Das & Dr. Rashmi Banga of UNCTAD, along with a large number of stakeholders.

The Indo-ASEAN FTA in a sense takes forward India’s “Look East” policy which was initiated in early 1990s, Shri Menon said, adding that today ASEAN was one of the fastest growing markets for our exports. “It is often said that ASEAN offers a market of just about 600 million people as compared to the market of 1.2 billion being offered by India. There is another way of looking at this situation. ASEAN though has a smaller market in terms of demography, but it is a market of over US $ 355 billion of extra ASEAN imports. India’s share in ASEAN’s global imports is less than even 1% of their total imports. The possibilities are unlimited”, Shri Menon said.

The Ministry of Commerce had requested UNCTAD under the Project “Strategies and Preparedness for Trade and Globalisation in India” to conduct a study to identify the items which are sensitive for India in the Indo-ASEAN FTA. In this connection, UNCTAD conducted a series of consultations with stakeholders throughout India in Ludhiana, Ahmedabad, Hyderabad, Cochin, Mumbai, Pune and Kolkata during January-February 2006. Today’s meeting is a concluding link in the series of consultations, Dr. Jha said, prior to finalisation of India’s list of sensitive products.

The sectors chosen for consultations are spices, plantation crops, vegetable oils, rice, fish, textiles, chemicals & plastics, electronics, machinery, auto components & footwear.

“It is admitted that our domestic industry faces some handicaps as compared to the ASEAN countries, but considering these handicaps the offer list for ASEAN has been divided into four categories viz. Normal Track 1, where the tariffs would be eliminated by 2011, Normal Track 2, where the tariffs would be brought down to 5% by 2011 and eliminated by 2013, Sensitive Track 1, where the tariffs would be brought down to 5% by 2013 and eliminated by 2018. The fourth category is the Sensitive Track 2, where there would be no reduction or elimination of tariffs”, Commerce Secretary explained in his address.

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GIVES NEW TWIST TO PARA 24 OF HONG KONG DECLARATION TO STRENGTHEN S&D TREATMENT FOR DEVELOPING COUNTRIES

Shri Kamal Nath, Union Minister of Commerce & Industry, told the developed country representatives at the G-6 meeting being currently held in London that “we might as well wind up the talks and go home” if the concerns of developing countries in the area of market access are not met. The G-6 meeting is being attended by the European Union (EU), USA, Brazil, India, Japan and Australia to discuss issues relating to the ongoing Doha Round of multilateral trade negotiations of the World Trade Organisation (WTO).

Turning the tables on developed countries through a brilliant twist to para 24 of the Hong Kong Ministerial Declaration, Shri Kamal Nath strongly underlined the need for special & differential (S&D) treatment for developing countries by insisting that the “level of ambition” in the negotiations should first be done in percentage terms rather than in terms of coefficients. Presenting a simple and straight forward formula for progress of the trade talks, the Minister said that developed countries should first declare their “level of ambition” in agriculture, and whatever they were willing to do, developing countries would do two-thirds of that. Whatever developed countries were willing to do in agriculture, developing countries could be willing to match in non-agricultural market access (NAMA), but here also developed countries must do 10% more. This linkage would satisfy the requirement of para 24 of the Hong Kong Ministerial Declaration. But developed countries are not willing to follow this methodology, Shri Kamal Nath said, while noting that the EU was unwilling to move in agricultural market access, and the US was unwilling to move on domestic support (i.e., heavy farm subsidies), but both, together with some other developed countries, were pressing countries like India and Brazil to provide more market access in the industrial sector through coefficients for tariff cuts that did not take into account sensitivities of developing countries.

At the time of the Hong Kong Ministerial, the linkage between agriculture and NAMA established in para 24 of the Hong Kong Ministerial Declaration was seen in some quarters as detrimental to developing countries. But now at the G-6 meeting, India has used the same para as the strongest weapon in its arsenal. “By saying that developing countries are willing to match in NAMA what developed countries do in agriculture (and basing this on para 24) India has put them on the mat. So far, the talks are deadlocked and expectations for a solution by 30^th April, are dim”, according to reports reaching here from London.

Developed countries were caught unawares by India’s insistence on describing ambitions in percentage terms and not in terms of coefficients. They were almost shell shocked by Shri Kamal Nath’s twist to para 24 of Hong Kong Declaration.

On agriculture, the Minister made it clear that at Hong Kong, it was agreed that domestic support cuts must be effective. “For me, this is the central barometer of this round. Otherwise, any market access commitments by developing countries cannot be justified”, he said. On NAMA or industrial tariffs, Shri Kamal Nath emphasised that the principle of less than full reciprocity in reduction commitments is clearly mandated in the Doha Declaration and reaffirmed in the July Framework and the Hong Kong Declaration. his clearly means that developed countries will offer greater percentage reductions than the developing countries in average terms. (For instance, if the US wants developing countries like India to take a coefficient of 20 which would result in an approximately 68% reduction then the US would need to take a coefficient of 2, which would result in a 78% reduction. The easiest way forward is for the developed countries to indicate the level of ambition. The developing countries can then offer reductions based on less than full reciprocity).

The talks held yesterday were picketed by Action Aid. Their criticisms were directed against US, EU, Japan and Australia, whom they depicted through effigies of 4 hungry sharks with teeth bared.

Para 24 of the Hong Kong Ministerial Declaration adopted on 18^th December, 2005 relates to Balance between Agriculture and NAMA. It reads as follows:

“We recognize that it is important to advance the development objectives of this Round through enhanced market access for developing countries in both Agriculture and NAMA. To that end, we instruct our negotiators to ensure that there is a comparably high level of ambition in market access for Agriculture and NAMA. This ambition is to be achieved in a balanced and proportionate manner consistent with the principle of special and differential treatment”.

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Press Information Bureau

Shri Kamal Nath, Minister of Commerce and Industry, leaves tomorrow morning to attend the meeting of the G-6 scheduled to be held in London from 10^th to 12^th March, 2006 – a gathering of trade ministers of six countries viz., the European Union (EU), USA, Brazil, India, Australia and Japan, to discuss the Doha Development Agenda and issues in the context of the Hong Kong Declaration adopted at the Hong Kong Ministerial Conference of the World Trade Organisation (WTO) to carry forward the process of the Doha Round of multilateral trade negotiations. India and Brazil represent the G-20 grouping in the G-6. Shri Kamal Nath will articulate the interests and concerns of developing countries at the meeting in the key areas of the ongoing negotiations such as agriculture and non-agricultural market access (NAMA).

The issues discussed at the Hong Kong Ministerial related to the reduction of domestic support, elimination of export subsidies, sensitive products, special products and special safeguard mechanism in agriculture; elimination of export subsidies and accelerated reduction in domestic support in cotton; non-agricultural market access; services; development package for least developed countries and other development issues under the Doha Work Programme.

The G-6 meeting aims to have an exchange of views on various issues on the agenda in order to narrow down the differences between the developed country and developing country perspectives as far as possible in order to facilitate discussions in the larger body of the WTO membership so as to meet the various deadlines for finalisation of modalities for further negotiations, as mandated by the Hong Kong Declaration.

Press Information Bureau

Foreign Direct Investment (FDI) received by India has registered an increase of 326% in January 2006 being valued at US $ 647.7 million as against the FDI inflows of US $ 152 million in January 2005, Shri Kamal Nath, Union Minister of Commerce & Industry, indicated while releasing the figures for FDI inflows during the current financial year 2005-06 (April-January) as well as the data for January 2006. The FDI data includes only the equity component.

The Minister indicated that FDI inflow in equity up to the third quarter of the financial year 2005-06 (April 2005- January 2006) has been US$ 4.34 billion. This represents an increase of 60.5% over the FDI inflows of US$ 2.7 billion received during the corresponding period of the previous year 2004-05.

The major investing countries during this period have been Germany (35%), UK (26%), Mauritius (22%), Singapore (6%) and USA (2%).

The major sectors attracting investments in January 2006 were Chemicals (other than fertilizers)(37%), Fuels (power & oil refinery)(26%), Agricultural machinery (8%), Drugs & Pharmaceuticals (6%) and Services sector(4%).

M/s Micro Inks Ltd.(Printing inks manufacture), M/s GVK Power & Infrastructure (Electricity Generation), M/s New Holland Tractors (Tractors, Agricultural machinery) received high inflows during the month of January 2006.

The major investing countries during this period have been Mauritius (47%), USA (9%), UK (9%), Germany (7%), Singapore (5%).

The major sectors receiving inflows are Electrical equipments (20%), Services sector (11%), Cement & Gypsum (10%), Chemicals (other than fertilizers)(10%), Transportation (5%)

India today signed a Preferential Trade Agreement (PTA) with Chile, which, in the words of Shri Kamal Nath, Union Minister of Commerce and Industry, marks a “watershed in ties between the two countries as it will impart a new dimension to our trade relations in the times to come”. The Agreement was signed by Shri S.N. Menon, Commerce Secretary, from the Indian side and Mr. Jorge Heine, Ambassador of Chile in India on behalf of the Chilean Government in the presence of Shri Kamal Nath, Union Minister of Commerce and Industry and Shri Jairam Ramesh, Minister of State for Commerce. Shri Kamal Nath said the PTA would take bilateral trade to a higher plane as the next few years would witness a substantial growth in two-way trade. In 2004-05, total trade between India and Chile stood at US $ 447.54 million.

The PTA provides tariff preferences ranging from 10 to 50% on 178 tariff lines at the 8-digit level to Chile and a similar range of preferences on 296 tariff lines at the 8-digit level to India. It will benefit 98% of the items being exported by Chile to India and 91% of the goods being exported by India to Chile currently. The Indian products which would benefit include textiles, chemicals, pharmaceuticals, engineering and agricultural machinery. The Chilean products benefiting from the PTA are copper, cellulose, newsprint, iodine, fish meal, wood boards, planks and salmon.

Both sides also discussed the draft reports of the Joint Study Group (JSG) and agreed to submit their findings to their respective governments to consider further action on a Free Trade Agreement (FTA) between the two countries.

Chile has been one of India’s major trading partners in Latin America and the Government of India attaches a great deal of significance to promoting commercial relations with Chile, Shri Kamal Nath said, adding that Indian economy was also going at a rapid pace and India now ranked among the world’s 10 largest economies.

“The Preferential Trade Agreement strategically positions Chile to access and to capitalise on the Indian market and its technological assets. For both India and Chile, the availability of clean energy technologies, information technology enabled services, applications of peaceful uses of outer space, access to low cost medicines, and harvesting ocean resources are very important. These are some areas where both our countries can work together. Among non-traditional sectors, there is enormous scope for cooperation in fruits and vegetables or agro-based industries”, Shri Kamal Nath said.

INDO-UZBEK IT CENTRE IN TASHKENT TO BE NAMED AFTER

PROTOCOL OF SIXTH SESSION OF INDO-UZBEK COMMISSION ON TRADE, ECONOMIC, SCIENTIFIC AND TECHNOLOGICAL COOPERATION SIGNED

With the view to substantially increasing the volume of bilateral trade, Uzbekistan has agreed to directly source a large number of products from India including cotton, yarn, grain, flour, mineral fertilizers, polyethylene, liquid gas, raw silk and silk products, cable-conductor products, the products of chemical industry, copper, zinc etc. This is indicated in the Protocol of the Sixth Session of the Inter-Governmental Commission on Trade, Economic, Scientific and Technological Cooperation between Indian and Uzbekistan, which was signed here today. The Protocol was signed by Shri Jairam Ramesh, Minister of State for Commerce and Co-Chairman of the Commission from Indian side, and Dr. Alisher Erkinovich Shaykhov, Minister of Foreign Economic Relations, Investments and Trade of the Republic of Uzbekistan and Co-Chairman of the Commission, from Uzbek side.

Welcoming the proposal from Shri Jairam Ramesh to name the Indo-Ukbek IT Centre being set up in The Tashkent University of Information Technology (TUIT) after Shri Jawahar Lal Nehru who was the first Indian Prime Minister to visit Tashkent 50 years ago, both sides agreed to name the center as Jawahar Lal Nehru India-Uzbekistan Centre for Information Technology.

To expedite concrete proposals for Indian companies in mining of gold in Uzbekistan, the Uzbek side was requested to nominate their agency for signing the MoU with MMTC Ltd. and National Mineral Development Corporation (NMDC) from Indian side.

To tap the huge potential for cooperation in the oil & gas sector, the two sides agreed to the constitution of a Joint Working Group (JWG) on Hydrocarbons under the auspices of the Inter-governmental Commission. It was also decided that a delegation from GAIL (India) Ltd. would visit Uzbekistan next month to explore the opportunities in construction of LPG plants, Gas Pipelines and Gas Processing facilities.

Later, Dr. Shaykhov and his delegation also called on Shri Kamal Nath, Union Minister of Commerce & Industry.

During the two-day deliberations, Shri Jairam Ramesh emphasised that to promote business and tourism between the two countries, Uzbekistan must initiate steps to liberalize the Uzbek business and tourist visa regime for Indian nationals. Under the Protocol signed today, the Uzbek side agreed to take appropriate steps in this regard at the earliest.

The government’s website containing information on foreign direct investment (FDI), industrial policy etc., has been a big hit, having registered a record increase of 150% in the number of queries received in the last two years.

Department of Industrial Policy & Promotion hosts an inter-active and investor friendly website (http://dipp.gov.in) with the objective of providing information about the investment climate in India. The website contains updated information on FDI/Industrial Policy, State Industrial Policies, Press Notes/Releases & Notifications issued by DIPP, FDI Statistics and Publications covering investment opportunities in India, entry options available to the foreign investors etc.

In addition to the above, an on-line advisory service through chat session and bulletin board is available during prescribed hours at the site. Investors can join chat session twice daily on working days between 11 AM – 12 noon and 4 -5 PM. During the chat session, replies are given to the questioner instantly while questions posted at bulletin board (available 24 hrs) are replied same day/next working day. When this feature was started at DIPP website, chat session was available for only one hour in the evening. Encouraged by the response and keeping in view the convenience of queries in Far East & North America, chat session was made available between 11 & 12 hrs in the morning.

In an update on the website submitted to Shri Kamal Nath, Minister of Commerce & Industry, DIPP has said that substantial increase in the number of queries received during interactive session at this website has been observed during the last three years. As against a total number of 2055 queries received and replied during the period Jan – Dec, 2003, the number of queries received went up to 3598 during the twelve months of 2004 showing an increase of 75%. This upward trend was maintained during the year 2005 also when the number of queries received and replied at the website was 5397, again an increase of 50% over 2004. Compared with the figures of 2003, number of queries received during 2005 shows an increase of excess to 150 %.

Queries received during chat session are replied immediately and those received at the Bulletin board were replied within two and half hours of being posted.

India’s share in world market for basmati rice is about 53%, Shri Jairam Ramesh, Minister of State for Commerce, said in a written reply in the Lok Sabha today.

The rice exporters have requested the government for notification of ‘super’ variety of rice as ‘Basmati’ rice. The request has been examined and recommended to Department of Agriculture & Cooperation for necessary Notification under the Seeds Act 1966, he said.

The steps being taken by the Government to increase export of Basmati rice include providing assistance to Indian exporters for undertaking publicity campaign, mounting trade delegations abroad, participation in international fairs, buyer-seller meets and providing financial assistance to exporters for improving quality, packaging and brand promotion, he added.

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The Union Minister of State for Commerce, Shri Jairam Ramesh today said that the time has come for India and Uzbekistan to build on their centuries old cultural and trade relations, and come together for a mutually beneficial economic cooperation in their respective areas of strength, especially Information technology and oil & gas sector. He was addressing the sixth session of the Inter-Governmental Commission on Trade, Economic, Scientific and Technological Cooperation between Indian and Uzbekistan, here. The Uzbek delegation was led by Dr. Alisher Erkinovich Shaykhov, Minister of Foreign Economic Relations, Investments and Trade of the Republic of Uzbekistan.

Taking note of the commanding position that India has earned in the field of information technology, Shri Jairam Ramesh expressed satisfaction over the progress made in setting up of Indo-Ukbek IT Centre in The Tashkent University of Information Technology (TUIT) with a grant of Rs. 30 million. Shri Ramesh informed Dr. Shaykhov that experts from C-DAC, Pune are scheduled to arrive in Tashkent next month to install equipment and to conduct IT training courses. Eight faculty members from TUIT have already completed advanced IT training from C-DAC. The Uzbek side offered to provide full cooperation for encouraging investment by Indian IT companies in Uzbekistan, and to make Uzbekistan their base for further expansion in CIS countries. Dr. Shaykhov appreciated the active involvement of Indian companies in reconstruction and modernization of Uzbek Railways. To facilitate bilateral trade, Shri Ramesh proposed that Indian businessmen intending to visit Uzbekistan be granted visas on the basis of letters issued by the recognized Indian Chamber of Commerce & Industry.

Besides huge potential for cooperation in the oil & gas sector, the two sides also decided to focus on the following areas: textiles (cotton & silk) and garments, pharmaceuticals & hospital equipment, healthcare, food processing, construction and industrial processing of minerals. Indo-Uzbekistan bilateral trade during 2004-05 was Rs. 220.55 crore (including exports from India of Rs. 88.32 crore and imports of Rs. 132.23 crore), against Rs. 69.58 crore in 2003-04, registering an increase of 14.58 % in dollar terms.

A Preferential Trade Agreement (PTA) between India and Chile will be signed here tomorrow. The Agreement will be signed in the presence of Shri Kamal Nath, Union Minister of Commerce and Industry, by Shri S.N. Menon, Commerce Secretary, from the Indian side and Mr. Jorge Heine, Ambassador of Chile in India on behalf of the Chilean Government.

During the visit of the Chilean President to India in January 2005, a Framework Agreement on Economic Cooperation was signed between India and Chile on January 20, 2005. This Agreement envisaged PTA between the two sides. The Framework Agreement also provided for a Joint Study Group to identify the potential for cooperation between the two countries in trade in goods and services, investments and other areas of economic cooperation.

Chile is one of the major Latin American countries with a GDP of US $ 76.3 billion and a bilateral trade of US $ 53.2 billion during 2004. Its trade surplus was US $ 8.5 billion during the year. Chile is endowed with rich natural resources, is the world’s leading producer of copper and its total resources are estimated to represent 25% of world’s proven reserves of copper.

Since the early nineties, the Chilean economy has been one of the best performing in Latin America, with an average growth of 5.5% during the period 1990-2003. The growth has been about 6.1% during 2004 and 5.7% during the first six months of 2005. There are no restrictions on imports and exports in Chile.

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The Union Minister of State for Industry, Dr. Ashwani Kumar today said that while Indian has arrived on the global economic scene, it is heartening to note that more and more Indian corporates are becoming aware of their responsibility towards the society, and contributing actively to ameliorate the living conditions of underprivileged sections of Indian society. He was addressing a select gathering after giving away the Businessworld-FICCI-SEDF Corporate Social Responsibility Award 2005, here. The award was constituted in the year 1999 by the Federation of Indian Chambers of Commerce and Industry – Socio Economic Development Foundation (FICCI-SEDF) to recognize and promote voluntary social development initiatives among Indian corporates.

The award for the year 2005 was won by M/s Satyam Computer Services Ltd. M/s Kinetic Engineering was the first runner up while M/s Deepak Fertilisers and Petrochemicals Corporation Ltd. was the second runner-up. The Jury Members for selection of winners comprised Dr. Abid Hussain (Chairman), Dr. Girija Vyas, Justice Leila Seth and Prof. Muchkund Dubey.

Speaking on the occasion, Dr. Ashwani Kumar called upon FICCI-SEDF to take up community health work in backward districts of the country. In this context, he offered to contribute and collaborate with FICCI towards a community health initiative in Gurdaspur, a district of Punjab on Indo-Pak border with poor socio-economic and community health indicators. FICCI-SEDF responded favourably to the proposal.

Dr. Kumar said that today business houses are increasingly willing to re-evaluate their performance according to the Triple-Bottom-Line concept of factoring financial, social and environmental indicators. “The belief is that taking care of stakeholders enhances not only the goodwill of the company but also helps towards creating general well being in society. Companies are increasingly taking time off from their core business activities, to take on projects with a social cause, projects that reach out and touch the lives of others. This Award is recognition of all such efforts”, he added.

The Trade and Economic Framework between India and Australia being signed today would open up new growth avenues for trade and economic cooperation between the two countries, Shri Kamal Nath, Union Minister of Commerce & Industry, said here today while addressing the Australia-India Business Forum Meeting with the Prime Minister of Australia, Mr. John Howard. The Agreement is to be signed later today by the Commerce Secretary, Shri S.N. Menon along with the Australian High Commissioner, Mr. John McCarthy. In order to forge closer bilateral trade and economic ties, the last meeting of the India-Australia Joint Ministerial Commission in May 2005 mandated the conclusion of an India-Australia Trade and Economic Framework (TEF). The initiative would support further expansion of bilateral economic and commercial ties and would facilitate future development of relationship on a balanced and comprehensive basis.

The key sectors getting focussed in the TEF include energy & mining, infrastructure development & financing, ICT, education, tourism and film & entertainment, bio-technology apart from traditional areas of textiles/clothing, footwear and agriculture. Initiatives under the TEF would assist private sector business of both countries to identify commercial opportunities under these areas.

“Our Prime Minister, Dr. Manmohan Singh has mentioned several times that he foresees the rise of a major free trade area in Asia covering all major Asian economies, including China, Japan and South Korea and possibly extending to Australia and New Zealand. This Pan-Asian Free Trade Area could be the third pole of the world economy after the European Union and North Atlantic Free Trade Area. I am certain that this would open up new growth avenues for our own economy. The Trade and Economic Framework which would be signed this evening could be a first step in this direction. This Framework Agreement would provide us an avenue to interact in a more focused manner and to identify the areas where we could harness the complementarities of our two economies”, Shri Kamal Nath said.

Later, at a luncheon meeting with the Australian Prime Minister, Shri Kamal Nath called for a more active economic relationship with Australia, especially in the area of investment given the vast opportunities that exist in areas where Australia has the expertise and which India considers as its priority sectors. While Australia was among the major foreign investors of India, its investment in the country valued at around US $ 150 million was still quite low compared to Australia’s total outward investment, he noted. “Some of Australia's best known firms are already operating successfully in India, while hosts of small to medium size Australian companies are finding their way to Indian markets. There are more than 500 Australian joint ventures in India”, he said, adding that Indian investments in Australia too were growing.

Two-way trade between India and Australia stood at over US $ 4 billion with an annual growth rate of 20%, while India ranked as Australia’s 6^th biggest export market, bigger than even the UK. Referring to Regional Trade Agreements, Shri Kamal Nath said that India was on the verge of entering into Free Trade Agreements with the ASEAN countries and Thailand within the next few months.

Guidelines for enhancement of Foreign Direct Investment (FDI) ceiling in the telecom sector were notified vide Press Note 5 (2005 Series) on 3.11.2005. In terms of para 4 of the said Press Note, an initial correction time of 4 months from the date of issue of the Press Note was allowed to the existing licensee companies providing telecom services for ensuring adherence to the conditions.

The Government has decided to extend the time limit for the telecom service provider companies to comply with the conditions set out in Press Note 5 (2005 Series) by four months w.e.f. from 3.3.2006, i.e., till 2.7.2006.

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

KAMAL NATH CALLS FOR FDI IN SEZs
OPEN HOUSE WITH SEZ STAKEHOLDERS HELD

New Delhi: March 04, 2006

Shri Kamal Nath, Union Minister of Commerce & Industry, today called for increased foreign direct investment (FDI) in India’s Special Economic Zones (SEZs) as these zones offer tremendous possibilities for FDI. Speaking at an Open House Interactive Session with SEZ stakeholders here, he asked the stakeholders to come up with state-specific issues, which he would take up with respective state governments in order to make the SEZs truly effective. On this occasion, Shri Kamal Nath formally released the SEZ Act, 2005 and SEZ Rules, 2006 which have come into effect from 10^th February, 2006. He said he was open to suggestions for further simplification of the procedural and regulatory aspects of the SEZ Act.

The government has recently approved 117 new SEZs, which have committed investments of over Rs.1,00,000 crore and employment of over 5 lakh people by 2009, Shri Kamal Nath said, adding that the coming year would see phenomenal investments in SEZs in sectors like IT, pharma, bio-technology, textiles and chemicals. Of the 117 SEZs approved for establishment, 7 are already become operational in 2004-05 and a further 6 SEZs are now getting ready for operation, while other zones are at various stages of implementation.

Shri S.N. Menon, Commerce Secretary; Shri G.K. Pillai, Special Secretary; and Shri Rahul Khullar, Joint Secretary, Ministry of Commerce & Industry participated along with Shri Sharad Jaipuria, Chairman; Shri T. Vasu, Vice Chairman and Shri L.B. Singhal, Director General of the Export Promotion Council for EOUs & SEZs and all stakeholders.

Shri Jaipuria said that the SEZ Act and Rules would provide stability and continuity in the SEZ policy and would help developers in firming up their plans for setting up of new SEZs quickly. As a result of the financial package provided under the Act, transaction costs would come down, thereby helping exporters to become internationally competitive, he said.

Promotion of investments from both domestic and foreign source is one of the main objectives of the SEZ scheme. At present, foreign investments, including NRI investment in the setting up of units in SEZs is RS.600 crore, accounting for about 25% of the total investments. FDI up to 100% for setting up of SEZs is permissible with the clearance of the Board of Approval.

An important feature of the SEZ Act is that it incorporates comprehensive definitions relating to SEZ. It incorporates definitions of manufacturing, as also of services which would mean such tradeable services which are covered under the General Agreement on Trade in Services (GATS) and which earn foreign exchange. Further, Free Trade and Warehousing Zones (FTWZs) have been defined in the Act as SEZs for trading, warehousing and other related activities. The Act also introduces the concept of International Financial Services Centre.

Foreign Direct Investment (FDI) inflows into India in equity up to the third quarter of the financial year 2005-06 (April-December 2005) are US $ 3.7 billion, representing an increase of 45% over FDI inflows received during the corresponding period of the previous year 2004-05. Further, this represents only the equity component of FDI. Inflows of FDI during April-December 2004 were US $ 2.5 billion. This was indicated by Shri Kamal Nath, Minister for Commerce & Industry, at an Open House with Special Economic Zone (SEZ) stakeholders here today.

During the current year (April-December 2005), the major investing countries are Mauritius, USA, UK, Singapore and Japan. The major sectors attracting highest FDI inflows are electrical equipments (including computer software & electronics), services sector, cement & gypsum products, telecommunications and chemicals (other than fertilisers).

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The Union Minister of State for Industry, Dr. Ashwani Kumar today said that alongside the exponential growth in the services sector, the manufacturing sector is the next big growth story that will realise the full economic potential of India and create large employment generation opportunities in the entire country. He said that the Government would do everything to create an enabling environment for this. He was delivering the keynote address at the Roundtable on Manufacturing, at the Conference on ‘Indo-US Economic Cooperation’, organized by the Confederation of Indian Industry (CII) in partnership with the US India Business Council (USIBC), here.

Speaking on the occasion, Dr. Kumar said that massive employment generation is the foremost priority of the UPA Government as laid out in the National Common Minimum Programme. Therefore, the manufacturing sector that provides direct employment to over 4.5 crore workers is a natural priority for the Government, he added. Dr. Kumar informed that during the year 2005-06, manufacturing sector has grown at a rate of about 9%. However, the Government is making all efforts to take this to 12%, and it is with this goal in mind that the National Manufacturing Competitiveness Council (NMCC) has been set up with the mandate to come up with concrete steps that would help the sector grow faster, he added. To ensure that more and more jobs are created in the hinterland, the Government would strive to infuse a new enthusiasm in the industrial towns/clusters all over the country, he stressed.

Citing example of robust automobile exports from India, Dr. Ashwani Kumar said it proves that manufacturing in India can be carried out at a hugely competitive cost with no compromise on quality. He invited the American industry leaders to benefit from the new era of mutual trust and economic partnership kicked off between India and United States, and seriously consider India for setting up their manufacturing bases. Besides large units, Small and Medium Enterprises(SMEs) too can greatly benefit from the new opportunities of trade and commerce that would emerge between India and United States, he said.

Speaking on this occasion, the President of the USIBC, Mr. Ron Somers said India’s competitive labour cost, large pool of English speaking population, strong democracy, a robust legal system that protects intellectual property rights, abundant raw materials, large technically sound work force and a progressive Government are some of the facts that the global business community cannot afford to ignore. The growing profile of India as an emerging economic force can be gauged from the fact that in the last couple of years there has been a manifold increase in the membership of USIBC in the United States, he remarked.

Shri Kamal Nath, Union Minister of Commerce & Industry, has said that India looks at the ongoing negotiations in the World Trade Organisation (WTO) from the perspective of her development requirements and economic growth. Addressing a Course organised by the National Defence College (NDC) here this morning on “WTO and its Implications for India” as part of a capsule on Economy, Science and Technology, Shri Kamal Nath underlined that India’s experience of the last ten years had shown that on balance, “our membership of the WTO is beneficial to us”.

“Since the establishment of the WTO on January 1, 1995, India’s trade has been growing continuously, both in the merchandise goods category as well as commercial services. Total merchandise goods exports of India have increased from US $ 26 billion in 1994-95 to US $ 81 billion in 2004-2005. While total merchandise imports (excluding petroleum products) of India have increased from US $ 23 billion in 1994-95 to US $ 77 billion in 2004-2005. Similarly, India’s total commercial services trade increased from US $ 14 billion in 1994 to US $ 80 billion in 2004. The Indian economy has averaged a growth rate of about 7% for over a decade and looks poised for achieving even higher growth of 8 to 10 per cent in the next few years. Our trade, both exports and import, have been rising steadily. There is little doubt that sustaining this growth pattern would require even closer integration with the global mainstream”, the Minister said.

Stating that the WTO Hong Kong Ministerial Conference was an important milestone, Shri Kamal Nath reiterated that the Hong Kong Declaration addressed India’s core concerns and interests and provided negotiating space for future work leading upto finalisation of modalities for the negotiations. The salient elements of the Declaration and gains for India are as follows, he said:

· Duty-Free, Quota-Free market access for all LDCs’ products by all developed countries. Developing country declaring itself in a position to do so to also provide such access; however flexibility in coverage and to phase in their commitments provided.

· In Cotton, export subsidies to be eliminated by developed countries in 2006; trade distorting domestic subsidies to be reduced more ambitiously and over a shorter period of time.

· To establish modalities in Agriculture and non-agricultural market access (NAMA) by 30 April 2006; Draft Schedules by July 31 2006.

· In agriculture, to eliminate export subsidies by 2013, with substantial part in the first half of implementation period; elimination of cotton export subsidies by developed countries by 2006.

· On their trade distorting domestic support, the three heaviest subsidizers to attract steepest cuts; developing countries like India with no AMS will be exempt from any cuts on de minimis and on overall levels of agricultural subsidies.

· Developing countries to have the flexibility to self-designate Special Products; price and quantity triggers agreed on the Special Safeguard Mechanism

· In NAMA, S&DT elements, such as on flexibilities and less than full reciprocity in reduction commitments for developing countries re-affirmed.

· In Services, to submit a second round of revised offers by July 31, 2006; Final Draft Schedules by October 31, 2006.

· No sub-categorization of developing countries when addressing concerns of small, vulnerable economies.

The efforts at coalition building by India and other developing countries was reflected at the outcome of Hong Kong in December 2005, Shri Kamal Nath said, adding that the government would continue to hold periodic consultations with stakeholders to fine-tune its negotiating strategy.

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Shri Kamal Nath, Union Minister of Commerce and Industry, will hold an Open House interactive session with the Special Economic Zones (SEZ) stakeholders here tomorrow. After extensive consultations with various Departments of the Central & State Governments and other stakeholders, SEZ Act and Rules were given effect on 10/02/06. Export Promotion Council for SEZs and Export Oriented Units (EOUs) is now organising the release of SEZ Act 2005 and SEZ Rules 2006 by Shri Kamal Nath, which will be followed by the interactive session.

15 SEZs are in operation at present. These are at Kandla and Surat (Gujarat); Mumbai (Maharashtra); Cochin (Kerala); Noida (UP); 3 SEZs at Chennai and nearby (Tamil Nadu); Visakhapatnam (Andhra Pradesh); Indore (Madhya Pradesh); Jaipur and Jodhpur (Rajasthan); and at Falta, Manikanchan and Salt Lake Electronic City (West Bengal)

Besides the 15 established SEZs, around 65 greenfield SEZs have been approved by the government spread across several states including Andhra Pradesh, Gujarat, Haryana, Jharkhand, Karnataka, Kerala, Maharashtra, Orissa, Punjab, Tamil Nadu, Uttar Pradesh, West Bengal, Madhya Pradesh and the Union Territories of Delhi, Pondicherry and Chandigarh.

The SEZs already established as well as those approved for establishment are thus disbursed all over the country, both in economically not developed and not so developed locations.

The advantages of establishment of SEZs include generation of additional economic activity, promotion of exports of goods and services, promotion of investment from domestic and foreign sources, creation of employment opportunities and development of infrastructure facilities.

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India and the United States will aim at doubling bilateral trade to a level of US $ 40 billion within three years and collaboration between small and medium enterprises of the two countries will play a major role in augmenting the trade flows. This was indicated by Shri Kamal Nath, Union Minister of Commerce and Industry, and Mr. Rob Portman, the United States Trade Representative (USTR) following a meeting they had here today to discuss bilateral trade relations. The two-way trade between India and the US in 2004-05 stood at US $ 20 billion. Underlining the vast potential for increasing the trade volume, Mr. Portman mentioned that USA’s merchandise trade with China alone was valued at US $ 300 billion annually, whereas USA’s trade with India covering both goods and services would amount to around US $ 30 billion.

Mr. Portman was accompanied by Mr. Karan Bhatia, Deputy USTR, Mr. Peter Allgeier, Deputy USTR and other US officials. Shri S.N. Menon, Commerce Secretary, Shri Ajai Dua, Secretary (Industrial Policy & Promotion), Shri G.K. Pillai, Special Secretary, Ministry of Commerce & Industry and other senior officials participated from the Indian side. The Doha Development Agenda also figured in the talks.

The discussions focussed mainly on a review of the activities of the India-US Trade Policy Forum, especially in the context of issues and priorities being addressed by the five focus groups on agriculture, tariff and non-tariff barriers (NBT) in industrial products, services, investment and innovation and creativity. The first meeting of the India-US Trade Policy Forum was held in November 2005 in New Delhi, co-chaired by Shri Kamal Nath and Mr. Rob Portman, where it was decided to set up the five focus groups. More recently, a meeting of the India-US Trade Policy Forum was held in Washington on 16-17 February 2006, which was co-chaired by Shri Menon from the Indian side and Shri Karan Bhatia from the US side.

The US is India’s largest trading partner and foremost export destination. At present, it accounts for 16.48% of India’s exports and around 6.26% of India’s imports. India accounts for only about 1.06% of the USA’s total exports and imports. Growth of India’s exports to the US in the year 2004-05 over the previous year was 15.50% while the growth in the US exports to India was 35.72% over the previous year. During the 8 months of the current financial year (April-November 2005), India’s exports to the USA at US $ 10,064.94 million registered a positive growth of 15.05% over the corresponding period of the previous year when the exports were US $ 8747.97 million. During April-November 2005, India’s imports from the US at US $ 4589.39 million registered a positive growth of 16.74% over the corresponding period of the previous year when the imports were US $ 3931.18 million.

There is huge untapped potential to increase bilateral trade. The major items of Indian exports to the US are: gems & jewellery; readymade garments (cotton) & accessories; manufactures of metals’ primary and semi-finished items and steel; and drugs, pharmaceuticals and fine chemicals.

The Union Minister of State for Commerce, Shri Jairam Ramesh today said that handicrafts are a very important source of employment for the masses and the Government would make all efforts to enhance India’s share in the world handicrafts export market. He was speaking on the occasion of inauguration of the first ever Handicrafts and Gifts Sourcing Show, here. The Union Minister of Textiles, Shri Shankersinh Vaghela and the Union Minister of State for Textiles, Shri E.V.K.S Elangovan were also present on this occasion. The five-day show is being jointly organized by the Development Commissioner (Handicrafts), Ministry of Textiles and the Export Promotion Council for Handicrafts.

Shri Jairam Ramesh said that after agriculture, handicrafts are the second biggest source of employment in rural and tribal economy providing livelihood to millions of artisans and craftspersons all over the country. A quantum jump in India’s handicraft exports is highly desirable as it would result in tremendous employment generation, he added.

The show is being held in an area of 50,000 sq. mtrs at the Pragati Maidan, with a strong participation of over 800 established self-help groups, NGOs and Master Crafts persons from all over the country. For more than 7000 registered exporters from all over the country, this is an opportunity to source their handicrafts product requirements directly from the manufacturers.

EMPLOYMENT OPPORTUNITIES IN SEZS

Investment of the order of Rs. 100,00 crore over the next 3 years in infrastructure development of Special Economic Zones and in setting up of units therein, with an employment potential of over 5 lakh jobs has been estimated. This estimation is on the basis of the investment/employment potential projected by the promoters of the Special Economic Zones (SEZs) at the time of seeking approval for establishment of SEZs by them. No estimate has however been made of the break up of the said 5 lakh job opportunities into categories of specialists, trained, and untrained manpower.

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

Month	INDEX			Growth Rates (%)
	*2003-04*	*2004-05*	*2005-06*	*2004-05*	*2005-06*
April	167.6	182.8	191.4	9.1	4.7
May	176.0	185.2	197.0	5.2	6.4
June	175.0	180.8	192.7	3.3	6.6
July	175.6	189.5	193.3	7.9	2.0
August	174.0	184.9	195.4	6.3	5.7
September	186.7	187.0	191.4	0.2	2.4
October	178.8	207.2	217.5	15.9	5.0
November	181.0	191.3	197.0	5.7	3.0
December	190.7	199.9	209.3	4.8	4.7
January	194.6	202.8	209.9	4.2	3.5
February	186.6	188.1	198.7	0.8	5.6
March	202.4	211.3		4.4
Apr - Feb	180.6	191.1	199.7	5.8	4.5

CRUDE PETROLEUM PRODUCTION
Weight: 4.17%
Month	Production (in Thousand tonnes)						Growth Rates (%)
	*2003-04*		*2004-05*		*2005-06*		*2004-05*	*2005-06*
April	2572	2814		2802		9.4			-0.4
May	2667	2886		2830		8.2			-1.9
June	2754	2783		2792		1.1			0.3
July	2858	2864		2751		0.2			-3.9
August	2735	2874		2411		5.1			-16.1
September	2710	2777		2572		2.5			-7.4
October	2886	2881		2676		-0.2			-7.1
November	2777	2801		2562		0.9			-8.5
December	2893	2876		2642		-0.6			-8.1
January	2907	2913		2774		0.2			-4.8
February	2731	2596		2545		-4.9			-2.0
March	2885	2917				1.1
Cumulative Total (Apr-Feb)	30490	31065		29357		1.9			-5.5

	OUTPUT OF PETROLEUM REFINERY PRODUCTS
	Weight: 2.00%
	Month	Output ( in Thousand Tonnes)						Growth Rates(%)
		*2003-04*	*2004-05*		*2005-06*			*2004-05*		*2005-06*
	April	8559		9694		8947	13.3		-7.7
	May	8990		10234		9624	13.8		-6.0
	June	9130		10002		9896	9.6		-1.1
	July	9391		9745		10097	3.8		3.6
	August	9384		9797		10042	4.4		2.5
	September	9340		9317		9776	-0.2		4.9
	October	9375		9958		9719	6.2		-2.4
	November	9613		9708		9853	1.0		1.5
	December	9018		9846		10754	9.2		9.2
	January	10316		10295		10857	-0.2		5.5
	February	9829		9484		10072	-3.5		6.2
	March	10363		10135			-2.2
	Cumulative Total (Apr-Feb)	102946		108082		109636	5.0		1.4
*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 (%)
	*2003-04*		*2004-05*	*2005-06*			*2004-05*	*2005-06*
April	26.3	28.2			30.5	7.2			8.2
May	26.8	27.6			30.7	2.9			11.2
June	25.9	27.6			28.5	6.6			3.2
July	26.6	28.6			28.3	7.5			-0.9
August	26.0	26.2			29.1	1.0			10.9
September	25.8	28.2			29.5	9.3			4.6
October	27.8	31.1			32.9	11.8			5.8
November	30.3	32.5			34.8	7.3			7.1
December	33.4	36.0			38.4	7.7			6.6
January	34.5	35.4			39.1	2.6			10.5
February	33.8	34.5			37.8	2.2			9.3
March	37.5	40.7				8.6
Cumulative Total (Apr-Feb)	317.2	341.2			362.9	7.6			6.4

CEMENT PRODUCTION
Weight:1.99%
Month		Production( Thousand Tonnes)			Growth Rates(%)
		*2003-04*	*2004-05*	*2005-06*	*2004-05*	*2005-06*
April		9560	11140	12240	16.5	9.9
May		11110	10950	12630	-1.4	15.3
June		10720	10300	12010	-3.9	16.6
July		9930	10768	11160	8.4	3.6
August		9250	9355	11160	1.1	19.3
September		9400	10340	10845	10.0	4.9
October		9910	11253	12218	13.6	8.6
November		9660	10764	11599	11.4	7.8
December		10560	11433	12968	8.3	13.4
January		10730	11760	13571	9.6	15.4
February		10830	10971	12757	1.3	16.3
March		11780	12525		6.3
Cumulative Total (Apr-Feb)		111660	119034	133158	6.6	11.9
	*Note :* 1. Cumulative total may not tally with monthly total ;
	2. Production and Growth rates are provisional.
	Source : Department of Industrial Policy & Promotion

UNIDO DG CALLS ON ASHWINI KUMAR

February 2006

CRUDE PETROLEUM PRODUCTION

Source : Ministry of Petroleum & Natural Gas

OUTPUT OF PETROLEUM REFINERY PRODUCTS

Source:Ministry of Petroleum & Natural Gas

COAL PRODUCTION

Source : Department of Coal

ELECTRICITY GENERATION

CEMENT PRODUCTION

Weight:1.99%

FINISHED (CARBON) STEEL PRODUCTION

Weight : 5.13%

EXTENSION OF DEPB TO HELP EXPORTERS: KAMAL NATH

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Press Information Bureau

Press Information Bureau

INDO-UZBEK IT CENTRE IN TASHKENT TO BE NAMED AFTER

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

KAMAL NATH CALLS FOR FDI IN SEZs
OPEN HOUSE WITH SEZ STAKEHOLDERS HELD

New Delhi: March 04, 2006

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EMPLOYMENT OPPORTUNITIES IN SEZS

		Sector-wise Growth Rate (%) in Production
Sector	Weight (%)	Feb 2005	Feb 2006	Apr-Feb 2004-05	Apr-Feb 2005-06
Crude Petroleum	4.17	-4.9	-2.0	1.8	-5.5
Petroleum Ref. Products	2.00	-3.5	6.2	4.3	1.4
Coal	3.22	2.2	9.3	3.9	6.4
Electricity	10.17	-0.8	9.0	5.2	5.3
Cement	1.99	1.3	16.3	6.6	11.9
Finished (carbon) steel	5.13	6.0	-1.1	7.5	5.3
Overall	26.68	0.8	5.6	5.8	4.5

*Note :* 1. Cumulative total may not tally with monthly total ;
2. Production data and Growth rates are provisional.
Source : Ministry of Petroleum & Natural Gas

*Note :* 1. Cumulative total May not tally with monthly total;
2. Production Data and Growth rates are provisional.
Source: Ministry of Steel

UNIDO DG CALLS ON ASHWINI KUMAR

February 2006

CRUDE PETROLEUM PRODUCTION

Source : Ministry of Petroleum & Natural Gas

OUTPUT OF PETROLEUM REFINERY PRODUCTS

Source:Ministry of Petroleum & Natural Gas

COAL PRODUCTION

Source : Department of Coal

ELECTRICITY GENERATION

CEMENT PRODUCTION

Weight:1.99%

FINISHED (CARBON) STEEL PRODUCTION

Weight : 5.13%

EXTENSION OF DEPB TO HELP EXPORTERS: KAMAL NATH

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Press Information Bureau

Press Information Bureau

INDO-UZBEK IT CENTRE IN TASHKENT TO BE NAMED AFTER

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

KAMAL NATH CALLS FOR FDI IN SEZs OPEN HOUSE WITH SEZ STAKEHOLDERS HELD

New Delhi: March 04, 2006

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EMPLOYMENT OPPORTUNITIES IN SEZS

KAMAL NATH CALLS FOR FDI IN SEZs
OPEN HOUSE WITH SEZ STAKEHOLDERS HELD