EXPORT GROWTH MORE THAN TWICE INDIA’S GDP GROWTH RATE
INVESTMENT OF RS. 100,000 CRORE EXPECTED IN SEZs BY DECEMBER 2007
SPECIAL PURPOSE TEA FUND LAUNCHED FOR DEVELOPMENT OF TEA SECTOR
INDO-ASEAN FTA LIKELY TO BE CONCLUDED BY JULY 2007
ANNUAL REPORT OF THE MINISTRY OF COMMERCE & INDUSTRY
DEPARTMENT OF COMMERCE
Date : 03 Apr 2007
Location : New Delhi
The sustained high growth rate of merchandise exports at more
than 20 per cent during the last four years is more than twice the current
growth of Gross Domestic Product (GDP). “This has been
possible as a result of stable policy framework provided by the Trade Policy and
a continuous, conscious & concerted effort by the Government to reduce trade
barriers, bring down transaction costs and facilitate a favorable international
environment”, notes the Annual Report of Ministry of Commerce & Industry
(Department of Commerce) which was released recently. After crossing the
landmark figure of US $ 100 billion in 2005-06, exports in the current year
touched US $ 89 billion during the first three quarters (April-December 2006).
During the last few years, the rising competitiveness of some of the sectors
like engineering goods (auto parts) and high commodity prices (petroleum and
metals) have been the driving force for high sustained growth of exports.
The Annual Report mentions the several benefits that accrue
from the Special Economic Zones (SEZs). The SEZ policy aims at generating
greater economic activity and employment by providing a stable, transparent and
efficient policy framework for establishment and running of SEZs. The main
objectives of the SEZ Act are; 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.
So far, formal approval has been granted to 234 SEZ proposals and
in-principle approval to 162 SEZ proposals. Investment of the order of
Rs.1,00,000 crore including FDI of US $ 5-6 billion is expected by end of
December 2007 leading to creation of direct employment of 5 lakh jobs. Out
of the 234 formal approvals, notifications have already been issued in respect
of 63 SEZs. IN the 63 notified SEZs which have come up after
February 2006, investment of Rs.13,435 crore has already been made in less than
one year. These SEZs have, so far, provided direct employment to 18457 persons.
With a view to ensuring healthy growth and improved productively
in the plantation sector, the Government has initiated a number of measures
during the year. A Special Purpose Tea Fund (SPTF) has been set up under the
Tea Board for funding replantation and rejuvenation of old tea bushes with the
goal of long-term development of tea industry. The proposal is to cover an area
of 2.1 lakh hectares for rejuvenation and replantation activities over a period
of 15 years. To begin with, the scheme would be implemented till the end of
11th Plan (including the remaining period of 2006-07) with an estimated outlay
of Rs.567.10 crore covering an area of 85044 hectares. Under the SPTF, the
Government would be providing a subsidy of 25 percent of the cost.
On multilateral trade, throughout the negotiations,
continued to pursue its national interests across all the areas under the Doha
Work Programme. It continued to work constructively with its coalition partners,
particularly, the G-20 and the G-33 in the agriculture, NAMA-11 and other
developing country groupings including the African Group, ACP countries, CARICOM,
and LDCs in order to secure its development imperatives.
The Doha Round, which was launched in November 2001, achieved an
important milestone with the Declaration issued at Sixth Ministerial Conference
of the WTO held in Hong Kong in December 2005 with WTO members agreeing to
establish modalities for negotiating agriculture access and Non-Agricultural
market Access (NAMA) and to conclude the negotiations across all areas of the
Doha Round by 2006 end. Intensive discussions through January to July 2006 had
focused mainly on the triangular issues of domestic support, Agricultural Market
Access (AMA) and NAMA. Negotiations under the Doha Round in the WTO have been
stalemated primarily over agricultural trade. As the gap remained too wide, the
formal meeting of the Trade Negotiating Committee (TNC) held on 24th July 2006
recommended for suspension of the negotiations across the Round as a whole. The
WTO General Council at its meeting held on 27th July 2006 supported this
recommendation for suspension of the Doha Round negotiations as a whole. A soft
resumption of negotiations across the board was agreed on the basis of TNC
decision held on 16th November 2006. Full-scale resumption of the negotiations
across the board was reported by the negotiations across the board was reported
by the Chairman of the TNC in the meeting of the General Council held on 7th
India has welcomed the soft
resumption and the subsequent full-scale resumption of the negotiations
The 7th India-EU Summit was held in Helsinki in October 2006.
Summit agreed that both sides move
towards negotiations for a broad-based Trade and Investment Agreement.
The European Commission is currently seeking a mandate from its Council of
Ministers for the launch of negotiations for such an Agreement.
During the year, a review of the India-Singapore Comprehensive
Economic Cooperation Agreement (CECA) was undertaken and fruitful discussions
took place for smooth and purposeful implementation of the Agreement.
Negotiations for conclusion of the Free Trade Agreement with ASEAN are well
underway. Both sides have shown flexibility to conclude the agreement as early
as possible and against this backdrop, three meetings of India-ASEAN Trade
Negotiating Committee were held during the year. It is hoped to conclude the FTA
with ASEAN by July 2007. A Trade and Economic Framework (TEF) Agreement has
also been signed with Australia for enhancing bilateral trade and investment on
a comprehensive basis.