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The growing competitiveness of Indian exports and the high growth rate registered by India’s manufacturing sector reflecting productivity changes, coupled with recovery of the global economy and world trade helped maintain buoyancy in India’s export growth over and above the targetted levels during 2004-05. India’s export performance during 2004-05 was also influenced by continued trade promotion and trade facilitation efforts of the Government and a focussed approach announced in the new comprehensive Foreign Trade Policy (2004-09) announced in August 2004 to double exports during the next four years, according to the Annual Report 2004-2005 of the Ministry of Commerce & Industry (Department of Commerce). With the high growth achieved despite strengthening of the rupee vis-à-vis the US dollar and the overall impact of rise in fuel prices on competitiveness, the country is expected to double its percentage share of world merchandise trade by increasing its exports to US $ 150 billion by 2009, the Report adds.
Subsequent to the Report, India’s merchandise exports have touched almost 80 billion dollars, as announced recently by Shri Kamal Nath, Union Minister of Commerce & Industry, against a target of US $ 74 billion. In view of this record performance, India’s export target for the year 2005-06 has been revised upwards to US $ 92 billion from the US $ 88 billion target set earlier.
Referring to Special Economic Zones (SEZs), the Report says that 36 SEZs have been approved and all the 8 Export Processing Zones (EPZs) have been converted into SEZs. Private investment by entrepreneurs for establishing units SEZs is about Rs.2000 crore of which foreign/NRI investment is about Rs.500 crore, accounting for nearly 25% of total investment. In order to give stability to the policy regime, Government intends to enact a legislation for SEZs as early as possible, the Report says.
On the multilateral trade front, India took an active part in the revival of the Doha process by interacting with both the developing and the developed countries in the World Trade Organisation (WTO). As a result of these efforts, the Framework Agreement was adopted by WTO member countries in the General Council meeting in Geneva of the WTO on 1st August, 2004 ensuring that the negotiations were back on track. India was able to achieve all her major objectives in this Framework Agreement, including in the crucial area of agriculture. With a view to safeguarding the interests of farming sector, India made concerted efforts with like-minded alliance on agriculture and the G-33 alliance on Special Products. This ensured that the elements and principles incorporated in the agreed framework on agriculture would lead to substantial reductions in trade-distorting domestic subsidies provided to their farm sector largely by the developed countries, a credible and date for elimination of their export subsidies and substantial market access improvements for products of export interest to developing countries. Similarly, India negotiated successfully in the area of non-agricultural market access (NAMA), Services, and ensured that the Framework Agreement includes a firm commitment to addressing Implementation Issues and operationalisation of Special and Differential Treatment (S&DT) for developing countries on a time-bound basis. One of the significant achievements in the Framework Agreement was the removal of 3 of the 4 Singapore issues on which India had raised objections – namely, Investment, Government Procurement and Competition.
The year also saw the launch of fresh initiatives for regional free trade agreements (RTAs) or comprehensive economic cooperation agreements (CECA). India continued to engage in transforming the Preferential Trade Arrangement (PTA) with SAARC countries into a SAARC Free Trade Area (SAFTA), which would come into existence from 1st January, 2006. Besides, an Early Harvest Programme in BIMSTEC which covers countries on the rim of the Bay of Bengal, negotiations with ASEAN countries collectively and with countries with Singapore individually are nearing completion. At present, India has a full-fledged FTA with Sri Lanka. An Early Harvest Programme has been signed identifying common list of items for exchange of tariff concessions as a first step towards establishing a Free Trade Area between India and Thailand. India is also currently negotiating FTAs or CECA’s agreements with Singapore and the ASEAN as well as with the MERCOSUR countries (Brazil, Argentina, Uruguay and Paraguay) and a grouping of 5 South African countries led by South Africa known as the South Africa Customs Union (SACU).
SB/MRS
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