The basic role of
the Department of Commerce is to facilitate creation of an enabling environment
and infrastructure for accelerated growth of exports and trade. The core
functions of the Department are regulation, development and promotion of
India’s international trade and commerce through formulation and implementation
of appropriate international trade and commercial policies. The long-term
vision of the Department is to make India a major player in the world trade by
2020 and assuming a role of leadership in the international trade organizations
commensurate with India’s growing importance. The goal in the medium-term as outlined
in the Foreign Trade Policy (FTP 2009-14) is to double India’s exports of goods
and services by 2014 with a long term objective of doubling India’s share in
global trade by the end of 2020 through appropriate policy support. A snapshot
of the year under review of the Department of commerce is as follows:
STRATEGY FOR DOUBLING EXPORTS IN NEXT THREE
YEARS (2011-12 TO 2013-14)
Shri Anand Sharma, the Union Minister for the
Commerce, Industry & Textiles unveiled the Strategy for doubling exports on
3rd May, 2011. The Salient points of the strategy are as follows:
THE TARGET
The target is to double the country’s
merchandise exports in dollar terms over the next three years (2011-12 to
2013-14) from US $ 246 billion in 2010-11 to US$ 500 billion in 2013-14.
To realize this, exports have to grow at a
compound average growth of 26.7 % per annum.
The overall strategy to realize this goal
is
PRODUCT STRATEGY
Build on our strength in sectors with great
growth potential
engineering goods
basic chemical industries and organic and inorganic chemical industries
pharmaceutical industry (including biotech)
electronics
Promote light manufacturing exports with
high value addition
leather products and textiles
Encourage high employment generating
sectors
gems and jewellery
agricultural products
MARKET STRATEGY
Focus on markets in Asia (including ASEAN),
Africa and Latin America.
Open up new vistas, both in terms of
markets and new products in these new markets
Retain presence and market share in our
“old developed country markets”;
Move up the value chain in providing
products in these old developed country markets
TECHNOLOGIES AND R&D
Areas that hold out promise for high
technology exports
Pharmaceuticals
Electronics
Automobiles
Computer and software based smart
engineering.
Environmental products;
green technology and high-value engineering products.
High end areas in
electronics, aerospace, and engineering products.
BUILDING A BRAND IMAGE
thrust for quality upgradation.
expanded certification of export products encouraged, where needed.
Brand India promotion campaign for key
export products
Essential Support
Essential policy support needed to realize
the ambitious export targets for 2013-14 and beyond is:
Stable policy environment: Continuation of
existing incentive schemes
Preferential access to new markets: putting
in place conducive trading arrangements
Reduction in transaction costs:
Implementation of recommendations of Task Force
Substantial step up in overall Plan support
Priority strengthening of trade related
infrastructure
ANNUAL SUPPLEMENT 2011-12 TO THE FOREIGN
TRADE POLICY (FTP) 2009-2014
The Commerce, Industry and Textiles
Minister (CITM), Shri Anand
Sharma, announced the Annual Supplement 2011-12 to the Foreign Trade Policy 2009-2014
on 13th October, 2011. The salient features are as under:
(i) Special Bonus
Benefit Scheme: A new scheme to provide special assistance to specified sectors
for 6 months has been introduced. The support is given to Engineering,
Pharmaceutical and Chemical sectors covering 50 products. This scheme will be
available on exports made on or after 1.10.2011 and up to 31.3.2012. The rate
of duty credit is 1% of FOB value of exports.
(ii) Special Focus Market Scheme [SFMS]:
Exporters of all products to notified countries are entitled for Duty Credit
Scrip equivalent to 3% of FOB value of exports. The Scheme covers a total of
112 markets. However, exports to SFMS markets in CIS, Latin American and
African countries are entitled for 1% additional benefit of FOB value of
exports with effect from 1.4.2011.
(iii) Focus Product Scheme [FPS]: The list
of items under FPS has been expanded to include 130 additional items covering
Chemicals, Pharmaceuticals, (only specified APIs) Textiles, Handicrafts,
Engineering and Electronics sector. The items covered under FPS are entitled
for Duty Credit Scrip equivalent to 2% of FOB value of exports.
(iv) Market Linked
Focus Products Scheme [MLFPS]: The list of items under MLFPS has been extended
to cover new items to specified countries. It has been decided to extend MLFPS
for exports of Agricultural tractors greater than 1800cc capacity which would
now be eligible for duty credit for exports made to Turkey.
Sugar machinery & high-pressure boilers
would be eligible for Brazil, Kenya, South Africa, Tanzania and Egypt. The
scheme has also been extended to all existing MLFPS Countries for printing
inks, writing ink, etc. The items covered under MLFPS are entitled to get duty
credit scrip @ 2% of FOB value of exports. Benefits under MLFPS have been
extended for export of ready-made garments to USA and EU.
(v) EDI initiatives: In furtherance of the
EDI initiatives, online message exchange of DFIA Authorization with Customs has
started from 13.10.2011. Therefore, now Advance Authorization, EPCG and DFIA
are completely EDI enabled. In order to reduce the interface of exporters with
the Regional Authorities of DGFT, the application of IEC (Import-Export Code)
has been made online w.e.f. 1.1.2011.
REDUCTION IN TRANSACTION COST
The Report of Task Force on Transaction
Cost in Exports was released here today by the Finance Minister, Shri Pranab Mukherjee
in the presence of Shri Anand
Sharma, Minister of Commerce and Industry and Shri Jyotiraditya M Scindia, Minister
of State for commerce and Industry.
The Task Force chaired by Shri Scindia was constituted in October 2009 to identify and
suggest ways to achieve significant improvement in the functioning of export
processes and reduce time and money spent in export transactions, with a view
to enhance the competitiveness of Indian exports.
The
Task Force identified 44 issues and taken up with the relevant Ministries and
after consultations with them, it was agreed to implement 32 of these
issues. It is expected that implementation
of 23 issues is likely to mitigate the transaction cost by approximately
Rs.2100 crore.
Permanent reduction of transaction cost through these initiatives will
have a long term positive impact on the competitiveness of India’s exports.
TRADE NORMALISATION WITH PAKISTAN
New Ground was covered during the 5th round
of talks in April 2011 When Commerce Secretary Shri Rahul Khullar visited Pakistan.
Many bilateral Groups/ Sub-groups were set up. Almost all of these Groups/
Sub-groups have met and worked on their specific designated tasks. Shri Anand Sharma invited his
Pakistan counterpart and the Commerce Ministers of both countries met in
September 2011 and gave a clear political mandate to the respective Commerce
Secretaries to lay down specific timelines for full normalisation of the trade
relationship, dismantling of remaining non-tariff barriers, and full
implementation of the legal obligations under the SAARC Agreement on South
Asian Free Trade Area (SAFTA). Both sides agreed that Pakistan’s Commerce Minister’s
visit to India after 35 years and the political ownership of leaders of both the countries has not only
given the trade normalization process further strength and direction but a great hope and confidence to the business
community also. During the 17th SAARC Summit held at Maldives (9 – 11 November
2011), the political leadership on both sides directed that the two sides also
work on enhancing preferential trading arrangements as part of the shared
vision to significantly expand bilateral trade. Pakistan side informed that its
Cabinet has given a mandate to the Commerce Ministry for complete normalization
of trade with India.
The 6th round of India-Pakistan talks on
Commercial and Economic Co-operation was held during 14th-16th November 2011 at
New Delhi, between Commerce Secretaries of India and Pakistan. The move to full normalisation of trade
relations shall be sequenced. In the
first stage, Pakistan will transition from the current Positive List approach
to a Negative List. The consultation
process on devising this Negative List is almost complete. A small Negative List shall be finalised and
ratified by February, 2012. Thereafter,
all items other than those on the Negative List shall be freely exportable from
India to Pakistan. In the second stage,
the Negative List shall be phased out.
The timing for this phasing out will be announced in February 2012 at
the time the List is notified and it is expected that the phasing out will be
completed before the end of 2012.
STATUS OF FTAS IN INDIA
CECA with Malaysia came into force on 1st
July 2011 and a very comprehensive CEPA with Japan came into force on 1st
August, 2011.
Details of countries with which India has
entered into Free Trade Agreements (FTAs) and their implementation are as follows:
S. No.
|
Name of the Agreement
|
Date of Signing of the Agreement
|
Date of Implementation of the Agreement
|
1.
|
India - Sri Lanka FTA
|
28th December. 1998
|
March,
2000
|
2.
|
Agreement on SAFTA
(India, Pakistan, Nepal, Sri Lanka,
Bangladesh, Bhutan, the Maldives and Afghanistan)
|
4th January, 2004
|
1st January, 2006 (Tariff concessions
implemented from 1st July, 2006
|
3.
|
Revised Agreement of Cooperation between
Government of India and Nepal to control unauthorized trade
|
27.10.2009
|
27.10.2009
|
4.
|
India - Bhutan Agreement on Trade
Commerce and Transit
|
17.1.1972
|
Renewed periodically, with mutually
agreed modifications.
|
5.
|
India - Thailand FTA - Early Harvest
Scheme (EHS)
|
1.9.2004
|
1.9.2004
|
6.
|
India - Singapore CECA
|
29th June, 2005
|
1st August, 2005
|
7.
|
India - ASEAN- CECA - Trade in Goods
Agreement (Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philippines,
Singapore, Thailand and Vietnam)
|
13.8.2009
|
1.1.2010
|
8.
|
India - South Korea CEPA
|
7.08. 2009
|
1.1.2010
|
9.
|
India - Japan CEPA
|
16.02.2011
|
To be implemented w.e.f.
1st August, 2011
|
10.
|
India - Malaysia CECA
|
18.02.2011
|
1st July, 2011
|
In addition to these 10 FTAs, India has
entered into Preferential Trade Agreements (PTAs) with some countries. The details of countries with which India has
entered into Preferential Trade Agreements (PTAs):
S. No.
|
Name of the Agreement
|
Date of Signing of the Agreement
|
Date of Implementation of the Agreement
|
1.
|
Asia Pacific Trade Agreement (APTA)
(Bangladesh, China, India, Republic of
Korea, Sri Lanka)
|
July, 1975
(revised Agreement signed on 2nd
November, 2005
|
1st November, 1976
|
2.
|
Global System of Trade Preferences
(G S T P)
(Algeria, Argentina, Bangladesh, Benin,
Bolivia, Brazil, Cameroon, Chile, Colombia, Cuba, Democratic People's
Republic of Korea, Ecuador, Egypt, Ghana, Guinea, Guyana, India, Indonesia,
Iran, Iraq, Libya, Malaysia, Mexico, Morocco, Mozambique, Myanmar, Nicaragua,
Nigeria, Pakistan, Peru, Philippines, Republic of Korea, Romania, Singapore,
Sri Lanka, Sudan, Thailand, Trinidad and Tobago, Tunisia, Tanzania, Venezuela,
Viet Nam, Yugoslavia, Zimbabwe)
|
April, 1988
|
April,1989
|
3.
|
India - Afghanistan
|
6th March, 2003
|
May,2003
|
4.
|
India - MERCOSUR
|
25th January, 2004
|
June 1, 2009.
|
5.
|
India - Chile
|
8th March, 2006
|
September, 2007
|
The details of FTAs that the Union
Government is negotiating with other countries and the status of the
negotiations is given below:
S. No.
|
Name of the Agreement
|
Status
|
1
|
India - EU BTIA
(Austria, Belgium, Bulgaria, Cyprus,
Czech Republic, Denmark, Estonia Finland, France, Germany, Greece, Hungary,
Ireland, Italy, Latvia, Lithuania, Luxembourg , Malta, Netherlands, Poland,
Portugal, Romania, Slovakia, Slovenia, Spain, Sweden, United Kingdom)
|
Negotiations launched on 28th June 2007 in the areas
of Goods, Services, Investment, Sanitary
and Phyto-sanitary Measures, Technical Barriers to
Trade, Trade Facilitation and Customs Cooperation, Competition, IPR &
GIs. etc
Twelve rounds of negotiations have been
held so far.
|
2
|
India - ASEAN CECA- Services and
Investment Agreement
(Brunei, Cambodia, Indonesia, Laos,
Malaysia, Myanmar, Philippines, Singapore, Thailand and Vietnam)
|
Negotiations on Trade in Services and
Investment are under way.
|
3
|
India – Sri Lanka CEPA
|
Existing FTA is being expanded into
CEPA. Negotiations on Investments and
Services have been resumed in December, 2010.
|
4
|
India - Thailand CECA
|
20 rounds of negotiations have been held
so far by the Trade Negotiating Committee (TNC).
|
5
|
India - Mauritius CECPA
|
Chapter on Trade in Goods (Preferential
Trade Agreement) has been finalised while negotiations on Trade in Services
and Trade in Investment are underway.
|
6
|
India - EFTA BTIA (Iceland, Norway,
Liechtenstein and Switzerland)
|
7 Rounds of negotiations have been held
so far.
|
7
|
India - New Zealand FTA/CECA
|
5 rounds of negotiations have been held held so far.
|
8
|
India – Israel FTA
|
2 rounds of negotiations have been held
so far. The 2nd round of negotiations took place in February 27-28, 2011 in
Jerusalem.
|
9
|
India - Singapore CECA (Review)
|
The Second Review of India-Singapore CECA
was launched on May 11, 2010. Thereafter, Working Group meetings have been
held and the last such meeting was held in Delhi during June 14-15, 2011.
|
10
|
India – Southern African Customs Union
(SACU) PTA
(South Africa, Botswana, Lesotho,
Swaziland and Namibia)
|
5 rounds of negotiations have been held
so far. The 5th round was held during October 7-8, 2010.
|
11
|
Indian - MERCOSUR PTA
(Argentina, Brazil, Paraguay and Uruguay)
|
Negotiations for widening the PTA by
widening product coverage and deepening preferences are underway.
Second meeting of Joint Administrative
Committee on India-MERCOSUR PTA took place in June 2010.
|
12
|
India – Chile PTA
|
The PTA expansion by widening product
coverage and deepening preferences.
Second meeting for expansion of the
India-Chile PTA took place in August 2010.
|
13
|
BIMSTEC CECA
(Bangladesh, India, Myanmar, Sri Lanka,
Thailand, Bhutan and Nepal)
|
Negotiations are spread over (i) tariff concessions on trade in goods; (ii) customs
cooperation; (iii) services’ and (iv) investments. 19 meetings of the Trade Negotiation
Committee (TNC) have taken place so far.
At the 19th TNC meeting, the parties have agreed to conclude the
Agreement on Trade in Goods within 2011.
|
14
|
India – Gulf Cooperation Council (GCC)
Framework Agreement
(Saudi Arabia, Oman, Kuwait, Bahrain,
Qatar and Yemen.)
|
2 rounds of negotiations have been held
so far. The 2nd round was held in
Riyadh in September, 2008.
|
15
|
India – Canada CEPA
|
The inaugural round of negotiation took
place in November, 2010 in New Delhi.
This was followed by the first meeting in Ottawa, Canada during 4-5
July, 2011.
|
16
|
India -
Indonesia Comprehensive Economic Cooperation Agreement (CECA)
|
Commencement of negotiation on Indonesia
- India CECA was announced on 25th January 2011 during the visit of
Indonesian President to New Delhi.
|
17
|
India-Australia CECA
|
Negotiations have started
|
***
DS/gk