Export growth more than Twice India’s GDP growth rate

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 10th 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, India has 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 February 2007. 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. The 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.

Source : Press Information Bureau

Keywords