9.
COMMERCIAL RELATIONS & TRADE
AGREEMENTS
INTRODUCTION
There are 65 formal Commercial Wings functioning in the Indian Missions/Posts abroad, which are funded from the Budget of Department of Commerce. These Commercial Offices, working as units are attached to the Indian Missions. These include the office of the Ambassador of India to WTO in Geneva. In addition, about 20 other Indian Missions have also been provided with commercial budget either to employ local Marketing Assistants for undertaking commercial and economic job or to carry out trade promotional activities.
The Commercial Offices abroad, provide the institutional framework and are meant to promote India's trade and economic exchanges with the world. The primary task of these Wings is to assist the Government in formulation of its trade & economic policies through regular feed back on the prevailing global market trends, trade activities etc.
In keeping with the requirement of quick dissemination of information, data and bilateral/multilateral exchanges, a computer database report system was introduced in the Department for monitoring the activities of the Commercial Offices abroad. The Commercial Representatives posted abroad are kept informed of the important developments in the Indian Economy and Quarterly Newsletters are issued to the Commercial Wings. Most of the Commercial Wings are now provided with modern IT equipment .
In order to strengthen these Commercial Wings and increase their activities, budgetary allocation towards these offices have been augmented. The budget provisions have been enhanced from a paltry amount of Rs.16.00 crores in BE 1993-94 to Rs.62.27 crores in BE 2003-2004 which also include substantial allocation of funds for undertaking trade promotion activities.
The international trade scenario is expanding and changing fast. Also in the wake of liberalisation process which was initiated in mid 1991 for gearing up Indian Economy, a proposal is being finalised in this Department for restructuring and streamlining the Commercial Wings in Indian Missions abroad with a view to equip them to discharge their function efficiently and effectively and to make them market oriented with optimal use of the limited human resources.Region-wise/Territory-wise reorganization process has been initiated which has led to some relocation of posts in the deficient Missions. Taking into account the recommendations of the Expenditure Reforms Commission, certain India-based posts in the Missions have been earmarked for conversion into local posts in order to achieve economy.
For quite some time there has been a need to have effective interaction with our Commercial Representatives (CRs) for identifying issues coming in way of trade promotion and to undertake promotional measures for promoting bilateral trade. It has now been decided that annual meeting of CRs would be held in India, which would provide an opportunity for regular interaction between CRs, Department of Commerce, local Trade Associations and Exporting Community at large. Similarly, the local Marketing Assistants are also being invited to India to have first-hand knowledge of the Govt. of India machinery.
As per the announcement in the EXIM Policy 2002-07 by the Commerce & Industry Minister, Business Centres with several facilities were set up in the Commercial Wings of 23 selected Missions abroad.
COMMONWEALTH OF INDEPENDENT STATES AND BALTIC STATES (CIS &B)
CIS region consists of 12 countries namely, the Russian Federation, Armenia, Azerbaijan, Belarus, Georgia, Moldova, Ukraine, Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan, Uzbekistan, (the last 5 countries jointly referred to as the Central Asian Republics) and 3 Baltic States namely Latvia, Lithuania and Estonia. Russian Federation is the leading trading partner and occupies an important position in India's foreign trade in the CIS region. Ukraine is India's second largest trading partner in this region.
Bilateral trade with these countries has been as under :-
Out of India's Global exports / imports, share of exports and imports to the CIS region during the year 2002 03 were 1.80% and 1.39% respectively.
The principal commodities of our export to the region include tea, coffee, tobacco, leather, footwear of leather, drugs and pharmaceuticals, fine chemicals, spices, rice (other than basmati), processed minerals, cosmetics and toiletries, cotton yarn fabric, RMG cotton including accessories etc.
The important items of our import from this region are Pulp and waste paper, cotton raw and waste, metaliferous ores and metal scrap, organic chemicals, fertilizers, newsprint, iron and steel, non ferrous metals, machinery except electrical and electronics, transport equipment, project goods, etc.
Bilateral framework agreements on trade and economic cooperation have already been concluded with all the countries except with Azerbaijan. Negotiations are already on with Azerbaijan for signing the agreement. For trade with these countries, Most Favoured Nation (MFN) treatment has been accorded mutually.
RUSSIA
Russian Federation, which represents the major portion of the former USSR, continues to be India's single most important economic partner in the region. The bilateral framework Agreement on Trade and Economic Cooperation with Russian Federation signed on 22nd May, 1992, provides that all transactions between the two countries would be undertaken in hard currency unless otherwise specified by inter governmental agreements. Under the 1993 Agreement, signed through exchange of letters during the visit of Russian President Boris Yeltsin in January, 1993, India has to repay to Russia an annual debt repayment of Rs.3000 crores (US 1billion) in the form of export of goods and services for 12 years (1993-2004) starting from 1.4.1993 and significantly smaller amounts for the subsequent 33 years. Russian Federation for importing goods and service from India uses these funds. Russia is free to import goods as provided in the India Exim Policy. Bulk of our trade is taking place under rupee debt repayment route.
During the visit of president of Russian Federation to India in October, 2000; a Protocol of Intentions on Cooperation in the field of processing and trade of rough natural diamonds and precious metals was signed on 3rd October, 2000 between Ministry of Finance of the Russian Federation.
The meetings of Joint Commission / Working Groups are held on an annual basis. During the year 2003 04 the following meetings were held to discuss various matters concerning bilateral cooperation:-
a) The Ninth Session of the Indo Russian Working Group on Trade and Economic Cooperation (WGTEC), for which Department of Commerce is nodal, was held in Moscow in May 2003.
b) Under the aegis of the Indo Russian WGTEC the 9th Meeting of the Sub Group on Transport was held in May 2003 at Moscow.
c) Under the aegis of Indo- Russian WGTEC The 4th Meeting of the Sub-Group on Agriculture was held at Moscow in May 2003.
d) Under the aegis of the Indo Russian WGTEC the 9th Meeting of the Sub-Group on Banking and Financial Matters was held in Yaroslavl, Russia in October 2003.
e) The Third Session of the Indo-Armenian Inter-Governmental Commission on Trade, Economic, Scientific and Technological, Cultural and Educational Cooperation was held in New Delhi in May 2003, wherein various issues concerning bilateral trade & economic cooperation were discussed.
f) The Third Session of the Indo Ukrainian Inter-Governmental Commission on Trade, Economic, Scientific, Technological, Industrial and Cultural Cooperation, for which Ministry of External Affairs is nodal, was held at Kyiv in July 2003, wherein various issues of mutual interest were discussed.
CENTRAL ASIAN REPUBLICS
Kazakhstan, Kyrgyzstan, Uzbekistan, Tajikistan, Turkmenistan, constitute the five Central Asian Republics in the CIS region. In this region natural resources are found in abundance and there is a vast potential for bilateral co-operation in various sectors.
Inter-Governmental Commissions (IGC) have been set-up with all the Central Asian Republics except Turkmenistan. For IGC with Kyrgyzstan, Tajikistan and Uzbekistan Department of Commerce id the nodal Department.
a) The Second meeting of the Coordination Council of the International North- South Transport Corridor (NSTC) was held on April 29-30, 2003 Tehran. Prior to the Coordination Council meeting, Second meeting of the Expert Groups under the aegis of North- South Transport Corridor Coordination Council was held in Tehran on April 26-28, 2003.
b) The Third meeting of the Expert Groups under the aegis of North- South Transport Corridor Coordination Council was held in Astrakhan on December 1-3, 2003.
c) The Third Session of the Indo Kyrgyz Inter Governmental Commission on Trade, Economic, Scientific & Technological Cooperation was held in New Delhi in November 2003 wherein various issues concerning bilateral trade & cooperation were discussed.
To facilitate bilateral trade with the countries of this region a Trilateral Transit Agreement between India, Iran and Turkmenistan on transit of goods has been signed. This Agreement would reduce the time taken in shipment to these countries. Uzbekistan has also shown interest in joining this Agreement and the accession of Uzbekistan is under process. The other Central Asian Republics are also being encouraged to join this Agreement through diplomatic channels. The formalities for accession of Kyrgyz Republic to the Trilateral Transit Agreement have completed.
BILATERAL VISITS
a) The Finance Minister, led a high powered delegation to Moscow in May, 2003 in connection with the 9th Session of the Indo-Russian Inter-Governmental Commission and the 9th Session of the Indo-Russian Working Group on Trade & Economic Cooperation (WGTEC) held back to back under the Chairmanship of Commerce Secretary.
b) Hon'ble Prime Minister of India, Shri Atal Behari Vajpayee, visited Russia in May 2003.
c) The President of the Kyrgyz Republic visited India in November 2003.
d) Hon'ble Prime Minister of India, Shri Atal Behari Vajpayee visited the Russian Federation and Tajikistan in November 2003.
TRADE PROMOTION ACTIVITIES
a) An International Transit Agreement "North
South Transport Corridor" has been signed between India, Iran and Russian
Federation for movement of goods via Iran, Caspian
Sea and Astrakhan to Russia. The advantages of this Agreement are as follows: -
l The Agreement will provide a shorter route for trade to Iran, Russian Federation and beyond. Transit movement will be better and faster which is likely to be cheaper & less time consuming by about 20% as compared to the present route.
l Exports will get a competitive advantage.
l Approval of the Ministry of Commerce & Industry to the accession of the following countries namely Kazakhstan, Belarus, Bulgaria, Armenia, Azerbaijan, Sultnate of Oman, Tajikistan and Sayrian Arab Republic has already been conveyed to Ministry of Shipping.
b) "Focus: CIS Programme" was launched on 31st March 2003 at the time of announcement of EXIM Policy for the year 2003-2004. The "Focus: CIS Programme" aims to focus at the countries of the CIS region with emphasis in the first phase on seven countries, viz. Kazakhstan, Kyrgyzstan, Uzbekistan, Turkmenistan, Tajikistan, Azerbaijan & Ukraine and with a view to enhance India's trade with countries of the CIS region, the scope of the Focus: CIS Programme has been extended to rest of the CIS region, namely Russia Federation, Belarus, Armenia, Moldova, and Georgia as well. Therefore, w.e.f. April 2004 the programme covers all the 12 CIS countries.
The programme focuses on various major product group/ services for enhancing India's exports to countries of the CIS Region. The programme aims to increase interaction between the business entities of the two regions by identifying areas of bilateral trade and investment. The exports to the Region are envisaged to be enhanced through combined efforts of various institutions of Government of India, and other Trade Promotion Organisations. The main objective will be to increase mutual direct interaction among businessmen by identifying the areas of bilateral interest and investment. The details of the Programmes have also been hosted on Department's website under option "Trade Promotion Programmes."
c) There is a regular exchange of delegations with countries in this region by participation in trade fairs of mutual interest and exchange of trade related information.
l FIEO organised a business delegation for Buyer-Seller Meets in CIS countries (Kazakhstan, Kyrgyzstan, Azerbaijan and Uzbekistan) from 10-22 January 2004.
d) Bilateral trade and economic cooperation between India and these countries is regularly reviewed through the meetings of Joint Commissions / Working Groups and Joint Business Councils.
e) There is a regular interaction between the governments for enhancing bilateral trade and economic cooperation.
f) Government has allowed exports of Indian Banks in Russia, SBI along-with Canara Bank is likely to start its operation in Moscow.
g) For ensuring greater presence of Indian banks in Russia, State Bank of India along with the Canara Bank is likely to start its operation in Moscow .
h) The EXIM Bank of India has signed agreements to provide Line of Credit worth USD 35 million to the Russian banks for boosting Indian Exports to the Russian Federation.
NORTH EAST ASIA
North East Asia comprises of China, Japan, Republic of Korea, Hong-Kong, Taiwan, Democratic People Republic of Korea, Macao and Mongolia. India's trade with these countries amounted to Rs.74,823.81 crores during 2002-2003, registering a growth of 26.12% over 2001-2002. The imports from North East Asia were of the order of Rs.37,690.60 crores during 2002-2003, registering a growth of about 19.43% over 2001-2002. The exports to North East Asia region registered a growth of 33.72% during 2002-2003 over 2001-2002 and amounted to Rs.37,133.21 crores. Japan, Hong-Kong, China and Republic of Korea are the major trading partners of India in this region.
The pattern of trade with North East Asian countries over the last few years is as under:
During the last five years, except during 2000-01, the trade with NEA countries registered negative balance of trade. However, the trade registered positive balance of trade during 1992-93 to 1997-98.
As per the data for April-June, 2003-04, the trade with NEA countries is of the order of Rs.19,633.89 crores, registering a growth of about 22.56% over 2002-03 for the corresponding period. The balance of trade is negative to the tune of Rs. 2762.21 crores as against Rs. 349.93 crores during 2002-03. The detailed data is given below:
Major items of export to North East Asian countries are gems and jewellery, iron ore, cotton yarn, fabric made ups, marine products, plastic and linoleum products, drugs and pharmaceuticals and fine chemicals. Major imports from this region include electronic goods, machinery, pearls and precious stones, organic chemicals, professional instruments, transport equipment, iron & steel, silver, coal, coke, briquettes.
The highest trade turn over during the year 2002-03 in NEA region was with China. Till 2001-02 Japan was the India's number one trading partner in North East Asia region. Indian exports to China registered a very steep increase of 109.05% during 2002-03 over 2001-02, while imports from China also registered a significant increase of 38.65%. Major items of Indian exports to China are primary and semi-finished iron and steel, iron ore, plastic and linoleum products, minerals and ores and marine products. Major imports form China include electronic goods, chemicals, coal, coke, briquettes, medicinal and pharmaceuticals products. During the period April-June 2003-04, Indian exports to China registered a growth of 41.95% as against growth of 46.87% in imports from China. The overall trade growth registered during April-June 2003-04 over the corresponding period of last year was 45.09%.
An Indian delegation led by the Commerce &Industries Minister visited China during June 2003 and had discussions with Chinese delegation led by Minister of Commerce. The visit coincided with the visit of Prime Minister to China. The specific issues discussed with the Chinese side related to holding of the next meeting of the Joint Economic Group, the need for adopting a comprehensive approach in prescribing phytosanitary standards for fresh fruits and vegetables, and the need to explore possibility for China to import tobacco from India as well as other agri products, including food grains. Besides, both sides took note of increasing bilateral trade and were optimistic about attaining $10 billion trade level within the next 2-3 years. Views on WTO issues of common interest related to negotiations on Agreement on Agriculture and TRIPS were also exchanged, with the two sides agreeing to cooperate on several issues of concern to the developing countries.
Commerce &Industries Minister visited China in October 2003 in connection with the inauguration of the India Exhibition and Seminar on Trade and Investment. These events were organized by CII in collaboration with Indian Embassy in Beijing. Meeting was also held with Vice Premier of China. The issues discussed during the meeting related to steel exports to China, anti-dumping investigations, next meeting of JEG, etc.
Indian exports to Japan registered a growth of 24.80% while imports from Japan declined by 13.53% during 2002-03 over 2001-02. Major items of export to Japan include gems and jewellery, marine products, iron ore, cotton yarn fabrics, made ups and petroleum products. Major items of import from Japan are machinery, electronic goods, professional instruments, iron and steel and organic chemicals. During April-June 2002-03, Indian exports to Japan registered a decline of 8.64%. However, imports from Japan grew by 32.99%. The decline in Indian exports to Japan may be attributable to the prevailing economic situation in Japan.
Indian exports to Hong Kong during 2003-04 amounted to Rs. 11828 crores registering a growth of 4.81%. Imports from Hong Kong amounted to Rs. 4705 crores, an increase of 35.37%. Exports to Hong Kong account for about 4.68% of India's overall exports. During April-June 2002-03, Indian exports to Hong Kong registered a decline of 11.23%. However, Indian imports from Hong Kong registered a growth of 39.84%. The major items of exports to Hong Kong are gems and jewellery, finished leather, drugs, pharmaceuticals, and cotton yarn fabrics. The share of gems and jewellery in India's exports to Hong Kong is about 67%. The major items of imports from Hong Kong are pearls, semi-finished stones, gold and electronic goods.
Indian exports to Republic of Korea during 2002-03 amounted to Rs. 31120 crores registering an increase of 38.78%. Imports from Korea during 2002-03 amounted to Rs. 7374 crores registering a growth of 35.47%. Major items of exports to Korea are cotton yarn, fabrics, made ups iron ore, oil meals, drugs, pharmaceuticals, fine chemicals, and petroleum, products. Major items of imports from Korea are electronic goods, machinery, transport equipment and iron and steel. During April-June 2003-04, Indian exports to Republic of Korea were of the order of Rs. 630.81 crores registering a decline of 18.49%. Imports from Korea during April-June 2003-04 were of the order of Rs. 2056.27 crores registering a growth of 58.32%. Imports of electronic goods from Korea account for about 33% of total imports from Korea.
An Indian delegation led by the Commerce &Industries Minister visited Seoul during October 2003 in connection with the Fourth India-Korea Trade Ministers' Meeting (Joint Trade Committee). Simultaneously two events i.e. Destination India and a meeting of the Investment Promotion Committee were also held in Korea. Deptt of IPP coordinated these events. The Joint Trade Committee meeting reviewed the overall bilateral trade and investment between the two countries. The Ministers noted that there was considerable potential for trade levels to increase and decided that positive steps needed to be taken in this direction. India's increasing capabilities in agricultural exports and problems faced by Korean companies in doing business with India were duly noted with the Ministers expressing their desire that trade should soon reach the dollar 5 billion dollar mark.
SOUTH EAST ASIA
India's trade with East Asia region comprising the ASEAN countries (viz. Indonesia, Malaysia, Singapore, Thailand, Philippines, Brunei, Vietnam, Myanmar, Laos and Cambodia), Australia New Zealand and countries of Oceania, during the year 2002-03, at US $ 11784.77 million registered a growth of 21% over the previous year. Traditionally, India has an adverse balance of trade in the region.
Our exports to this region, during the year 2002-03, grew by 32% over the pervious year, imports witnessed a growth of 14%.
CURRENT TRENDS
During the year 2003-2004 (Apr-July), the bilateral trade with the countries in the East Asia Region Natural Fibers was held in New Delhi in October, 2003 under the umbrella of India-Australia JMC. Pursuant to the setting up of a Joint Trade Commission with Myanmar in July, 2003, the inaugural session of the Commission was held in Yangon on 15th July, 2003. Shri Arun Jaitley, Minister for Commerce & Industry led the Indian delegation. The 8th Session of the India-New Zealand Joint Trade Committee was also held in New Delhi, 13-14 October, 2003.
The 11th meeting of India-Thailand Joint Trade Committee (JT) was held in Bangkok from 26-27 September, 2003. A wide range of issues relating to bilateral trade and economic cooperation were discussed.
India has established Joint Business Councils with Singapore, New Zealand, Australia, Malaysia, Indonesia, Thailand, Vietnam and Philippines. The meetings of the Council take place at frequent intervals in respective country wherein a wide range of issues of mutual interest are discussed to expand trade. Such meetings also provide good fora for businessmen to explore the potential for growth in bilateral trade and investment.
The 14th Meeting of the India-Australia Joint Business Council was held in New Delhi on 18th February, 2003 back to back with the meeting of the Joint Ministerial Commission. Meeting of the India-Philippines Joint Business Council between the respective Chambers of Trade & Industry of the two countries was also held in New Delhi in November, 2003.
On April 8, 2002, the Prime Minister of India and the Prime Minister of Singapore met in Singapore and agreed to establish a Joint Study Group to study the benefits of India-Singapore Comprehensive Economic Cooperation Agreement (CECA). From the Indian side, the Joint Study Group was headed by Dr. Rakesh Mohan, presently Dy. Governor, RBI.
The Joint Study Group met seven times, alternatively in India and Singapore, and submitted its report to the two Prime Ministers. In its report, the Joint Study Group concluded that a CECA between India and Singapore would provide significant benefits for both countries, in terms of the potential for increased trade and investment, and through economic cooperation. The JSG recommended that the two countries enter into formal negotiations for the CECA, using the JSG Report as a framework.
The Report of the JSG envisaged the CECA to be structured as an integrated package of agreements between India and Singapore including:
l A Free Trade Agreement, which would include, inter alia, trade in goods and services, and investment;
l A bilateral agreement on investment promotion, protection and cooperation;
l An improved Double Taxation Avoidance Agreement;
l A more liberal Air Services Agreement, and Open Skies for Charter Flights; and
l A work programme for economic cooperation covering areas outlined in the Joint Study Report, including, inter alia, the creation of the India-Singapore Fund, the setting up of a second India Centre in Singapore and Tourism Cooperation.
The following important bilateral visits took place during the year 2003:
Mr. Mark Vaile, Minister of Trade, Austrralia , visited India in Feb. 2003 for the 8th India-Australia JMC Meeting.
Malaysian Minister for Enterpreneurial Development, Mr. Mohamed Nazri Abdul Aziz, called on C&IM on 11th March, 2003.
Prime Minister of Singapore, H.E. Goh Chok Tong, visited India in April, 2003.
Commerce & Industry Minister led an Indian delegation to Myanmar in July 2003 in connection with the signing of MoU on the setting up of Joint Trade Committee (JTC). Subsequently, the inaugural session of the JTC was held on 15th July, 2003.
Deputy Prime Minister of Thailand visited India in August, 2003. Dr. Richard Grant, Deputy Secretary of Foreign Affairs & Trade, led the New Zealand delegation for the 8th India-New Zealand meeting of Joint Trade Committee held on 13-14 October, 2003. During the above visits, a range of issues of mutual interest in trade and economic cooperation, were discussed.
INDIA'S TRADE WITH COUNTRIES IN THE WEST ASIA & NORTH AFRICA (WANA) REGION
West Asia and North Africa (WANA) region comprises 19 countries. These are (i ) Gulf Cooperation Council (GCC) countries (i.e., Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and United Arab Emirates), (ii) West Asian countries (i.e., Iran, Iraq, Israel, Jordan, Lebanon, Yemen and Syria) and (iii) North African countries(i.e., Algeria, Egypt, Libya, Morocco, Sudan and Tunisia). WANA region occupies an important position in India's foreign trade accounting for about 14% of India's global exports in 2002-03.
Our principal export products to this region comprise gems & jewellery, textiles and readymade garments, machinery and instruments, manufactures of metals, basmati rice, plastics and linoleum products, drugs, pharmaceuticals &chemicals, primary & semi-finished Iron & steel, etc. Our principal imports from this region consist of petroleum (crude and products), inorganic chemicals, pearls and precious/semi-precious stones, gold, metalliferrous ores and metal scrap, fertilizers and non-ferrous metals.
Trade with countries in the WANA region during 2002-03
Exports to the WANA region from India during 2002-03 touched the figure of Rs. 36,363.22 Crores (US $ 7513.79 million) as against Rs. 27,555.59 Crores (US $ 5777.83 million) during the previous year, reflecting a growth of 31.3% (30.1% in Dollar terms). Non-oil imports from WANA countries during the year 2002-03 amounted to Rs. 17,361.88 Crores (US $ 3587.51 million) as compared to Rs. 15119.25 Crores (US $ 3170.19 million) in the previous year, registering a growth of 14.8% (13.2% in Dollar terms). The balance of trade amounted to Rs. 19001.34 Crores (US $ 3926.28 million) during 2002-03 against Rs. 12436.34 Crores (US $ 2607.64 million) during 2001-02, which shows an increase of 52.8% (50.6% in Dollar terms). Trade data mentioned above are summarised below in a tabular form:
As may be seen from the statement, exports to the WANA region during 2002-03 amounted to 14.4% of India's global exports of Rs. 252789.97 Crores (US $ 52234.40 million), which reflects a slight increase from a share of 13.2 % recorded in the previous year. Non-oil import from the WANA region amounted to 5.9 % of the country's global imports valued at Rs. 296596.94 Crores (US $ 6128.31 million) during the year 2002-03, as against the share of 6.2 % recorded in the previous year.
During 2002-03 as in the previous year, United Arab Emirates ranked first among the destinations for India's exports in the WANA region. Our exports to that country amounted to Rs. 16036.69 crores (US $ 3313.69 million) as compared to Rs. 11883.81 crores ( US $ 2491.79 million) during 2001-02, i.e. a growth of 35% (33% growth in Dollar terms). The other major destinations include Saudi Arabia, Israel, Egypt etc.
Analysis of trade with WANA countries during April-December '03
The following table indicates the status of India's trade with countries in the WANA region during April-December 2003:
Source: DGCI&S
It may be seen that during April-December `03, exports to WANA countries registered a growth of 17.8% in Rupee terms(24 % in Dollar terms), reaching a figure of Rs. 30,874. 66 crores (US $ 6,684.90 million). Non-oil imports registered a growth of 20.5% (26.8% in Dollar terms) and amounted to Rs. 15053.01 crores (US $ 3,259.24 million).
Institutional Arrangements
Trade and economic cooperation issues between India and WANA countries are regularly reviewed through the bilateral Joint Commissions or Joint Committees. India has such institutional mechanisms with almost all countries in the region.
Apart from initiatives at the Government level, apex trade bodies like CII, FICCI, FIEO, ASSOCHAM etc. also supplement our efforts by sponsoring business delegations to various countries. Joint Business Council (JBC) Arrangements exist between FICCI on the Indian side and counterpart organisations in WANA countries. CII has similar arrangements in the form of Joint Business Group (JBG).
Recent developments/initiatives in trade and economic co-operation with countries in the WANA region
With a view to facilitate direct contacts between the Commercial Representatives(CRs) of India stationed in the West Asia North Africa(WANA) region and the country's business community, one-day conferences of CRs from select countries in the WANA region were organised in Kolkata, Bangalore, Chennai, Mumbai, and New Delhi from 3-7 June 2003 in association with Apex trade bodies. CRs stationed in Algeria, Egypt, Iran, Israel, Kuwait, Oman, Saudi Arabia, Sudan, UAE and Yemen took part in the conference.
The Conference provided the CRs an opportunity to present to our businessmen a fair idea about the economic conditions, Customs regulations, banking facilities and business opportunities in the respective countries where they are stationed. It also helped them in understanding the concerns, expectations, needs and difficulties of our businessmen.
The 8th Session of the India-Algeria Joint Commission Meeting was held in New Delhi on 8-10 October 2003, which was chaired by Shri S.B. Mookherjee, MOS(C&I) from the Indian side and the Algerian Transport Minister, Mr. Abdel Malek Sellal.
The 4th meeting of the India-Oman Joint Commission was held in Muscat (Oman) on 20-22 October 2003. The Indian delegation was led by Shri S.B. Mookherjee, MOS(C&I) and the Omani delegation was led by Mr. Maqbool Ali Sultan, Commerce & Industry Minister of Oman.
The Second meeting of the India-Egypt Joint Working Group on Trade issues was held in New Delhi on 10-11 April 2003. The 3rd meeting was held in Cairo on 8-10 December 2003. The meetings inter-alia examined issues relating to finalisation of a Preferential Trade Agreement with Egypt.
The 13th meeting of India-Iran Joint Commission was held in Tehran (Iran) on 13-14 December 2003, which inter-alia reviewed the present state of bilateral trade. The third Session of India-Israel Joint Trade and Economic Committee was held on the 14th January 2004 in Jerusalem, which was co-chaired from the Indian side by the Commerce and Industry Minister.
A Gulf Cooperation Council (GCC)-India Industrial Conference was organised by the Confederation of Indian Industry (CII) in collaboration with the Government of India in Mumbai on February 17-18, 2004. This was the first - ever Conference of its kind. The Commerce & Industry Minister co-chaired the Conference from the Indian side. His counterparts from all the GCC countries, viz., Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and United Arab Emirates participated in the conference along with officials from GCC Secretariat.
Saudi Arabia has lifted the ban on import of bovine meat, meat of sheep and goat and meat preparations from India.
TRADE BETWEEN INDIA AND SUB-SAHARAN AFRICAN COUNTRIES
India's trade with Sub-Saharan Africa (SSA) has been increasing due to various initiatives taken by the Government and the private sector. India's Trade with SSA during the last three years is as follows:
During 2002-03 total trade between India and Sub-Saharan Africa has grown to Rs 25820.74 Crore as against Rs 20381.69 Crore in 2001-2002 thereby registering a growth of about 26.68%. Total trade during 2003-04 (Apr-Dec) stood at Rs 19843.55 Crore as against Rs 20021.85 Crore in the corresponding period of 2002-2003, thereby registering a decline of 0.90 %.
India's exports to the region have increased by 15.13 % from Rs 10306.38 Crore in 2001-2002 to Rs 11865.42 Crore in 2002-2003. During 2003-04 (Apr-Dec) exports were Rs 9798.10 Crore as against Rs 8886.90 Crore in the corresponding period of 2002-03 thereby registering a growth of 10.25%.
India's imports from the region have increased by 38.51 % from Rs 10075.31 Crore in 2001-2002 to Rs 13955.32 Crore in 2002-2003. During 2003-04 (Apr-Dec) imports stood at Rs 10045.45 Crore as against Rs 11134.95 Crore in the corresponding period of 2002-2003 thereby registering a decline of 9.78 %.
Initiatives Taken to Promote Bilateral Cooperation
Bilateral Trade Agreements are one of the tools to promote trade with countries in sub Saharan Africa. Such Trade Agreement exist with 23 countries in the region. A trade Agreement with Zambia was signed in April 2003 during the visit of the Zambian President to India.
The Joint Trade Committee is an institutional arrangement created by the Trade Agreement, providing for discussions on various issues relating to trade & cooperation in specific sectors. Shri S B Mookherjee, Minister of State(Commerce & Industry) led a delegation to Dar-es-Salaam, Tanzania in July 2003 in connection with the 1st Joint Trade Committee Meeting between India and Tanzania and participation in Dar-es-Salaam International Trade Fair (DITF) 2003. The 3rd Board Meeting of India-South Africa Commercial Alliance (ISACA) was held in New Delhi in Aug. 2003 under the co-chairmanship of Commerce Secretary and Director General, Department of Trade & Industry, South Africa.
Conference of Commercial Representatives/ Heads of Missions
In order to review the progress of the bilateral trade and identify bottlenecks in the sub-Saharan African region and also to ascertain measures to improve the same, Shri Rajiv Pratap Rudy, Minister of State(Commerce & Industry) chaired a Conference of Heads of Missions/Commercial Representatives for Western Region in Lagos, Nigeria from 22-23 May 2003. Shri S B Mookherjee, Minister of State(Commerce & Industry) chaired a Conference of CRs of Indian Missions of Southern Africa Region in Cape Town, South Africa from 12-13 June, 2003. A Commercial Representatives Conference for the Eastern Africa Region was also held under the chairmanship of Shri S B Mookherjee, Minister of State(Commerce & Industry) on 28th June, 2003 in Dar-es-Salaam, Tanzania.
Department of Commerce, Govt. of India in association with Ministry of External Affairs, the Federation of Indian Chambers of Commerce & Industry (FICCI), Confederation of Indian Industry (CII), Federation of Indian Export Organisation (FIEO) and Associated Chambers of Commerce & Industry (ASSOCHAM) organised a Conference of Heads of Missions/Commercial Representatives of 11 Indian Missions in Sub Saharan Region during 10-15, November,2003 in Mumbai, Bangalore and New Delhi. The meetings at all these places were attended by members of Trade Chamabers, EPCs and exporter community.
It has been decided by the Ministry of External Affairs to form a Task Force on the New Partnership for Africa's Development (NEPAD), to implement the US$ 200 million of Line of Credit announced by the Prime Minister and also study other ways and means of assisting NEPAD. The task force will consist of Joint Secretary, Department of Economic Affairs (DEA), Joint Secretary (ITP) & Joint Secretary (Africa), Ministry of External Affairs (MEA), Joint Secretary (Commerce), EXIM (Export-Import) Bank (Managing Director) and the Confederation of Indian Industry.
Focus Africa Programme
The "Focus: Africa" Programme was launched by Minister for Commerce & Industry on 31st March, 2002 along with the announcement of EXIM policy for the years 2002-2007, with a view to enhance the trade with Sub Saharan African Countries. During the first year i.e. 2002-2003 of the Focus Africa Programme emphasis was laid only on seven targeted countries namely South Africa, Ghana, Tanzania, Mauritius, Nigeria , Kenya and Ethiopia. From 1st April 2003 the Focus Africa Programme has been extended to all the countries of Sub Saharan Africa where India has Missions as also to 6 countries of Northern Africa Region. Hence the total number of countries covered under the Focus Africa Programme have increased from the initial seven countries to twenty four countries in African Continent.
An awareness seminar on the Focus Africa Programme was jointly organized by the Export Promotion Councils of the Chemical Sector viz. CAPEXIL, CHEMEXCIL, PLEXCONCIL and Shellac EPC at Kolkatta in August, 2003. Another awareness seminar on Focus Africa was organized by Department of Commerce on 22nd September 2003 and a booklet containing the guidelines on the Focus Africa Programme for the year 2003-04 along with information pertaining to Focus Countries was released by Shri Arun Jaitley, Minister of Commerce & Industry during the seminar. The seminar was attended by African Diplomats posted in Delhi, Apex Chambers, Export Promotion Councils and exporters.
Under the Focus Africa Programme the Department of Commerce and Federation of Indian Chambers of Commerce & Industry jointly organized the 2nd India Africa Health Summit from 19-21, November, 2003 in Mumbai. At this forum, Health Ministers, Directors of Health Services and Chief Representatives of the Registration Agencies from 24 African countries attended and interacted with leading Indian manufacturers for sourcing their health-care requirements from India. The main objective of this Summit was to facilitate an interactive discussion among key players in the Pharma & Health Care Industries and policy makers from African Countries and India, for increasing trade & investment in these sectors. The other objectives of the Summit included exploring Joint Ventures and Co-production possibilities in African countries and highlighting India's capabilities for setting up Hospital Infrastructure. Unit visits were also arranged to give the delegates first hand knowledge of the working of the Indian Pharma Companies. The State Government of Maharashtra launched a Medical Tourism Council during the Meet.
A Focus Africa seminar was organized by CHEMEXCIL in Jaipur on 27th November, 2003. It was attended by officials from the Department of Commerce, representatives from Nigeria & Kenyan High Commission in New Delhi and the exporter community. Under the "Focus Africa" Programme Ministry of Commerce & Industry, Government of India and Federation of Indian Chambers of Commerce & Industry (FICCI) jointly organised the India- Africa Summit on Water Partnership from 11-12 Feb. 2004 at Pune, Maharashtra. The programme comprised of an International Conference on the first day and one to one meeting/ Field visits on the second day. The main objective of this Summit was to facilitate an interactive discussion among key players in this sector and policy makers from African Countries and India, for increasing trade & investment in these sectors. The other objectives of the Summit on Water Partnership was to showcase India's capabilities in the water pumps and irrigation equipment industry and also to highlight its capabilities to offer expertise for water management, conservation etc There was also a seminar on technical aspects of water management. Irrigation Ministers/senior officials of water services related Ministries from African countries as well as Ministers/senior officials from Central Govt. & State Govt. of Maharashtra attended the summit.
INDIA-EUROPE TRADE
European Countries accounted for about 25% of India's total trade during 2002-03. Bilateral trade between India and Europe during the last five years and in the first four months of 2003-04 has been as under:
* are the figures for the corresponding period of 2002-03.
During 2002-03, trade between India and European countries recorded an impressive growth of 13.5%. While India's exports to European countries recorded a growth of 15%, India's imports from these countries recorded a growth of 12%.
Our major items of export to Europe are gems and jewellery, textiles including yarn / fabrics / made-ups / readymade garments, drugs & pharmaceuticals, leather garments / goods / footwear, finished leather, machinery and instruments, manufactures of metals, handicrafts, transport equipment, coffee, dyes/intermediates, organic / inorganic / agro-chemicals, carpets, marine products, plastics and linoleum products, cashew, tea, electronic goods etc. Commodities with more than 10% share of our exports to Europe in 2002-03 were RMG cotton including accessories and gems & jewellery.
The major items of import from Europe are gold & silver, pearls, precious & semi-precious stones, machinery, project goods, electronic goods, organic chemicals, iron & steel, professional instruments, transport equipment, medicinal & pharmaceutical products, machine tools, artificial resins, plastic materials, manufactures of metals, paper board & manufactures, metalifers ores & scrap, non-ferrous metals, petroleum crude & products, etc. Pearls, precious/semi-precious stones, machinery and gold accounted for about 50% of our imports from Europe during 2002-03.
European Union is India's largest trading partner. However, despite the fact that more than US $ 11 Billion exports of India are directed to EU, India's share in EU's global imports is around 1% and India ranks 20th as EU's trading partner. With nearly 370 million citizens with high purchasing power and a common currency (Euro) in most of the EU countries, it is also our largest potential market. Foreign direct investment (FDI) approved from EU countries from January, 1991 to March, 2003 is over US $ 16 billion out of which the actual inflow is over US $ 5 billion. The top sectors attracting FDI and technology transfer from EU are fuels(power & oil refinery), telecommunications, transportation industries, chemicals(other than fertilizers), metallurgical industries, electrical equipments (including computer software & electronics) and industrial machinery.
INDIA-EUROPE TRADE
(Value in US $ Million)
More than 3400 technical collaborations have been approved with companies from EU countries. The UK, Germany, the Netherlands and France are among the top 10 countries from which FDI has been approved in India during the above mentioned period.
India and the EU countries have enjoyed healthy economic relations both individually and collectively. These relations are built on the foundations of (i) India-EU Cooperation Agreement on Partnership and Development which came in to effect in August, 1994; (ii) India-EC Joint Commission. India also has bilateral framework Agreement with some individual EU countries in areas such as trade, investment, taxation, textiles, civil aviation, tourism, science and technology, agriculture, etc. India has agreements for investment promotion/protection with 13 countries of EU. Similarly, agreements for avoidance of double taxation exist with 14 countries in EU. There are other cooperation programmes such as Indo-German Export Promotion Programme, Indo-British Partnership Initiative and different economic cooperation programmes with European Commission. These agreements/fora provide a permanent platform for constant review of bilateral economic and commercial relations.
The 4th India-EU Summit was held in New Delhi on 29th November, 2003. An India-EU Business Summit was also held on 28th November 2003 in conjunction with the political Summit. The high level interaction between the Indian and the EU businessmen was coordinated by FICCI and CII from the Indian side with their EU counterparts. The business summit focused on sectors of information technology, tourism, pharmaceuticals, agro-processing, manufacturing, etc. A bilateral agreement on Customs Cooperation was initiated by the two sides during the Summit.
The focus of bilateral relations with EU has shifted to higher plane. In addition to the traditional sectors of textiles, leather, gems & jewellery, etc., the current focus includes sunrise sectors of pharmaceuticals, processed food, information technology and services sector. Sectoral cooperation in science & technology, biotechnology, space, information technology & communication, etc., also find a firm place in bilateral economic partnership.
A number of bilateral instruments have been built into the India-EU bilateral economic dialogue to address increased economic partnership. The Asia-Invest, Economic Cross Cultural Programme, Asia Information Technology & Communications are some of such existing instruments which are available for the entrepreneurs for increasing economic cooperation. A new bilateral Trade and Investment Development Programme (TIDP) has been approved for implementation for enhancement of bilateral trade and investment cooperation under specific themes.
The apex forum for bilateral India-EU economic interaction is the India-EC Joint Commission which had its last meeting in New Delhi in October 2003. This Joint Commission has three Sub-Commissions on trade & commercial cooperation, economic cooperation and development cooperation and Joint Working Groups on agriculture/marine products, textiles, information technology & communications, consular matters, environment and steel.
In addition to the India-EU aforesaid institutional framework, bilateral arrangements in the form of Joint Commissions/Committees also exist with almost all countries of Europe for undertaking periodical review of bilateral trade and economic relations. These meetings have been held at regular intervals.
Notwithstanding the cooperation framework existing with the countries of European Union, health/sanitary & phyto sanitary standards, complex system of quota/tariff, packaging & labeling requirements, preferential trading arrangements, use of anti- dumping/anti-subsidy investigations against Indian products/goods, etc., have a bearing upon India's trade with EU. The Indian products affected are textiles, marine products, meat, milk/egg, gherkin, floriculture, mushroom, sugar, rice, whisky, etc. Considering the fact that India's exports constitute a miniscule proportion of EU's global imports, these developments have to be addressed appropriately by India's trade and industry.
We maintain a continuous dialogue with the EU and member countries at Government and industry level to address different aspects of economic relations. The Business Summit has become an annual feature. Market Access issues are regularly monitored and taken up with the European Union and EU member countries in order to ensure that such standards do not become market access barriers for India's exports to EU countries.
India's Trade Relationship with the countries of erstwhile East Europe
The group of erstwhile "Rupee Payment Area (RPA) countries have always occupied an important place in India's foreign trade. The political and economic changes in East Europe and the USSR from the late 1980s onwards naturally had profound implications inter-alia, for India's trade arrangement and move to a situation of trade based on hard currency with all former RPA countries.
Upto the end of 1980s, trade with these countries was regulated by the rupee payment agreement. After the political and economic changes in the Central and East Europe, bilateral trade between India and these countries is in operation on the free convertible currency basis as in the case of other countries. All these countries are members of WTO and hence bilateral trade with these countries is regulated as such.
The Central and East Europe countries include Albania, Bosnia & Herzegovina(B&H), Bulgaria, Croatia, Czech Republic, Hungary, Poland, Romania, Macedonia, Serbia & Montenegro (the former Federal Republic of Yugoslavia), Slovak Republic and Slovenia.
Bilateral Economic Relations
The disintegration of the COMECON countries, the transition from centrally planned, socialist economies to market -oriented economies, collapse of old trading arrangements, dismantling of rupee payment system, severe liquidity constraints etc. led to a decline in India's trade with the erstwhile Central and East European countries from US $ 777 million in 1990-1991 to US $ 390 million in 1993-1994. A brief upswing of trade during 1995-1996 ( US $ 646 million, a rise of 72% over the previous year's figure of US $ 374.4 million), was not sustained and trade continued to decline till the year 2000-2001. However, bilateral trade has started growing at a moderate but healthy rate from 2000-2001 when it rose from US$ 387.88 million to US$ 470.14 million during 2001-2002. During 2002-2003 the level of trade has further improved to US$ 592.34 million.
Important trade related issues and Government initiatives to address such problems
The Indian trade and industry are faced with problems like lack of information of each other's capabilities and emerging potential, fragmentation of retail markets, severe liquidity constraints, problems relating to business visa, difficulty in registration of products, especially drugs and pharmaceuticals etc.
Government has taken a number of steps to address such problems and to boost the level of trade with the erstwhile RPA (Rupee Payment Area) countries other than conclusion of new framework trade agreement substituting rupee payment trade by trade in free convertible currencies - which include inter alia, counter trade (switch, swap or barter), conclusion of a new and more extensive inter-banking arrangements, exchange of official and business visits, encouragement and promotion of direct business level contacts, setting up of joint commissions/ joint committees, identifying new commodities of trade (such as engineering items; software/Information Technology; plastics; packaging; food processing; etc.), concluding agreements (like shipping, civil aviation etc.) for infrastructure improvement, participation in mutual trade fairs, promotion and encouragement of joint ventures etc.
The Department of Commerce jointly with FICCI and CII organised an interaction of the Indian Commercial Missions in the Central and East European countries along with representatives from Anti-dumping Directorate of the Department of Commerce and other Organisations, viz., Exim Bank, ECGC etc. with trade and industry in Delhi, Mumbai and Chennai from 28-04-03 to 02-05-03. The interaction served a dual objective - it sensitised the Commercial Representatives to the needs of the trade and industry and also provided an opportunity for dissemination of information by Commercial Representatives to Trade and Industry.
Joint Committees / Joint Commissions
In order to oversee the bilateral economic relations, Joint Commission and Joint Committee level interactions are held periodically with these countries. Enhancement of Bilateral Trade and Investment opportunities is an important target of these interactions. Besides, sectoral level bilateral working group mechanism is also available to address sector specific issues. The 4th Session of Indo-Slovenian Joint Committee Meeting was held in New Delhi during 27th and 28th February, 2003. An Inter-Session Consultations between India and Romania under the aegis of Indo-Romanian Joint Commission was held from 2nd to 4th April 2003 in Bucharest. The 16th Session of the Indo-Romanian Joint Commission Meeting was held in New Delhi on 20th and 21st October, 2003. Hob'ble Minister of Commerce and Industry and Law and Justice, Shri Arun Jaitley was the Co-Chairman from the Indian side.
INDO-LATIN AMERICAN TRADE
Latin American and Caribbean (LAC) region comprising of 43 countries accounts for about 5% of the world trade. But India is not a significant trading partner of this region. Though there is much scope for enhancing two way trade between India and the LAC region, the volume of trade is low. The share of our exports to the region is minuscule. However, there is a trend and potential for growth. In recent years, our exports have been showing a continuously rising trend as could be seen from the following data:
It may be seen, that the total Indian trade with Latin American and Caribbean region rose from US$ 481.79 million in 1992-93 to US$ 2681.28 million in 2002-03, registering thereby an increase of more than 456%. India's exports to the region have gone up from US$ 165.55 million in 1992-93 to US$ 1636.36 million in 2002-03 registering an increase of 888.43%.
FOCUS: LAC PROGRAMME
Considering the potential that the region offers, an integrated programme "Focus:LAC" was launched in November, 1997 by the Commerce Ministry. This programme is aimed at sensitizing the organisations viz. Export Promotion Councils, Chambers of Commerce & Industry, CII, etc. Exim Bank and ECGC, was also involved in trade promotion efforts. Various incentives and export promotion measures have been designed and incorporated in this programme, out of which double weightage under textiles quota policy, enhanced support from MDA for sales tours, participation in fairs/exhibitions, market surveys, etc. a scheme for giving awards to best performers in exports to the LAC region has also been drawn up. The programme has been extended upto March, 2005 in order to consolidate the gains of previous years and significantly enhance India's trade with the Latin American region. The main objective is to increase interaction between the two regions by identifying areas of bilateral trade and investments.
MAJOR TRADING PARTNERS
Mexico, Brazil, Argentina, Chile, Peru, Venezuela and Colombia, Trinidad & Tobago and Panama are India's major trading partners constituting 88% of the total trade with the LAC region. The FOCUS:LAC programme shall aim to focus at Latin American region, with added emphasis on the 9 major trading partners of the region.
MAJOR ITEMS OF EXPORTS & IMPORTS
The important items of export to this region are textiles and ready made garments, engineering goods such bicycles and components thereof, mopeds, diesel engines, automotive components, hand tools, etc., chemical and allied items like fine chemicals, dyes and dye intermediates, tyres and tubes, rubber gloves. Besides, India also exports handicrafts items, sports goods, electronic items, jute, shellac, tea and spices to Latin American. India's major imports from the region are iron & steel and their products, non-ferrous metals, crude minerals, chemicals, PVC, pulp & paper waste, raw wool etc.
EXTREME FOCUS PRODUCT GROUPS
Three products groups i.e. textiles, engineering products and chemical products constitutes nearly 80% of India's exports to the region. In the textiles sector, readymade garments, made ups, fabrics, yarn, carpets, handicrafts, etc. are fast moving export items. In the engineering sector, automobiles, auto components, electrical appliances, machinery, computer software, etc. have good scope for exports, Bulk drugs, pharmaceuticals, dyes and intermediates, agrochemical. Plastic products, naphtha, resins, essentials oils, molasses, tyres for busses, trucks & Cycles are important items in the chemical product sector.
The FOCUS:LAC programme shall aim to focus on the following major products groups for enhancing India's exports to the Latin American region:
(i) Textiles including ready-made garments, carpets & handicrafts;
(ii) Engineering products including computer software;
(iii) Chemical products including drugs/ pharmaceuticals.
STUDY OF TRADE ANALYSIS
The National Centre for Trade Information(NCTI) has updated the study on 11 Latin American Countries (Argentina, Brazil, Chile, Bolivia, Colombia, Mexico, Peru, Uruguay, Paraguay. Venezuela, Trinidad & Tobago) and analyzed comprehensively trade data of 17 more Latin American Countries. The NCTI has added this information on their website for information of exporters, Councils and trade bodies for planning export strategies for Latin American countries. NCTI has now proposed to upgrade the earlier trade data of 28 countries. NCTI has also carried out trade study on PTA lines of Venezuela, Uruguay, Brazil and Mercosur countries.
INSTITUTIONAL MECHANISM
Following bilateral institutional arrangements already exists with the countries of the Latin American region:
(i) Indo-Argentine Joint Commission
(ii) Indo-Argentine Joint Trade Committee
(iii) Indo-Mexican Joint Commission
(iv) Indo-Brazilian Commercial Council
(v) Indo-Cuban Joint Commission
(vi) Indo-Cuban Trade revival Committee
(vii) Indo-Suriname Joint Commission
(viii) Indo-Guyana Joint Commission
COMMERCIAL STAFF IN THE INDIAN MISSIONS
To give impetus to our exports in LAC region, Department of Commerce has created posts of Marketing Assistants in 9 Latin American countries viz. Brazil, Argentina, Chile, Colombia, Venezuela, Peru, Panama, Trinidad & Tobago and Uruguay.
PROGRESS DURING 2003-04
(i) The Text of the Preferential Trade Agreement (PTA) between India and Mercosur has been signed on 25th January 2004. The Annexures to the PTA, including product list, are yet to be negotiated/finalized
(ii) CII organised Indo-LAC Pharma Meet in Mumbai & Hyderabad in May 2003.
(iii) Chemexcil participated in FCE Pharma, Brazil, 2003.
(iv) Plexconcil participated in Fair Escolor and Fair Hospitalar in July 2003.
(v) EPC for Handicrafts organised Indian handicrafts and Gifts Fair in New Delhi in Oct. 2003 and February 2004.
(vi) A Uruguayan Health Delegation visited India in May 2003.
(vii) Engineering Export Promotion Council organised IndiaTech 2003 in Brazil.
(viii) Meeting of Indo-Brazil Joint Commission was held on 21st October, 2003.
(ix) Meeting of Indo-Cuban Joint Commission was held in New Delhi on 25th Nov. 2003
(x) The Electronic and Computer Software EPC organized IndiaSoft 2004 in February 2004 by inviting buyers from Latin American and other regions.
North America Free Trade Agreement (NAFTA)
North America Free Trade Agreement (NAFTA) was formalised in 1994 with a customs union between the United States of America, Canada and Mexico. This is the largest and most important trading Bloc of the world. India's trade with these countries is as below :
Trade with USA
(Value in Us $ million)
Current Trend
EXPORTS
During the period April-December, 2003 India's export to USA at US $ 8162.32 million registered a positive growth of 1.70 % over the corresponding period of the previous year, when the export was US $ 8026.024 million. The share of India's export to USA out of India's global exports has been recorded 18.75 % during this period, which was 21.08% during the corresponding period of the previous year. The major items of export to USA during April-December 2003 are as below:
IMPORTS
India's imports from USA during April-December 2003 has been recorded as US $ 3644.24 million showing an increase of 20.35 % over the import in the corresponding period of the previous year when it was recorded at US $ 3027.95 million. During this period, the share of India's import has been recorded as 6.57%, which was 6.80% during the corresponding period of the last year. The major items of import from USA during April December 2003 is as below:
Balance of Trade
During the period April-December 2003 the balance of trade has remained in favour of India at US $ 4518.07 million. In the corresponding period of last year it was US $ 4998.08 million.
India-Canada Bilateral Trade
Trade with canada
(Value in Us $ million)
Current Trend
EXPORTS
During April-December 2003, India's exports to Canada at US $ 530.68 million registered a positive growth of 3.21% over the corresponding period of the previous year when the export was US $ 514.16 million. The share of India's export to Canada out of India's global exports during this period has been recorded 1.22%, which was 1.35% during the corresponding period of the previous year. The major commodities of exports to Canada during the period April-December 2003 are as below:
IMPORTS
During April-December 2003, India's imports from Canada has been recorded US $ 444.87 million showing a negative growth of 0.49% over the import in corresponding period of the previous year when it was recorded US $ 447.08 million. The share of India's import from Canada out of India's global import has been recorded as 0.80% during this period, which was 1.00 % during the corresponding period of last year. The major commodities of imports from Canada during the period April-December 2003 are as below :
Balance of Trade
During April-December 2003 the balance of trade has been in favour of India at US $ 85.81 million. In the corresponding period of last year it was US $ 67.07 million.
Current Trend
EXPORTS
IMPORTS
During April-December 2003, India's imports from Mexico has been recorded at US $ 49.84 million showing an increase of 11.46% over the import in correspond period of the previous year when it was recorded as US $ 44.71 million. During this period, the share of India's import from Mexico out of India's total import has been recorded as 0.09% which was 0.10% during the corresponding period of last year. The major commodities of imports from Mexico during April-December 2003 are as below:
Balance of Trade
During April-December 2003 the balance of trade has been in favour of India at US $ 122.72 million. In the corresponding period of last year it was US $ 160.03 million.
Measures undertaken for export promotion to NAFTA
The trade related information with respect to NAFTA partners is coordinated with the apex chambers of commerce and EPCs. The thrust is given on identified important sectors for expansion and consolidation of our trade. The analyzed trade data of NAFTA countries is regularly passed to Apex chamber of commerce and Export Promotion councils for disseminating it to their member exporters. The member exporters are provided all assistance for promoting exports, participation in fairs/exhibitions, identification of export products and potential market areas for exports, details of reputed buyers. The difficulties faced by the exporters in NAFTA countries are regularly taken up with the concerned authorities in these countries and the issues are resolved through correspondence, Video Conferences and Meetings. The various legislation/steps taken by these countries and the possible impact of these measures on Indian exports are analyzed. Remedial action is taken in consultation with other Ministries/Departments and our Missions abroad.
SOUTH ASIA & S.A.A.R.C.
The South Asia region comprises Afghanistan, Bangladesh, Bhutan, Maldives, Nepal, Pakistan and Sri Lanka. With the exception of Afghanistan, these countries including India have organised themselves as members of the South Asian Association for Regional Cooperation (SAARC).
In 2002-2003, India's total trade turnover with the SAARC member countries amounted to Rs.14932.81 crores against Rs.12388.09 crores achieved in the previous year, reflecting an increase of 20.54%%. While India's exports to these countries stood at Rs.12530.14 crores in 2002-2003 against Rs.9662.44 crores in 2000-2001 registering an increase of 29.67%, imports from these countries amounted to Rs.2402.67 crores in 2002-2003 as compared to Rs.2725.65 crores in 2000-2001 showing a decline of 11.84%.
Our trade with these countries 2002-2003 amounted to 2.71% of our global trade. While India's exports to these countries amounted to 4.95%, our imports from these countries amounted to 0.81% of our global imports.
During April-August., 2003, our total trade with the SAARC member countries amounted to Rs. 7627.87 crores against Rs. 5513.98 crores in the same period during the previous year, i.e. increase of 38.33%. While Indian exports to these countries touched Rs. 6716.45 crores in April-August 2003 as compared to Rs. 4624.7 crores in the same period last year, i.e. increase of 45.22%, our imports from these countries were to the tune of Rs. 911.42 crores as compared to Rs. 889.28 crores during April-Sept., 2001, showing an increase of 2.48%.
AFGHANISTAN
During 2002-2003, our exports to Afghanistan amounted to Rs. 294.09 crores as compared to Rs. 116.23 crores in 2001-2002. Imports from that country were of the order of Rs. 88.10 crores in 2002-2003 as compared to Rs. 83.57 crores in 2001-2002. During the period April-Dec., 2003, exports touched Rs. 428.43 crores as compared to Rs. 197.26 crores during the same period in the previous year registering an increase of 117.19%. Imports increased by 51.91% from Rs. 68.83 crores during April-Dec. 2002 to Rs. 104.56 crores during April-Dec., 2003.
Main items exported to Afghanistan include, rubber and articles thereof, cotton, sugar and confectionery, tobacco and manufactured tobacco substitutes, pharmaceutical products, man-made yarn fabrics and made-ups and manufactures of metals. Main imports from Afghanistan are edible fruits and nuts excluding cashew nuts, lac, gums, resins.
BANGLADESH
Bangladesh is our largest trading partner in the region. During 2002-2003, exports increased to Rs. 5297.19 crores as compared to Rs. 4779.58 crores during 2001-2002 registering an upward trend of about 11%. Imports from Bangladesh were of the order of Rs. 262.78 crores in 2002-2003 as compared to Rs. 281.94 crores in 2001-2002 recording a downward turn of about 7%.
During April-Dec., 2003-2004, our exports to Bangladesh amounted to Rs. 5338.95 crores as compared to Rs. 3688.03 crores in the same period in the previous year reflecting an increase of 44.76%. Imports from Bangladesh amounted to Rs. 241.84 crores during April-Dec., 2003-2004 as compared to Rs. 209.77 crores in the same period in the previous year, registering an increase of 15.29% primarily because of increased imports of inorganic chemicals, jute raw etc.
Major items of export to Bangladesh are rice, cotton yarn, fabrics, made ups, readymade garments (woven and knit), wheat, transport equipment, machinery and instruments, oil meals, primary and semi-finished iron and steel, coal, drugs, pharmaceuticals and fine chemicals, sugar, plastic and linoleum products, pulses, inorganic / organic/ agro chemicals and manmade yarn, fabrics and made-ups. Major imports from Bangladesh are readymade garments (woven and knitted), textile
Trade with bangladesh
articles and other textile yarn, fabrics, made-up articles, inorganic chemicals and fish. The bilateral trade is carried out within the framework provided by the India-Bangladesh Trade Agreement, with mutually Most Favoured Nation (MFN) Treatment accorded to each other. It provides for periodical review by the two Governments to monitor the implementation of the understandings agreed upon in the Agreement. The last Trade Review Talks at Commerce Secretary level were held in New Delhi on 24-25 March, 2003. The First Meeting of Joint Working Group was held between the two countries at Dhaka on October 20-22, 2003 and the Second Meeting of this Group was held in New Delhi on March 23-24, 2004. During these discussions, para-tariff, Non-tariff barriers, Revision of Bilateral Trade Agreement and India-Bangladesh Bilateral FTA : Status after SAFTA were discussed.
PAKISTAN
India's trade with Pakistan is constrained by the discriminatory policy adopted by Pakistan against imports from India. While we accord MFN treatment to imports from Pakistan, they allow their private sector to import only out of a list of 600 items from India modified by Govt. of Pakistan from time to time.
During 2002-2003, exports from India showed a strong growth of 45% at Rs. 996.01 crores as compared to Rs. 686.79 crores in the previous year. During 2002-2003, imports from Pakistan amounted to Rs. 215.44 crores against Rs. 308.83 crores in the previous year.
However, during April-Dec., 2003-2004, our exports were of the order of Rs. 604.86 crores as compared to Rs. 757.51 crores in the same period in the previous year. During April-Dec., 2003-2004, Pakistan's exports to India touched to Rs. 224.31 crores as against exports worth Rs.128.15 crores effected in the same period last year.
SRI LANKA
Sri Lanka has traditionally been an important export market for India, and is the second largest importer of Indian goods in the region after Bangladesh. The bilateral trade is carried out in accordance with the provisions of the Trade Agreement signed in 1961. The trade is in freely convertible currencies and on MFN basis. The trade has grown strongly in recent years, with India enjoying a favourable trade balance. Both countries are signatories to WTO, SAARC and the Bangkok Agreement. Within the framework of SAARC Preferential Trading Arrangement and the Bangkok Agreement, mutual preferential trade concessions are extended to each other.
India and Sri Lanka have signed a Free Trade Agreement on 28th December, 1998, under which tariff on a large number of items would be phased out within an agreed time frame except in the Negative List. The Agreement is in operation since 1st March 2000 and India's tariff liberalisation programme is complete (tariff reduced to zero) since 18th March, 2003, Sri Lanka's tariff liberalisation programme will be complete in the year 2008. The two sides will maintain Negative Lists of items on which no duty concessions are given where protection to local industry is considered necessary.
During 2002-2003, our exports to Sri Lanka amounted to Rs. 4456.64 crores against Rs. 3008.85 crores in the previous year showing an increase of 48%. Imports during 2002-2003 amounted to Rs. 441.46 crores compared to Rs.321.34 crores in 2001-2002. For the period April-Dec., 2003, the exports have increased to Rs. 4258.45 crores compared to Rs. 3178.01 crores during the same period in the previous year recording a growth of about 38.98%. Imports, however, touched Rs. 450.07 crores during April-Dec., 2003 against Rs. 323.83 crores in April-Dec., 2002.
Main items exported to Sri Lanka are vehicles, pharmaceutical products, salt, sulphur, earths and stone, cocoa and cocoa preparations, coffee, tea, mate and spices, cereals, fish, plastic and articles thereof, paper and paper board, articles of paper, man-made filaments, articles of apparel and clothing accessories, iron and steel and articles thereof.
BHUTAN
The bilateral Trade Agreement between India and Bhutan provides for free trade and commerce. Commercial transactions are carried out in Indian Rupees and Bhutanese Ngultrum. India provides unhindered transit facilities to landlocked Bhutan to facilitate its trade with third countries. Bilateral trade and economic relations continued to run smoothly during the year.
MALDIVES
India-Maldives trade is regulated in terms of the bilateral Trade Agreement signed in 1981. Exports from India to Maldives amounted to Rs.152.93 crores in 2002-2003 while imports were only Rs.1.61 crores. Exports touched Rs.153.28 crores during April-Dec., 2003 and imports amounted to Rs.1.36 crores during the same period.
NEPAL
Indo-Nepal relations on trade and other related matters are governed by the bilateral Treaties of Trade and Transit, and Agreement for Cooperation to Control Unauthorised Trade. The Treaty of Transit as modified on 5th January, 1999, is automatically extendable for a period of seven years at a time, unless either party gave to the other a written notice, six months in advance, of its intention to terminate the Treaty. The Treaty of Trade and the Agreement for Cooperation to control Unauthorised Trade which were valid upto December 5, 2001, had been extended for a period of three months upto March 5, 2002, on ad-hoc basis.
Though under the international conventions, Nepal being a landlocked country, India is obliged to provide only one transit route to facilitate Nepal's trade with third countries, 15 transit routes have been provided through the Indian territory and more such routes can be added to the list with mutual agreement. In addition, facilities have also been provided for Nepalese trade with Bangladesh by road and rail route and with Bhutan by road route. Movement of Nepalese goods from one part of Nepal to another part of Nepal through the Indian territory is also permitted. On the request of Government of Nepal, an additional transit route was opened during 1997 through Phulbari-Banglaband to facilitate movement of Nepalese goods to and through Bangladesh over a shorter distance.
Goods of Nepalese origin were allowed duty free entry in India as a special privilege given to that country. This led to large scale duty free import into India of items using substantial inputs of third country origin with minimal value addition in Nepal causing injury to Indian industry. Accordingly, as provided in the Treaty, the process of negotiations was initiated for making modifications in the Treaty and its Protocols to address the problems faced by the Indian industry. The India-Nepal Treaty of Trade was reviewed and modified on March 2, 2002 restoring the concept of value addition in imports from Nepal and making the value addition criteria more transparent. The Treaty of Trade is now valid for five years from March 6, 2002. The Agreement for Cooperation to Control Unauthorised Trade was also renewed for a period of five years with effect from 6th March, 2002. The India-Nepal Treaty of Transit would remain in force up to January 5, 2006 and shall be automatically extendable for further 7 years at a time unless either party gave a notice for its termination.
SOUTH ASIA & S.A.A.R.C.
The South Asia region comprises Afghanistan, Bangladesh, Bhutan, Maldives, Nepal, Pakistan and Sri Lanka. With the exception of Afghanistan, these countries including India have organised themselves as members of the South Asian Association for Regional Cooperation (SAARC).
In 2002-2003, India's total trade turnover with the SAARC member countries amounted to Rs.14932.81 crores against Rs.12388.09 crores achieved in the previous year, reflecting an increase of 20.54%. While India's exports to these countries stood at Rs.12530.14 crores in 2002-2003 against Rs.9662.44 crores in 2001-2002 registering an increase of 29.67%, imports from these countries amounted to Rs.2402.67 crores in 2002-2003 as compared to Rs.2725.65 crores in 2001-2002 showing a decline of 11.84%.
Our trade with these countries 2002-2003 amounted to 2.72% of our global trade. While India's exports to these countries amounted to 4.95%, our imports from these countries amounted to 0.81% of our global imports.
During April-December, 2003, our total trade with the SAARC member countries amounted to Rs. 14789.77crores against Rs. 10546.13 crores in the same period during the previous year, i.e. increase of 40.24%. While Indian exports to these countries touched Rs. 12810.43 crores in April-December 2003 as compared to Rs. 8877.99 crores in the same period last year, i.e. increase of 44.29%, our imports from these countries were to the tune of Rs. 1979.34 crores in April-December 2003 as compared to Rs. 1668.14 crores during the same period in 2002, showing an increase of 18.66%.
S.A.A.R.C.
In recognition of the fact that our geographical proximity, cultural and religious affinity and economic synergies can be used to our mutual benefit, the seven countries of South Asia, viz, India, Nepal, Pakistan, Bangladesh, Sri Lanka, Bhutan and Maldives have organised themselves into an association called the South Asian Association for Regional Cooperation (SAARC).
The Committee on Economic Cooperation (CEC), led by Commerce Secretaries of the respective member States, is the forum under SAARC to deliberate upon the measures to be taken to promote intra-regional trade and economic cooperation. The meetings of CEC are generally held in the country holding Chairmanship of SAARC. From May 1995 to May 1997, the chairmanship of SAARC was with Government of India. The 6th, 7th and 8th meetings of the Committee were held in New Delhi in November 16-17, 1995, October 28-29, 1996 and April 21-22, 1997. In May 1997, the Chairmanship of SAARC was assumed by Maldives and the 9th meeting of the CEC was held in Male in November 16-17, 1997. The 10th Meeting of CEC was held in Dhaka, Bangladesh on 31st January and 1st February, 1999. The eleventh meeting of Committee on Economic Cooperation was held on October 26-27, 2002 at Kathmandu.