2. The strategies that have been advocated for the medium term have been drawn on the experience of the earlier strategies as well. New strategies have been evolved based both on these and other experiences, on assessment of the changing global trade scenario and on our real & revealed comparative advantages. They are briefly indicated below:

• In contrast to the earlier approach of mainly focussing on existing products and existing markets of India’s export sector based on the revealed comparative advantage principle, the new approach is also based on the real comparative advantage taking into account the potentialities. Therefore, the strategy makes an opportunity assessment after examining the import basket of major importing economies of the world and identifying potential items of exports in which India is competitive vis-à-vis some of the major exporting countries of these products at present. The existing products and markets have also been analysed. A total of 220 commodities at the 4-digit level have been identified including potential items based on the import basket of major trading partners as well as India’s export basket to these major trading partners.
• Focus markets have similarly been identified based on a set of criteria. USA, EU and Japan as expected are the main markets based on most of the criteria.
• In addition, some of the key strategic policy issues that have a bearing on India’s competitive advantage in opportunity areas have been identified and brought out in a focussed manner so that policy measures are taken to enhance the competitive edge of our exporting community. Sector-wise strategies have also been identified for the identified key sectors in consultation with Export Promotion Councils/Commodity Boards and other export related bodies. These strategies can help in removing the bottlenecks and help in realising the real comparative advantages to the fullest extent.
• The Medium Term Export strategy also takes into account the international developments and the complexities arising in the New World Trade Order under the WTO.
• Estimates of export growth for 2006-07 both sector-wise and region-wise have been made in order to achieve the target of 1% share in world trade.
• As all strategies are ultimately to be transferred into quantifiable results, task setting at the commodity level and at the market level along with the setting up of an institutional mechanism has been done in this document.

3. Some of the highlights of fifteen key macro policy issues for the commodities sector discussed in the document are as follows:

• Policy for price competitiveness by maintaining appropriate Real Effective Exchange Rate of the rupee at appropriate level, adopting a common nomenclature at 8-digit level for tariffs and balancing overall tariffs by protecting sensitive items likely to be affected by removal of QRs.
• An effective and responsive trade defense mechanism to provide protection against unfair trade practices.
• WTO compatible policies by providing non-actionable subsidies and supporting agriculture sector.
• Continually evaluating FDI policy framework and procedural packages to promote exports as is being done now.
• Effective tax rebate schemes to help exporters, which include transparent and comprehensive schemes of reimbursement, comprehensive VAT system at every level, rebating services tax besides lower customs and excise duties for major inputs needed for exports which can minimise the need for duty drawback.
• Reducing transaction costs by EDI system and digital signatures, procedural simplifications, increasing accountability of export processing personnel, etc.
• Developing export infrastructure by identifying and prioritising specific infrastructure projects within SEZs crucial for export enhancement and including export infrastructure as part of the Exim Policy.
• Forging Strategic Free Trade Agreements after analysing the complementarity between partner countries.
• More flexibility in Labour policy by re-examining the role of the Government in the labour markets.
• Export credit strategy in a WTO compatible way and enhancing bank credit for export sector in general and Agro-exports in particular.
• Enhancing export responsibility of State Governments to play a pro-active role in facilitating better environment for export production by widening and deepening the scheme already taken up for export assistance to States.
• Developing SSI export industry by a well-formulated package offering support to SSIs and vigorously pursuing the package that has been prepared for strengthening the SSI sector.
• Continuation of the policy related to Special Economic Zones and adding new features like port-based SEZs, single window clearances, providing off-shore banking facilities, etc.
• Significant expansion of Market Assistance Programmes currently in vogue and effective internal dissemination of information
• Based on the experience of Focus LAC, giving a regional focus to other areas like Africa.

4. In addition to the strategic policy issues in the merchandise sector, the need to capitalize the opportunities in the services sector has been emphasised. The need to carry forward our emphasis on movement of natural persons in WTO negotiations while utilising the opportunities already existing in other modes like consumption abroad mode has also been emphasized. The recommendations of the Committee set up by the Dept. of Commerce on data related issues for services need to be implemented and a separate detailed strategy for Export of services to be formulated taking note of the WTO negotiations.
5. Some of the Sector-wise strategies based on internal research in the Department of Commerce and consultations with EPCs/CBs and other export bodies are the following.

6. Export Projections

Based on historical trends, estimates of growth rate have been made to achieve 1% share in world trade in 2006-07. A compound growth rate of 11.9% for the next five years is needed to achieve around 80.48 billion dollars which forms 1% share in world trade.

7. Institutional Mechanism

• An institutional mechanism is being set up to monitor the implementation of the strategy. An Action Committee under the Commerce Secretary with the Economic Adviser as the nodal officer and including a core group of senior officers, representatives of major export promotion bodies and representatives from academia shall ensure that resources are committed to achieve goals and provide the dynamic track against which progress can be measured.
• A Market Intelligence Unit is proposed to be set up which will help this Action Committee.
• All commodity divisions and territorial divisions of the Dept. of Commerce along with the EPCs/CBs and Indian Missions abroad will take steps to concretise the policies suggested in this strategy document.