March 16, 2002

'16'

    The new 5-year Export & Import (Exim) Policy for the period 2002-2007 will be announced by Shri Murasoli Maran, Union Minister of Commerce and Industry, on 31^st March, 2002. Interacting with the Board of Trade here today in wide ranging pre-Exim Policy consultations which lasted for over 3 hours, the Minister said that the aim would be to achieve at least 1% share of the global trade (as against 0.67% at present) and for achieving this, a compound annual growth rate of 11.9% would be required over the next 5 years to increase India’s exports to a level of US $ 80 billion by the end of the Plan period. "This is achievable with the cooperation of the trade and industry", Shri Maran said while agreeing with the members on the need to reduce transaction costs and for ensuring a hassle-free policy environment for external trade. He reiterated the importance of international trade as an effective instrument of economic growth, employment generation and poverty alleviation and said that it should be treated as an integral part of the country’s economic endeavours and not just a residual activity. He noted that there had been a shift away from export pessimism in recent times with export consciousness being created for the first time. "The time has come to move from policy to implementation", he said adding that the States would have to play a crucial role in this process. Shri Maran expressed the hope that the 18% export growth seen in January 2002 would be sustained in February and March to enable the country to achieve the revised target of 3% during the financial year 2001-2002. Earlier, Shri Dipak Chatterjee, Commerce Secretary, also indicated that the export figure in January was not a mere flash in the pan. The 18% growth rate, he said, would have to be sustained not only for the rest of this financial year which would allow us to reach the scaled down target of 3% but also to achieve the annual growth rate of 11% projected in the medium term strategy. Dr. Raman Singh, Minister of State for Commerce & Industry, Shri S. B. Mahapatra, Secretary (Textiles); Shri N.L. Lakhanpal, Secretary & Director General of Foreign Trade; Shri Shashank, Secretary (ER), Ministry of External Affairs; and Shri J. Vasudevan, Chairman & Managing Director, India Trade Promotion Organisation (ITPO) also participated in the discussions with the leading members of trade and industry represented on the Board.

    Members of the Board made a series of useful suggestions, which the Minister welcomed as valuable inputs and the "last word" in the formulation of the new 5-year Exim Policy. Shri Ramu S Deora, Shri Satish Dhandha and Shri Rafeeque Ahmed underlined the importance of marketing and urged that the forthcoming Policy should incorporate marketing strategies for identified markets and products over the next 5 years. Members suggested massive publicity campaigns in overseas markets which could be supported by the government utilising the Market Access Initiative Scheme and the India Brand Equity Fund, which could be clubbed together for optimum results. Shri S. K. Saraf, Vice President, Federation of Indian Export Organisations (FIEO) urged the setting up of a Trade Centre in Mumbai while Shri Praveen Shankar Pandya of the gem & jewellery sector stressed the need to make India a global exhibition centre which would give a boost to sourcing from India by the major foreign buyers. Shri Saraf along with others also urged the government to continue the DEPB scheme as it alleviated the high incidence of transactions costs to some extent. Shri Rahmatullah Ansari and Shri Navratan Samdaria urged the government to accord high priority to the cottage sector of handlooms and handicrafts and for automatic grant of EOUs/EPZs status for this important employment-oriented industry. Shri Nalin Kohli said that there was a positive trend in both software and hardware exports this year and suggested that the Policy should look at new areas of opportunity opening up in this sector such as export of services through the Internet. He also felt that the Policy should provide incentives for attracting relocation of companies from abroad into India. The importance of promoting cluster approach for raising export competitiveness of Indian industry including in agriculture and the agro-processing sectors was emphasised by Dr. Manmohan Attawar and other members.

    Shri Tarun Das, Secretary General, Confederation of Indian Industry (CII), said that the Policy should have a clear strategy in the emerging global context and it should be an ongoing process with continuous review and monitoring of the strategy through sub-groups wherever required. Other suggestions made by Shri Das included integration of tariff policy and exchange rate policy with Commerce Ministry intervention in order to improve competitiveness of the Indian industry; reduction in transaction costs through procedural simplifications; tapping of emerging opportunities provided by relocation of companies from abroad; and promotion of freer trade within the South Asian region. He emphasised the importance of the Policy as an instrument for raising confidence levels of the exporting community in particular and the economy in general at this juncture as also for policies which would be supportive of the industry. Shri R.S. Lodha, President, Federation of Indian Chamber of Commerce and Industry (FICCI), welcomed the medium term strategy for identifying 15 macro-policy issues and urged effective implementation of policies through the setting up of an inter-ministerial committee. He also said that continuous monitoring of SEZs was needed with a view to removing various obstacles and speeding up implementation and suggested focussing on specific areas which could be developed as centres of excellence. He also sought continuance of the DEPB scheme and suggested that in the WTO India should focus on four major areas viz., agriculture, textiles, services and TRIPs. Shri K.K. Modi suggtested that manufactured products, processed products and value-added services should be looked at separately to fully exploit the country’s comparative advantages. Shri Shashi Ruia said that the Export Promotion Board should be activated to function on the lines of the Foreign Investment Promotion Board (FIPB) as an effective decision making body under the Chairmanship of the Commerce & Industry Minister to resolve the problems of the exporters. Shri V. C. Burman of Dabur India also participated.

    Shri T.N. Tinan spoke of the importance of macro-economic policies in raising the country’s share of world trade and suggested review of how policy initiatives had worked so far. Much more is clearly possible if the environment is conducive, he said. Dr. Sanjaya Baru urged greater synergy between the industry and the Ministries of Commerce and External Affairs particularly in view of the important role that could be played by India’s Missions abroad. He agreed with other that macro economic issues were important today and called for and for bringing the focus back on economics, away from other issues. Shri K. Venugopal noted that the target of raising export to US $ 80 billion was achievable provided the obstacles were cleared in terms of procedural and policy decisions. While emphasis has to be on raising competitiveness, external trade performance would also depend on the efficiency of the economy as a whole, he said.