INTERNATIONAL SECTION
Turnaround in exports by September October says Anand Sharma
Reviews export performance with industry chambers and
EPCs
The union Minister of Commerce, Industry & Textiles Shri
Anand Sharma today reviewed the export performance with
the Export Promotion Councils and leading Chambers of
Commerce and Industry in the backdrop of a visible
slowdown in exports. The Minister noted that the
performance in July 2012 has been worrisome as exports
have dipped by 14.8% as compared to last year. The first
four months of the current financial year have seen
exports reaching US$ 97.6 billion as compared to US$
102.8 billion during the same period last year. A
sectoral assessment was made on the sectors which are
facing critical slow down and clearly the labour
intensive sectors like handicrafts, textiles and gems &
jewellery have been adversely affected by this slow
down.
This interaction brought out the fact that the prolonged
crisis in the Euro Zone has cast a long shadow on the
exports and the measures have been taken in June are
likely to have an impact beginning September. “I have
said earlier that the various incentives that we have
announced and the sector-specific thrust, the support
that has been given to the SMEs and some major sectors,
which are labour-intensive, handloom, handicraft,
readymade garments, through interest subvention and
other support measures. We hope that there will be a
turnaround by the month of October, September-October,
by the time we enter October, we hope that we will be
able to bring about a positive improvement and enter a
strong positive territory,” the Minister added.
The Minister explained that efforts are on to bring “down the
transaction cost. All the major ports and airports will
be functioning 24X7 when it comes to exports. We have
discussed this with the Central Board of Excise and
Customs.” The issue of procedural simplifications was
also discussed.
Commerce Secretary, DGFT and the senior officers of
Commerce Department have been directed to hold regional
consultations with the State Governments and the
exporting community and the process of consultations be
initiated. Commerce Secretary has already held
consultations in Kolkata, Mumbai, Hyderabad and Chennai
and similar consultations have already been held in
Ahmadabad and Cochin. “There will be monthly trade
facilitation meetings between the Commerce Secretary,
DGFT, our regional DGFT offices and the export councils.
We will be monitoring this very closely,” added the
Minister.
****
INDIA REDUCES SAFTA SENSITIVE LIST FOR NLDCs BY 264
TARIFF LINES
The Cabinet approved Reduction of 30% (264 tariff
lines,) from the SAFTA Sensitive list for Non Least
Developed Countries (NLDCs) allowing the peak tariff
rates to reduce to 5% within three years, as per agreed
SAFTA process of tariff liberalization. This shall
reduce India’s Sensitive list for Pakistan from 878 to
614 tariff lines. With this decision India has
effectively performed its lead role in harmonizing the
SAFTA framework and ensuring move towards a vibrant
economic community and move towards normalization of
trade relations with Pakistan.
India has, in the last one year, steered the trade
liberalization process under SAFTA so as to accelerate
the pace of the process for SAFTA Economic Integration.
A major step taken in this direction was to unilaterally
reduce its sensitive list for the Least Developed
Countries (LDCs) under SAFTA, in November 2011, to 25
tariff lines thus allowing all other imports at zero
basic customs duty. Afghanistan, Bangladesh, Bhutan,
Maldives and Nepal benefited as a result of this trade
liberalization move.
The bilateral trade dialogue with Pakistan resumed in
April 2011. Sustained discussions at various levels
resulted in the drawing of a roadmap for an
uninterruptible and irreversible trade liberalization
process
Commerce Ministers of India and Pakistan, during the
bilateral meeting held at Islamabad on 14th February
2012, agreed that India will consider reduction of up to
30% of its SAFTA Sensitive List, within four months of
the notification of a small negative list by Pakistan.
Consequently, Pakistan Government moved from its
‘positive list’ regime to a ‘negative list’ regime
notifying it in March 2012.
India has also taken significant steps to take forward
the trade liberalization process. It has removed the
restrictions on investments from Pakistan, agreed upon a
liberalized visa regime, opened a state of the art
Integrated Check Post (ICP) to encourage two way trade.
INTERNATIOANL TRADE
{Trade Agreements}
India's Current
Engagements in RTAs
I.
Association of South East Asian
Nations (ASEAN) and India Free Trade
Agreement (FTA) negotiations:
India’s
engagement with the Association of South East Asian
Nations (ASEAN) started with its "Look East Policy" in
the year 1991. ASEAN has a membership of 10 countries
namely Brunei Darussalam, Cambodia, Indonesia, Lao PDR,
Malaysia, Myanmar, Philippines, Singapore, Thailand and
Vietnam. India became a Sectoral Dialogue Partner of
ASEAN in 1992 and Full Dialogue Partner in 1996. In
November 2001, the ASEAN-India relationship was upgraded
to the summit level.
2.
The 1st ASEAN Economic Ministers (AEM) – India
consultations were held on 15th September 2002 in Brunei
Darussalam where the Ministers, after discussing the
Joint Study Report decided to establish an ASEAN-India
Economic Linkages Task Force (AIELTF). The AIELTF was
asked to prepare a draft Framework Agreement to enhance
the ASEAN-India trade and economic cooperation before
the 2nd AEM – India consultations. Subsequently, at the
First ASEAN-India Summit held on 5 November 2002 in
Phnom Penh, Cambodia, the Prime Minister of India made
the following major announcements:-
(i)
India will extend special & differential trade
treatment to ASEAN countries, based on their level of
development to improve their market access to India;
(ii)
FTA within 10 years timeframe;
3. A
Framework Agreement on Comprehensive Economic
Cooperation between the ASEAN and India was signed by
the Prime Minster of India and the Heads of
Nation/Governments of ASEAN members during the Second
ASEAN – India Summit on 8th October 2003 in Bali,
Indonesia.
4. The
key elements of the Framework Agreement on Comprehensive
Economic Cooperation between the ASEAN and India cover
FTA in Goods, Services, Investment and other areas of
Economic Cooperation. The Agreement also provided for an
Early Harvest Programme (EHP) covering areas of Economic
Cooperation and a common list of items for exchange of
tariff concessions as a confidence building measure.
However, due to difference of opinion on Rules of
Origin, the EHP could not be implemented.
5.
After 23 meetings of the ASEAN-India Trade
Negotiating Committee (TNC) , India and the ASEAN have
signed the following Agreements on 13th August 2009:-
(i) Trade
in Goods Agreement along with its Annexes;
(ii)
Agreement on Dispute Settlement Mechanism;
(iii) Protocol to Amend the Framework Agreement;
(iv)
Understanding on Article 4 of the Agreement on Trade in
Goods Agreement;
6. These
Agreements are available on this web-page under the
heading ‘Agreements already concluded’.
7 All the
ASEAN countries have implemented the above Agreement.
8.
Negotiations in Trade in Services and Investment are
underway and are targeted to be concluded by the end of
2011.
II.
India- Sri Lanka Comprehensive Economic Partnership
Agreement (CEPA) negotiations
India-Sri
Lanka Free Trade Agreement (ISLFTA), which was signed in
1998, has become operational in 2000.
2. Sri
Lanka is India’s largest trading partner country in the
SAARC region. The bilateral trade between India and
Sri Lanka has grown four times in the last nine years
increasing from US $ 658 million in 2000 to US $ 2719
million in 2009.
3. The
main Indian exports to Sri Lanka are Petroleum (Crude &
Products), Transport Equipments, Cotton, Yarn Fabrics,
Sugar, Drugs Pharmaceuticals & Fine Chemicals. The main
Sri Lankan exports to India are, spices, electrical
Machinery except electronic, Transport Equipments, Pulp
& Waste, Natural Rubber and Paper Board.
III.
Joint Study Group (JSG) and
Comprehensive Economic Partnership Agreement
(CEPA)
A JSG was
set up in April, 2003 with a view to widen the ambit of
ISLFTA and include Services and Investment. Report of
JSG was submitted in October, 2003. Based on the
recommendation of the JSG, CEPA negotiations were
started in February, 2005 and concluded in July 2008
after 13 rounds of negotiations. But due to reservations
expressed by Government of Sri Lanka, both sides have
still not signed the Agreement.
2.
Negotiations on Investment and Services have been
resumed in December, 2010.
IV.
India-Thailand Comprehensive Economic Cooperation
Agreement (CECA) negotiations
In November
2001, the Prime Minister of Thailand, Dr. Thaksin
Shinawatra and the Prime Minister of India had agreed to
set up a Joint Working Group (JWG) to undertake
feasibility study of a Free Trade Agreement (FTA)
between India and Thailand. The JWG had observed that
the policy regimes in both the countries were conducive
to more intensive bilateral economic integration and a
FTA could prove to be a building block for other
sub-regional, regional and global economic integration
processes of which both countries are a part. Having
observed rich potential of trade expansion, the JWG has
concluded that the proposed FTA between India and
Thailand is feasible, desirable and mutually beneficial.
Accordingly, a Joint Negotiating Group (JNG) was set up
to draft the Framework Agreement on India – Thailand
FTA.
During the
visit of Indian Prime Minister to Thailand, a Framework
Agreement for establishing Free Trade between India and
Thailand was signed by the Commerce Ministers of the two
sides on 9th October, 2003 in Bangkok, Thailand. The
Framework Agreement covers FTA in Goods, Services and
Investment and other areas of Economic Cooperation. The
Framework Agreement also provided for an Early Harvest
Scheme (EHS) for elimination of tariff on a fast track
basis on 82 items of export interest to the sides.
The tariff
concessions on 82 items of EHS list began from 1.9.2004
and have become zero for both sides from 1.9.2006
The
India-Thailand Trade Negotiating Committee (TNC) has
been constituted to negotiate a comprehensive FTA
covering Trade in Goods, Trade in Services, Investment,
Rules of Origin, Dispute Settlement Mechanism etc. So
far, 21 meetings of the TNC have been held".
V.
Bay of Bengal Initiative for Multi-Sectoral Technical
and Economic Cooperation (BIMSTEC) Free Trade Agreement
(FTA) negotiations
The
initiative to establish Bangladesh-India-Sri
Lanka-Thailand Economic Cooperation (BIST-EC) was taken
by Thailand in 1994 to explore economic cooperation on a
sub regional basis involving contiguous countries of
South East & South Asia grouped around the Bay of
Bengal. Myanmar was admitted in December, 1997 and the
initiative was renamed as BIMST-EC. The initiative
involves 3 members of SAARC (India, Bangladesh & Sri
Lanka) and 2 members of ASEAN (Thailand, Myanmar).
BIMST-EC is visualized as a ‘bridging link’ between two
major regional groupings i.e. ASEAN and SAARC. BIMST-EC
is an important element in India’s “Look East” strategy
and adds a new dimension to India’s economic cooperation
with South East Asian countries.
The 2nd
BIMSTEC Summit was hosted by India in New Delhi on 13
November 2008. It was preceded by the 11th Ministerial
Meeting and the 13th Senior Official’s Meeting on 11-12
November 2008. The 2nd Summit took place four years
after the 1st BIMSTEC Summit which was held in
Thailand.
The Summit
was attended by the Chief Adviser of the People's
Republic of Bangladesh, H.E. Fakhruddin Ahmed, the Prime
Minister of the Kingdom of Bhutan, H.E. Jigmi Y Thinley,
the Prime Minister of the Republic of India, H.E. Dr.
Manmohan Singh, the Prime Minister of the Union of
Myanmar, H.E. Thein Sein, the Prime Minister of the
Republic of Nepal, H.E. Pushpa Kamal Dahal 'Prachanda',
the President of the Democratic Socialist Republic of
Sri Lanka, H.E. Mahinda Rajapaksa and the Prime Minister
of the Kingdom of Thailand, H.E. Somchai Wongsawat.
At the
conclusion of the 2nd Summit, the leaders expressed
satisfaction at the progress that has been made in the
negotiations for a FTA in trade in goods and called for
its early conclusion. The leaders welcomed the
establishment of the Centre for Energy and the Centre
for Weather and Climate in India and the BIMSTEC
Cultural Observatory in Bhutan. They also expressed
concern at the threat posed by terrorism to the region
and expressed satisfaction at the finalization of the
BIMSTEC Convention on Combating International Terrorism,
Transnational Organized Crime and Illicit Drug
Trafficking.
The BIMSTEC
Trade Negotiating Committee (TNC) has held 19 sessions
of negotiations. The negotiations are spread over the
areas of (i) tariff concessions on trade in goods, (ii)
customs cooperation, (iii) services and (iv)
investments.
At the 19th
meeting of the TNC parties agreed to conclude the
Agreement on Trade in Goods within 2011 and implement
the tariff concessions from July 1, 2012. All parties
are to finalize their schedules of concession and
exchange it with other parties. Negotiations will
continue on the Agreements on Services and Investment.
VI.
India-Gulf
Cooperation Council (GCC) Free Trade Agreement (FTA)
negotiations:
A Framework
Agreement on Economic Cooperation between Republic of
India and Gulf Cooperation Council was signed on 25th
August, 2004. The Framework Agreement provided that
both the parties shall consider ways and means for
extending and liberalizing the trade relations and also
for initiating discussions on the feasibility of a FTA
between them.
Two rounds
of negotiations have been held so far. The 1st round of
negotiations was held in Riyadh on 21st – 22nd March,
2006. During this round, GCC side has agreed to include
Services, Investment and general economic cooperation
along with goods in the GCC-India FTA. Further, the
Agreement on the modalities for negotiations was
finalized. The 2nd round of negotiations was also held
in Riyadh on 9-10 September, 2008. Proposed
Tariff
Liberalization Scheduled was discussed during this
round. It was further decided that the 3rd round of
negotiations would be held in Delhi.
VII
India-Mauritius Comprehensive Economic Cooperation and
Partnership Agreement (CECPA) negotiations:
A Joint
Study Group (JSG) was constituted in November 2003 to
study modalities of the CECPA. The JSG discussed in
detail the complementariness and potential synergies
between the two economies and, in its report of
November, 2004, identified Investment, Trade in Goods
and Services and General Economic Cooperation for
developing modalities of CECPA.
During his
visit to Mauritius from March 30 - April 2, 2005, the
Hon’ble Prime Minister of India conveyed India’s
acceptance of the JSG report on CECPA and both sides
agreed to set up a High Powered Negotiating Team for
processing and finalizing the recommendations of the JSG
report within a 12 month period. Accordingly, an
Empowered Team was constituted for negotiating a CECPA
with Mauritius. 10 rounds of negotiations have been
held so far by the empowered team.
Chapter on
Trade in Goods (Preferential Trade Agreement) has been
finalised. This Chapter includes Tariffs, Texts of
Preferential Trade Agreement (PTA) and its Annexure,
viz. Rules of Origin, Operational Certification
Procedures and Trade Defence Measures.
Negotiations
were held on Trade in Services with a view to creating a
more liberal, facilitative, transparent and competitive
services regime in the two countries and to strengthen
cooperation in services sector. Negotiations were also
held on Trade in Investments for improving the legal
framework existing in both countries, including the
bilateral Double Taxation Avoidance Convention (DTAC)
and Bilateral Investment Promotion & Protection
Agreement (BIPA).
However, the
Chapters on Trade in Services and Trade in Investment
could not be finalized as the two sides did not agree on
the definition of 'Enterprise' and treatment to 'Shell
Companies'. Consequently, negotiations are at a
standstill since the 10th round of negotiations which
was held on 23-24 October, 2006. India’s proposal for
modifications to India-Mauritius DTAC has not so far
been accepted by Mauritius. Hence, India has put on hold
the CECPA negotiations until India’s proposal for
modifications to the India-Mauritius DTAC are accepted
by Mauritius.
6. Following Memorandum of Understanding related to
the CECPA were
signed by India and Mauritius in October, 2005
under the aegis of
CECPA :
Ø
MOU in the field of Consumer Protection and Legal
Metrology;
Ø
MOU between Bureau of Indian Standards (BIS) and
Mauritius Standards Bureau(MSB);
Ø
MOU between Indian Institute of Public Administration
(IIPA) and Government of Mauritius;
Ø
MOU on Preferential Trade Agreement (PTA)
VIII.
India-SACU Preferential Trade Agreement (PTA)
negotiations:
South
African Customs Union
(SACU) comprises of South Africa, Lesotho, Swaziland,
Botswana and Namibia. So far, 5 rounds of negotiations
of India-SACU PTA have been held. The 1st round of
technical discussions for India-SACU PTA took place in
Pretoria on 5th–6th October, 2007. The 2nd round of PTA
negotiations was held at Walvis Bay, Namibia on 21-22
February, 2008 while 3rd round was held at New Delhi on
25th–27th November, 2008 During the 3rd round of
negotiations, a Memorandum of Understanding (MOU), was
signed on 26th November, 2008 by the representatives of
India and SACU to facilitate negotiations. 4th round of
negotiations was held at Pretoria on 7th – 8th October,
2009.
The 5th
round of negotiations was held during 7th – 8th October,
2010. During this round of negotiations, SACU has
presented a revised text of the PTA as a working
document. Further, both sides have agreed on the
following:-
The text on
‘Dispute Settlement Procedures’
To use the
text proposed by India on ‘Customs Cooperation and Trade
Facilitation’ and TBT as the working text
To use the
text on ‘SPS’ proposed by SACU as the working text.
XI.
Second Review of India-Singapore Comprehensive Economic
Cooperation Agreement (CECA):
The
Comprehensive Economic Cooperation Agreement (CECA)
between India and Singapore was signed on 29th June,
2005 by the Prime Minister Mr. Manmohan Singh and H.E.
Mr. Lee Hsien Loong, Prime Minister of Singapore. The
CECA has become operational with effect from
1-8-2005. The details of the India-Singapore CECA are
available on this web-page under the heading ‘Agreements
already concluded’.
India-Singapore CECA is reviewed from time to time.
1st Review was concluded on 1st October 2007.
The 2nd
Review of India-Singapore CECA was launched by the
Commerce & Industry Minister, India on 11th May, 2010.
The 1st Secretary level meeting of the 2nd Review was
held in Singapore on 3rd August, 2010. Thereafter,
Working Group meetings on Goods and Services &
Investment were held time to time, with the last meeting
held in Singapore in September 2011".
X.
Expansion of India-Chile Preferential Trade Agreement
(PTA):
A Framework
Agreement to promote economic cooperation between India
and Chile was signed on January 20, 2005 which envisaged
for a Preferential Trade Agreement (PTA) between the two
countries as a first step.
The
India-Chile
PTA
was signed
on 8th March, 2006 and has become operational on
September, 2007. The details of India-Chile PTA are
available on this web-page under the heading ‘Agreements
already concluded’.
Expansion
of the PTA - During the 1st meeting of the Joint
Administrative Committee (JAC), which was held in New
Delhi in February, 2009 to review the implementation of
India-Chile PTA, both sides agreed to initiate the
process of deepening and widening of the agreed lists of
the existing India- Chile PTA. The 1st Meeting on
negotiation on expansion of India-Chile PTA was held in
Santiago on 28-29 January, 2010 in which both sides
exchanged their wish list to each other.
In the 2nd
meeting on expansion of India-Chile PTA, which was
held in August, 2010, both sides discussed the further
modalities of the expansion of the PTA including
exchange of initial offer lists .
The 3rd
meeting on expansion of India-Chile PTA was held in 30
June- 1 July, 2011 in Chile. During the meeting, both
sides agreed on broad principle for expansion of the
PTA. They also agreed to exchange new wish lists in
order of priority and to hold the next meeting by
November, 2011.
XI.
MERCOSUR Preferential Trade Agreement (PTA) Negotiations:
MERCOSUR is
a trading bloc in South America region comprising of
Argentina, Brazil, Paraguay and Uruguay. It was formed
in 1991 with the objective of free movement of goods,
services, capital and people and became a customs union
in January 1995. MERCOSUR’s role model is European
Union. It is the third largest integrated market after
the European Union (EU), North American Free Trade
Agreement (NAFTA).
A
Framework Agreement was signed between India and
MERCOSUR on 17th June 2003
at Asuncion, Paraguay to create conditions and
mechanisms for negotiations by granting reciprocal
tariff preferences in the first stage and, in the second
stage, to negotiate a free trade area between the two
parties
As a follow
up to the said Framework Agreement, a PTA between India
and MERCOSUR was signed in New Delhi on January 25, 2004
and five annexes to this Agreement were signed and
incorporated on March 19, 2005. The first two Annexes of
the PTA relate to the list of products on which the two
sides have agreed to give fixed tariff preferences to
each other. The remaining three Annexes relate to the
Rules of Origin,
Preferential Safeguard Measures
and Dispute Settlement Procedures respectively. By this
PTA, India and MERCOSUR have agreed to give tariff
concessions, ranging from 10% to 100% to the other side
on 450 and 452 tariff lines respectively. The
India-MERCOSUR PTA has become operational with effect
from 1st June, 2009.
The details
of the India-MERCOSUR PTA are available on MOC web-page
under the heading ‘Agreements already concluded’.
Expansion of
India-MERCOSUR PTA - Through IBSA Declaration made by
the Heads of India, Brazil and South Africa in 2006, it
was agreed that India-MERCOSUR PTA would be expanded by
increasing the number of products covered and increasing
the tariff concessions agreed by each side.
The first
meeting of Joint Administrative Committee (JAC) on
India-MERCOSUR PTA was held in November, 2009 in Uruguay
to discuss the various aspects of the implementation and
expansion of the Agreement. The 2nd meeting of JAC on
India-MERCOSUR PTA was held in June, 2010, in which both
sides exchanged their respective wish list of additional
items for expansion of the PTA and discussed the further
modalities of expansion of the PTA including exchange of
their initial offers lists in the matter.
XII.
India-Pakistan Trading Arrangement:
India and
Pakistan have no formal trade agreement. India has
granted Most Favoured Nation (MFN) Status to Pakistan,
whereas Pakistan maintains a List of Importable Items
from India called ‘Positive List’ which now consists of
1938 items. To see this list, please visit Government
of Pakistan website
http://www.commerce.gov.pk.
Both
countries have constituted a Joint Study Group (JSG) at
the level of Commerce Secretary. Apart from the JSG,
the issues pertaining to commercial and economic
cooperation are discussed at Commerce Secretary level
within the framework of the Composite Dialogue. The
fourth round of dialogue was held in New Delhi on 31
July – 1 August 2007.
Bi-lateral
trade and commerce talks were held between Commerce
Secretaries of India and Pakistan on 27-28 April 2011,
in Islamabad. The two sides, inter-alia, agreed to
improve trade infrastructure and expand trade through
Attari-Wagah land route. It was agreed to set up a
Working Group to address and resolve clearly identified
sector-specific barriers to trade. Both sides agreed to
undertake new initiatives to enable trade in electricity
and Bt. Cotton seeds as also expand trade in petroleum
products. It was agreed that cooperation in Information
Technology sector would be encouraged through the
private sector. Both sides agreed to facilitate grant of
Business Visas to encourage expansion of trade. Pakistan
recognized that grant of MFN status to India would help
in expanding bilateral trade relations. It agreed to
replace its present ‘Positive List’ with ‘Negative
List’, by October 2011.
Joint Working Groups have been set up for Customs
cooperation, trade in electricity and trade in all types
of Petroleum Products. A Joint Working Group on
‘Economic and Commercial Cooperation & Trade Promotion’
to be co-chaired by the Joint Secretaries of the
respective Departments of Commerce has been set up for
reviewing the implementation of the decisions taken
during the meeting of the two Commerce Secretaries and
also other trade promotion issues.
Pakistan recognized that grant of MFN status to India
would help in expanding bilateral trade relations. It
has agreed to replace its present ‘Positive List’ with
‘Negative List’, by October 2011.
XIII.
India-EU Broad Based Trade and Investment Agreement
negotiations:
On 28th June
2007, India and the EU began negotiations on a
broad-based Bilateral Trade and Investment Agreement
(BTIA) in Brussels, Belgium.
These
negotiations are pursuant to the commitment made by
political leaders at the India-EU Summit held in
Helsinki on 13 October 2006 to move towards negotiations
for a broad-based trade and investment agreement. India
and the EU expect to promote bilateral trade by removing
barriers to trade in goods and services and investment
across all sectors of the economy. Both parties believe
that a comprehensive and ambitious agreement that is
consistent with WTO rules and principles would open new
markets and would expand opportunities for Indian and EU
businesses.
The
negotiations cover Trade in Goods, Trade in Services,
Investment, Sanitary and Phytosanitary Measures,
Technical Barriers to Trade, Rules of Origin, Trade
Facilitation and Customs Cooperation, Competition, Trade
Defence mechanism, Government Procurement, Dispute
Settlement, IPR & GIs. So far, 13 rounds of
negotiations have been held alternately at Brussels and
New Delhi. The 13th round was held in Delhi during 31st
March to 6th April, 2011.
XIV.
India-European Free Trade Association
(EFTA) Negotiations on broad-based Bilateral Trade and
Investment Agreement:
The European
Free Trade Association (EFTA) comprises Switzerland,
Iceland, Norway & Liechtenstein. These countries are not
part of the European Union (EU). Recognizing the need
for enhancing bilateral trade, a Joint Study Group
between India and EFTA was established and mandated to
take a comprehensive view of bilateral economic linkages
between India and EFTA, covering among other, trade in
goods and services, investment flows, and other areas of
economic cooperation, and to examine the feasibility of
a bilateral broad based trade and investment agreement.
Based on the
conclusions of JSG, negotiations commenced in October
2008 for the India-EFTA broad based Trade and Investment
Agreement (BTIA). The negotiations cover Trade in Goods,
Trade in Services, Investment, Sanitary and
Phytosanitary Measures, Technical Barriers to Trade,
Rules of Origin, Trade Facilitation and Customs
Cooperation, Competition, Trade Defence, Dispute
Settlement and IPR.
8 rounds of
negotiations have been held so far, in addition to the
meeting of Chief Negotiators (CNs) held on May 30-31,
2011. The 8th round of negotiations was held during June
14-17, 2011.
XV.
Global System of Trade Preferences (GSTP):
The
Agreement establishing the Global System of Trade
Preferences (GSTP) among Developing countries was signed
on 13th April, 1988 at Belgrade following conclusion of
the First Round of Negotiations. The GSTP came into
being after a long process of negotiations during the
Ministerial Meeting of the Group of 77, notably at
Mexico City in 1976, Arusha in 1979 and Caracas in
1981. The Ministers of Foreign Affairs of the Group of
77 in New York set up the GSTP Negotiating Committee in
1982. The New Delhi Ministerial meetings, held in July
1985, gave further impetus to the GSTP negotiation
process. The Brasilia Ministerial Meeting held in May
1986 launched the First Round of GSTP Negotiations. At
the conclusion of the First Round in April 1988 in
Belgrade, the GSTP Agreement was signed on 13 April
1988. The Agreement entered into force on 19th April
1989. Forty-four countries have ratified the Agreement
and have become participants. The GSTP establishes a
framework for the exchange of trade concessions among
the members of the Group of 77. It lays down rules,
principles and procedures for conduct of negotiations
and for implementation of the results of the
negotiations. The coverage of the GSTP extends to
arrangements in the area of tariffs, para-tariff,
non-tariff measures, direct trade measures including
medium and long-term contracts and sectoral agreements.
One of the basic principles of the Agreement is that it
is to be negotiated step by step improved upon and
extended in successive stages
The current
round of GSTP negotiations, also known as “São Paulo
Round” was launched in 2004 with 22 participating
countries, on the occasion of the UNCTAD XI Quadrennial
Conference in Sao Paulo in Brazil. At the end of the
negotiations, Ministerial Modalities were adopted on 2
December, 2009 wherein Ministers agreed to modalities
based on a tariff reduction of at least 20% on at least
70% of all dutiable tariff-lines. Members who were in
the process of their WTO accession namely, Algeria and
Iran were to be given specific flexibilities. The
modalities on market access adopted by the Ministers are
as under:
v
Across-the-board, line-by-line, linear cut of at least
20% on dutiable tariff lines;
v
Product
coverage to be at least 70% of dutiable tariff lines;
v
Product
coverage shall be 60% for participants having more than
50% of their national tariff lines at zero duty
level;
v
Tariff cuts
shall be made on the MFN tariffs applicable on the date
of importation. Alternatively, participants may choose
to apply the cuts on the MFN tariffs applicable on the
date of conclusion of the Third Round;
v
The
Negotiating Committee shall also consider proposal for
revision of the GSTP rules of origin.
Based on
these modalities, intensive negotiations were held in
2010 for finalisation of the schedules of Members.
During this period, Cuba, Egypt, India, Indonesia,
Korea, Malaysia, Mercosur and Morocco submitted their
schedules and bilateral negotiations were held to
finalise the schedule. It is significant to note that
India unilaterally offered a tariff reduction of 25% on
77% of its tariff lines for Least Developed Countries
(LDCs).
A
Ministerial Meeting of the GSTP Negotiating Committee
was held on 15 December,2010 in Foz do Iguacu, Brazil
for signing of the "Final Act Embodying the Results of
the Sao Paulo Round" and the "Sao Paulo Round Protocol
on the Agreement on GSTP". The Ministers or Head of the
Delegations of Members who have submitted their final
schedules namely Cuba, Egypt, India, Indonesia, Korea,
Malaysia, Mercosur and Morocco would be signing the two
documents. India was represented by H.E. Mr. B.S.
Prakash, Ambassador of India to Brazil.
XVI.
Asia Pacific
Trade Agreement (APTA):
The
Asia-Pacific Trade Agreement
(APTA), previously named the
Bangkok Agreement,
signed in 1975 as an initiative of ESCAP, is a
preferential tariff arrangement that aims at promoting
intra-regional trade through exchange of mutually agreed
concessions by member countries. APTA has five members
namely Bangladesh, China, India, Republic of Korea, Lao
People's Democratic Republic and Sri Lanka. ESCAP
functions as the secretariat for the Agreement.
During the
Second Session of the Ministerial Council at Goa on 26
October 2007 the following important decisions were
taken:
v
To launch
the 4th Round of Negotiations;
v
To adopt
modalities for extension of negotiations in other areas
such as non-tariff measures, trade facilitation,
services, and investment;
v
A common set
of Operational Procedures for the Certificate and
Verification of the Origin of Goods for APTA was
approved and it was decided that the same would be
implemented w.e.f. 1st January, 2008; and
v
To explore
the possibilities of expanding the membership of the
Agreement.
Pursuant to
the directions of the Ministers, the Standing Committee
initiated negotiations in the areas of tariff
concessions with an average of 50% MOP on 50% of tariff
lines along with framework agreements on
(i)
trade facilitation;
(ii)
trade in services;
(iii)
investments and
(iv)
Non-tariff measures.
To move
forward the 4th Round of Negotiations, the 35th Session
of the Standing Committee and the 3rd Session of the
Ministerial Council were held in Seoul, Republic of
Korea on December 13-14, 2009 and December 15, 2009
respectively. Mongolia, which has expressed its interest
in acceding to APTA, was also invited to participate as
an observer to the Session. The Indian delegation was
led by Shri Jyotiraditya M. Scindia, Hon’ble Minister of
State for Commerce and Industry.
Under the
4th Round, the Standing Committee of Participating
States has finalised framework agreements in the areas
of (i) trade facilitation, (ii) trade in services and
(iii) promotion and liberalization of investments.
Offers of further tariff liberalization in goods have
also been exchanged.
The Standing
Committee is also considering a framework agreement on
non-tariff measures and a revision of the APTA rules of
origin.
XVII.
India -New
Zealand Free Trade Agreement / Comprehensive Economic
Cooperation Agreement:
India and
New Zealand are negotiating Free Trade Agreement /
Comprehensive Economic Cooperation Agreement (CECA). 6
rounds of negotiations have been held so far. The 6th
round of negotiations was held during August, 2011.
XVIII.
India-Canada
Comprehensive Economic Partnership Agreement (CEPA):
During the
visit of Prime Minister of Canada, Mr. Stephen Harper to
India during November 15-18, 2009, two countries
announced the setting up of a Joint Study Group (JSG)
that will explore the possibility of a Comprehensive
Economic Partnership Agreement (CEPA) between India and
Canada.
The JSG was
mandated to undertake a detailed study of bilateral
economic relationship between the two countries,
covering among others, trade in goods and services,
investment flows and other areas of economic cooperation
and make comprehensive recommendations for enhancing
bilateral economic engagements between the two
countries.
The JSG in
its report has concluded that a CEPA between the two
countries is likely to increase bilateral trade both in
goods and services and enhance linkages in investment
flows, technology transfer, movement of natural persons,
R&D etc.
Both
countries have agreed to initiate negotiations towards a
CEPA covering trade in goods, services and other areas
of economic cooperation. The inaugural session of the
negotiations was held in New Delhi on 16th November
2010.
XIX.
India-Australia Comprehensive Economic Cooperation
Agreement (CECA):
In April
2008, a Joint Study Group (JSG) was constituted to,
inter alia, examine the feasibility for establishing a
Free Trade Agreement (FTA) between India and Australia.
Based on the recommendations of the JSG, India-Australia
are negotiating CECA covering trade in goods, services,
investment and IPR related issues. The 1st round of
India-Australia CECA negotiations was held during
28th-29th July, 2011.
XX.
India-Indonesia Comprehensive Economic Cooperation
Agreement (CECA):
Commencement
of negotiations on India-Indonesia CECA was announced on
25th January, 2011 during the visit of Indonesian
President to New Delhi.
XXI.
INDIA
TOPPLED CHINA IN EXPORT GROWTH RATE
Indian
exporters have overtaking China in exports growth rate
recording an increase of 16.1% in 2011, topping the list
of all major global trading countries, reported a
released WTO report.
WTO Report
informed that India had the fasted export growth among
the major traders I 2012, with shipments rising to
16.1%. Meanwhile, China had the second fastest export
growth of any
XXII.
FTA
NEGOTIATIONS WITH EU TO CONCLUDE BY THE END OF 2012
On 26th
June, 2012 EU The Union Commerce, Industry & Textile
Minister met with EU Trade Commissioner Karel De Gucht
to review ongoing India-EU Negotiations for a Free Trade
Agreement. They expressed satisfaction at the progress
to date and agreed on a road map with the objective of
reaching a political conclusion to the negotiations by
the end of the year 2012.
Towards this
end they tasked their Chief Negotiators to engage
constructively and identify possible solutions for the
remaining issues. A series of meetings of working level
and at Chief Negotiator Level will be held between now
and the end of the year to drive the process forward
towards an early conclusion. The India and EU are keen
to find solutions which are mutually acceptable as well
as ambitious so as to give an important boost to trade
between India and EU.
Bilateral
Trade in goods between India and EU in the year 2011
rose to USD 102.58 Billion, an increase of 18% over USD
86.69 billion recorded in 2010. Moreover, trade is
remarkably balanced. The two-way bilateral trade in
services was also extremely healthy at 26.356 billion in
2011, showing an increase of 12% compared to the
previous year.
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