Académique Documents
Professionnel Documents
Culture Documents
Trade diversification reflects an economys growing competitiveness resulting from its broadening productive base with processes getting more efficient, improving fundamentals, and its increasing willingness and capabilities to effectively integrate with the world economy. Asia and ASEAN region is Indias largest trading partner. During the period April- September 2010-11, Asia and ASEAN region accounted for about 58% of Indias trade (exports and imports). Europe and America, together, account for around 31% of Indias trade. Region wise share of Indias Export and Import during April September 2010-11 is shown in Chart 7.1 and Chart 7.2 respectively. Indias trade and the growth rate of Indias trade with major regions of the world are shown in Chart 7.3 and Chart 7.4 respectively.
87
88
CHAPTER-7
Chemicals, Dyes/Intermediates, etc. The major commodities imported from this region are Coal/Coke/Briquettes, Vegetable oils, Petroleum Oils, Electronic Goods, Organic Chemicals, Machinery except Electrical Machinery, Professional Instruments, Wood and Wood Products, Non-Ferrous Metals, Metalifers Ores and Metal Scrap, etc.
89
Annual Report 2010-11 Table 7.1 Indias Trade with ASEAN Member Countries Value in US$ Million
Country Exports
Brunei Cambodia Indonesia Lao PDR Malaysia Myanmar Philippines Singapore Thailand Vietnam ASEAN 17.64 46.9 2559.82 9 3419.97 221.64 743.77 8444.93 1938.31 1738.65 397.52 2.72 6666.34 0.53
2008-09 Imports
Exports
24.43 45.54 3059.52 16.93 2835.38 207.97 748.71 7568.29 1740.1 1838.87
Imports
428.65 5.05
Total Trade
453.08 50.59
8551.62 11611.14 20.05 5176.24 1289.35 312.71 6163.91 2930.13 521.8 36.98 8011.62 1497.32 1061.42 13732.2 4670.23 2360.67
19140.63 26202.97
14050.8 25659.27
India's total Trade 185295.36 303696.31 488991.67 178662.17 286822.8 465484.94 105351.89 161449.28 266801.17 Trade with ASEAN as %age of total
10.33%
8.63%
9.27%
10.12%
8.86%
9.34%
11.02%
8.70%
9.62%
between India and the ASEAN, on 13th August 2009. Table 7.2 indicates the dates of enforcement of the Trade in Goods Agreement with respect to India and other countries. In the case of remaining two countries, it will come into force after they complete their internal requirements. The Agreement is expected to further boost bilateral trade and investment between India and the ASEAN. India and the ASEAN are currently negotiating Agreements on Trade in Services and Investment which are targeted to be concluded by March, 2011.
90
CHAPTER-7
The Union Minister for Commerce and Industry, Shri Anand Sharma with the Trade/Commerce Ministers and Officials from the ASEAN Member States at the 8th AEM-India Consultations, in Da Nang, Vietnam on August 27, 2010.
Shri Anand Sharma, Commerce and Industry Ministerexchanging the India-Malaysia Comprehensive Economic Cooperation Agreement with his Malaysian counterpart, Mr Mustapa Mohamed on 18th February, 2011 at Kuala Lumpur in the presence of Prime Minister of Malaysia, Mr Mohd Najib Tun Abdul Razak.
91
Annual Report 2010-11 Table: 7.2 Trade in Goods Agreement between India and ASEAN countries S. No
1. 2. 3. 4. 5. 6.
Countries
Malaysia, Singapore, Thailand Vietnam Myanmar India and Indonesia India and Brunei Darussalam Lao PBR
India and Malaysia have concluded negotiations towards a Comprehensive Economic Cooperation Agreement (CECA). An agreement has been signed by both countries envisaging that the CECA would be implemented with effect from 1st July, 2011. Both countries are likely to sign the CECA in early 2011. India and Indonesia set up a joint feasibility study of a Comprehensive Economic Cooperation Agreement (CECA) between the two countries in 2007. The Joint Study Group has submitted its Report in September, 2009. Negotiations for the India Thailand Free Trade Agreement are underway and both sides have agreed to conclude a comprehensive Free Trade Agreement including Trade in Goods, Services, Investment and Economic Cooperation as a single undertaking by 2011.
Table: 7.3 Indias trade with Australia and New Zealand (Value in US$ million)
Country 2007-2008 2008-2009 2009-10 2010-11(P) April-September, 2010 Exports
778.83 88.91 867.74
Exports
1,152.40 158.82 1311.22
Imports
7,815.32 335.94 8151.26
Exports
1,439.32 188.62 1627.94
Imports
11,098.07 423.74 11521.81
Exports
1,384.96 255.17 1640.13
Imports
12,407.37 499.21 12906.58
Imports
5,586.24 354.41 5940.65
92
CHAPTER-7
Table: 7.4 Trade with North East Asian Countries (Value in US$ million) Year
2006-07 2007-08 2008-09 2009-10 2010-11 (April-Sept)*
* Provisional Source: DGCI&S
Exports
19359.8 26450.0 25449.1 28904.5 15575.4
Imports
31493.8 44755.4 58455.9 53491.5 33001.9
Total Trade
50853.6 71205.4 84005.0 82396.0 48577.3
Balance of Trade
(-) 12134.0 (-) 18305.4 (-) 33006.8 (-) 24587.0 (-) 17426.5
Major items of export to the region are gems and jewellery, iron ore, Primary and Semi-finished Iron & Steel, Plastic and Linoleum Products, Cotton Yarn, Fabric Made Ups and Marine Products.
Major items of import include Electronic Goods, Machinery, Organic Chemicals, pearls, precious and semi-precious Stones, Coal, Coke, Briquettes, Iron & Steel and Transport Equipment.
93
The Union Minister for Commerce and Industry, Shri Anand Sharma with the Chinese Premier, Mr. Wen Jiabao, at the India-China Business Co-operation Summit, in New Delhi on December 15, 2010.
China and India have agreed to endeavour to raise the volume of bilateral trade to US$ 100 billion by 2015. Trade with China has already crossed US$ 42.4 billion during 2009-10. Major items of Indian exports to China include iron ore, primary and semi-finished iron & steel, Plastic & Linoleum Products, Processed Minerals, Inorganic/ Organic/agro Chemicals, Minerals and Ores, Drugs, Pharmaceutical and Fine Chemicals. Major imports from China include Electronic Goods, Coal, Coke, Briquettes, Organic Chemicals, Machinery and Medicinal & Pharmaceuticals Products. Indian exports to Japan registered a growth of 19.9%, while imports from the country registered a decline of 14.6% during 2009-10 over that of the previous year. Major items of export to Japan include gems and jewellery, marine Products, Iron Ore, Petroleum, Crude & Products and Oil Meals.
Major items of import from Japan are machinery, electronic Goods, Transport Equipment, Iron and Steel, Professional Instruments and Organic Chemicals. During the Japanese Prime Ministers visit to India in August 2007, it was agreed that the two countries would work towards achieving an annual trade volume of US$ 20 billion by 2010. The actual trade flow during 2009-10 was US$ 10.36 billion. Exports to Hong Kong, China accounted for 4.3% of Indias overall exports during 2009-10. During 200910 Indias exports to Hong Kong, China amounted to US$ 7.8 billion registering a growth of 18.5% over the last year. Imports from Hong Kong, China in 2009-10 amounted to US$ 4.7 billion, recording a decline of 26.6% per cent over the previous year. The major items of exports to Hong Kong are gems
94
CHAPTER-7
and jewellery, finished leather, electronic Goods, Marine products, Natural Silk Yarn, Cotton Yarn Fabrics Made Ups, Plastic & Linoleum Products and Petroleum: Crude & Products. The share of Gems and Jewellery in Indias exports to Hong Kong is about 80%. The major items of imports are Pearls, Precious & Semi-Precious Stones, Electronic Goods, Machinery, Gold, Silver and Cotton Yarn & Fabrics. Indian exports to the Republic of Korea during 2009-
Box: 7.1 Outcome of Chinese Premiers Visit during 15-17 December, 2010
i) Positively viewed the growing opportunities in the economic relationship and agreed to establish a Strategic Economic Dialogue to enhance macro-economic policy coordination, to promote exchanges and interactions and join hands to address issues and challenges appearing in economic development and enhance economic cooperation. ii) Set a new bilateral trade target of USD 100 billion by 2015. The two sides agreed to take measures to promote greater Indian exports to China with a view to reduce Indias trade deficit. This includes support for Indian participation in Chinas national and regional trade fairs, advancing of trade facilitation, enhancing exchange and cooperation of pharmaceutical supervision, stronger relationships between Chinese enterprises and Indian IT industry and speedier completion of phytosanitary negotiations on agro products. iii) Agreed to expand cooperation in infrastructure, environmental protection, information technology, tele communications, investment and finance on a priority basis to draw on each others strengths and pursue mutual benefit and win-win results. India welcomed Chinese enterprises to invest and participate in Indias infrastructure development such as in roads, railways and in the manufacturing sector. The two sides agreed to encourage greater mutual investment and project contracting cooperation between businesses of the two countries, appropriately handle economic and trade frictions and differences and jointly oppose protectionism in all forms. They constituted an IndiaChina CEOs Forum to deliberate on business issues and make recommendations on expansion of trade and investment cooperation. iv) Concluded a Memorandum of Understanding between the Reserve Bank of India and China Banking Regulatory Commission to increase banking and financial cooperation. India and China also agreed to grant permission to the banks of the other country to open branches and representative offices. Modalities will be worked out by the concerned authorities.
95
Trade Negotiations
a) India - Korea CEPA
A Comprehensive Economic Partnership Agreement (CEPA) between India and Republic of Korea was signed on 7th August, 2009. The CEPA came into force from 1st January, 2010. The first meeting of the Joint Committee at Ministerial level to review the implementation of CEPA was held on 20th January, 2011 in New Delhi.
headed by the Trade and Commerce Ministers of the two countries. The report of India-China JTF was considered by the two Commerce Ministers at the 8th Session of India-China JEG held on 19th January, 2010 in Beijing. No decision was taken on the recommendations of the JTF.
96
97
Annual Report 2010-11 Table 7.6 Bilateral Trade with Bangladesh (Value in US$ million)
Year 2005-06 2006-07 2007-08 2008-09 2009-10 2009-10 (April-Sept) 2010-11(April-Sept)*
* Provisional Source: DGCI&S
(iii) Bhutan
The current Free Trade Agreement between India and Bhutan, namely Agreement on Trade, Commerce and Transit was signed in New Delhi on 28th July, 2006 for a period of ten years with effect from 29th July, 2006. Under this Agreement India also provides transit facilities to landlocked Bhutan to facilitate its trade with third countries and
movement of goods from one part of Bhutan to another through Indian Territory. The requirements of Bhutan are mainly met by imports from India. Commercial transactions are carried out in Indian Rupees and Bhutanese Ngultrum. Indias trade with Bhutan has increased substantially from US$187.94 million in 2005-06 to US$271.97 million in 2009-10. The trend in trade between India and Bhutan is given in Table 7.7.
iv) Iran
Iran has a strategically important location bordering Pakistan and Afghanistan and sitting atop the Persian Gulf and Hormuz Straits. Its rich deposits of oil and gas as well as other mineral resources, bolsters its important regional role. Indias core interest in the bilateral relationship with Iran includes its need for steady and undisrupted supply of crude oil and gas as well as acquisition
98
CHAPTER-7
of oil/gas fields for its energy security. Iran is also crucial for connectivity to Afghanistan and Central Asia. Iran is not a member of WTO, as on date. Hence, it is trying to enter into a number of FTAs and Preferential Trade Agreements (PTAs) with countries located in Asia, Africa and Europe. Indias bilateral enagement with Iran may potentially be affected by the Comprehensive Iran Sanctions, Accountability and Divestment Act
v) Maldives
The Bilateral Trade Agreement signed on 31st March, 1981 will remain progressively in force until it is modified or terminated by either country by giving three months notice to the other. The Agreement provides for Most Favoured Nation (MFN) treatment to each other in trade and merchant vessels, promotion of commercial and technical cooperation through exchange of
delegations and participation in trade fairs and exhibitions and supply of essential commodities by Government of India to Government of Maldives on annual quota. All payments between India and Maldives are in freely convertible currency, subject to their foreign exchange regulations. Indias trade with Maldives has increased substantially from US$69.56 million in 2005-06 to US$83.49 million in 2009-10. The trend in trade between India and Maldives is given in Table 7.9.
99
Annual Report 2010-11 Table 7.9 Bilateral Trade with Maldives (Value in US$ million)
Year 2005-06 2006-07 2007-08 2008-09 2009-10 2009-10 (April-Sept) 2010-11 (April-Sept.) *
* Provisional Source: DGCI&S
vi) Nepal
A Treaty of Trade and the Agreement of Cooperation between the two countries was signed on 27th October, 2009 at Kathmandu, Nepal, by Shri Anand Sharma, Commerce & Industry Minister, and Shri Rajendra Mahato, Minister for Commerce & Supplies, Government of Nepal. The Treaty aims at improving bilateral trade between the two countries by increasing the mutually agreed points of trade, expansion in the list of items included for preferential trade, simplification of trade procedures, improving Nepalese supply capacities,
provision of two level institutional mechanisms for problem resolution etc. An Inter-Governmental Committee (IGC) meeting on Trade, Transit and Cooperation to control unauthorised trade was held on 27-28 January 2010. The Indian delegation was led by Shri Rahul Khullar, Commerce Secretary. Both sides held detailed discussion on various bilateral issues. Indias trade with Nepal has increased substantially from US$ 1239.82million in 2005-06 to US$1985.92 million in 2009-10. The trend in trade between India and Nepal is given in Table 7.10.
100
Box: 7.2 Line of Control (LOC) Trade Items of export to and import from Pakistan
Items for export from the Indian side are: Carpets, Rugs, Wall Hangings, Shawls And Stoles, Namdas, Gabbas, Embroidered items including crewel, Furniture Including Walnut Furniture, Wooden Handicrafts, Fresh Fruits and Vegetables, Dry Fruits including Walnuts, Saffron, Aromatic Plants, Fruit bearing plants, Dhania/Moongi/Imli and Black Mushrooms, Kashmiri Spices, Rajmah, Honey, Paper mache Products, Spring Rubberized Coir/Foam Mattresses/Cushion/Pillows & Quilts and Medicinal Herbs. Items for export from the Pakistan side are: Rice, Jahnamaz and Tusbies, Precious Stones, Gabbas,
Namdas, Peshawari Leather Chappals, Medicinal Herbs, Maize And Maize Products, Fresh Fruits and Vegetables, Dry Fruits including Walnuts, Honey, Moongi, Imli, Black Mushroom, Furniture Including Walnut Furniture, Wooden Handicrafts, Carpets and Rugs, Wall Hangings, Embroidered Items, Foam Mattresses, Cushions and Pillows, Shawls and Stoles.
101
Table 7.12 Bilateral Trade with Sri Lanka (Value in US$ million)
Year 2005-06 2006-07 2007-08 2008-09 2009-10 2009-10 (April-Sept.) 2010-11 (April-Sept.)*
* Provisional Source: DGCI&S
Nepal, Pakistan and Sri Lanka as members, was established at the first SAARC Summit held on 4-8 December 1985. Afghanistan became its eighth member during the 14th SAARC Summit held
102
CHAPTER-7
in April 2007. India, Pakistan and Sri Lanka are categorized as Non-Least Developed Contracting States (NLDCSs) and Afghanistan, Bangladesh, Bhutan, Maldives and Nepal are categorized as Least Developed Contracting States (LDCSs). The SAARC Preferential Trading Arrangement (SAPTA) provided a framework for exchange of tariff concessions and also for liberalization in para-tariff and non-tariff measures with a view to promoting trade and economic cooperation among the SAARC member countries. The Agreement on South Asian Free Trade Area (SAFTA) was signed during the Twelfth SAARC Summit held at Islamabad in January 2004 which came into force from 1st January 2006. SAFTA, inter alia, prescribes a phased Tariff Liberalization Programme (TLP) according to which all the member states would reduce their tariffs, at the MFN applied rate existing as on 1st January 2006, to zero to five percent within ten years of the agreement coming into force. This TLP would cover all tariff lines except those items kept in the Sensitive List by each country. With the SAFTA Agreement coming into force, there would be no more negotiations under SAPTA. During the fourteenth SAARC Summit held in New Delhi on 3-4 April 2007 India, inter alia, unilaterally announced that before the end of 2007, India would allow the LDC countries of SAARC duty
Table 7.13 Indias Trade with SAARC Countries (Value in US$ Billion)
2006-07 2007-08 2008-09 2009-10 2009-10 (April-Sept) 80.95 4.58 128.13 0.58 2010-11 (April-Sept) 105.35 4.55 161.45 0.56
Exports
Indias Total % share of SAARC countries Indias Total % share of SAARC countries
Provisional Source: DGCI&S
126.41 5.12
Imports
185.74 0.81
103
Box 7.3 Highlights of Trade with SAARC (During April September, 2010-11)
Bangladesh was the largest trading partner of India in the SAARC region. India has recorded a negative growth rate of exports with Afghanistan and Pakistan in SAARC region. The lowest decline in growth of exports was recorded for Afghanistan at (-) 31.92%. Except for Bhutan, India runs a trade surplus with all other trading partners. For April-Sept. 2010-11
The major items of export from India to the US are gems & jewellery, RMG Cotton Incl Accessories, drugs, Pharmaceuticals & Fine Chemicals, Machinery and Instruments, Manufactures of Metals etc.
The major items of import from USA to India are transport equipments, Machinery (except Elec. & Electronic), Electronic Goods, Fertilizers Manufactured, Pearls Precious Semi-precious Stones etc.
104
Exports
1,266.64 1,364.41 1,122.77 587.94
Percentage Growth
14.13 7.27 -17.71 7.65
Imports
1,981.22 2,458.65 2,097.35 946.39
105
India-Canada CEPA
During the visit of Prime Minister of Canada, Mr.
106
CHAPTER-7
The major commodities of export to Mexico are drugs, pharmaceuticals & Fine Chemicals, Manufactures of Metals, Transport Equipments, Inorganic, Organic, Agro Chemicals, RMG Cotton Incl Accessories etc. The major commodities imported from Mexico are Petroleum (crude and products), electronic goods, Transport Equipments, Plastic materials and Iron and Steel etc.
107
The Union Minister for Commerce and Industry, Shri Anand Sharma addressing the 11th IndiaEU Business Summit, on the sidelines of the India-EU Summit, in Brussels, Belgium on December 10, 2010.
Trade between India and Europe during the last five years is given in Table 7.17 Table:7.17
Balance of Trade (-) 11265 (-) 14291 (-)15186 (-)17190 (-)7332 (-)6730
The EU, as a bloc, is Indias largest trading partner and accounts for about 16% of Indias exports and imports. The relationship between the EU and India has matured substantially in recent years, from that of aid donor and recipient, to one of partnership with opportunities for mutual benefit. Today, the EU and India, as global actors in a multi-
polar world, share a strategic partnership, of which commercial interaction forms a key component. The frequency and intensity of Indias contacts with the EU have grown exponentially since 2000. Indias engagement with EU in trade in goods has increased by more than three and a half times between 2000 and 2010.
108
CHAPTER-7
Approvals for Foreign Direct Investment (FDI) from EU Member States during the period April, 2000 to December, 2010 were of the order of US$ 25.33 billion (source- DIPP website). UK, Netherlands, Germany and France are the major sources of FDI that have been approved. The share of EU in total FDI inflows in India is 20.05%. Top sectors attracting FDI inflows from EU are Services Sectors, Automobile Industries, Housing and Real Estate, Chemicals (other than Fertilizers) and Construction Activities. India and EU have enjoyed healthy economic relations. These relations have been built on the foundations of (i) India-EU Cooperation Agreement on Partnership and Development which came into effect in August, 1994, (ii) India-EU Strategic Partnership Agreement (iii) Agreement on Scientific and Technological cooperation, 2002 (iv) Agreement on Customs Co-operation, 2003. India also has bilateral framework Agreements with a number of individual EU countries in areas of trade, investment and avoidance of double taxation. India has agreements for investment promotion and protection with 28 countries of Europe, including 20 countries of EU. Similarly, agreements for avoidance of double taxation exist with 28 countries of Europe, including 21 countries of EU. India-EU bilateral relations are periodically reviewed at the official level by the India-EC Joint Commission, which last met on 29th September, 2010 at Brussels. Three Sub- Commissions namely Sub-Commission on Trade, Sub-Commission on Economic Cooperation and Sub-Commission on Development Cooperation and nine Joint Working Groups on agriculture and marine products, textiles, information technology & communications, consular matters, environment, steel, food processing industries, pharmaceuticals & biotechnology and TBT/ SPS issues are functioning.
109
To explore the possibility of a Free Trade Agreement (FTA) between India and Turkey, the India-Turkey Joint Study Group (JSG) has been set up. So far, three meetings of the JSG have been held and
discussions are in final stages. The 4th round of Indo-Turkey JSG meeting was held in Ankara on 1314 January 2011 during which the JSG report was discussed.
110
The CIS region had a share of 0.94 per cent in Indias exports and 2.12 per cent in its imports during 2009-10. The principal commodities of exports to the region include drugs and pharmaceuticals
& fine chemicals, machinery & instruments, tea, coffee, transport equipments, RMG cotton including accessories, manufactures of metals etc. Important items of imports to India from this region
111
Russian Federation
The Russian Federation, constituting a major portion of the former USSR, continues to be Indias most important trading partner in the region accounting for about 58% of Indias total trade with CIS region in 2009-10. During 2010-11, following meetings were held to discuss various issues concerning bilateral cooperation: 4th Session of India-Russia Forum on Trade & Investment was held on 20th December, 2010 at New Delhi, under the Co-Chairpersonship of Shri R.P. Singh, Secretary, Department of Industrial Policy & Promotion from the Indian side and Mr. Stanislav Voskresensky, Deputy Minister of Economic Development from the Russian side. 16th Session of the Indo-Russian InterGovernmental Commission on Trade, Economic, Scientific, Technological and Cultural Cooperation was held on 18th November, 2010 in New Delhi under the Co-Chairmanship of Shri S.M. Krishna, Minister of External Affairs from the Indian side and Mr. Sergei Borisovich Ivanov, Deputy Chairman of the Russian Federation Government from the Russian side. 16th Session of the India-Russia Working Group on Trade & Economic Cooperation of the IndoRussian Inter-Governmental Commission on Trade, Economic, Scientific, Technological and Cultural Cooperation was held on 5th & 6th October 2010 in New Delhi under the CoChairmanship of Dr. Shyam Agarwal, Joint Secretary, Department of Commerce from the Indian side and Mr. S. V. Chernyshev, Director of the Department of the Countries of Asia and Africa, Ministry of Economic Development of
112
CHAPTER-7
The Union Minister for Commerce and Industry, Shri Anand Sharma meeting the Prime Minister of the Russian Federation, Mr. Vladimir V. Putin, in Moscow on June 19, 2010.
Deputy Prime Minister from Turkmen side on 25th May, 2010 in New Delhi during the state visit of H.E. Mr. Gurbanbuly Berdimuhamedov, President of Turkmenistan.
seeks to increase interaction between the business entities of the two regions by identifying areas of bilateral trade and investment. The focus is on major product groups/ services for raising Indias exports to this region. The exports to the region are to be enhanced through combined efforts of various institutions of the Government of India and various Trade Promotion Organizations. There is a regular exchange of delegations with CIS countries through participation in trade fairs of mutual interest and exchange of trade related information. 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.
113
Inter Governmental Commission/Joint Commission - with CIS Countries under Department of Commerce
India-Azerbaijan Inter Governmental Commission on Trade, Economic, Scientific & Technological Cooperation under the Co-Chairmanship of Minister of State for Commerce and Industry India-Kyrgyzstan Inter Governmental Commission (IGC) on Trade, Economic, Scientific & Technological Cooperation under the Co-Chairmanship of Minister of State for Commerce and Industry India-Uzbekistan Inter-Governmental Commission (IGC) on Trade, Economic, Scientific & Technical Cooperation under the Co-Chairmanship of Minister of State for Commerce and Industry.
Table: 7.20 Indias Trade with LAC Region (Value in US$ million)
Year
2005-2006
Total Trade Balance of Trade 5656.22 330.72 10380.43 --1851.11 12230.53 -884.16 16,135.99 -3,791.93 16,613.82 -4,192.98
11929.87 -1909.11
The Indias trade with the region increased from US$ 5656.22 million in 2005-06 to US$ 16613.82 million in 2009-10. Indias exports to the region
has gone up from US$ 2993.47 million in 200506 to US$ 6210.42 million in 2009-10 showing a growth of 107%. The percentage share of Indias
114
CHAPTER-7
exports to Latin America in her global exports has increased from 2.90% in 2005-06 to 3.47% in 200910. However, India has been heavy negative trade balance with the region. Three product groups viz. textiles, engineering products and chemical products constituted about 50 % of Indias exports to this region during 2008-09 and 2009-10. 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. In the Chemical products sector, bulk drugs, pharmaceuticals, dyes and intermediates, agrochemicals, plastic products, naphtha, resins, essentials oils, molasses and tyres for automobiles & bicycles are the important items.
Institutional Mechanism
The following institutional arrangements already exist in relation to Indias trade relations with the countries of the Latin American region:
Indo-Argentine Joint Commission Indo-Argentine Joint Trade Committee Indo-Mexican Joint Commission Indo-Brazilian Commercial Council Indo-Cuban Joint Commission Indo-Cuban Trade Revival Committee Indo-Suriname Joint Commission Indo-Guyana Joint Commission Indo-Venezuela Joint Commission India Brazil Trade Monitoring Mechanism India Trinidad and Tobago Joint Commission
In order to have increased frequency of interaction with important trading partners in the LAC region, efforts are made to hold the meetings of the Joint Commissions on a regular basis.
115
ECGC Cover
The Export Credit Guarantee Corporation of India (ECGC) undertakes periodically a comprehensive review of the grading of the countries based on the methodology of risk scoring. As per ECGC Country Risk and Cover Policy on LAC region (reviewed as on 30.06.2010), sixteen Latin American countries have been placed in low risk categories of A1 and A2. No country has been placed in very high-risk category of D
Lines of Credit
EXIM Bank extends Lines of Credit (LOCs) to overseas financial institutions, regional development banks, sovereign governments and other entities overseas, to enable buyers in those countries, to import goods and services from India on deferred credit terms. The Indian exporters can obtain payment of eligible value from EXIM Bank, without recourse to them, against negotiation of shipping documents. LOC is a financing mechanism that provides a safe mode of non-recourse financing option to Indian exporters, especially to SMEs, and serves as an effective market entry tool The EXIM Bank has currently extended fifteen lines of credit to banks/governments in the LAC region as given under (as on 13.12.2010):
India-MERCOSUR PTA
A Preferential Trade Agreement (PTA) between India and MERCOSUR (a trading bloc of Argentina,
116
CHAPTER-7
Commercial Relations and Trade Agreements Table 7.21 Exim Bank lines of credit (As on 13.12.2010)
Sr. No. 1 2
Borrower
Banco de Comercio Exterior de Colombia S.A. (Bancoldex), Colombia Corporacion Andina de Fomento (Andean Development Corporation) (covering Bolivia, Colombia, Ecuador, Peru and Venezuela)
Purpose
Tenor (Years)
10.00
General purpose
4 5 6 7
Republic Bank Ltd., Trinidad & Tobago Government of Suriname Government of Guyana Government of Honduras
General purpose General purpose Cricket stadium in Georgetown Communication, Health, Transport and Air Force Components from India to Honduras Signaling System Export of water pumps Water supply project Purchases from BEL,HAL and Ordinance Factory Board Supply of ten crash fire tenders Purchase of Helicopters from HAL
8 9 10 11
12 13
4.30 5.76
117
Other Developments
CII organized the fourth India Latin America Caribbean (LAC) Conclave in April, 2010 in New Delhi. About 200 delegates representing India and LAC governments departments, business groups, financial institutions belonging to important sectors like Textiles, Food Processing, Chemicals, Engineering including Automotives and Energy (Oil, Gas) participated in the event. Fourteen LAC countries Argentina, Brazil, Chile, Colombia, Costa Rica, Cuba, Dominican Republic, Ecuador, ElSalvador, Mexico, Paraguay, Peru, Uruguay and Venezuela represented in the event. CII organized Business Seminars in Brazil, Peru and Chile in Sept, 2010 coinciding with the visit of Minister of State (Commerce & Industry), to strengthen Indias trade ties with Latin America. India Engineering Show (INDEE) was organized by Engineering Export Promotion Council (EEPC) in Colombia in October 2010 to showcase skills and technologies at international level and to strengthen the brand India in the LAC region. In the series of India Show, one such event is proposed to be organized in Sao Paulo (Brazil) in March, 2011 by CII under aegis of Deptt. of Commerce to showcase Indias strength in manufacturing and services in overseas markets, especially in developed and emerging markets, to promote India as a favourable destination for trade and investment.
Table: 7.22 Indias Trade with Countries in Sub-Saharan Africa (Value in US$ million)
Year 2006-07 2007-08 2008-09 2009-10 2009-10 (AprilSept. 09) 2010-11(AprilSept. 10)*
* Provisional) Source: DGCI&S
Total trade with countries in SSA Region during 2009-10 amounted to US$31022.10 million with exports amounted to US$10307.79 million and imports at US$20715.10 million. The total trade during April-September, 2010 (Provisional data) has been US$18710.12 million with exports at US$6995.94 million and imports amounting to US$11714.18 million. The corresponding figures during April-September 2009 were US$13880.80 million (total trade), US$4975.69 million (exports) and US$8905.20 million (imports) respectively. Bilateral trade with West African countries was US$13,001.27 million during 2009-10 as compared to US$14,536.45 million during 200809. Transport equipment, Drugs, Pharmaceuticals & Fine Chemicals, Rice, manufactures of Metals and Machinery and Instruments were the major items of export. Metalifers ores & metal scrap, Cashew nuts, Wood and Wood products, Inorganic Chemicals and Fertilizers and Crude were the major items of import. Nigeria was the top most trading partner within this region with a trade of US$ 8,696.57 million during 2009-10 as compared to US$ 10,429.61 million during 2008-09.
118
CHAPTER-7
The Union Minister of Commerce and Industry, Shri Anand Sharma and the President of South Africa, Dr. Jacob Zuma at the Business Meeting, organized by the ASSOCHAM, CII and FICCI, in New Delhi on June 04, 2010.
Bilateral trade with countries in Southern Africa was US$ 13,500.89 million during 2009-10 as compared to US$ 10,357.56 million during 200809. Transport equipments, Drugs, Pharmaceuticals and Fine Chemicals, Machinery and instruments, primary and semi finished Iron and Steel and Rice were the major items of export. Gold, Metalifers, Ores & metal scrap, Inorganic Chemicals, Coal and Non-ferrous metals were the major items of import. South Africa was the top most trading partner within this region with a trade of US$ 7,733.00 million during 2009-10 as compared to US$ 7,493.86 million during 2008-09. Bilateral trade with countries of East Africa was US$3,900.67 million during 2009-10 as compared to US$ 4,863.22 million during 2008-09. Primary and semi finished Iron & Steel, Machinery & Instruments,
Drugs, Pharmaceuticals & Fine Chemicals, Sugar and manufactures of Metals were the major items of export. Cashew nuts, Pulses, Metalifers Ores and metal scrap, Inorganic Chemicals and Spices were the major items of import. Kenya was the top most trading partner within this region with a trade of US$1,530.93 million during 2009-10 as compared to US$ 1,444.27 million during 2008-09. Bilateral trade with countries of Central Africa was US$ 620.06 million during 2009-10 as compared to US$ 537.93 million during 2008-09, indicating a growth of 75.25%. Drugs, Pharmaceuticals & Fine Chemicals, Machinery & Instruments, Transport Equipments, manufactures of metals and Plastic and Linoleum products were the major items of export. Metalifers ores and metal scrap, Pulses, Cotton raw, Tea and Non-ferrous metals were the
119
Preferential Trade Agreement (PTA) with Southern African Customs Union (SACU)
The Southern African Customs Union (SACU), the oldest Custom Union of the world, comprises of South Africa, Lesotho, Swaziland, Botswana and Namibia. India and SACU have expressed their intent to enter into a Preferential Trade Agreement (PTA) with the aim of promoting expansion of trade between the two parties and providing mechanism to negotiate and conclude a comprehensive Free Trade Agreement within a reasonable time. India and SACU have commenced negotiations for PTA in October, 2007 and five meetings of the negotiating teams have taken place so far. Fifth round of negotiations on India-SACU PTA was held in New Delhi on 7-8, October, 2010.
120
CHAPTER-7
Minister for Commerce and Industry, Shri Anand Sharma with the Foreign Minister of Ghana, Mr. Alhaji Muhammad Mumuni and Indian delegation members, in Ghana on September 03, 2010.
Bilateral Cooperation
Issues pertaining to trade and economic cooperation between India and African countries are reviewed through Joint Commissions and Joint Trade Committees (JTCs). Business to Business interactions have also been encouraged between Apex Indian Chambers and their African counterpart Chambers with a view to further enhance trade and investment relations between India and African countries. High level bilateral meetings and visits by trade and industry delegations are also organized with a view to strengthen trade and economic partnerships between India and African countries. High level delegations led by the Commerce & Industry Minister visited South Africa and Ghana during 29th August to 3rd September, 2010 and held bilateral meeting with their counterparts. The 6th meeting of the India-Kenya Joint Trade Committee (JTC) was held in Nairobi on 12-13 October, 2010, which was co-chaired by Shri
Anand Sharma, Honble Minister of Commerce and Industry from the Indian side. During the meeting, both sides agreed to make all possible efforts to achieve a target of bilateral trade of US$ 2.5 billion in the next 3 years, up from the bilateral trade of US$ 1.5 billion in 2009-10. The key sectors identified for bilateral cooperation were agriculture including Agro-processing; Drugs and Pharmaceuticals; infrastructure development sectors like Road, Rail, and energy including generation, transmission and distribution of power, Airport; Information and Communication Technology (ICT); Oil & Gas; Manufacturing; and Healthcare.
VIII. Trade with countries in the West Asia & North Africa (WANA) Region
The West Asia and North Africa (WANA) region comprises 18 countries. These are (i) Six Gulf Cooperation Council (GCC) countries (Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and United
121
The Union Minister for Commerce and Industry, Shri Anand Sharma inaugurated the Namaskar Africa event, organised by the Federation of Indian Chambers of Commerce and Industry (FICCI) in association with the Ministry of Commerce and Industry, at Nairobi, Kenya on October 14, 2010.
Arab Emirates), (ii) Six West Asian countries (Iraq, Israel, Jordan, Lebanon, Yemen and Syria) and (iii) Six North African countries (Algeria, Egypt, Libya, Morocco, Sudan and Tunisia). During April-September, 2010-11, Indias exports to the WANA region have gone up from US$ 17,924.33 million to US$ 22,470.92 million. Similarly, imports have also registered an increase from US$ 28,472.61 to US$ 40,490.75 million compared to the figures during the corresponding period of the previous year. The United Arab Emirates (UAE) ranked first among the destinations for Indias exports in the WANA region and among the GCC countries. The other major destinations in the WANA region include Saudi Arabia, Israel, Egypt and Kuwait. The details of bilateral trade between India and countries of
WANA Region during 2009-10 and 2010-11 (AprilSeptember) are given in Table 7.23. The principal export products from India to the WANA region comprises of Gems & Jewellery, Petroleum (crude & products), manufactures of metals, Machinery and Instruments, Rice-Basmati, Transport equipments, Electronic Goods, Manmade Yarn, Fabrics, Made ups, Meat & Preparations, Primary and semi-finished Iron & Steel etc. The principal imports from the WANA region consists of Petroleum (crude and products), Pearls and Precious/Semi-Precious stones, Gold, Fertilizers Manufactured, Organic Chemicals, Inorganic Chemicals, Metalliferrous Ores and Metal scrap, Artificial Resins, Non-ferrous metals, Fertilizers (crude) etc.
122
Recent developments/initiatives:
a) Free Trade Agreement (FTA) with Israel
The Trade and Economic Relations Committee has approved for initiating negotiations with Israel for entering into a Free Trade Agreement. The first round of negotiations was held in New Delhi during the month of May, 2010. In this meeting, broad parameters for negotiations were finalized. The second round of negotiations is slated for February, 2011 in Jerusalem.
123
Table: 7.23 Bilateral trade between India and countries of WANA Region during 2009-10 and 2010-11 (April-September)
Exports 2009-2010 (April- Sept.) Imports Total Trade Trade Balance Exports 2010-2011 (April- Sept.) Imports Total Trade Trade Balance
S. No.
Country
124
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 342.35 134.47 605.96 265.39 849.54 121.14 386.00 69.02 112.27 125.77 527.47 342.58 2078.62 208.19 180.36 76.86 11144.41 353.93 17924.33 23.35 80950.31 168.52 272.40 857.19 2988.85 855.94 470.84 3600.93 3.17 239.71 395.43 1161.54 2122.24 7097.61 205.43 66.05 161.64 7215.62 589.50 28472.61 26.65 128131.42 510.87 406.87 1463.15 3254.24 1705.48 591.98 3986.93 72.19 351.98 521.20 1689.01 2464.82 9176.23 413.62 246.41 238.50 18360.03 943.43 46396.94 22.19 209081.73 173.84 -137.93 -251.24 -2723.45 -6.40 -349.70 -3214.93 65.85 -127.44 -269.65 -634.06 -1779.65 -5018.99 2.77 114.31 -84.79 3928.80 -235.57 -10548.23 22.35 -47181.12 345.89 223.40 997.00 232.43 1319.05 152.22 875.03 85.80 68.30 130.89 551.82 173.27 2214.44 228.62 195.56 119.90 14272.37 284.93 22470.92 22.32 105351.89 995.68 325.59 597.06 3404.04 1029.51 516.71 4360.99 12.32 447.19 553.46 1467.98 3290.61 9753.32 273.50 10.65 213.17 12163.09 1075.88 40490.75 28.05 161449.28
Algeria Baharain Is Egypt A Rp Iraq Israel Jordan Kuwait Lebanon Libya Morocco Oman Qatar Saudi Arab Sudan Syria Tunisia U Arab Emts Yemen Republc Total of WANA % Share in Indias total Indias Total
1341.57 548.99 1594.06 3636.47 2348.56 668.93 5236.02 98.12 515.49 684.35 2019.80 3463.88 11967.76 502.12 206.21 333.07 26435.46 1360.81 62961.67 23.59 266801.17
-649.79 -102.19 399.94 -3171.61 289.55 -364.49 -3485.96 73.48 -378.88 -422.57 -916.16 -3117.35 -7538.88 -44.88 184.91 -93.27 2109.28 -790.95 -18019.82 32.12 -56097.39
Source: DGCI&S