Press Information Bureau

Government of India

Ministry of Commerce & Industry

16-December-2011 11:02 IST

The basic role of the Department of Commerce is to facilitate creation of an enabling environment and infrastructure for accelerated growth of exports and trade. The core functions of the Department are regulation, development and promotion of India’s international trade and commerce through formulation and implementation of appropriate international trade and commercial policies. The long-term vision of the Department is to make India a major player in the world trade by 2020 and assuming a role of leadership in the international trade organizations commensurate with India’s growing importance. The goal in the medium-term as outlined in the Foreign Trade Policy (FTP 2009-14) is to double India’s exports of goods and services by 2014 with a long term objective of doubling India’s share in global trade by the end of 2020 through appropriate policy support. A snapshot of the year under review of the Department of commerce is as follows:

STRATEGY FOR DOUBLING EXPORTS IN NEXT THREE YEARS (2011-12 TO 2013-14)

Shri Anand Sharma, the Union Minister for the Commerce, Industry & Textiles unveiled the Strategy for doubling exports on 3rd May, 2011. The Salient points of the strategy are as follows:

THE TARGET

The target is to double the country’s merchandise exports in dollar terms over the next three years (2011-12 to 2013-14) from US $ 246 billion in 2010-11 to US$ 500 billion in 2013-14.

To realize this, exports have to grow at a compound average growth of 26.7 % per annum.

The overall strategy to realize this goal is

PRODUCT STRATEGY

Build on our strength in sectors with great growth potential

engineering goods

basic chemical industries and organic and inorganic chemical industries

pharmaceutical industry (including biotech)

electronics

Promote light manufacturing exports with high value  addition

leather products and textiles

Encourage high employment generating sectors

gems and jewellery

agricultural products

MARKET STRATEGY

Focus on markets in Asia (including ASEAN), Africa and Latin America. 

Open up new vistas, both in terms of markets and new products in these new markets

Retain presence and market share in our “old developed country markets”;

Move up the value chain in providing products in these old developed country markets

TECHNOLOGIES AND R&D

Areas that hold out promise for high technology exports

Pharmaceuticals 

Electronics

Automobiles

Computer and software based smart engineering.

Environmental products; green technology and high-value engineering products.

High end areas in electronics, aerospace, and engineering products.

BUILDING A BRAND IMAGE

thrust for quality upgradation. 

expanded certification of export products encouraged, where needed. 

Brand India promotion campaign for key export products

Essential Support

Essential policy support needed to realize the ambitious export targets for 2013-14 and beyond is:

Stable policy environment: Continuation of existing incentive schemes

Preferential access to new markets: putting in place conducive trading arrangements

Reduction in transaction costs: Implementation of recommendations of Task Force

Substantial step up in overall Plan support

Priority strengthening of trade related infrastructure

ANNUAL SUPPLEMENT 2011-12 TO THE FOREIGN TRADE POLICY (FTP) 2009-2014

The Commerce, Industry and Textiles Minister (CITM), Shri Anand Sharma, announced the Annual Supplement 2011-12 to the Foreign Trade Policy 2009-2014 on 13th October, 2011. The salient features are as under:

(i) Special Bonus Benefit Scheme: A new scheme to provide special assistance to specified sectors for 6 months has been introduced. The support is given to Engineering, Pharmaceutical and Chemical sectors covering 50 products. This scheme will be available on exports made on or after 1.10.2011 and up to 31.3.2012. The rate of duty credit is 1% of FOB value of exports.

(ii) Special Focus Market Scheme [SFMS]: Exporters of all products to notified countries are entitled for Duty Credit Scrip equivalent to 3% of FOB value of exports. The Scheme covers a total of 112 markets. However, exports to SFMS markets in CIS, Latin American and African countries are entitled for 1% additional benefit of FOB value of exports with effect from 1.4.2011.

(iii) Focus Product Scheme [FPS]: The list of items under FPS has been expanded to include 130 additional items covering Chemicals, Pharmaceuticals, (only specified APIs) Textiles, Handicrafts, Engineering and Electronics sector. The items covered under FPS are entitled for Duty Credit Scrip equivalent to 2% of FOB value of exports.

(iv) Market Linked Focus Products Scheme [MLFPS]: The list of items under MLFPS has been extended to cover new items to specified countries. It has been decided to extend MLFPS for exports of Agricultural tractors greater than 1800cc capacity which would now be eligible for duty credit for exports made to Turkey.

Sugar machinery & high-pressure boilers would be eligible for Brazil, Kenya, South Africa, Tanzania and Egypt. The scheme has also been extended to all existing MLFPS Countries for printing inks, writing ink, etc. The items covered under MLFPS are entitled to get duty credit scrip @ 2% of FOB value of exports. Benefits under MLFPS have been extended for export of ready-made garments to USA and EU.

(v) EDI initiatives: In furtherance of the EDI initiatives, online message exchange of DFIA Authorization with Customs has started from 13.10.2011. Therefore, now Advance Authorization, EPCG and DFIA are completely EDI enabled. In order to reduce the interface of exporters with the Regional Authorities of DGFT, the application of IEC (Import-Export Code) has been made online w.e.f. 1.1.2011.

REDUCTION IN TRANSACTION COST

The Report of Task Force on Transaction Cost in Exports was released here today by the Finance Minister, Shri Pranab Mukherjee in the presence of Shri Anand Sharma, Minister of Commerce and Industry and Shri Jyotiraditya M Scindia, Minister of State for commerce and Industry.    The Task Force chaired by Shri Scindia was constituted in October 2009 to identify and suggest ways to achieve significant improvement in the functioning of export processes and reduce time and money spent in export transactions, with a view to enhance the competitiveness of Indian exports.  

The Task Force identified 44 issues and taken up with the relevant Ministries and after consultations with them, it was agreed to implement 32 of these issues. It is expected that implementation of 23 issues is likely to mitigate the transaction cost by approximately Rs.2100 crore.  Permanent reduction of transaction cost through these initiatives will have a long term positive impact on the competitiveness of India’s exports.

TRADE NORMALISATION WITH PAKISTAN

New Ground was covered during the 5th round of talks in April 2011 When Commerce Secretary Shri Rahul Khullar visited Pakistan. Many bilateral Groups/ Sub-groups were set up. Almost all of these Groups/ Sub-groups have met and worked on their specific designated tasks. Shri Anand Sharma invited his Pakistan counterpart and the Commerce Ministers of both countries met in September 2011 and gave a clear political mandate to the respective Commerce Secretaries to lay down specific timelines for full normalisation of the trade relationship, dismantling of remaining non-tariff barriers, and full implementation of the legal obligations under the SAARC Agreement on South Asian Free Trade Area (SAFTA).  Both  sides agreed that Pakistan’s Commerce Minister’s visit to India after 35 years and the political ownership of  leaders of both the countries has not only given the trade normalization process further strength and direction but  a great hope and confidence to the business community also. During the 17th SAARC Summit held at Maldives (9 – 11 November 2011), the political leadership on both sides directed that the two sides also work on enhancing preferential trading arrangements as part of the shared vision to significantly expand bilateral trade. Pakistan side informed that its Cabinet has given a mandate to the Commerce Ministry for complete normalization of trade with India.

The 6th round of India-Pakistan talks on Commercial and Economic Co-operation was held during 14th-16th November 2011 at New Delhi, between Commerce Secretaries of India and Pakistan.   The move to full normalisation of trade relations shall be sequenced.  In the first stage, Pakistan will transition from the current Positive List approach to a Negative List.  The consultation process on devising this Negative List is almost complete.  A small Negative List shall be finalised and ratified by February, 2012.  Thereafter, all items other than those on the Negative List shall be freely exportable from India to Pakistan.  In the second stage, the Negative List shall be phased out.  The timing for this phasing out will be announced in February 2012 at the time the List is notified and it is expected that the phasing out will be completed before the end of 2012.

STATUS OF FTAS IN INDIA

CECA with Malaysia came into force on 1st July 2011 and a very comprehensive CEPA with Japan came into force on 1st August, 2011. 

Details of countries with which India has entered into Free Trade Agreements (FTAs) and their implementation are as follows:

In addition to these 10 FTAs, India has entered into Preferential Trade Agreements (PTAs) with some countries.  The details of countries with which India has entered into Preferential Trade Agreements (PTAs):

 The details of FTAs that the Union Government is negotiating with other countries and the status of the negotiations is given below:

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DS/gk

Export Doubling Strategy expands sectoral incentives and market access while streamlining export procedures and trade normalisation. The government adopts a coordinated export doubling strategy focused on sectoral product priorities, targeted market expansion, technology and brand enhancement, and complementary policy instruments. The Annual Supplement to the Foreign Trade Policy adds temporary sectoral duty credit schemes, expanded focus market and product benefits, market linked product extensions and EDI integration to streamline authorisations. A task force on transaction costs recommended multiple reforms for implementation to reduce export transaction costs. Phased bilateral trade normalisation with a neighbouring country is planned through transition from a positive to a negative list and eventual removal of the negative list. The paper also details concluded FTAs and ongoing negotiations.