Strategise to achieve quantum leap in India’s exports, Kamal Nath tells Board of Trade
ENGAGEMENT WITH GLOBAL ECONOMY TO FUEL GROWTH
Shri Kamal Nath,
Minister of Commerce & Industry, today called upon the Board of Trade to
strategise in order to achieve a quantum leap in India’s exports and to enhance
India’s engagement with the world economy to a level of US $ 500 billion by way
of trade (import and export of merchandise and services) in the next four years
so as to fuel domestic economic activity.
Inaugurating the first meeting of the reconstituted Board of Trade – a high-level forum for dialogue between
government and the trade & industry on India’s external trade – here this
morning, Shri Kamal Nath said that the three things needed to achieve this were
– Vision, Strategy and Implementation. “While the government
is there to provide vision, and the bureaucracy
is in place to do the implementation, it is the second step of ‘strategising’ in which there is a
hiatus, a vacuum. I see the Board of
Trade essentially as a body which will provide us with these strategies – both
short-term as well as medium-term and long-term”, he said. Stating that exports were the most efficient
instrument for generation of employment, Shri
Kamal Nath informed that exports had created one million incremental jobs in
the last financial year and said by the expected achievement of over US $ 150
billion worth of merchandise exports over the next four years, a further one
crore jobs would be added. Members
of the Board later also had an interactive session with the Prime Minister Dr.
Manmohan Singh.
In a presentation on an overview of India’s export
performance at the inaugural which was attended, among others by, Shri EVKS
Elangovan, Minister of State for Commerce & Industry, Shri S.N. Menon,
Commerce Secretary, Shri N.N. Khanna, Chairman & Managing Director, India
Trade Promotion Organisation (ITPO) and Shri Kumaramangalam Birla, Chairman of
the Board of Trade along with other members, Shri K.T. Chacko, Director General
of Foreign Trade (DGFT) said that India’s
merchandise exports almost touched US $ 80 billion last year and India’s share
in world exports increased from 0.66% in 2000 to 0.82% in 2004. The export performance of April-May 2005,
showed a growth of 19% over the already high base of last year. However, “We must go further, and faster”,
Shri Kamal Nath said. Alongside increasing exports, imports also had to be
facilitated as they fuelled industrial activity. “There is nothing wrong with
importing even consumer goods – since consumers deserve to have a choice”, Shri
Kamal Nath said.
Flagging some key
issues for the Board, Shri Kamal Nath emphasised the critical importance of infrastructure and reduction of transaction costs.
He suggested that the Board of Trade could devote a special meeting
entirely to brainstorming on transaction costs, the elimination of which would
greatly enhance India’s competitiveness.
The Minister said
that the Board of Trade had been revitalised so that it could become the most
potent instrument for realising India’s trade objectives. “In the first
place, from a unwieldy body of over 100 members, the number was reduced to
one-third. Then we decided to choose
some of our finest captains of industry as its members, and instead of the
Minister chairing it, we brought in a leading industrialist as the Chairman”,
he said. Shri Menon said that the reconstituted
Board of Trade reflected the government’s commitment to an open dialogue to put
in place efficient delivery mechanisms for India’s trade and economy.
Shri Nath sought the Board’s inputs for finalising an alternative to the Duty
Entitlement Pass Book (DEPB) Scheme.
“The challenge is to devise a scheme that truly neutralizes all levies –
not only customs & excise duties, but also State levies – and at the same
time is WTO-compatible. We have done
some work on this already, but a full-fledged discussion on the various
alternatives in the Board of Trade would be an invaluable exercise. Also
very useful would be for the Board of Trade to evaluate our various export
promotion schemes: the Target Plus
Scheme, the Vishesh Krishi Upaj
Yojana Scheme, the Served from India
Scheme – and give us your views on these”, he said.
Calling for
translating the Special Economic Zone (SEZ)
Act into action, Shri Kamal Nath said:
“I want to infuse a new breath of life into existing SEZs, and quickly have a chain of new ones – SEZs
with state-of-the-art equipment and systems, with world-class
infrastructure. Linked to SEZs are the
Free Trade & Warehousing Zones. I
think that there is much unexplored and untapped advantage to be gained from
making India an international trading hub. The advantages of manufacturing and
of services are well known, but the fact that mere trading can also bring huge
gains is not adequately appreciated. We have the examples of Dubai and
Singapore that have built their prosperity only on trading. Why can we not replicate this?”.
Shri Birla assured
Shri Kamal Nath that the Board would live up to its mandate. It would, in particular, look at exports as
a national priority; issues such as evolving the DEPB successor scheme so that
taxes were not exported while being WTO-compatible; reducing cost disabilities
through elimination of transaction cost; and the issue of non-tariff barriers.
Underlining the importance of international retail sourcing, he
mentioned that as much as US $ 15 billion worth of goods was sourced by
Wal-Mart from China in 2004 and said the Board could consider what role India
could play in attracting some of this.
On WTO, Shri Kamal Nath said that India must be an
active player in framing the rules of world trade so that the system could be
fair and equitable. Shri Birla observed that the Board of Trade could also
function as a very important platform for debate and obtaining views of the
industry on WTO issues particularly in the context of the Hong Kong Ministerial
which would have a profound and far-reaching impact on member countries.
SB/MRS
(Release ID :9746)