New Delhi: The global challenges impacting our economy have been the key consideration while drawing up the Foreign Trade Policy (FTP), said Mr Anand Sharma, Union Minister of Commerce, Industry and Textiles during the Interactive Session on Foreign Trade Policy with CII members today. Mr Sharma mentioned that the situation today is very much different from the crisis of 2008-09 wherein unlike today the resources were not a constraint and a stimulus package of US$ one trillion helped in the rebound of the world economy. India also spent Rs. 1.85 lakh crore to perk up its economy with positive results.
According to Mr Sharma, India cannot wait for a pick up in the world economy to attain pre-crisis level of growth. Hence the strategy of market diversification through the focus market and focus product scheme has been adopted which has worked to our advantage. At present, 66 % of our exports are with Asia, Latin American Countries and Africa. This year the FTP has added 14 markets to this scheme.
Mr. Sharma further mentioned that at a time when the world has turned protectionist, India has been negotiating free trade agreements and Comprehensive Economic Policy Agreements at multi-lateral and bilateral levels with countries around the world which have yielded positive spin-off benefits. Our exports have crossed US$ 305 billion last fiscal despite adverse circumstances and the target is to raise it to US$500 billion by 2012 and to double the percent share of goods and services in GDP by 2020 for which a strategy which is futuristic with clear aims and directions is required. The industry has to rise to the occasion and work in close partnership with the government to make this possible.
However, the government recognizes the challenges faced by our economy. The depreciating rupee, widening trade and current account deficit, escalating oil prices are matters of concern. The supplement to FTP addresses these concerns. The scrips for domestic procurement, reduction in transactions costs, e-enabled services are steps in this direction.
The government understands the ground realities and hence has framed the policy to unleash the potential of untapped areas. It is in this direction that the policy thrust on the North East, emphasized Mr Sharma.
Mr Sharma added that the focus on trade with ASEAN and South Asia is meant to facilitate development of the North Eastern region. Besides, for SAARC to be meaningful, it is equally important to move forward in trade with Pakistan. He further mentioned that Pakistan is moving towards granting MFN to India and 88 per cent of the items have been de-notified. Similarly, we have to address the problem of trade imbalance with China. India is promoting the NMIZ- 7 have been notified and another 5 would be notified in August. The Government is also working on facilitating trade through use of national currency, Mr Sharma confirmed.
Dr. Anup Pujari, DGFT, during his address, mentioned that the government is also working on policies for facilitating exports by addressing problems in areas such as discharge of export obligation, incentives for hand tools and bicycle industry in Ludhiana as also for exports of agriculture and services.
Earlier Mr Sunil Munjal, Past President, CII welcomed the provisions of the Foreign Trade Policy such as extending interest subvention, ECGC cover, simplification of procedures, among others.