6th January, 2003
Ministry of Commerce & Industry


EXPORT GROWTH ON A HIGH TRAJECTORY - HIGHLIGHTS OF PERFORMANCE IN THE FOREIGN TRADE SECTOR IN 2002


India’s exports have been on a high growth trajectory throughout the year 2002. In fact, the country’s export growth during the first half of the current fiscal (April-September 2002) touched 19% and what is particularly noteworthy is that against the export target of 12% set for the whose fiscal year, the growth of India’s exports during the first 8 months (April-November 2002) has been over 15%. Thus, the double-digit export growth momentum was sustained throughout the year 2002.

The new Export-Import (EXIM) Policy unveiled by the government on March 31, 2002 for the five-year span zeroed in on export market diversification as one of its policy planks with special focus on hitherto untapped regions like sub-Saharan Africa and the Commonwealth of Independent States (CIS). The Policy contained several far-reaching components to take India’s exports on a steady growth trajectory. These include, among others, removal of all import curbs or quantitative restrictions (QRs), save a few sensitive items reserved for exports through state trading enterprises, a farm-to-port approach for exports of agricultural products, special thrust on cottage sectors and handicrafts and beefed up Assistance to States for Infrastructural Development for Exports (ASIDE).

Agri Export Zones (AEZs) which were introduced in the previous year Exim Policy had really taken off by now with an aggregate outlay of Rs. 1025 crore being forecast during the next three to five years in the 40 AEZs sanctioned in as many as 17 States. What is of significance is that the private investment in these zones over the last one year was of the order of Rs. 95 crore while total exports from these zones during the period October 2001 to October 2002 fetched Rs. 148.43 crore. It is to be noted that the products covered by the AEZs include pineapples, gherkins, litchis, mangoes, vegetables, potatoes, apples, onion, garlic, basmati rice, walnut, besides non-traditional ones like ginger, turmeric, orchids and cherry pepper. Alongside the sprouting of these AEZs, modern perishable cargo handling facility and auction centres for flowers have also been coming up, giving a decisive push to exports of these items from India.

Yet another milestone in 2002 made by the authorities in their consistent quest for pushing export products of heritage value was the enhancement of export capabilities of the small scale sector, which accounts for about 50 per cent of the country’s exports. These capabilities were strengthened through a programme for "Special Focus on Cottage Sector and Handicrafts" including promotion of cotton sector exports under Khadi & Village Industries commission, access to funds from Market Access Initiative (MAI) for units in the handicrafts sector and benefits of export house status at a lower average export performance. Analogous spurs would be extended to industrial cluster towns with export potential like Tirupur (hosiery), Panipat (woollen blankets) and Ludhiana (woolen knitwear).

As the country has realised that successful export effort lays in fostering exclusive export enclaves such as Special Economic Zones (SEZs) modelled after the ones in China, though not at that gigantic scale, the Exim Policy unveiled additional incentives to SEZs. These include, inter-alia, income tax concessions, exemption from Central Sales Tax (CST) on supplies from Domestic Tariff Area (DTA), drawback/duty entitlement passbook (DEPB) to DTA suppliers, freedom to make overseas investment and carry out commodity hedging. For the first time, Overseas Banking Units (OBUs), free from such obligations like credit reserve ratio and statutory liquidity ratio, would be set up in SEZs to provide access to external finance at international rates. This was followed up by a post-Budget announcement by which 100 per cent deduction of export profit was allowed to all SEZs starting production on or after April 1, 2002 for a period of five years and thereafter at 50 per cent for the next two years. The export performance of SEZs or units in Export Processing Zones (EPZs) during the period April to November 2002 was Rs. 5380.97 crore, as compared to Rs. 4936.42 crore in the comparable months of 2001.

Alongside specific spurs to traditional export items like gems & jewellery, exports of agri & allied product, additional fillip to SEZs, the Exim Policy also accorded impetus to the hardware sector as the Electronic Hardware Technology Park (EHTP) scheme was modified to enable the sector to avail of the zero duty regime under the Information Technology Agreement (ITA-I).

Apart from these specific booster measures, the government also rationalised and simplified procedures in respect of various export promotion schemes with a view to cutting down unwanted hassles and minimise the interface between the bureaucrats who administer these schemes and the genuine exporters with a view to bringing down the transaction cost to industry and trade tangibly. The 2002-03 Union Budget too take due care of exporters and major changes in this policy include reduction in the peak rate of customs duty from 35 per cent to 30 per cent and the customs duty on dairy products was hiked to the WTO bound rate of 40 per cent.

In order to provide a level playing field for domestic industry and exporters who are faced with cheap imports threatening their viability, the Designated Authority in the Anti-Dumping & Allied Duties was proactive, providing the much-needed breather to domestic industry by its dispassionate and logical probe into dumping, establishing linkage between dumping and injury.

The year 2002 also saw finalisation of the report of the Committee on the Operational Modalities of the Rs. 500 crore Price Stabilisation Fund for Commodities as the government was seriously concerned over the problems plaguing growers of coffee, tea, rubber and tobacco due to prevalent poor prices for these commodities. The scheme to be operational for ten years would commence from April 2003 and would seek to effect price stabilisation for each of the commodities without resorting to the costly practice of procurement operations.

The Medium Term Export Strategy (MTES) was announced by the government in January 2002. The strategy aimed at augmenting the country’s share in world trade to one per cent by 2006-07 from the extant of 0.67 per cent which implies doubling exports from the present level. The MTES incorporates product (as many as 220 commodities) and market identification for exports and indicative sector-wise strategies for identified potential sectors.

In the post-Doha developments, India continues to play a proactive role by taking active part in all negotiations for which modalities have to be firmed up before March 31, 2003 and final negotiations to be sealed by 2005. On the General Agreement on Trade in Services (GATS), India continues to focus on seeking enhanced market access for developing countries in future negotiations. India has time and again urged that the Work Programme on Implementation Issues should be given the highest priority. Greater attention needs to be devoted to issues about Sanitary & Phyto-sanitary standards and technical barriers to trade so as to fully realise gains in agricultural trade liberalisation. India also stuck to its contention that the trade-related intellectual property rights (TRIPs) agenda should reflect the concerns of developing world. India’s viewpoints on all these issues were forcibly articulated at the mini-ministerial held in Sydney, Australia, in the middle of November, 2002.

   
Home
Press Releases

English Releases
Hindi Releases
Urdu Releases
Ministrywise Releases

Photogallery
  Today's Photogallery
Photo Archives
Features
English Features
Hindi Features
PIB
  Contact Information
About us
Subscribe PIB Releases
Accredited Journalists
Important Links
Pesident's Office
Prime Minister's Office
Indian Parliament
Media Units
DD News
AIR News
GOI Website Directory