India’s export target of US $ 92 billion set for the year 2005-06 will be exceeded, according to the Annual Report of the Ministry of Commerce & Industry (Department of Commerce) for 2005-06 which has been released here today. India’s merchandise exports continued to record double-digit growth during the current financial year touching 20%. This was even more significant coming in the wake of consistently high export growth of more than 20% during the last three years. During 2004-05, India’s merchandise exports at US $ 80 billion far exceeded the export target. At a business luncheon meeting in honour of Prime Minister of Bangladesh yesterday, the Union Minister of Commerce & Industry Minister, Shri Kamal Nath, had also stated that the merchandise export target for the current financial year would be exceeded by a wide margin.
Referring to the Annual Supplement to the Foreign Trade Policy announced by Shri Kamal Nath in 2005, the Report says that the Policy provided for a series of new initiatives to actively engage state governments in promoting India’s international trade, besides containing a series of other measures to simplify procedures, reduce transaction costs and enhance competitiveness of Indian exports, especially in the manufacturing sector.
Some of the major policy measures taken during the year were:
Removal of Export Cess on all agricultural and plantation commodities(valued at around Rs.100 crore) is expected to make agricultural exports more competitive.
Measures have been taken under the Export Promotion Capital Goods (EPCG) Scheme to provide a thrust to the Agricultural sector, the SSI sector, the retail sector, Port Handling services, etc. to promote exports through modernisation of plant and machinery and efficiency improvement and at the same time to facilitate further growth in overall exports.
A National Export Insurance Account (NEIA) was approved by the government recently to ensure the availability of credit risk cover for projects and other high value exports, which are desirable from the point of view of national interest, but which ECGC is presently unable to underwrite.
Trade facilitation measures have been instituted for service exports under the ‘Served from India’ Scheme.
Benefits under the ‘Vishesh Krishi Upaj Yojana’were extended to exports of poultry and dairy products in addition to export of flowers, fruits, vegetables, minor forest produce and their value added products.
Procedural simplification and reduction of transaction costs were vigorously pursued. Time limits have been fixed for issue of various licences and all 33 DGFT offices have been computerized and networked.
As a major step forward meant to instil confidence in investors and signal the government’s commitment to a stable SEZ policy regime, a comprehensive Special Economic Zones Act 2005, was passed by Parliament in May 2005 and received Presidential assent on the 23rd of June 2005. The SEZ Act 2005 and the rules of the SEZ which came into effect from 10th February 2006 are expected to provide a large flow of foreign and domestic investment in SEZs, in infrastructure and manufacture, leading to generation of additional economic activity and creation of employment opportunities.
The country’s first Free Trade Warehousing Zone (FTWZ) at Haldia in West Bengal has already received in principle clearance from the Centre, as a joint venture between IL&FS and MMTC. This is likely to come into operation by the middle of 2006.
On the multilateral trade front, India played a constructive role at Hong Kong while pursuing its negotiating objectives in the negotiations. From India’s perspective, the Hong Kong outcome addresses some of the country’s core concerns and interests and provides a negotiating space for future work. The year 2006 is crucial for WTO negotiations since the Ministerial Conference has resolved to complete the ongoing negotiations in 2006, the Report states.
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SB/NSD/MRS