Chapter-7 · 15575.4 33001.9: 48577.3 (-) 17426.5 * Provisional Source: DGCI&S: Major items of...

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Chapter-7

Commercial Relations and Trade Agreements

Trade diversification reflects an economy’s growing competitiveness resulting from its broadening productive base with processes getting more efficient, improving fundamentals, and its increasing willingness and capabilities to effectively integrate with the world economy. Asia and ASEAN region is India’s largest trading partner. During the period April- September 2010-11, Asia and ASEAN region accounted

for about 58% of India’s trade (exports and imports). Europe and America, together, account for around 31% of India’s trade. Region – wise share of India’s Export and Import during April – September 2010-11 is shown in Chart 7.1 and Chart 7.2 respectively. India’s trade and the growth rate of India’s trade with major regions of the world are shown in Chart 7.3 and Chart 7.4 respectively.

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Annual Report 2010-11

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CHAPTER-7 Commercial Relations and Trade Agreements

I. Trade with Asia

a) South East Asia

ASEAN Region-General

India’s trade with ASEAN (Association of South East

Asian Nations) countries viz. Brunei Darussalam,

Cambodia, Indonesia, Lao PDR, Malaysia, Myanmar,

Philippines, Singapore, Thailand and Vietnam

stood at US$ 43.91 billion during the year 2009-10.

Traditionally, India has an adverse balance of trade

in the region. The major destinations for India’s

exports in the region are Indonesia, Malaysia,

Singapore, Thailand and Vietnam, while the

major sources of imports are Indonesia, Malaysia,

Singapore, Thailand and Myanmar.

Major Commodities of Export & Import – ASEAN

The Principal Commodities of export include

Petroleum Products, Oil Meals, Gem and Jewellery,

Electronic Goods, Cotton Yarn/RMG Cotton,

Machinery and Instruments, Primary/Semi-

Finished Iron & Steel, Transport Equipments, Marine

Products, Drugs/Pharma, Inorganic/Organic/ Agro

Chemicals, Dyes/Intermediates, etc.

The major commodities imported from this

region are Coal/Coke/Briquettes, Vegetable

oils, Petroleum Oils, Electronic Goods, Organic

Chemicals, Machinery except Electrical Machinery,

Professional Instruments, Wood and Wood

Products, Non-Ferrous Metals, Metalifers Ores and

Metal Scrap, etc.

Trade Promotion Activities

India currently has Joint Trade Committees with

Brunei, Myanmar, Thailand and a Joint Working

Group on Trade & Investment with the Philippines.

India has established an ASEAN India Business

Council (AIBC). India also has Joint Business

Councils (JBC), established at the business level,

with Singapore, Malaysia, Indonesia, Thailand,

Vietnam and Philippines. Meetings of JBCs are held

between the business communities of both sides

to discuss a wide range of issues of mutual interest

for expansion of bilateral trade.

An India-ASEAN Business Fair is being organized in

New Delhi from 2nd March to 6th March, 2011.

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Table 7.1India’s Trade with ASEAN Member Countries

Value in US$ Million

Latest Trade figure for the ASEANCountry 2008-09 2009-10 2010-11(P)

Upto September 2010

Exports Imports Total

TradeExports Imports Total

TradeExports Imports Total

Trade

Brunei 17.64 397.52 415.16 24.43 428.65 453.08 10.65 85.87 96.52

Cambodia 46.9 2.72 49.62 45.54 5.05 50.59 28.08 3.35 31.43

Indonesia 2559.82 6666.34 9226.16 3059.52 8551.62 11611.14 2242.07 4301.66 6543.73

Lao PDR 9 0.53 9.53 16.93 20.05 36.98 2.39 0.13 2.52

Malaysia 3419.97 7184.78 10604.75 2835.38 5176.24 8011.62 1989.96 2929.93 4919.89

Myanmar 221.64 928.97 1150.61 207.97 1289.35 1497.32 129.87 610.72 740.59

Philippines 743.77 254.77 998.54 748.71 312.71 1061.42 371.47 204.96 576.43

Singapore 8444.93 7654.86 16099.79 7568.29 6163.91 13732.2 4643.38 3488.34 8131.72

Thailand 1938.31 2703.82 4642.13 1740.1 2930.13 4670.23 1088.47 1976.11 3064.58

Vietnam 1738.65 408.66 2147.31 1838.87 521.8 2360.67 1102.12 449.72 1551.84

ASEAN 19140.63 26202.97 45343.6 18085.74 25399.51 43485.25 11608.47 14050.8 25659.27

India's total Trade 185295.36 303696.31 488991.67 178662.17 286822.8 465484.94 105351.89 161449.28 266801.17

Trade with ASEAN as %age of total 10.33% 8.63% 9.27% 10.12% 8.86% 9.34% 11.02% 8.70% 9.62%

Engagements with ASEAN

In pursuance of India’s ‘Look East Policy’, a

continuous dialogue is maintained with the ASEAN

and the countries of South-East Asia. Summit level

engagements, Ministerial meetings and official

level discussions are held in order to fulfill the

‘Look East Policy’ agenda.

India and the ASEAN have signed the Trade in

Goods Agreement under the broader framework of

Comprehensive Economic Cooperation Agreement

between India and the ASEAN, on 13th August

2009. Table 7.2 indicates the dates of enforcement

of the Trade in Goods Agreement with respect

to India and other countries. In the case of

remaining two countries, it will come into force

after they complete their internal requirements.

The Agreement is expected to further boost

bilateral trade and investment between India and

the ASEAN. India and the ASEAN are currently

negotiating Agreements on Trade in Services and

Investment which are targeted to be concluded by

March, 2011.

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The Union Minister for Commerce and Industry, Shri Anand Sharma with the Trade/Commerce Ministers and Officials from the ASEAN Member States at the 8th AEM-India Consultations, in Da Nang, Vietnam on

August 27, 2010.

Shri Anand Sharma, Commerce and Industry Minister exchanging the India-Malaysia Comprehensive Economic Cooperation Agreement with his Malaysian counterpart, Mr Mustapa Mohamed on 18th February, 2011 at Kuala

Lumpur in the presence of Prime Minister of Malaysia, Mr Mohd Najib Tun Abdul Razak.

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Table: 7.3

India’s trade with Australia and New Zealand(Value in US$ million)

Country 2007-2008 2008-2009 2009-10 2010-11(P)April-September,

2010

Exports Imports Exports Imports Exports Imports Exports ImportsAUSTRALIA 1,152.40 7,815.32 1,439.32 11,098.07 1,384.96 12,407.37 778.83 5,586.24

NEW ZEALAND 158.82 335.94 188.62 423.74 255.17 499.21 88.91 354.41

Total 1311.22 8151.26 1627.94 11521.81 1640.13 12906.58 867.74 5940.65

Source: DGCI&S

Table: 7.2Trade in Goods Agreement between

India and ASEAN countries

S. No Countries Date of coming into force1. Malaysia, Singapore, Thailand 1st January 20102. Vietnam 1st June 20103. Myanmar 1st September 20104. India and Indonesia 1st October 20105. India and Brunei Darussalam 1st November, 20106. Lao PBR 24th January, 2011

India and Malaysia have concluded negotiations

towards a Comprehensive Economic Cooperation

Agreement (CECA). An agreement has been signed

by both countries envisaging that the CECA would

be implemented with effect from 1st July, 2011.

Both countries are likely to sign the CECA in early

2011.

India and Indonesia set up a joint feasibility

study of a Comprehensive Economic Cooperation

Agreement (CECA) between the two countries

in 2007. The Joint Study Group has submitted its

Report in September, 2009.

Negotiations for the India –Thailand Free Trade

Agreement are underway and both sides have

agreed to conclude a comprehensive Free Trade

Agreement including Trade in Goods, Services,

Investment and Economic Cooperation as a ‘single

undertaking’ by 2011.

Trade with Australia and New Zealand

India’s trade with Australia and New Zealand

showed robust growth in recent years.

The principal commodities of export to Australia

are diamonds and diamond jewellery, iron ore,

wind power generating sets, refrigerators, cars,

pharmaceutical products, electricity meters etc.

Important items of import from Australia are gold,

coking coal, copper ores, petroleum and LNG,

chickpeas, alumina, wool etc.

The Principal Commodities of exports to New

Zealand are parts of aeroplanes/helicopters/

air craft engines, light oil and preparation, non-

industrial diamonds fluorides of aluminium, zinc

(not alloyed) etc. Important items of import from

New Zealand are coal, wood, newsprint in rolls of

sheets, apples, aluminium waste & scrap and wool

etc.

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Trade Promotion Activities

India has Joint Trade Committees with New

Zealand, Fiji and a Joint Commission with Australia

at the Ministerial level.

India has Joint Business Councils (JBC), established

at the business level, with New Zealand and

Australia. Meetings of JBCs are held between the

business communities of both sides to discuss

a wide range of issues of mutual interest for

expansion of bilateral trade.

India and Australia set up a joint feasibility study

of a Free Trade Agreement (FTA) between the

two countries in 2008. The Joint Study Group has

submitted its Report in May, 2010.

India and New Zealand have started negotiations

for a Comprehensive Economic Cooperation

Agreement (CECA)/Free Trade Agreement (FTA)

between the two countries. Three rounds of

negotiations between the two countries have been

held so far.

B) North East Asia

India’s trade with the North East Asian region

comprising of China, Japan, Republic of Korea,

Hong Kong China, Taiwan China, Democratic

People Republic of Korea, Macao and Mongolia

stood at US$ 82.39 billion during 2009-10, which

is a decline of 1.9% over the previous year. Exports

to the North East Asia region were of the order

of US$ 28.9 billion during 2009-10, registering

a growth of 13.5% over the last year. However,

imports from the region declined by 8.49% to US$

53.49 billion during 2009-10. India’s major trading

partners in the region are China, Japan, Hong Kong

and Republic of Korea. Trade with North East Asian

countries from 2006-07 to 2010-11 (April-June) is

given in the Table 7.4:

Table: 7.4Trade with North East Asian Countries

(Value in US$ million)

Year Exports Imports Total TradeBalance of

Trade2006-07 19359.8 31493.8 50853.6 (-) 12134.0

2007-08 26450.0 44755.4 71205.4 (-) 18305.4

2008-09 25449.1 58455.9 84005.0 (-) 33006.8

2009-10 28904.5 53491.5 82396.0 (-) 24587.0

2010-11 (April-Sept)* 15575.4 33001.9 48577.3 (-) 17426.5

* Provisional Source: DGCI&S

Major items of export to the region are gems and

jewellery, iron ore, Primary and Semi-finished Iron

& Steel, Plastic and Linoleum Products, Cotton

Yarn, Fabric Made Ups and Marine Products.

Major items of import include Electronic Goods,

Machinery, Organic Chemicals, pearls, precious

and semi-precious Stones, Coal, Coke, Briquettes,

Iron & Steel and Transport Equipment.

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The Union Minister for Commerce and Industry, Shri Anand Sharma with the Chinese Premier, Mr. Wen Jiabao, at the India-China Business

Co-operation Summit, in New Delhi on December 15, 2010.

China and India have agreed to endeavour to

raise the volume of bilateral trade to US$ 100

billion by 2015. Trade with China has already

crossed US$ 42.4 billion during 2009-10. Major

items of Indian exports to China include iron ore,

primary and semi-finished iron & steel, Plastic &

Linoleum Products, Processed Minerals, Inorganic/

Organic/agro Chemicals, Minerals and Ores, Drugs,

Pharmaceutical and Fine Chemicals. Major imports

from China include Electronic Goods, Coal, Coke,

Briquettes, Organic Chemicals, Machinery and

Medicinal & Pharmaceuticals Products.

Indian exports to Japan registered a growth of

19.9%, while imports from the country registered

a decline of 14.6% during 2009-10 over that of

the previous year. Major items of export to Japan

include gems and jewellery, marine Products, Iron

Ore, Petroleum, Crude & Products and Oil Meals.

Major items of import from Japan are machinery,

electronic Goods, Transport Equipment, Iron

and Steel, Professional Instruments and Organic

Chemicals. During the Japanese Prime Minister’s

visit to India in August 2007, it was agreed that

the two countries would work towards achieving

an annual trade volume of US$ 20 billion by 2010.

The actual trade flow during 2009-10 was US$

10.36 billion.

Exports to Hong Kong, China accounted for 4.3% of

India’s overall exports during 2009-10. During 2009-

10 India’s exports to Hong Kong, China amounted

to US$ 7.8 billion registering a growth of 18.5%

over the last year. Imports from Hong Kong, China

in 2009-10 amounted to US$ 4.7 billion, recording

a decline of 26.6% per cent over the previous year.

The major items of exports to Hong Kong are gems

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and jewellery, finished leather, electronic Goods,

Marine products, Natural Silk Yarn, Cotton Yarn

Fabrics Made Ups, Plastic & Linoleum Products and

Petroleum: Crude & Products. The share of Gems

and Jewellery in India’s exports to Hong Kong is

about 80%. The major items of imports are Pearls,

Precious & Semi-Precious Stones, Electronic Goods,

Machinery, Gold, Silver and Cotton Yarn & Fabrics.

Indian exports to the Republic of Korea during 2009-

10 amounted to US$ 3.4 billion registering a decline

of 13.4% over the last year while Imports from

Korea during 2009-10 amounted to US$ 8.5 billion

registering a decline of 1.1%. Major items of exports

are Petroleum Products, Cotton Yarn, Fabrics, Made

Ups, Oil Meals, Minerals & Ores, Iron Ore, Primary

and Semi-Finished Iron & Steel, Non-Ferrous Metals,

and Drugs, Pharmaceuticals & Fine Chemicals. Major

items of imports are Electronic Goods, Machinery,

Transport Equipment and Iron and Steel.

Box: 7.1Outcome of Chinese Premier’s Visit during 15-17 December, 2010

i) Positively viewed the growing opportunities in the economic relationship and agreed to establish a

Strategic Economic Dialogue to enhance macro-economic policy coordination, to promote exchanges

and interactions and join hands to address issues and challenges appearing in economic development

and enhance economic cooperation.

ii) Set a new bilateral trade target of USD 100 billion by 2015. The two sides agreed to take measures

to promote greater Indian exports to China with a view to reduce India’s trade deficit. This

includes support for Indian participation in China’s national and regional trade fairs, advancing of

trade facilitation, enhancing exchange and cooperation of pharmaceutical supervision, stronger

relationships between Chinese enterprises and Indian IT industry and speedier completion of phyto-

sanitary negotiations on agro products.

iii) Agreed to expand cooperation in infrastructure, environmental protection, information technology,

tele communications, investment and finance on a priority basis to draw on each other’s strengths

and pursue mutual benefit and win-win results. India welcomed Chinese enterprises to invest and

participate in India’s infrastructure development such as in roads, railways and in the manufacturing

sector. The two sides agreed to encourage greater mutual investment and project contracting

cooperation between businesses of the two countries, appropriately handle economic and trade

frictions and differences and jointly oppose protectionism in all forms. They constituted an India-

China CEO’s Forum to deliberate on business issues and make recommendations on expansion of

trade and investment cooperation.

iv) Concluded a Memorandum of Understanding between the Reserve Bank of India and China Banking

Regulatory Commission to increase banking and financial cooperation. India and China also agreed

to grant permission to the banks of the other country to open branches and representative offices.

Modalities will be worked out by the concerned authorities.

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Trade Negotiations

a) India - Korea CEPA

A Comprehensive Economic Partnership Agreement

(CEPA) between India and Republic of Korea was

signed on 7th August, 2009. The CEPA came into

force from 1st January, 2010. The first meeting of

the Joint Committee at Ministerial level to review

the implementation of CEPA was held on 20th

January, 2011 in New Delhi.

b) India - Japan CEPA

A Comprehensive Economic Partnership Agreement

(CEPA) between India and Japan was signed on 16th

February, 2011.

c) India-China Joint Task Force (JTF) for RTA Feasibility

This Joint Task Force (JTF) of India and China was constituted to study the feasibility and the benefits of a possible China-India Regional Trading Arrangement (RTA). The JTF finalized its report in its sixth meeting held on 21st and 22nd October, 2007. The Prime Minister visited China during 13-15 January, 2008 and discussed the findings of this report with the Chinese Prime Minister. Both the Prime Ministers decided to refer the report for consideration to the Joint Economic Group (JEG)

headed by the Trade and Commerce Ministers of the two countries. The report of India-China JTF was considered by the two Commerce Ministers at the 8th Session of India-China JEG held on 19th January, 2010 in Beijing. No decision was taken on the recommendations of the JTF.

I. Bilateral Trade Relations with countries in South Asia and Iran

(i) Afghanistan

India & Afghanistan signed the Preferential Trade Agreement on March 6, 2003 in New Delhi. This agreement would remain in force till either party gives to the other a notice for its termination. Under the Agreement, India has granted preferential tariff for 38 products from Afghanistan including raisins, dry fruits, fresh fruits and Spices whereas Afghanistan granted preferential tariff to 8 items from India including tea, Antisera and Medicines, Refined Sugar, Cement Clinkers and White Cement. Afghanistan was inducted as the eighth member of SAARC during the Fourteenth SAARC Summit held in New Delhi on 3-4 April 2007. India’s trade with Afghanistan has increased substantially from US$ 201.09 million in 2005-06 to US$ 588.74 million in 2009-10. The trend in trade between India and Afghanistan is given in Table 7.5.

Table: 7.5Bilateral Trade with Afghanistan


Year Exports Imports Total Trade Balance of Trade2005-06 142.67 58.42 201.09 84.252006-07 182.11 34.37 216.48 147.742007-08 249.21 109.97 359.18 139.242008-09 394.23 126.24 520.47 267.99

2009-10 463.55 125.19 588.74 338.36

2009-10 (April-Sept) 252.67 39.99 292.66 212.68

2010-11(April-Sept)* 172.03 35.27 207.30 136.75* ProvisionalSource: DGCI&S

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(ii) Bangladesh

The Bilateral Trade Agreement between India and

Bangladesh, renewed from time to time, provides

for expansion of trade and economic cooperation,

making mutually beneficial arrangement for the use

of waterways, railways and roadways, passage of

goods between two places in one country through

the territory of the other, exchange of business

and trade delegations and consultations to review

the working of the Agreement at least once a year.

The 7th meeting of the Joint Working Group (JWG)

on trade between India and Bangladesh was held

on May 6-7, 2010 at Dhaka in Bangladesh where

the two sides had a detailed discussion on various

bilateral trade issues. In the JWG meeting Indian

side expressed its readiness to assist Bangladesh

in strengthening the Bangladesh Standards and

Testing Institute (BSTI). The Indian side informed

that it is upgrading the 14 Land Customs Stations/

Integrated Check Posts on India- Bangladesh

Border at an estimated cost of 125 US$ million.

The second meeting of Sub-group on improving

of infrastructure was held in October 2010. The

subgroup made recommendations for improving

the infrastructure at Land Customs Stations

on India-Bangladesh Border. A Memorandum

of Understanding (MoU) on establishment of

Border -Haats at Baliamari-Kalaichari (Pillar No.

1072) and Lauwaghar-Balat (Pillar No. 1213) at

Meghalaya, India –Bangladesh border was signed

on 23.10.2010 during the visit of Mr. Muhammad

Khan, Commerce Minister, Bangladesh. Following

commodities will be allowed to be traded in the

Border Haats :

a) locally produced vegetables, food items, fruits,

spices;

b) minor local forest produce e.g. bamboo,

bamboo grass, and broom stick but excluding

timber;

c) products of local cottage industries like

Gamcha, Lungi etc.;

d) small locally produced agriculture household

implements e.g., dao, plough, axe, spade,

chisel etc.;

e) locally produced garments, melamine products,

processed food items, fruit juice, etc.

The commodities will be allowed to be exchanged in

the designated Border Haats in local currency and/

or on barter basis. Each individual will be allowed

to purchase only as much of the locally produced

commodities which are reasonable for bona-fide

personal/family consumption. The estimated

value of such purchases shall not be more than

the respective local currency equivalent of US$50

(fifty) for any particular day.

Two agreements on Standard Operating Procedures

(SoPs) namely (i) Procedure for monitoring

of entry/exit of Nepalese vehicles through

Phulbari- Banglabandha LCS and (ii) Procedure

for monitoring of entry/exit of vehicles at Land

Custom Station(LCS) on India-Bangladesh border

were signed on 23.10.2010 during the visit of

the Bangladesh Commerce Minister. India’s trade

with Bangladesh has increased substantially from

US$1791.39 million in 2005-06 to US$2688.43

million in 2009-10. The trend in trade between

India and Bangladesh is given in Table 7.6.

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Table 7.6Bilateral Trade with Bangladesh


Year Exports Imports Total Trade Balance of Trade2005-06 1664.36 127.03 1791.39 1537.332006-07 1629.57 228.00 1857.57 1401.572007-08 2923.72 257.02 3180.74 2666.72008-09 2497.87 313.11 2810.98 2184.762009-10 2433.77 254.66 2688.43 2179.112009-10 (April-Sept) 1057.01 114.70 1171.71 942.31

2010-11(April-Sept)* 1368.48 154.91 1523.39 1213.57


(iii) Bhutan

The current Free Trade Agreement between

India and Bhutan, namely ‘Agreement on Trade,

Commerce and Transit’ was signed in New Delhi on

28th July, 2006 for a period of ten years with effect

from 29th July, 2006. Under this Agreement India

also provides transit facilities to landlocked Bhutan

to facilitate its trade with third countries and

movement of goods from one part of Bhutan to

another through Indian Territory. The requirements

of Bhutan are mainly met by imports from India.

Commercial transactions are carried out in Indian

Rupees and Bhutanese Ngultrum. India’s trade

with Bhutan has increased substantially from

US$187.94 million in 2005-06 to US$271.97 million

in 2009-10. The trend in trade between India and

Bhutan is given in Table 7.7.

Table: 7.7Bilateral Trade with Bhutan

(Value in US$ million)Year Exports Imports Total Trade Balance of Trade

2005-06 99.17 88.77 187.94 10.4

2006-07 57.66 142.05 199.71 -84.39

2007-08 86.74 194.72 281.46 -107.98

2008-09 111.15 151.79 262.94 -40.64

2009-10 118.86 153.11 271.97 -34.25

2009-10 (April-Sept) 48.31 64.91 113.22 -16.60

2010-11 (April-Sept)* 114.63 88.16 202.79 26.47

*ProvisionalSource: DGCI&S

iv) Iran

Iran has a strategically important location bordering

Pakistan and Afghanistan and sitting atop the

Persian Gulf and Hormuz Straits. Its rich deposits

of oil and gas as well as other mineral resources,

bolsters its important regional role. India’s core

interest in the bilateral relationship with Iran

includes its need for steady and undisrupted

supply of crude oil and gas as well as acquisition

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of oil/gas fields for its energy security. Iran is also

crucial for connectivity to Afghanistan and Central

Asia. Iran is not a member of WTO, as on date.

Hence, it is trying to enter into a number of FTAs

and Preferential Trade Agreements (PTAs) with

countries located in Asia, Africa and Europe.

India’s bilateral enagement with Iran may

potentially be affected by the “Comprehensive

Iran Sanctions, Accountability and Divestment Act

Table: 7.8Bilateral Trade with Iran

(Value in US$ Million)

Year Export Import Total Trade Balance of Trade

2005 – 06 1188.35 702.46 1890.81 485.89

2006 – 07 1446.48 7618.55 9065.03 -6172.07

2007 – 08 1943.92 10943.61 12887.53 -8999.69

2008 - 09 2534.01 12376.77 14910.78 -9842.76

2009 – 10 1853.17 11540.85 13394.02 -9687.68

2009- 10 (April-Sept) 975.41 5668.11 6643.52 -4692.70

2010-11 (April- Sept)* 1038.51 4790.43 5828.94 -3751.92

*Provisional (Source – DGCIS, Kolkata)

v) Maldives

The Bilateral Trade Agreement signed on 31st

March, 1981 will remain progressively in force

until it is modified or terminated by either country

by giving three months’ notice to the other. The

Agreement provides for Most Favoured Nation

(MFN) treatment to each other in trade and

merchant vessels, promotion of commercial

and technical cooperation through exchange of

of 2010” which was signed into law by President

Obama on July 1, 2010. The Act has broadened

the scope of sanctionable activities to Iran’s energy

and other sectors and has also sought to make sure

that the sanctions are enforced. India’s trade with

Iran has increased substantially from US$1890.81

million in 2005-06 to US$13394.02 million in 2009-

10. The trend in trade between India and Iran is

given in Table 7.8.

delegations and participation in trade fairs and

exhibitions and supply of essential commodities by

Government of India to Government of Maldives

on annual quota. All payments between India and

Maldives are in freely convertible currency, subject

to their foreign exchange regulations. India’s trade

with Maldives has increased substantially from

US$69.56 million in 2005-06 to US$83.49 million

in 2009-10. The trend in trade between India and

Maldives is given in Table 7.9.

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Table 7.9Bilateral Trade with Maldives


Year Exports Imports Total Trade Balance of Trade

2005-06 67.58 1.98 69.56 65.6

2006-07 68.68 3.05 71.73 65.63

2007-08 89.72 4.15 93.87 85.57

2008-09 127.91 3.97 131.88 123.94

2009-10 79.86 3.63 83.49 76.23

2009-10 (April-Sept) 37.56 1.26 38.82 36.30

2010-11 (April-Sept.) * 48.13 29.44 77.57 18.69

* ProvisionalSource: DGCI&S

vi) Nepal

A Treaty of Trade and the Agreement of Cooperation

between the two countries was signed on 27th

October, 2009 at Kathmandu, Nepal, by Shri Anand

Sharma, Commerce & Industry Minister, and

Shri Rajendra Mahato, Minister for Commerce &

Supplies, Government of Nepal. The Treaty aims

at improving bilateral trade between the two

countries by increasing the mutually agreed points

of trade, expansion in the list of items included

for preferential trade, simplification of trade

procedures, improving Nepalese supply capacities,

provision of two level institutional mechanisms for

problem resolution etc. An Inter-Governmental

Committee (IGC) meeting on Trade, Transit and

Cooperation to control unauthorised trade was

held on 27-28 January 2010. The Indian delegation

was led by Shri Rahul Khullar, Commerce Secretary.

Both sides held detailed discussion on various

bilateral issues. India’s trade with Nepal has

increased substantially from US$ 1239.82million

in 2005-06 to US$1985.92 million in 2009-10. The

trend in trade between India and Nepal is given in

Table 7.10.

Table 7.10Bilateral Trade with Nepal


Year Exports Imports Total Trade Balance of Trade2005-06 859.97 379.85 1239.82 480.122006-07 927.40 306.02 1233.42 621.382007-08 1507.42 628.56 2135.98 878.862008-09 1570.15 496.04 2066.19 1074.112009-10 1533.31 452.61 1985.92 1080.702009-10 (April-Sept.) 689.16 233.81 922.97 455.352010-11 (April-Sept.)* 974.02 242.23 1216.25 731.79

* Provisional Source: DGCIS

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vii) Pakistan

India and Pakistan have no formal trade agreement.

India has granted MFN status to Pakistan but

Pakistan is yet to reciprocate. Pakistan maintains

a list of importable items from India, called

Positive List, as notified from time to time. The

present Positive List consists of 1938 items. Both

countries have set up a Joint Study Group (JSG) at

Commerce Secretary Level for adopting a strategy

to boost trade and economic cooperation between

the two countries. Apart from JSG, Commerce

Secretary-level discussions on trade and economic

cooperation are held within the framework of

Composite Dialogue between the two countries.

Cross Line of Control (LOC) Trade from both

Salamabad on the Srinagar-Muzaffarabad Highway

and Chakkan-da-bagh on the Poonch Rawalkot

axis from J&K on the Indian side to Chakoti and

Rawalkote on the Pakistani side commenced from

21st October, 2008. A list of 21 items for trade

was approved for trade from both sides. All these

items have been allowed duty free passage. India’s

trade with Pakistan has increased substantially

from US$868.79 million in 2005-06 to US$1849.26

million in 2009-10. The trend in trade between

India and Pakistan is given in Table 7.11.

Table: 7.11Bilateral Trade with Pakistan

(ValueR in US$ million)Year Exports Imports Total Trade Balance of Trade

2005-06 689.23 179.56 868.79 509.67

2006-07 1350.09 323.62 1673.71 1026.47

2007-08 1950.53 287.97 2238.5 1662.56

2008-09 1439.88 370.17 1810.05 1069.71

2009-10 1573.32 275.94 1849.26 1297.38

2008-09 (April-Sept.) 800.55 124.47 925.02 676.08

2010-11 (April-Sept.)* 784.56 170.07 954.63 614.49


Box: 7.2Line of Control (LOC) Trade

Items of export to and import from Pakistan

Items for export from the Indian side are• : Carpets, Rugs, Wall Hangings, Shawls And Stoles, Namdas, Gabbas, Embroidered items including crewel, Furniture Including Walnut Furniture, Wooden Handicrafts, Fresh Fruits and Vegetables, Dry Fruits including Walnuts, Saffron, Aromatic Plants, Fruit bearing plants, Dhania/Moongi/Imli and Black Mushrooms, Kashmiri Spices, Rajmah, Honey, Paper mache Products, Spring Rubberized Coir/Foam Mattresses/Cushion/Pillows & Quilts and Medicinal Herbs.

Items for export from the Pakistan side are• : Rice, Jahnamaz and Tusbies, Precious Stones, Gabbas,

Namdas, Peshawari Leather Chappals, Medicinal Herbs, Maize And Maize Products, Fresh Fruits and

Vegetables, Dry Fruits including Walnuts, Honey, Moongi, Imli, Black Mushroom, Furniture Including

Walnut Furniture, Wooden Handicrafts, Carpets and Rugs, Wall Hangings, Embroidered Items, Foam

Mattresses, Cushions and Pillows, Shawls and Stoles.

102


viii) Sri Lanka

Sri Lanka has traditionally been an important

export market for India. India-Sri Lanka Free Trade

Agreement (ISLFTA) was signed on 28th December,

1998, which has been in operation since 1st March,

2000. Under this Agreement, both countries

agreed to phase out trade tariffs from each other

within a fixed time frame except for those items in

the Negative List of each other. A Joint Study Group

(JSG) was set up in April, 2003 to widen the ambit

of ISLFTA to go beyond trade in goods to include

services and to facilitate greater investment

flows between the two countries. Report of JSG

was submitted in October, 2003. Based on the

recommendation and conclusion of the JSG,

negotiations for a Comprehensive Economic

Partnership Agreement (CEPA) were started in

February, 2005 and concluded in July 2008, after

13 rounds of negotiations. On account of some

reservations expressed by the Government of Sri

Lanka, the Agreement could not be signed then.

After a gap of 2 years, both sides resumed

discussions on implementation of issues of

ISLFTA and agreed to take forward the process of

signing a comprehensive agreement for economic

cooperation. A Sri Lankan delegation led by the

Director General, Commerce, Sri Lanka visited

Delhi on 15-16 November 2010. As a follow up,

an Indian delegation led by Joint Secretary, FT(SA)

visited Colombo(Sri Lanka) on 23-24 December

2010 to review outstanding trade issues. Sri

Lankan side has agreed to provide a revised draft

framework for economic cooperation agreement

after consultations with the stakeholders. It was

also decided that different sub groups on pruning

of negative lists, scheduling of investment and

scheduling of services would work simultaneously

and come out with the offers of the respective

countries. India’s trade with Sri Lanka has marginally

declined from US$ 2602.37 million in 2005-06 to

US$ 2580.20 million in 2009-10. The trend in trade

between India and Sri Lanka is given in Table 7.12.

Table 7.12Bilateral Trade with Sri Lanka


Year Exports Imports Total Trade Balance of Trade2005-06 2024.67 577.70 2602.37 1446.972006-07 2258.30 470.33 2728.63 1787.972007-08 2830.43 634.96 3465.39 2195.472008-09 2425.92 356.57 2782.49 2069.35

2009-10 2188.01 392.19 2580.20 1795.82

2009-10 (April-Sept.) 823.75 162.22 985.97 661.532010-11 (April-Sept.)* 1328.19 186.50 1514.69 1141.69


III. South Asian Association for Regional Cooperation (SAARC)

South Asian Association for Regional Cooperation

(SAARC), with India, Bangladesh, Bhutan, Maldives,

Nepal, Pakistan and Sri Lanka as members, was

established at the first SAARC Summit held on 4-8

December 1985. Afghanistan became its eighth

member during the 14th SAARC Summit held

103


in April 2007. India, Pakistan and Sri Lanka are

categorized as Non-Least Developed Contracting

States (NLDCSs) and Afghanistan, Bangladesh,

Bhutan, Maldives and Nepal are categorized as

Least Developed Contracting States (LDCSs).

The SAARC Preferential Trading Arrangement

(SAPTA) provided a framework for exchange of tariff

concessions and also for liberalization in para-tariff

and non-tariff measures with a view to promoting

trade and economic cooperation among the SAARC

member countries. The Agreement on South Asian

Free Trade Area (SAFTA) was signed during the

Twelfth SAARC Summit held at Islamabad in January

2004 which came into force from 1st January

2006. SAFTA, inter alia, prescribes a phased Tariff

Liberalization Programme (TLP) according to which

all the member states would reduce their tariffs,

at the MFN applied rate existing as on 1st January

2006, to zero to five percent within ten years of

the agreement coming into force. This TLP would

cover all tariff lines except those items kept in the

Sensitive List by each country. With the SAFTA

Agreement coming into force, there would be no

more negotiations under SAPTA.

During the fourteenth SAARC Summit held in New

Delhi on 3-4 April 2007 India, inter alia, unilaterally

announced that before the end of 2007, India

would allow the LDC countries of SAARC duty

free access to its markets, and India would also

further reduce the Sensitive List of SAFTA for these

countries. In pursuance of this, India has notified

tariff reductions to zero per cent for SAARC LDC

countries under SAFTA, with effect from 1st

January, 2008. India thus completed SAFTA TLP one

year ahead of the stipulated three years from 1st

January, 2006 for completion of TLP by the NLDCSs

for LDCSs. India has also reduced its Sensitive List

under SAFTA for these countries from 744 items to

480 items.

SAFTA Ministerial Council (SMC) consisting of

Ministers of Commerce/Trade of the Member

States is the highest decision making body of

SAFTA and the SMC is supported by a Committee of

Experts (COE) with nominees from member states.

The fifth meeting of the COE and SMC was held

on October 26- 27, 2009, and 28th October 2009

respectively at Kathmandu, Nepal.

India has developed a web based portal providing

detailed information on current and updated

import policies in respect of various products

imported into India. It provides a one stop

knowledge base for exporters in the SAARC region

exporting different products to India. The portal

also called the Compendium is freely accessible at

the site address:-url:http://compendium.iift.ac.in/

index.asp

Table 7.13India’s Trade with SAARC Countries

(Value in US$ Billion)

2006-07 2007-08 2008-09 2009-10 2009-10 (April-Sept)

2010-11 (April-Sept)

ExportsIndia’s Total 126.41 163.13 185.30 178.75 80.95 105.35% share of SAARC countries 5.12 5.91 4.62 4.69 4.58 4.55

ImportsIndia’s Total 185.74 251.65 303.70 288.37 128.13 161.45% share of SAARC countries 0.81 0.84 0.60 0.57 0.58 0.56

Provisional Source: DGCI&S

104


Box 7.3Highlights of Trade with SAARC

(During April – September, 2010-11) Bangladesh was the largest trading partner of India in the SAARC region. •India has recorded a negative growth rate of exports with Afghanistan and Pakistan in SAARC •region. The lowest decline in growth of exports was recorded for Afghanistan at (-) 31.92%. •Except for Bhutan, India runs a trade surplus with all other trading partners. •For April-Sept. 2010-11•

The SAARC Agreement on Trade in Services (SATIS)

was signed in the sixteenth SAARC meeting held

in April 2010 at Thimpu in Bhutan. This marks

the first step in expanding the scope of the SAFTA

agreement which is essentially a goods agreement

at present. The Sixth meeting of Expert Group on

SATIS and Second meeting of the Working Group

on Reduction in the Sensitive List under SAFTA shall

be scheduled shortly by the SAARC Secretariat.

The recent trend in India’s trade with SAARC

countries is indicated in Table 7.13.

III. Trade with North America Free Trade Agreement (NAFTA)

The United States of America, Canada and Mexico

are signatories to the North America Free Trade

Agreement (NAFTA) (signed in 1994) and form one

of the largest and the most important trading block

of the world.

India-US Bilateral Trade

In 2009-10 USA was one of India’s largest trading

partner and export destination. The bilateral trade

for 2007-08 and the current year are given in Table

7.14.

Table 7.14India-US Bilateral Trade

(Value in US$ million)Year Exports Percentage

GrowthImports Percentage

GrowthTrade

balance

2007-08 20,722.17 9.92 21,029.58 79.33 -307.41

2008-09 20,818.38 0.46 18,162.92 -13.63 2,655.46

2009-10 19,535.49 -7.63 16,973.68 -8.55 2,561.82

2010 - 11 (April- Sept.2010)* 11710.2 30.09 8614.66 -4.28 3095.55


The major items of export from India to the US are

gems & jewellery, RMG Cotton Incl Accessories,

drugs, Pharmaceuticals & Fine Chemicals,

Machinery and Instruments, Manufactures of

Metals etc.

The major items of import from USA to India

are transport equipments, Machinery (except

Elec. & Electronic), Electronic Goods, Fertilizers

Manufactured, Pearls Precious Semi-precious

Stones etc.

105


India-US Commercial Dialogue

During the visit of the US President to India, a

document “India-US Relations: A Vision for the 21st

Century” was released by the Prime Minister of

India and the President of United States of America

on 21st March, 2000 at New Delhi. To implement

the Indo-US Commercial Dialogue envisaged in that

document, the Minister of Commerce & Industry

and Secretary, US Department of Commerce

signed the India-United States Commercial

Dialogue on 23.3.2000 at New Delhi. The

Dialogue aims at facilitating trade and maximizing

investment opportunities across a broad range

of economic sectors, including IT, infrastructure,

biotechnology and services. Issues taken up for

discussion under the Commercial Dialogue are in

the following four broad categories : exchange of

information on standards, exchange of information

on antidumping/trade defence mechanisms,

exchange of information on IPR and focus on Small

and Medium Enterprises (SMEs). The ‘Commercial

Dialogue’ arrangement is reviewed every two years

and has now been extended for a two year period

from March 2010 to 2012.

India-US Trade Policy Forum

India-US Trade Policy Forum (TPF), announced

during the visit of Prime Minister Dr. Manmohan

Singh to the US in July, 2005, is a part of the

overall Strategic Dialogue between India and the

United States and is designed to expand bilateral

trade and investment relations between India and

the United States. The TPF is co-chaired by the

Minister of Commerce & Industry and the United

States Trade Representative. Discussions under the

TPF are structured around five focus groups: Tariff

and Non-Tariff Barriers; Agriculture; Investment;

Services; and Innovation and Creativity.

Seventh Ministerial meeting of the TPF was held

in Washington DC on 21st September 2010. During

the meeting, all the focus groups under the TPF,

held comprehensive discussions on a wide range of

issues and, identified areas for future constructive

engagement between the two trading partners.

A Private Sector Advisory Group (PSAG) was formed

in April 2007 as an adjunct to the TPF to provide the

TPF with views and advice from non-government

trade and investment experts. The PSAG members

offer independent recommendations and policy

advice, and inject new ideas into the TPF dialogue.

During the last TPF meeting, PSAG decided to

undertake studies in sectors like technology, trade,

urban infrastructure etc. The studies are expected

to come up with specific recommendations

for increasing bilateral trade and augmenting

investment flows in both directions.

India-Canada Bilateral Trade

The bilateral trade between India and Canada

during 2007 - 08 and the current year are given in

Table 7.15.

Table 7.15 India Canada Trade

(Value in US$ Million)Year Exports Percentage


GrowthTrade

balance2007-08 1,266.64 14.13 1,981.22 11.56 -714.58

2008-09 1,364.41 7.27 2,458.65 24.10 -1,094.24

2009-10 1,122.77 -17.71 2,097.35 -14.70 -974.58

2010 - 11 (April-Sept. 2010)* 587.94 7.65 946.39 -3.08 -358.45


106


The major commodities of export to Canada are

RMG cotton Incl accessories, drugs, Pharmaceuticals

& Fine Chemicals, Manufactures Of Metals, Gems

& Jewellery, Machinery and Instruments etc. The

major items of import from Canada are pulses,

Fertilizers manufactured, Machinery (except

electrical and electronic), Transport Equipments,

pulp and waste paper etc.

Annual Ministerial Dialogue on trade and investment

Commerce and Industry Minister and Canada’s

Minister for International Trade held the first Annual

Ministerial Dialogue on trade and investment in

Ottawa, Canada, on 24th September 2010. The

meeting reviewed the India Canada trade and

investment relationship.

India-Canada Trade Policy Consultation

The seventh India-Canada Trade Policy Consultations

was held on 18th October, 2010 in New Delhi. Both

sides noted the significant growth in bilateral

trade between Canada and India in the recent

years, as well as the need to further strengthen

this relationship whose potential remains largely

untapped. A number of issues of concern between

the two countries were discussed during the

meeting.

India-Canada CEPA

During the visit of Prime Minister of Canada, Mr.

Stephen Harper to India during November 15-

18, 2009, two countries announced the setting

up of a Joint Study Group (JSG) that will explore

the possibility of a Comprehensive Economic

Partnership Agreement (CEPA) between India and

Canada.

The JSG was mandated to undertake a detailed

study of bilateral economic relationship between

the two countries, covering among others, trade

in goods and services, investment flows and

other areas of economic cooperation and make

comprehensive recommendations for enhancing

bilateral economic engagements between the two

countries.

The JSG in its report has concluded that a CEPA

between the two countries is likely to increase

bilateral trade both in goods and services and

enhance linkages in investment flows, technology

transfer, movement of natural persons, R&D etc.

Both countries have agreed to initiate negotiations

towards a CEPA covering trade in goods, services

and other areas of economic cooperation. The

inaugural session of the negotiations was held in

New Delhi on 16th November 2010.

India-Mexico Bilateral Trade

Details of the bilateral trade between India and

Mexico since 2007-08 is given in Table 7.16.

Table 7.16India-Mexico Bilateral Trade

(Value in US$ million)Year Exports Percentage


GrowthTrade

balance

2007-08 592.35 10.52 1,189.13 49.52 -596.78

2008-09 659.51 11.34 1,725.09 45.07 -1065.58

2009-10 596.18 -9.60 1,048.97 -39.19 -452.79

2010 - 11 (April- Sept. 2010)* 238.44 55.10 296.54 35.95 -58.10


107


The major commodities of export to Mexico

are drugs, pharmaceuticals & Fine Chemicals,

Manufactures of Metals, Transport Equipments,

Inorganic, Organic, Agro Chemicals, RMG Cotton

Incl Accessories etc. The major commodities

imported from Mexico are Petroleum (crude and

products), electronic goods, Transport Equipments,

Plastic materials and Iron and Steel etc.

India Mexico Bilateral High Level Group (BHLG)

A Memorandum of Understanding (MOU) was

signed between India and Mexico on 21 May,

2007 at New Delhi by Minister of Commerce and

Industry and Minister of Economy, Mexico for the

establishment of a Bilateral High Level Group on

Trade, Investment and Economic Cooperation. This

MOU envisages establishing a Bilateral High Level

Group (HLG) on Trade, Investment and Economic

Cooperation that shall meet once a year alternately

in each country. The functions of the HLG

mainly include promoting bilateral cooperation,

maintaining liaison in the economic, commercial,

technical and other related fields and information

exchange. Under the BHLG six Working Groups have

been created – (i) Trade Promotion (ii) Investment

Promotion (including infrastructure) (iii) Custom

Cooperation (iv) Services Promotion (v) Tourism

Promotion and (vi) Industrial dialogue with private

sector participation (Chemical-Pharma, Textiles

and Bio-fuels sectors.)

The second meeting of the BHLG was held in

Mexico City on April 22 – 23, 2010. The meeting

was co-chaired by Commerce Secretary on the

Indian side and Vice Minister for Foreign Trade,

Ministry of Economy on the Mexican side. Bilateral

issues of concern on trade and investment were

discussed during the meeting under all the six

working groups. The meeting also identified future

areas of cooperation for expanding the trade

and investment relationship between the two

countries.

IV. Trade with Europe

The European Union (EU) presently consists of 27

countries viz. Austria, Belgium, Bulgaria, Cyprus,

Czech Republic, Denmark, Estonia, Finland, France,

Germany, Greece, Hungary, Ireland, Italy, Latvia,

Lithuania, Luxembourg, Malta, Netherlands,

Poland, Portugal, Romania, Slovak Republic,

Slovenia, Spain, Sweden and U.K.

Besides there is also a bloc of EFTA countries

comprising of Switzerland, Norway, Iceland and

Leichtenstein.

Turkey, Albania, Croatia, Bosnia and Herzegovina,

Macedonia, Serbia while considered part of

Europe Division, are neither a member of the EU

nor EFTA blocs.

European Countries accounted for about 20.17%

of India’s total trade during 2009-10. During

2010-11 (April –September), India’s trade with

Europe increased by 17.74% as compared to the

corresponding period in 2009-10 with exports

increasing by 23.25% and imports by 13.87%. The

top five items of India’s exports to Europe during the

period were Petroleum (crude & products), Ready-

Made Garments Cotton Including Accessories,

Transport Equipment, Gems & Jewellery, Machinery

& Instruments. The top five items of India’s imports

from Europe were Pearls/Precious & semi-precious

stone, Machinery (except Electrical & Electronics),

Electronic Goods, Iron & Steel and Transport

Equipment.

108


Trade between India and Europe during the last five years is given in Table 7.17

Table:7.17 India’s Trade with Europe


Year ExportsGrowth rate(%)

ImportsGrowth rate(%)

Total Trade

Balance of Trade

2006-07 28903 16.03 40168 21.43 69071 (-) 11265

2007-08 37288 29.01 51579 28.41 88867 (-) 14291

2008-09 42,076 12.84 57262 11.02 99338 (-)15186

2009-10 38523 (-)8.44 55713 (-)2.71 94236 (-)17190

2009-10 (April-Sept.) 17253 - 24585 - 41838 (-)7332

2010-11 (April-Sept.)* 21265 23.25 27995 13.87 49260 (-)6730


The Union Minister for Commerce and Industry, Shri Anand Sharma addressing the 11th India–EU Business Summit, on the sidelines of the India-EU Summit, in Brussels, Belgium on December 10, 2010.

The EU, as a bloc, is India’s largest trading partner

and accounts for about 16% of India’s exports and

imports. The relationship between the EU and

India has matured substantially in recent years,

from that of aid donor and recipient, to one of

partnership with opportunities for mutual benefit.

Today, the EU and India, as global actors in a multi-

polar world, share a strategic partnership, of which

commercial interaction forms a key component.

The frequency and intensity of India’s contacts

with the EU have grown exponentially since 2000.

India’s engagement with EU in trade in goods has

increased by more than three and a half times

between 2000 and 2010.

109


Approvals for Foreign Direct Investment (FDI) from

EU Member States during the period April, 2000

to December, 2010 were of the order of US$ 25.33

billion (source- DIPP website). UK, Netherlands,

Germany and France are the major sources of

FDI that have been approved. The share of EU in

total FDI inflows in India is 20.05%. Top sectors

attracting FDI inflows from EU are Services Sectors,

Automobile Industries, Housing and Real Estate,

Chemicals (other than Fertilizers) and Construction

Activities.

India and EU have enjoyed healthy economic

relations. These relations have been built on the

foundations of (i) India-EU Cooperation Agreement

on Partnership and Development which came

into effect in August, 1994, (ii) India-EU Strategic

Partnership Agreement (iii) Agreement on

Scientific and Technological cooperation, 2002

(iv) Agreement on Customs Co-operation, 2003.

India also has bilateral framework Agreements

with a number of individual EU countries in areas

of trade, investment and avoidance of double

taxation. India has agreements for investment

promotion and protection with 28 countries of

Europe, including 20 countries of EU. Similarly,

agreements for avoidance of double taxation exist

with 28 countries of Europe, including 21 countries

of EU.

India-EU bilateral relations are periodically

reviewed at the official level by the India-EC Joint

Commission, which last met on 29th September,

2010 at Brussels. Three Sub- Commissions namely

Sub-Commission on Trade, Sub-Commission on

Economic Cooperation and Sub-Commission on

Development Cooperation and nine Joint Working

Groups on agriculture and marine products, textiles,

information technology & communications,

consular matters, environment, steel, food

processing industries, pharmaceuticals & bio-

technology and TBT/ SPS issues are functioning.

The Sub-Commission on Development Cooperation

met on 27th September, 2010 at Brussels. The

meetings of Sub-Commission on Trade and Sub-

Commission on Economic Cooperation were held

on 18th September, 2010 and 14th June, 2010

respectively in Delhi.

India’s trade with the EU is hampered by sanitary

and phytosanitary standards, technical barriers,

complex system of quota/tariff, use of antidumping/

anti-subsidy measures against Indian products.

These issues which have a bearing on market

access for India’s exports to the EU are regularly

taken up in the Joint Working Groups and Sub-

Commission on Trade. The EU market has stringent

quality norms and standards. Indian trade and

industry need to meet these norms to increase

the market share of Indian products in EU. Issues

affecting trade with individual European countries

are also taken up at the bilateral fora in the form of

Joint Commissions. This continuous dialogue helps

in creating an environment for enhancing bilateral

trade and investment flows.

During the year 2010, Joint Commission meetings

were held with Spain (9th Session on June 21 2010

at Madrid, Spain), France (16th Session held at

Paris on 23rd-25th June 2010), UK (7th meeting held

at Delhi on 19th January 2011), Czech Republic (8th

session held in Delhi on 29-30th November 2010) ,

and Bulgaria (16th session in Sofia 8-9 April 2010).

A Joint Commission was also held with Switzerland

(12th session 1st October 2010) - from EFTA bloc.

In order to deepen and strengthen trade and

investment relations between India and the

EU, negotiations are currently underway for a

Broadbased Trade and Investment Agreement. In

September, 2005, the 6th India-EU Summit held in

New Delhi decided to establish a High-Level Trade

Group (HLTG) to explore ways and means to widen

and broaden the economic relationship and explore

110


possibility of a trade and investment agreement.

In October, 2006, the HLTG presented its report

to the 7th India-EU Summit at Helsinki. The

Summit decided that the two sides should enter

into negotiations for the trade and investment

agreement. 12 rounds of negotiations have been

held. The first round was held on 28th -29th June

2007 at Brussels and the 12th round was held from

26th – 28th January 2011 in India.

In order to strengthen the trade and investment

relations with the European Free Trade Association

(EFTA) countries comprising Switzerland,

Liechtenstein, Norway and Iceland (non-EU

member countries in Europe), an India-EFTA Joint

Study Group (JSG) was established in December,

2006 to take a comprehensive view of bilateral

economic linkages, covering among others, trade

in goods and services, investment flows, and other

areas of economic cooperation and to examine

the feasibility of a bilateral broad based trade and

investment agreement. The JSG recommended

commencement of negotiations for a Broad based

Trade and Investment Agreement (BTIA). Based on

this, the negotiations commenced in October, 2008.

Continuing with the efforts of the previous years

to strengthen the trade and investment relations

with EFTA countries, six rounds of negotiations

have been held so far. The fifth and sixth round of

negotiations were held during August 17-19, 2010

and November 11-12, 2010, during which Trade in

Goods, Services, Investment and IPR (Intellectual

Property Rights) were discussed.

India’s trade with EFTA countries has increased

from US$ 10,581 million in 2006-07 to US$ 16,451

million in 2009-10, with average annual growth

rate of 18.5% during the last three years.

Table:7.18 Trade with EFTA countries

(Value in US$ million)Year Exports Growth

rate(%)Imports Growth

rate(%)Total Trade Balance of

Trade

2006-07 664.04 6.57 9,916.62 44.72 10,580.66 -9,252.58

2007-08 1180.6 77.78 11,405.32 15.01 12,585.88 -10,224.76

2008-09 893.98 -24.27 12,993.81 13.93 13,887.79 -12,099.83

2009-10 835.44 -6.55 15,615.79 20.18 16,451.23 -14,780.35

2009-10 (April-Sept.) 391.89 5794.54 6,186.43 -5,402.65

2010-11 (April-Sept.)* 457.96 16.86 8488.59 46.49 8,946.55 -8,030.63


To explore the possibility of a Free Trade Agreement

(FTA) between India and Turkey, the India-Turkey

Joint Study Group (JSG) has been set up. So far,

three meetings of the JSG have been held and

discussions are in final stages. The 4th round of

Indo-Turkey JSG meeting was held in Ankara on 13-

14 January 2011 during which the JSG report was

discussed.

111


V. Trade with Commonwealth of Independent States (CIS)

The Commonwealth of Independent States (CIS)

comprises the Russian Federation, Armenia,

Azerbaijan, Belarus, Georgia, Moldova, Ukraine,

Table 7.19

Trade with CIS countriesValue in US$ Million

Year Export Import Total Trade %Growth

2006-07 1479 3861 5340 (+) 27.04

2007-08 1740 3788 5528 (+)3.58

2008-09 1925 6627 8552 (+)54.70

2009-10 1688 6104 7792 (-)8.89

2009-10(Apr-Sept.) 719 2924 3643

2010-2011(Apr-Jul) Provisional 1177 3100 4277 (+)17.40

(Source: DGCI &S)

Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan

and Uzbekistan (the last 5 countries jointly referred

to as the Central Asian Republics). Bilateral trade

with these countries is as shown in Chart 7.1 and

Table 7.19

The CIS region had a share of 0.94 per cent in India’s

exports and 2.12 per cent in its imports during

2009-10. The principal commodities of exports

to the region include drugs and pharmaceuticals

& fine chemicals, machinery & instruments,

tea, coffee, transport equipments, RMG cotton

including accessories, manufactures of metals etc.

Important items of imports to India from this region

112


are iron and steel, fertilizers, non-ferrous metals,

petroleum, crude & products, silver, synthetic

& reclaimed rubber, vegetable oils, newsprint,

project goods, crude minerals, inorganic chemicals,

metalifers ores and metal scrap etc.

Russian Federation

The Russian Federation, constituting a major portion

of the former USSR, continues to be India’s most

important trading partner in the region accounting

for about 58% of India’s total trade with CIS region

in 2009-10. During 2010-11, following meetings

were held to discuss various issues concerning

bilateral cooperation:4th Session of India-Russia Forum on Trade & •Investment was held on 20th December, 2010 at New Delhi, under the Co-Chairpersonship of Shri R.P. Singh, Secretary, Department of Industrial Policy & Promotion from the Indian side and Mr. Stanislav Voskresensky, Deputy Minister of Economic Development from the Russian side.16• th Session of the Indo-Russian Inter-Governmental Commission on Trade, Economic, Scientific, Technological and Cultural Cooperation was held on 18th November, 2010 in New Delhi under the Co-Chairmanship of Shri S.M. Krishna, Minister of External Affairs from the Indian side and Mr. Sergei Borisovich Ivanov, Deputy Chairman of the Russian Federation Government from the Russian side.16• th Session of the India-Russia Working Group on Trade & Economic Cooperation of the Indo-Russian Inter-Governmental Commission on Trade, Economic, Scientific, Technological and Cultural Cooperation was held on 5th & 6th October 2010 in New Delhi under the Co-Chairmanship of Dr. Shyam Agarwal, Joint Secretary, Department of Commerce from the Indian side and Mr. S. V. Chernyshev, Director of the Department of the Countries of Asia and Africa, Ministry of Economic Development of

the Russian Federation from the Russian side.4• th meeting of India-Russia Joint Task Force (JTF) was held on 18th May, 2010 in Moscow under the Co-Chairmanship of Dr. Shyam Agarwal, Joint Secretary, Department of Commerce from the Indian side and Mr. G. N. Sarishvili, Director of the Department of the Countries of Asia and Africa, Ministry of Economic Development of the Russian Federation from the Russian side.

Central Asian Republics

Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan

and Uzbekistan, constitute the five Central

Asian Republics in the CIS region. Department of

Commerce is the nodal Department for the Inter-

Governmental Commission (IGC) with Kyrgyzstan,

Tajikistan and Uzbekistan. During 2010-11,

following events were held:

2nd meeting of India-Kazakhstan Joint Working

Group on the outstanding debt issue relating

to tea was held from 25-26th January, 2011 in

Astana, Kazakhstan under the co-chairmanship of

Dr. Shyam Agarwal, Addl. Secretary, Department

of Commerce from Indian side and Mr. Ruslan

Dalenov, Vice Minister, Ministry of Finance of the

Republic of Kazakhstan from Kazakhstan side.

1st meeting of India-Kazakhstan Joint Working

Group on Trade and Economic Cooperation was

held from 13-14th January, 2011 in New Delhi

under the co-chairmanship of Dr. Shyam Agarwal,

Addl. Secretary, Department of Commerce from

Indian side and Ms. Zhanel Sabyrovna Kushukova,

Director, Department of Trade Policy, Ministry of

Economic Development & Trade of the Republic of

Kazakhstan from Kazakhstan side.

An Agreement between the Government

of Republic of India and the Government of

Turkmenistan on Trade and Economic Cooperation

was signed by Mr. Anand Sharma, C&IM from

Indian side and Mr. Hozamuhamet Muhammedov,

113


Deputy Prime Minister from Turkmen side on 25th

May, 2010 in New Delhi during the state visit of

H.E. Mr. Gurbanbuly Berdimuhamedov, President

of Turkmenistan.

Other CIS Countries

Other six CIS countries are Armenia, Azerbaijan,

Belarus, Georgia, Moldova and Ukraine. Ukraine

is India’s second largest trading partner of the CIS

region accounting for about 24% of India’s total

trade with CIS region in 2009-10. Department of

Commerce is the nodal Department for the Inter-

Governmental Commission (IGC) with Azerbaijan.

Trade Promotion and other Activities

“Focus: CIS Programme” launched in 2003-04

now covers all the CIS countries. The programme

seeks to increase interaction between the business

entities of the two regions by identifying areas

of bilateral trade and investment. The focus is on

major product groups/ services for raising India’s

exports to this region. The exports to the region

are to be enhanced through combined efforts of

various institutions of the Government of India and

various Trade Promotion Organizations.

There is a regular exchange of delegations with

CIS countries through participation in trade fairs

of mutual interest and exchange of trade related

information.

Bilateral trade and economic cooperation between

India and these countries is regularly reviewed

through the meetings of Joint Commissions /

Working Groups and Joint Business Councils.

The Union Minister for Commerce and Industry, Shri Anand Sharma meetingthe Prime Minister of the Russian Federation, Mr. Vladimir V. Putin,

in Moscow on June 19, 2010.

114


There is a regular interaction at the Governmental

level for enhancing bilateral trade and economic

cooperation.

Taking note of positive trends in bilateral trade

between India and Russia, it was agreed to by both

the Sides to achieve a bilateral trade target of US$

20 billion by 2015.

Inter Governmental Commission/Joint Commission - with CIS Countries under Department of Commerce

India-Azerbaijan Inter Governmental Commission

on Trade, Economic, Scientific & Technological

Cooperation under the Co-Chairmanship of

Minister of State for Commerce and Industry

India-Kyrgyzstan Inter Governmental Commission

(IGC) on Trade, Economic, Scientific & Technological


Minister of State for Commerce and Industry

India-Uzbekistan Inter-Governmental Commission

(IGC) on Trade, Economic, Scientific & Technical


Minister of State for Commerce and Industry.

India-Tajikistan Joint Commission on Trade,

Economic, Scientific & Technical Cooperation under

the Co-Chairmanship of Commerce secretary.

VI. Trade with Latin American and Caribbean Countries

Traditionally, relations between India and the

countries of Latin America have remained close

and cordial. However, commercial relations have

not grown commensurately. The main reasons

adversely affecting India’s trade with this region

are: distance, language barriers, inadequacy in

the exchange of information and the absence of

economic shipping and air links.

The Latin American and Caribbean (LAC) region

comprising 43 countries, accounts for about 5.23%

of world trade (source: WTO 2009). Despite, India

being not a significant trading partner, there is much

scope for enhancing two-way trade between India

and the LAC region. Over the years, India’s exports

have been showing a continuously increasing trend

as indicated in Table 7.20.

Table: 7.20India’s Trade with LAC Region

(Value in US$ million)Year Exports Growth

Rate (%)Imports Growth

Rate (%)Total Trade Balance of

Trade2005-2006 2993.47 38.54 2662.75 29.59 5656.22 330.72

2006-2007 4264.66 42.47 6,135.27 130.41 10380.43 --1851.11

2007-2008 5,673.19 33.00 6557.34 6.88 12230.53 -884.16

2008-2009 6,172.03 8.79 9,963.96 51.95 16,135.99 -3,791.93

2009-2010 6,210.42 0.62 10,403.40 4.41 16,613.82 -4,192.98

2010-2011 (April- Sept*)

5041.88 107.73 6950.99 92.38 11929.87 -1909.11

* ProvisionalSource: DGCIS

The India’s trade with the region increased from

US$ 5656.22 million in 2005-06 to US$ 16613.82

million in 2009-10. India’s exports to the region

has gone up from US$ 2993.47 million in 2005-

06 to US$ 6210.42 million in 2009-10 showing a

growth of 107%. The percentage share of India’s

115


exports to Latin America in her global exports has

increased from 2.90% in 2005-06 to 3.47% in 2009-

10. However, India has been heavy negative trade

balance with the region.

Three product groups viz. textiles, engineering

products and chemical products constituted

about 50 % of India’s exports to this region during

2008-09 and 2009-10. In the textiles sector,

readymade garments, made-ups, fabrics, yarn,

carpets, handicrafts etc. are fast moving export

items. In the Engineering sector, automobiles, auto

components, electrical appliances, machinery,

computer software etc. have good scope for

exports. In the Chemical products sector, bulk

drugs, pharmaceuticals, dyes and intermediates,

agrochemicals, plastic products, naphtha, resins,

essentials oils, molasses and tyres for automobiles

& bicycles are the important items.

Focus: LAC Programme

An integrated programme “Focus: LAC” was

launched in November, 1997 which has been

extended upto March, 2014 in order to consolidate

the gains of the previous years and significantly

enhance India’s trade with the LAC region. The

main objective of the programme is to increase

interaction between the two regions by identifying

potential areas of bilateral trade and investments.

Various incentives and export promotion measures

have been designed and incorporated in this

programme. In the Foreign Trade Policy announced

in 2009, Latin America has been given special focus

to diversify our trade basket and offset the inherent

disadvantages for our exporters such as credit risk,

higher freight cost etc. Under FTP 2009-2014,

Double Weight Scheme for exports to all countries

of LAC would continue. Sixteen new markets of

LAC region have been incorporated under Focus

Market Scheme (FMS). Thus, the total countries of

LAC region now covered by the FMS are thirty one.

Under the Market Linked Focus Product Scheme

(MLFPS), thirteen markets have been identified,

which include Brazil.

The Focus: LAC programme aims at focusing on the

Latin American region, with added emphasis on

the major trading partners of the region. In 2009-

10, Brazil, Venezuela, Chile, Argentina, Bahamas,

Colombia, Panama, Peru, Trinidad and Ecuador

are India’s top ten trading partners in LAC region

constituting approximately 85 % of the total trade

with the region.

Institutional Mechanism

The following institutional arrangements already

exist in relation to India’s trade relations with the

countries of the Latin American region:

Indo-Argenti• ne Joint Commission

Indo-Argentine Joint Trade Committee •

Indo-Mexican Joint Commission •

Indo-Brazilian Commercial Council •

Indo-Cuban Joint Commission •

Indo-Cuban Trade Revival Committee •

Indo-Suriname Joint Commission •

Indo-Guyana Joint Commission •

Indo-Venezuela Joint Commission •

India Brazil Trade Monitoring Mechanism •

India – Trinidad• and Tobago Joint Commission

In order to have increased frequency of interaction

with important trading partners in the LAC region,

efforts are made to hold the meetings of the Joint

Commissions on a regular basis.

Commercial Staff in the Indian Missions

At present, fourteen Indian Missions are functioning

in the Latin America region. However, there was

no commercial post in any of these Missions to

exclusively look after the trade related matters. Ten

posts of Marketing Assistant in nine Missions in

116


the LAC region have been provided to exclusively

manage the trade related matters and to respond

to queries of exporters and importers interested

to undertake business with Latin America and vice

versa. Efforts are being made to further strengthen

these Missions for commerce and trade.

Sponsoring of Trade Delegations/ Organising Seminars/ Conferences/ Trade Fairs/ Exhibitions

The Confederation of Indian Industries (CII), the

Federation of Indian Chambers of Commerce

and Industry (FICCI), and Export Promotion

Councils (EPCs) are sponsoring trade delegations

for promotion of trade in the region, organizing

seminars/ conferences and sector/ product specific

seminars in different cities for the benefit of the

local exporters and to sensitise them about the

trade opportunities available in the LAC region.

Vigorous efforts are also being made to ensure

participation by EPCs, etc. in trade fairs to be held

in Latin American countries since trade fairs act as

an important tool for trade promotion.

Implementation of India-Chile PTA

A Preferential Trade Agreement (PTA) between India

and Chile was signed on March 8, 2006. The said

PTA came into force with effect from 17th August,

2007 in Chile and from 11th September, 2007 in

India after completion of laid down formalities.

Under this PTA, India has offered tariff preferences

on 202 tariff lines (as per 2007 HS ) at the 8 digit

level to Chile with margin of preference (MoP)

ranging from 10%- 50%, and Chile has offered tariff

preferences on 296 tariff lines to India at the 8 digit

level with MoP ranging from 10%- 100%.

India-MERCOSUR PTA

A Preferential Trade Agreement (PTA) between

India and MERCOSUR (a trading bloc of Argentina,

Brazil, Paraguay and Uruguay in South America

region) was signed on 25th January, 2004 and

annexes to this Agreement were incorporated on

March 19, 2005. By this PTA, India and MERCOSUR

have agreed to give tariff concessions, ranging from

10% to 100% to each other on 450 and 452 tariff

lines respectively. India- MERCOSUR PTA came in

to operation from 1st June, 2009.

ECGC Cover

The Export Credit Guarantee Corporation of India

(ECGC) undertakes periodically a comprehensive

review of the grading of the countries based on the

methodology of risk scoring. As per ECGC Country

Risk and Cover Policy on LAC region (reviewed as

on 30.06.2010), sixteen Latin American countries

have been placed in low risk categories of ‘A1’ and

‘A2’. No country has been placed in very high-risk

category of ‘D’

Lines of Credit

EXIM Bank extends Lines of Credit (LOCs) to overseas

financial institutions, regional development banks,

sovereign governments and other entities overseas,

to enable buyers in those countries, to import

goods and services from India on deferred credit

terms. The Indian exporters can obtain payment of

eligible value from EXIM Bank, without recourse to

them, against negotiation of shipping documents.

LOC is a financing mechanism that provides a safe

mode of non-recourse financing option to Indian

exporters, especially to SMEs, and serves as an

effective market entry tool

The EXIM Bank has currently extended fifteen lines

of credit to banks/governments in the LAC region

as given under (as on 13.12.2010):

117


Table 7.21Exim Bank lines of credit (As on 13.12.2010)

Sr. No.

Borrower Amount of Credit USD mn

Purpose Tenor

(Years)

1 Banco de Comercio Exterior de Colombia S.A. (Bancoldex), Colombia

10.00 General purpose Upto 5 years

2 Corporacion Andina de Fomento (Andean Development Corporation) (covering Bolivia, Colombia, Ecuador, Peru and Venezuela)

10.00 General purpose Tranche A:

Upto 5 years

Tranche B:

Upto 2 years

3 Banco Bradesco S.A., Brazil 10.00 General purpose Tranche A:

Upto 5 years

Tranche B:

Upto 2 years

4 Republic Bank Ltd., Trinidad & Tobago 8.00 General purpose Upto 5 years

5 Government of Suriname 16.00 General purpose Upto 15 years

6 Government of Guyana 19.00 Cricket stadium in Georgetown

Upto 20 years

7 Government of Honduras 30.00 Communication, Health, Transport

and Air Force Components from India to Honduras

Upto 20 years

8 Government of Guyana 2.10 Signaling System Upto 20 years

9 Government of Jamaica 7.50 Export of water pumps

Upto 12 years

10 Government of Suriname 10.40 Water supply project

Upto 15 years

11 Government of Suriname 10.59 Purchases from BEL,HAL and

Ordinance Factory Board

Upto 15 years

12 Government of Suriname 4.30 Supply of ten crash fire tenders

Upto 15 years

13 Government of Suriname 5.76 Purchase of Helicopters from

HAL

Upto 15 years

118


Other Developments CII organized the fourth “India – Latin America •Caribbean (LAC) Conclave in April, 2010 in New Delhi. About 200 delegates representing India and LAC governments departments, business groups, financial institutions belonging to important sectors like Textiles, Food Processing, Chemicals, Engineering including Automotives and Energy (Oil, Gas) participated in the event. Fourteen LAC countries – Argentina, Brazil, Chile, Colombia, Costa Rica, Cuba, Dominican Republic, Ecuador, El-Salvador, Mexico, Paraguay, Peru, Uruguay and Venezuela represented in the event.CII organized Business Seminars in Brazil, Peru •and Chile in Sept, 2010 coinciding with the visit of Minister of State (Commerce & Industry), to strengthen India’s trade ties with Latin America. India Engineering Show (INDEE) was organized •by Engineering Export Promotion Council (EEPC) in Colombia in October 2010 to showcase skills and technologies at international level and to strengthen the brand India in the LAC region. In the series of “India Show”, one such event is •proposed to be organized in Sao Paulo (Brazil) in March, 2011 by CII under aegis of Deptt. of Commerce to showcase India’s strength in manufacturing and services in overseas markets, especially in developed and emerging markets, to promote India as a favourable destination for trade and investment.

VII. Trade with Countries in Sub Saharan Africa (SSA) Region

Since independence India has had cordial and

friendly trade relations with countries in Sub-

Saharan Africa (SSA) Region, consisting of Eastern,

Western, Central and Southern Africa. India’s trade

with SSA Region since 2006-07 is given in the Table

7.22.

Table: 7.22India’s Trade with Countries in Sub-Saharan

Africa(Value in US$ million)

Year Exports Imports Total Trade

2006-07 8407.53 11362.76 19770.29

2007-08 11539.57 14927.98 26467.55

2008-09 11390.82 18904.34 30295.16

2009-10 10307.79 20715.10 31022.10

2009-10 (April-Sept. 09)

4975.69 8905.20 13880.80

2010-11(April-Sept. 10)*

6995.94 11714.18 18710.12

* Provisional)Source: DGCI&S

Total trade with countries in SSA Region during

2009-10 amounted to US$31022.10 million with

exports amounted to US$10307.79 million and

imports at US$20715.10 million. The total trade

during April-September, 2010 (Provisional data)

has been US$18710.12 million with exports at

US$6995.94 million and imports amounting to

US$11714.18 million. The corresponding figures

during April-September 2009 were US$13880.80

million (total trade), US$4975.69 million (exports)

and US$8905.20 million (imports) respectively.

Bilateral trade with West African countries

was US$13,001.27 million during 2009-10 as

compared to US$14,536.45 million during 2008-

09. Transport equipment, Drugs, Pharmaceuticals

& Fine Chemicals, Rice, manufactures of Metals

and Machinery and Instruments were the major

items of export. Metalifers ores & metal scrap,

Cashew nuts, Wood and Wood products, Inorganic

Chemicals and Fertilizers and Crude were the

major items of import. Nigeria was the top most

trading partner within this region with a trade of

US$ 8,696.57 million during 2009-10 as compared

to US$ 10,429.61 million during 2008-09.

119


The Union Minister of Commerce and Industry, Shri Anand Sharma and the President of South Africa, Dr. Jacob Zuma at the Business Meeting, organized by the ASSOCHAM, CII and FICCI, in New Delhi on June 04, 2010.

Bilateral trade with countries in Southern Africa

was US$ 13,500.89 million during 2009-10 as

compared to US$ 10,357.56 million during 2008-

09. Transport equipments, Drugs, Pharmaceuticals

and Fine Chemicals, Machinery and instruments,

primary and semi finished Iron and Steel and Rice

were the major items of export. Gold, Metalifers,

Ores & metal scrap, Inorganic Chemicals, Coal

and Non-ferrous metals were the major items of

import. South Africa was the top most trading

partner within this region with a trade of US$

7,733.00 million during 2009-10 as compared to

US$ 7,493.86 million during 2008-09.

Bilateral trade with countries of East Africa was

US$3,900.67 million during 2009-10 as compared to

US$ 4,863.22 million during 2008-09. Primary and

semi finished Iron & Steel, Machinery & Instruments,

Drugs, Pharmaceuticals & Fine Chemicals, Sugar

and manufactures of Metals were the major items

of export. Cashew nuts, Pulses, Metalifers Ores and

metal scrap, Inorganic Chemicals and Spices were

the major items of import. Kenya was the top most


US$1,530.93 million during 2009-10 as compared

to US$ 1,444.27 million during 2008-09.

Bilateral trade with countries of Central Africa was

US$ 620.06 million during 2009-10 as compared

to US$ 537.93 million during 2008-09, indicating a

growth of 75.25%. Drugs, Pharmaceuticals & Fine

Chemicals, Machinery & Instruments, Transport

Equipments, manufactures of metals and Plastic

and Linoleum products were the major items of

export. Metalifers ores and metal scrap, Pulses,

Cotton raw, Tea and Non-ferrous metals were the

120


major items of import. Uganda was the top most


US$220.31 million during 2009-10 as compared to

US$ 237.10 million during 2008-09.

Preferential Trade Agreement (PTA) with Southern African Customs Union (SACU)

The Southern African Customs Union (SACU), the

oldest Custom Union of the world, comprises of

South Africa, Lesotho, Swaziland, Botswana and

Namibia. India and SACU have expressed their

intent to enter into a Preferential Trade Agreement

(PTA) with the aim of promoting expansion of trade

between the two parties and providing mechanism

to negotiate and conclude a comprehensive Free

Trade Agreement within a reasonable time. India

and SACU have commenced negotiations for PTA in

October, 2007 and five meetings of the negotiating

teams have taken place so far. Fifth round of

negotiations on India-SACU PTA was held in New

Delhi on 7-8, October, 2010.

CECPA with Mauritius

A Comprehensive Economic Cooperation and

Partnership Agreement (CECPA) aimed at boosting

bilateral trade, investment and general economic

cooperation between India and Mauritius is under

negotiation.

“Focus Africa” Programme

The “Focus Africa” Programme was initially launched

with focus on seven countries of Sub-Saharan African

(SSA) Region, viz., South Africa, Nigeria, Mauritius,

Tanzania, Kenya, Ghana and Ethiopia. With a view

to further widen and deepen India’s trade with

Africa, the scope of this Programme was further

extended to include Angola, Botswana, Ivory-Coast,

Madagascar, Mozambique, Senegal, Seychelles,

Uganda, Zambia, Namibia and Zimbabwe, along-

with the six countries of North Africa, viz., Egypt,

Libya, Tunisia, Sudan, Morocco and Algeria.

Under this Programme, the Government extends

assistance to exporters, Export Promotion Councils

etc. to visit countries in Africa and organize trade

fairs. Government also sponsors African trade

delegations to visit India. A number of export

promotion activities were conducted by various

Export Promotion Councils and Apex Chambers

with grant under Market Development Assistance

(MDA) and Market Access Invitation (MAI) Scheme.

A mega event, ‘The India Show’ was held in South

Africa from 29th August, 2010 to 1st September,

2010. The event, which was inaugurated by the

President of South Africa and Shri Anand Sharma,

Commerce and Industry Minister of India, consisted

of an ‘Exhibition’ by major Indian companies

showcasing Indian technology, products & services

and expertise of India in various sectors, a meeting

of the ‘India South-Africa CEOs Forum’, a ‘Doing

Business with India Conference’ showcasing the

business potential of India, ‘Cultural Programmes’

in Johannesburg and Durban to showcase India’s

rich culture, an ‘India Food Week’ in Johannesburg

exhibiting India’s cuisine and a ‘Fashion Show’ in

Johannesburg. Another major event, ‘Namaskar

Africa’, organized during 14 to 15 October, 2010

at Nairobi, Kenya, was inaugurated by Sh. Anand

Sharma, Commerce and Industry Minister of

India. The event consisted of an ‘India Exhibition’

and the ‘India-East Africa Business Forum’ with

participation of business delegations from 12 East

African countries.

121


Minister for Commerce and Industry, Shri Anand Sharma with the Foreign Minister of Ghana, Mr. Alhaji Muhammad Mumuni and Indian delegation members, in Ghana on September 03, 2010.

Bilateral Cooperation

Issues pertaining to trade and economic

cooperation between India and African countries

are reviewed through Joint Commissions and Joint

Trade Committees (JTCs). Business to Business

interactions have also been encouraged between

Apex Indian Chambers and their African counterpart

Chambers with a view to further enhance trade and

investment relations between India and African

countries. High level bilateral meetings and visits by

trade and industry delegations are also organized

with a view to strengthen trade and economic

partnerships between India and African countries.

High level delegations led by the Commerce &

Industry Minister visited South Africa and Ghana

during 29th August to 3rd September, 2010 and held

bilateral meeting with their counterparts.

The 6th meeting of the India-Kenya Joint Trade

Committee (JTC) was held in Nairobi on 12-13

October, 2010, which was co-chaired by Shri

Anand Sharma, Hon’ble Minister of Commerce and

Industry from the Indian side. During the meeting,

both sides agreed to make all possible efforts to

achieve a target of bilateral trade of US$ 2.5 billion

in the next 3 years, up from the bilateral trade of

US$ 1.5 billion in 2009-10. The key sectors identified

for bilateral cooperation were agriculture including

Agro-processing; Drugs and Pharmaceuticals;

infrastructure development sectors like Road, Rail,

and energy including generation, transmission

and distribution of power, Airport; Information

and Communication Technology (ICT); Oil & Gas;

Manufacturing; and Healthcare.

VIII. Trade with countries in the West Asia & North Africa (WANA) Region

The West Asia and North Africa (WANA) region

comprises 18 countries. These are (i) Six Gulf

Cooperation Council (GCC) countries (Bahrain,

Kuwait, Oman, Qatar, Saudi Arabia and United

122


Arab Emirates), (ii) Six West Asian countries (Iraq,

Israel, Jordan, Lebanon, Yemen and Syria) and (iii)

Six North African countries (Algeria, Egypt, Libya,

Morocco, Sudan and Tunisia).

During April-September, 2010-11, India’s exports to

the WANA region have gone up from US$ 17,924.33

million to US$ 22,470.92 million. Similarly,

imports have also registered an increase from US$

28,472.61 to US$ 40,490.75 million compared to

the figures during the corresponding period of the

previous year.

The United Arab Emirates (UAE) ranked first among

the destinations for India’s exports in the WANA

region and among the GCC countries. The other

major destinations in the WANA region include

Saudi Arabia, Israel, Egypt and Kuwait. The details

of bilateral trade between India and countries of

WANA Region during 2009-10 and 2010-11 (April-

September) are given in Table 7.23.

The principal export products from India to the

WANA region comprises of Gems & Jewellery,

Petroleum (crude & products), manufactures of

metals, Machinery and Instruments, Rice-Basmati,

Transport equipments, Electronic Goods, Manmade

Yarn, Fabrics, Made ups, Meat & Preparations,

Primary and semi-finished Iron & Steel etc.

The principal imports from the WANA region

consists of Petroleum (crude and products),

Pearls and Precious/Semi-Precious stones, Gold,

Fertilizers Manufactured, Organic Chemicals,

Inorganic Chemicals, Metalliferrous Ores and

Metal scrap, Artificial Resins, Non-ferrous metals,

Fertilizers (crude) etc.

The Union Minister for Commerce and Industry, Shri Anand Sharma inaugurated the ‘Namaskar Africa’ event, organised by the Federation of Indian Chambers of Commerce and Industry (FICCI) in association with the Ministry

of Commerce and Industry, at Nairobi, Kenya on October 14, 2010.

123


Institutional A rrangements

Issues pertaining to trade and economic

cooperation between India and WANA countries are

regularly reviewed in Bi-laterals, Joint Commission

Meetings or Joint Trade & Economic Committee

Meetings. Apex trade bodies like CII, FICCI, FIEO,

ASSOCHAM etc. sponsor business delegations

to various countries. Joint Business Council (JBC)

arrangements also exist between apex trade bodies

on the Indian side and counterpart organizations in

WANA countries.

Recent developments/initiatives:

a) Free Trade Agreement (FTA) with Israel

The Trade and Economic Relations Committee has

approved for initiating negotiations with Israel for

entering into a Free Trade Agreement. The first

round of negotiations was held in New Delhi during

the month of May, 2010. In this meeting, broad

parameters for negotiations were finalized. The

second round of negotiations is slated for February,

2011 in Jerusalem.

b) Indo-Syria Joint Commission Meeting

2nd Session of India-Syria Joint Commission Meeting

(JCM) was held at Damascus on 19th June, 2010.

The Commerce and Industry Minister of India co-

chaired the JCM.

c) Indo-Oman Joint Commission Meeting

Shri Anand Sharma, the Commerce & Industry

Minster co-chaired the 6th session of India-Oman

JCM during 5-6 September, 2010 in Muscat.

d) “India show” in Dubai

Department of Commerce organised a mega event

named “India Show” in Dubai during 8-10 June,

2010.

e) Bi-laterals meeting with Moroco and Egypt

Shri Jyotiraditya Scindia, Minister of State

(Commerce & Industry) visited Morocco on 26-27

October, 2010 to address World Economic Forum

meeting and also held bilateral meetings with Trade

Ministers of Morocco and Egypt to explore the

ways and means to enhance the bilateral trade.

124


Tabl

e: 7

.23

Bila

tera

l tra

de b

etw

een

Indi

a an

d co

untr

ies

of W

AN

A R

egio

ndu

ring

200

9-10

and

201

0-11

(Apr

il-Se

ptem

ber)

S.

No.

Coun

try

2009

-201

0 (A

pril-

Sep

t.)

2010

-201

1 (A

pril-

Sep

t.)

Expo

rts

Impo

rts

Tota

l Tra

deTr

ade

Bala

nce

Expo

rts

Impo

rts

Tota

l Tra

deTr

ade

Bala

nce

1 A

lger

ia

342.

3516

8.52

510.

8717

3.84

345.

8999

5.68

1341

.57

-649

.79

2Ba

hara

in Is

13

4.47

272.

4040

6.87

-137

.93

223.

4032

5.59

548.

99-1

02.1

9

3 E

gypt

A R

p 60

5.96

857.

1914

63.1

5-2

51.2

499

7.00

597.

0615

94.0

639

9.94

4Ir

aq

265.

3929

88.8

532

54.2

4-2

723.

4523

2.43

3404

.04

3636

.47

-317

1.61

5Is

rael

84

9.54

855.

9417

05.4

8-6

.40

1319

.05

1029

.51

2348

.56

289.

55

6Jo

rdan

12

1.14

470.

8459

1.98

-349

.70

152.

2251

6.71

668.

93-3

64.4

9

7 K

uwai

t 38

6.00

3600

.93

3986

.93

-321

4.93

875.

0343

60.9

952

36.0

2-3

485.

96

8Le

bano

n 69

.02

3.17

72.1

965

.85

85.8

012

.32

98.1

273

.48

9Li

bya

112.

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Chapter-7 · 15575.4 33001.9: 48577.3 (-) 17426.5 * Provisional Source: DGCI&S: Major items of...

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Transcript of Chapter-7 · 15575.4 33001.9: 48577.3 (-) 17426.5 * Provisional Source: DGCI&S: Major items of...