India to mainstream foreign trade
policy: Rajeev Kher, Commerce Secretary
New Delhi, April 05, 2014
"India needs to mainstream its foreign trade policy with the governance system of the country so as to enhance its competitiveness in a holistic and dynamic manner" said Mr Rajeev Kher, Commerce Secretary of India.
He was delivering the 17th CUTS 30th Anniversary Lecture
on "India's Export Competitiveness, Prospects & Challenges: The Role of
Trade Policy". It was organised here yesterday evening in partnership
with the Federation of Indian Chambers of Commerce and Industry (FICCI).
More than 80 participants representing various interests participated.
"Foreign trade has to be looked as a composite economic activity as
against in silos. Various government departments and the state
governments need to work in tandem. The foreign trade policy should have
strategic objectives to address, should be contextualised and not just
an amalgamation of a set of instruments towards export promotion", said
Mr Kher.
"Exports should no longer be considered as a function of surplus
generated over and above domestic consumption. It should be an intrinsic
part of a vibrant economy. Imports also play a very important role
because more than 60 per cent of our imports are intermediaries to
manufacturing. Intra-industry trade is growing," he added.
Welcoming the participants, Dr A Didar Singh, Secretary General of FICCI,
said: "There should be synergy between trade in manufacturing and
services." He underlined the value that consumer advocacy groups like
CUTS bring to the trade policy discourse of India, and recalled that
FICCI and CUTS have a long partnership working on these issues.
Three decades of working globally on trade and development
In his welcome remarks, Mr Pradeep S Mehta, Secretary
General of CUTS International, outlined the journey that the
organisation had undertaken over three decades including the crucial
role that it is playing as a pro-trade, pro-equity voice in Geneva, the
headquarters of the World Trade Organisation and in promoting
South-South cooperation through its three centres in Africa and two in
Asia.
Mehta highlighted why foreign trade should play a much greater role in
transforming India's manufacturing base from low to high value products
and its overall contribution to the growth and development of the Indian
economy.
Whole of government approach needed: Pradeep Mehta
"We need a whole-of-government approach to trade
policy-making and it should be a crucial cog in the wheel of generating
100 million new jobs over the next five years as visualised by our
National Manufacturing Policy and Plan," he added.
Chairing the event, Ms Lise Grande, Resident Coordinator of the United
Nations in India, said: "For India to grow faster and improve its
competitiveness, continuous enhancement of its entrepreneurial and
intellectual capacity is an imperative. India needs to further diversify
its product mix."
Speaking on the occasion, Mr Ajay Shankar, Member Secretary of the
National Manufacturing Competitiveness Council emphasised on the
importance of economies of scale in India's production structure to be
able to enhance its competitiveness.
Shying away from labour reforms: Ajay Shankar
In this context, Mr Shankar said: "Why are we shying away
from labour reforms? We need to look at all cognate issues of the
country's competitiveness and a national consensus is needed for
creating new jobs and going up the value chain of production."
"There should not be any dichotomy between domestic and global
competitiveness issues. We need to get right the sequencing of reforms
with right safety nets including trade adjustment programmes".
Talking about free trade agreements (FTAs) that India has negotiated
with some of its major trading partners in East and South East Asia in
recent years, Mr Kher said: "Indian industry should make full use of
them as they will serve as vehicles to enter the global value chains of
major products and services of India's interest."
"India is likely to be adversely affected by mega FTAs such as the
US-led Trans-Pacific Partnership agreement and, in this context,
successful negotiations of the Regional Comprehensive Economic
Partnership agreement in the Asia-Pacific region can be a potential game
changer," he added.
"India needs both locational and product diversification of its trade
composition. Strengthening of regional value chains should be a stepping
stone for getting into global value chains."
The Lecture was followed by a round of lively discussion. Questions
ranged from the need for generating more awareness among the Indian
industries about advantages that the country can draw from its FTAs to
relationship between standards and job creation to the role of exchange
rate management for enhancing trade competitiveness. There was a broad
consensus that the forthcoming foreign trade policy, which is due to be
announced by the new government, should have clear objectives and
roadmap for mainstreaming trade into India's national development
strategy.
A strong institutional mechanism for greater engagement of other
relevant departments and state governments should be in place so that
there is coherence between trade policy and other major macroeconomic
policies.
"We need to activate the Interstate Trade Council, established in 2005,
which has never met", said Mehta in response to a query on engaging
states.
CUTS International is pursuing consumer sovereignty through
evidence-based policy- and action-research and advocacy on cognate
subjects of trade, regulations and governance issues for enhancing
consumer welfare through job creation and poverty reduction. It has
become a Southern voice of consumers through its activities across Asia
and Africa
For further information please contact:
Pradeep S Mehta, +919829013131,
psm@cuts.org
Bipul Chatterjee, +919829285921,
bc@cuts.org