chapter-7 - ministry of commerce and industrytogether, account for around 32.3% of india’s trade...

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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- October 2011-12, Asia and

ASEAN region accounted for about 56% of India’s

Chart 7.1

Region – wise share of India’s Export (April – October, 2011-12)

trade (exports and imports). Europe and America,

together, account for around 32.3% of India’s trade

during this period. Region – wise share of India’s

Export and Import during April – October, 2011-12

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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CHAPTER-7 Commercial Relations and Trade Agreements

Chart 7.2

Region – wise share of India’s Import (April – October, 2011-12)

Chart 7.3

India’s trade with major regions of the world (April – October, 2011-12)

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Annual Report 2011-12

Chart 7.4

Growth Rate (%) in India’s Trade with Major Regions (April – October, 2011-12)

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 $ 57.89 million during the year 2010-11 and at US$ 46.05 million during the year 2011-12 (Till October, 2011). 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 and steel, transport equipments, marine products, drugs/pharma, inorganic/organic/ agro chemicals, dyes/intermediates, etc. The principal

commodities of import include 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 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. Such meetings also act as fora for businessmen to mutually interact and explore the potential for growth in trade and investment relations.

India has organised First India-ASEAN Business Fair in New Delhi during March, 2011 and is considering

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organising the Second India-ASEAN Business Fair in December, 2012.

Engagements with ASEAN

In order to address the economic content of

the ‘Look East Policy’, a continuous dialogue is

maintained with ASEAN and the countries of South-

East Asia. Summit level engagements, Ministerial

meetings and official level discussions are held in

order to fulfil 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

Table 7.1India – ASEAN Bilateral Trade

(US $ million)

Country

2009-10 2010-11 2011-12 (Till October, 2011)

Exports Imports Total Trade



Brunei 24.43 428.65 453.08 25.29 234.17 259.46 882.33 559.74 1442.07

Cambodia 45.54 5.05 50.59 63.91 8.01 71.92 52.16 5.11 57.27

Indonesia 3059.52 8551.62 11611.14 6245.33 9918.63 16163.96 3756.04 8490.90 12246.94

Lao PDR 16.93 20.05 36.98 14.06 0.22 14.28 5.08 24.56 29.64

Malaysia 2835.38 5176.24 8011.62 3956.98 6523.58 10480.56 2083.66 5303.65 7387.31

Myanmar 207.97 1289.35 1497.32 334.42 1017.67 1352.09 245.34 765.05 1010.39

Philippines 748.71 312.71 1061.42 882.74 429.39 1312.13 526.48 248.67 775.15

Singapore 7568.29 6163.91 13732.2 10302.71 7139.31 17442.02 10431.09 5401.05 15832.14

Thailand 1740.10 2930.13 4670.23 2792.80 4272.09 7064.89 1543.74 3050.46 4594.2

Vietnam 1838.87 521.80 2360.67 2659.56 1064.90 3724.46 1732.49 942.48 2674.97

Total for ASEAN

18085.74 25399.51 43485.25 27,277.81 30,607.97 57,885.77 21,258.40 24,791.67 46,050.07

India’s total Trade

178662.20 286822.77 465484.94 251,135.89 369,769.13 620,905.02 170,107.38 277,259.89 447,367.28

%age share of ASEAN Countries in India’s total trade

10.12% 8.86% 9.34% 10.86% 8.28% 8.69% 12.50% 8.94% 10.29%

between India and the ASEAN on 13th August 2009.

The Agreement has been fully implemented by

ASEAN Member States and India. 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 within the year 2012.

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The Union Minister for Commerce, Industry and Textiles, Shri Anand Sharma attending the ASEAN Economic Ministers (AEM)-India Consultations-9 along with the other ASEAN Trade Ministers,

at Manado, Indonesia

India-Malaysia Comprehensive Economic Cooperation Agreement

India has signed a Comprehensive Economic

Cooperation Agreement (CECA) with Malaysia on

18th February 2011. The Agreement has come into

effect from 1st July 2011.

Under the CECA, India and Malaysia has offered

commitments more than the commitments offered

by them under ASEAN -India Trade in Goods

Agreement.

Key items on which Malaysia has offered market

access to India are basmati rice, mangoes, eggs,

trucks, motorcycles and cotton garments which are

all items of considerable export interest to India.

Key items of Malaysia’s interest on which India has

offered market access are fruits, cocoa, palm oil

products and synthetic textiles. For refined palm oil

(RPO) exports by Malaysia into India, as compared

to the concessions under the India-ASEAN Trade

in Goods (TiG) Agreement, only advancement of

timeline from 2019 to 2018 is offered by India,

retaining the end-tariff rate of 45%.

India-Thailand Free Trade Agreement

On 9th October 2003, India and Thailand signed a

Framework Agreement for establishing an India-

Thailand Free Trade Area (FTA). The Agreement

envisages negotiation for establishing an India-

Thailand FTA with a view to strengthening

and enhancing liberalization of trade through

progressive elimination of tariffs, progressive

liberalization of trade in services, establishment of

an open and competitive investment regime etc.

With a view to accelerating the realization of

benefits from this Agreement, pending negotiations

towards the comprehensive FTA, India and Thailand

implemented an Early Harvest Scheme (EHS)

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comprising 82 items of mutual interest for which

both sides have undertaken tariff concessions

during 2004-2006 in a phased manner.

The 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 May, 2012. Second Protocol has

been signed on 25.01.2012 to amend Framework

Agreement for establishing Free Trade Area

between India and Thailand for (i) inclusion of

compression-type combined refrigerator-freezers,

fitted with separate external doors, household

type in the list of Early Harvest Scheme (EHS) items

and to eliminate tariff, simultaneously by both

sides, on this item with effect from the date of

implementation of this protocol and (ii) to amend

Interim Rules of Origin for incorporating a clause of

Third Party Invoicing.

India-Indonesia Comprehensive Economic Cooperation Agreement

Following the Joint Declaration of 2005 signed

between Prime Minister of India and Indonesian

President on establishing a New Strategic

Partnership, a Joint Study Group was set up in

2007 to examine the feasibility of a Comprehensive

Economic Cooperation Agreement (CECA) between

the two countries. The Group held 5 meetings and

submitted its Report in September 2009. The JSG

recommended launching of negotiations between

the two countries on a bilateral CECA by constituting

a Trade Negotiating Committee (TNC) covering

substantially all trade in goods and services;

investment; trade facilitation; and other areas of

economic cooperation, as a ‘single undertaking’.

Both Governments internally processed the Report

of the JSG and agreed to accept the recommendation

to commence bilateral CECA negotiations to be

built on, and going beyond the ASEAN-India FTA. In

January 2011, both sides announced the launch of

bilateral CECA negotiations.

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$ 118.25 billion during 2010-11, which is an

increase of 43.51% over the previous year. Exports

to the North East Asia region were of the order

of US$ 42.14 billion during 2010-11, registering

a growth of 45.80% over the last year. Imports

from the region were increased by 42.28 % to US$

76.1 billion during 2010-11. India’s major trading

partners in the region are China, Japan, Hong Kong

and Republic of Korea. Trade with North East Asian

countries from 2007-08 to 2011-12 (April-October)

is given below.

Table 7.2Trade with North East Asian Countries

(Value in US$ million)

Year Exports Imports Total Trade Balance of Trade

2007-08 2 6450.0 44755.4 71205.4 (-) 18305.4

2008-09 25449.1 58455.9 83905.0 (-) 33006.82009-10 28904.5 53491.5 82396.0 (-) 24587.02010-11 42141.96 76109.73 118251.70 (-) 33967.772011-12 (April-Oct)* 24170.38 56548.44 80718.81 (-) 32378.06(* Provisional)(Source – DGCI&S)

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Major items of export to the region are gems

and jewellery, non-ferrous metals; petroleum

(crude and products), ferro alloys, iron ore, cotton

yarn, fabric, made ups and marine products.

Major items of import include electronic goods,

machinery, organic chemicals, pearls, precious and

semi-precious stones, iron and steel, transport

equipment and organic chemicals.

China and India have agreed to endeavor to raise the

volume of bilateral trade to US$ 100 billion by 2015.

Trade with China has already crossed US$ 60 billion

during 2010-11. Major items of Indian exports to

China include non-ferrous metals, iron ore, ferro

alloys, cotton raw, other ores and minerals, plastic

and linoleum products, processed minerals. Major

imports from China include electronic goods,

project goods, iron and steel, organic chemicals,

machinery and transport equipments.

Indian exports to Japan registered a growth of

43.05%, while imports from the country registered

a growth of 28.18% during 2010-11 over that

of the previous year. Major items of export to

Japan include ferro alloys, gems and jewellery,

marine products, transport equipments, iron ore,

petroleum and oil meals. Major items of import

from Japan are machinery, electronic goods,

transport equipment, iron and steel, professional

instruments and organic chemicals. A bilateral trade

target of US$ 25 billion by 2014 has been fixed. It is

expected that after coming into force of CEPA from

1st August 2011, this target will be achieved during

the stipulated period.

Exports to Hong Kong, China accounted for 4.1% of

India’s overall exports during 2010-11. During 2010-

11 India’s exports to Hong Kong, China amounted

to US$ 10.32 billion registering a growth of 30.96%

over the last year. Imports from Hong Kong, China

in 2010-11 amounted to US$ 9.4 billion, recording

a growth of 98.88% over the previous year. The

major items of exports to Hong Kong are gems

and jewellery, finished leather, electronic goods,

marine products, natural silk yarn, cotton yarn

fabrics made ups, machinery and instruments,

non-ferrous metals and other commodities. The

share of Gems and Jewellery in India’s exports

to Hong Kong is about 80%. The major items of

imports are pearls, precious and semi-precious

stones, electronic goods, machinery, gold, silver

and printed books, newspapers & journals. Indian

exports to the Republic of Korea during 2010-11

amounted to US$ 4.1 billion registering a growth

of 21.10% over the last year while imports from

Korea during 2010-11 amounted to US$ 10.47

billion registering a growth of 22.15%. Major items

of exports are petroleum products, cotton yarn,

fabrics, made ups, oil meals, minerals and ores,

iron ore, gems & jewellary, ferro alloys, aluminum,

molasses and non-ferrous metals. Major items of

imports are electronic goods, machinery, transport

equipment and iron and steel.

Trade Negotiations

i) 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. The second meeting of

JS/DG Level to review the implementation of CEPA

was held on 29th September 2011 in Seoul.

ii) India - Japan CEPA

A Comprehensive Economic Partnership Agreement

(CEPA) between India and Japan was signed on

16th February, 2011. This Agreement has come

into force from 1st August, 2011.

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c) Bilateral Trade Relations with countries in South Asia and Iran

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. The provisions of

Table 7.3Bilateral Trade with Afghanistan

(Value in US $ million)

As on 31/01/2012


2006-07 182.11 34.37 216.48 147.74

2007-08 249.21 109.97 359.18 139.24

2008-09 394.23 126.24 520.47 267.99

2009-10 463.55 125.19 588.74 338.36

2010-11 411.78 146.03 557.81 265.75

2010-11 (April-Oct) 218.15 77.24 295.39 140.91

2011-12 (April-Oct) 287.99 65.33 353.32 222.66

Source: DGCI&S

TLP are applicable to Afghanistan with effect from

7th August, 2011. India has extended the TLP to

Afghanistan vide Notification No. 96/2011-Customs

dated 12.10.2011.

MOU between the Government of Afghanistan and

Government of India on the Co-operation in the

field of Cement sector was signed on 12th January

2012 at Hyderabad.

EXIM Bank has introduced Buyers Credit facility to

enable financing of infrastructure projects.

India’s trade with Afghanistan has increased

substantially from US$ 216.48 million in 2006-07 to

US$ 557.81 million in 2010-11. The trend in trade

between India and Afghanistan is given in Table

below.

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.

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,

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Bangladesh. Commerce, Industry and Textile

Minister has inaugurated the Border Haat at

Kalaichar on 23rd July 2011. Following commodities

are 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.;

The Union Minister for Commerce, Industry and Textiles Shri Anand Sharma addressing a press conference with his Bangladeshi Counterpart, Mr. Muhammad Faruk Khan, at Dhaka, Bangladesh on April 23, 2011

(e) locally produced garments, melamine

products, processed food items, fruit

juice, etc.

The commodities are allowed to be exchanged

in the designated Border Haats in local currency

and/or barter basis. Each individual is allowed to

purchase only as much of the locally produced

commodities which are reasonable for bona-fide

personal/family consumption. Estimated value of

such purchases shall not be more than respective

local currency equivalent of US$50 (fifty) for any

particular day.

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Prime Minister visited Bangladesh on September

6-7, 2011. The following bilateral documents were

also signed during the visit:-

(i) Addendum to the MoU between India

and Bangladesh to Facilitate, Overland

Transit Traffic between Bangladesh and

Nepal,

(ii) MoU on Renewable Energy Cooperation

(iii) MoU on Conservation of the Sundarban,

Protocol on Conservation of the Royal

Bengal Tiger of the Sunderban,

(iv) MoU on Cooperation in the field of Fisheries,

(v) MoU on Mutual Broadcast of Television

Programmes,

(vi) MoU between Jawaharlal Nehru University

and Dhaka University

(vii) MoU on Academic Cooperation between

National Institute of Fashion Technology

(NIFT), India and BGMEA Institute of Fashion

and Technology (BIFT), Bangladesh.

Both sides are working on several projects to

improve trade infrastructure and connectivity.

Department of Border Management, Ministry of

Home Affairs is developing 7 Integrated Check Posts

(ICPs) on India – Bangladesh Border viz; Petrapole,

Agartala, Dawki, Hili, Chandrabangha, Sutarkhandi

and Kawarpuchiah. Further, infrastructure at 8

Land Custom Stations (LCSs) along the Indo –

Bangladesh border are being developed under

the ASIDE scheme of D/O Commerce. These

LCSs are Borosora, Dalu, Ghasupara, Mahadipur,

Hilli, Phullbari, Srimantpur and Gojadanga. The

work at Phulbari , LCS has been completed. The

total projected cost of all the ICPs and LCSs being

developed is 125 US$ million. At Akhaura, the

construction work has commenced. The contract

for the work at Petrapole, ICP has been awarded

and the foundation stone has been laid on 27th

August, 2011.

India is providing Buyers Credit to Bangladesh

Government agencies for large project exports,

especially in the infrastructure sector such as

roads, bridges, railways, power lines, sewerage

plants, water treatment plants and housing. The

credit spanning over a period of 5-8 years will be

provided under National Export Insurance Account

(NEIA) through Exim Bank.

Customs has issued a circular dated 6.1.2011

wherein the samples would be drawn from the

first five consecutive consignments of each food

product of a particular importer and in the event

of samples conforming to the prescribe standards,

the customs would switch to a system of checking

5% - 20% of the consignment of the food items

on a random basis. This circular has simplified the

testing of food items requirements for Bangladesh

exporters.

India’s trade with Bangladesh has increased

substantially from US$1857.57 million in 2006-

07 to US$ 4053.15 million in 2010-11. The trend

in trade between India and Bangladesh is given in

Table below:

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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 India-

Bhutan bilateral meeting on Trade and Transit was

held on August 18-19, 2011 at New Delhi wherein

the detailed discussion on various bilateral issues

was held.

Most important requirements of Bhutan are mainly

met by imports from India. Therefore, Bhutanese

have been requesting for blanket exemption from

application of any export bans by India on essential

food commodities. Their request was considered

vide DGFT notification No. 87 (RE-2010/2009-

2014) dated 5.12.2011 exempting Bhutan from the

application of export ban on the following items,

with annual limits indicated against each:-

Table 7.4 Bilateral Trade with Bangladesh

Value in US $ million


2006-07 1629.57 228.00 1857.57 1401.57

2007-08 2923.72 257.02 3180.74 2666.7

2008-09 2497.87 313.11 2810.98 2184.76

2009-10 2433.77 254.66 2688.43 2179.11

2010-11 3606.40 446.75 4053.15 3159.65

2010-11 (April-Oct) 1605.00 200.63 1805.63 1404.37

2011-12 (April-Oct) 1651.47 334.02 1985.49 1317.45

Source: DGCI&S

(i) Milk Powder : 1,600 Metric Tonnes

(ii) Wheat : 24,000 Metric Tonnes

(iii) Edible Oil : 2,400 Metric Tonnes

(iv) Pulses : 1,200 Metric Tonnes

(v) Non-Basmati Rice : 21,200 Metric Tonnes

Bhutan’s request for use of Ghasuapara and Dalu

Land Customs Stations (LCSs) in Meghalaya on

Indo-Bangladesh border as on exit/entry points

for Bhutan’s trade with Bangladesh has been

considered. A Letter of Exchange (LoE) has been

signed for allowing LCSs from 1st February, 2012.

The Letter of Exchange (LoE) to amend the Letter of

Guarantee (LoG) under the India-Bhutan Agreement

on Trade, Commerce and Transit has been finalised

for implementation from 01.02.2012.

A Sub-group has also been constituted for

identifying the points of trade interest to Bhutan

and also suggesting the infrastructure required at

these places.

Limit of Quota restrictions for import of marble

from Bhutan has been raised from 1847 MT to 5882

MT vide DGFT Notification No. 69 (RE-2010)/2009-

14 dated 1.9.2011. The present enhancement may

cover their production capacity.

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Bhutan’s request for Duty Free Access at international airport in India has been considered vide notification no. 77/2011- Customs (NT) dated 14.11.2011

Commercial transactions are carried out in Indian Rupees and Bhutanese Ngultrum. India’s trade with Bhutan has increased substantially from US$199.71million in 2006-07 to US$ 377.57 million in 2010-11. The trend in trade between India and

Bhutan is given in Table below:

Table 7.5Bilateral Trade with Bhutan



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

2010-11 176.00 201.57 377.57 -25.57

2010-11 (April-Oct) 91.51 104.95 196.46 -13.44

2011-12 (April-Oct) 125.28 112.14 237.42 13.14

Source: DGCI&S

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 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 engagement with Iran has been

affected by the “Comprehensive Iran Sanctions,

Accountability and Divestment Act of 2010” which

was signed into law by President Obama on July 1,

2010. The Act 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 exports to Iran and Imports

from Iran showed a declining trend in 2009-10

as compared to 2008-09. In 2008-09, the total

trade with Iran was US$ 14,910.78 million which

decreased to US$ 13,394.02 million during 2009-

10. This was essentially because of the proscriptions

announced by US in dealing with Iranian banks as

a result of which both exporters and importers

are facing trouble in recovering payments. After

inclusion of Iran’s major banks under various UN, US

& EU sanctions, normal trade transactions/opening

of LCs, etc. have suffered. Payment settlement is

the main issue for trade with Iran.

India’s trade with Iran has increased substantially

from US$9065.03 million in 2006-07 to US$

13670.72 million in 2010-11. The trend in trade

between India and Iran is given in Table below:

Maldives

The Bilateral Trade Agreement signed on 31st

March, 1981 will remain progressively in force

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Table 7.6Bilateral Trade with Iran

(Value in US $ Million)

Year Export Import Total Trade Balance of Trade2006 - 07 1446.48 7618.55 9065.03 (-)6172.072007 - 08 1943.92 10943.61 12887.53 (-)8999.692008 - 09 2534.01 12376.77 14910.78 (-)9842.762009 -10 1853.17 11540.85 13394.02 (-)9687.682010- 11 2742.51 10928.21 13670.72 (-)8185.702010-11 (April-Oct) 1351.01 5819.93 7170.94 -4468.922011-12 (April-Oct) 1432.22 5939.94 7372.16 -4507.72

Source: DGCI&S

Table 7.7Bilateral Trade with Maldives



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

2010-11 106.66 31.38 138.04 75.28

2010-11 (April-Oct) 55.62 29.78 85.40 25.84

2011-12 (April-Oct) 66.69 13.28 79.98 53.41

Source: DGCI&S

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

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$71.73 million in 2006-07 to US$ 138.04 million

in 2010-11. The trend in trade between India and

Maldives is given in Table below:

Nepal

The Treaty of Trade and the Agreement of

Cooperation between the two countries was signed

on 27th October, 2009 at Kathmandu, 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

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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 5-6th December 2011. The Indian

delegation was led by Dr. Rahul Khullar, Commerce

Secretary. Both sides held detailed discussion on

various bilateral issues.

Nepalese request for waiver of Additional Duty

of Customs (ADC) on all export items to India was

considered vide Notification No.107/2011-Customs

dated 5.12.2011.

Provisions of Treaty of Trade signed in October

2009 for replacement of Duty Refund Procedure

(DRP) have been implemented vide Notifications

24-29/2011-Central Excise (N.T.) dated 5.12.2011.

Double Taxation Avoidance Agreement (DTAA) with

Nepal was signed on 27th November 2011 which will

help exporters and investors of both the countries

in improving mutual business engagements.

Table 7.8Bilateral Trade with Nepal



2006-07 927.40 306.02 1233.42 621.38

2007-08 1507.42 628.56 2135.98 878.86

2008-09 1570.15 496.04 2066.19 1074.11

2009-10 1533.31 452.61 1985.92 1080.70

2010-11 2204.40 513.40 2717.80 1691.00

2010-11 (April-Oct) 1144.10 301.10 1445.20 843.00

2011-12 (April-Oct) 1067.52 228.01 1295.54 839.51

Source: DGCI&S

Nepal has agreed to consider restoration of Margin

of Preferences (MoP) on import duty for Indian

goods (which was 20% in 2001-02 and eroded to

5% in 2006-07) in their forthcoming Budget Session

(June-July, 2012) and to abolish agricultural reform

fee of 5% on import of primary products from

India.

India is providing Buyers Credit to Nepalese

Government agencies for large project exports,

especially in the infrastructure sector such as roads,

bridges, railways, power lines, sewerage plants,

water treatment plants and housing from India.

The credit will be provided under National Export

Insurance Account (NEIA) through EXIM Bank for a

maximum period of 5 -8 years.

India’s trade with Nepal has increased substantially

from US$ 1233.42 million in 2006-07 to US$

2717.80 million in 2010-11. The trend in trade

between India and Nepal is given in Table below:

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Pakistan

India and Pakistan have no formal trade agreement.

India granted the MFN status to Pakistan way back in

1995-96 but Pakistan is yet to reciprocate. Recently,

a decision taken in this regard in the Cabinet

meeting of Pakistan, communicated through the

Press Release of Pakistan Government dated 2nd

November 2011, states that “the (Pakistan) Cabinet

gave Ministry of Commerce the mandate to take

the process of normalization forward, which would

culminate in the observance of Most Favoured

Nation (MFN) principle in its true spirit”.

Pakistan maintains a list of importable items from

India, called ‘Positive List’, as notified from time

to time. Till recently, the ‘Positive List’ of Pakistan

contained 1946 items which has been increased

to 1963 items, an addition of 17 new items vide

Notification F. No. 2(8)/2011-A.C(T.P) dated 28th

December, 2011 issued by Government of Pakistan.

This notification also increased the items allowed

for import by Pakistan from India through ‘land

route’ from 110 to 137.

Bilateral trade and commerce talks were held

between Commerce Secretaries of India and

Pakistan on 27-28 April 2011, in Islamabad

(Pakistan). The two sides, inter-alia, agreed to

improve trade infrastructure and expand trade

through Attari-Wagha land route. It was agreed

to set up a Working Group to address and resolve

clearly identified sector-specific barriers to trade.

Both sides agreed to undertake new initiatives to

enable trade in electricity and Bt. Cotton seeds as

also expand trade in petroleum products. It was

agreed that cooperation in Information Technology

sector would be encouraged through the private

sector. Both sides agreed to facilitate grant of

Business Visas to encourage expansion of trade.

Pakistan recognized that grant of MFN status

to India would help in expanding bilateral trade

relations. It agreed to replace its present ‘Positive

List’ with ‘Negative List’, by October 2011.

During the recent meeting of Commerce

Ministers’ of India and Pakistan held in New

Delhi on 28.09.2011, the Ministers affirmed

that fully normalized commercial links between

both countries would strengthen the bilateral

relationship and build the bridges of friendship,

trust and understanding- for mutual benefit of

their people and promotion of prosperity in South

Asia. Both Commerce Ministers mandated their

Commerce Secretaries to pursue with vigor the

task of fully normalizing bilateral trade relations.

They agreed that their countries would cooperate

for a high ambition of preferential trade relations

under the framework of South Asian Free Trade

Agreement (SAFTA). They noted with satisfaction

the joint and collaborative efforts already being

made by India and Pakistan to liberalize trade in

goods and services under SAFTA. They agreed that

all mutual obligations contracted under SAFTA

would be implemented with full sincerity.

Sixth round of talks on commercial and economic

co-operation between Commerce Secretaries

of India and Pakistan have been held on 14-15th

November, 2011 in New Delhi. During the above

discussion, following points have been agreed:

(i) Both sides have agreed to jointly work to

more than double bilateral trade within

three years, from current levels of 2.7

billion US dollars per annum to about 6

Billion dollars.

(ii) The Agreed minutes of the Sixth round

of talks reflect Pakistan’s position for

observance of Most Favoured Nation

(MFN) as follows:

“The move to full normalization of trade relations

shall be sequenced. In the first stage, Pakistan will

transition from the current Positive List approach

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to a Negative List. The consultation process on

devising this Negative List is almost complete. A

small Negative List shall be finalized and ratified

by February, 2012. Thereafter, all items other

than those on the Negative List shall be freely

exportable from India to Pakistan. In the second

stage, the Negative List shall be phased out. The

timing for this phasing out will be announced in

February 2012 at the time the List is notified and it

is expected that the phasing out will be completed

before the end of 2012.”

With the entire phasing out of the Negative List,

the transition process to MFN treatment shall be

complete.

Cross 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

Union Minister for Commerce, Industry & Textiles Shri. Anand Sharma with the

Commerce Minister of Pakistan

trade from both sides. All these items have been

allowed duty free passage. Details of these are

given in the Box 7.1

India’s trade with Pakistan has increased

substantially from US$1673.71 million in 2006-07

to US$ 2666.18 million in 2010-11. The trend in

trade between India and Pakistan is given in Table

7.9:

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Sri Lanka

Sri Lanka has traditionally been an important

export market for India. India-Sri Lanka Free Trade

Agreement (ISFTA) 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. On account of some reservations expressed

by 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 Director

Box : 7.1LOC Trade

Items of export to and import from PakistanItems 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 Hand-

icrafts, 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.

Table 7.9Bilateral Trade with Pakistan


Year Exports Imports Total Trade Balance of Trade2006-07 1350.09 323.62 1673.71 1026.472007-08 1950.53 287.97 2238.50 1662.562008-09 1439.88 370.17 1810.05 1069.71

2009-10 1573.32 275.94 1849.26 1297.38

2010-11 2333.67 332.51 2666.18 2001.162010-11 (April-Oct) 1066.90 201.16 1268.06 865.742011-12 (April-Oct) 694.25 226.16 920.41 468.09

Source: DGCI&S

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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 agreed

to provide a revised draft framework for economic

cooperation agreement after consultations with

the stakeholders. Response from Sri Lankan side

has informed that they require some more time for

finalization of the draft Chapters. India’s trade with

Sri Lanka has shown markable increase from US$

2728.63 million in 2006-07 to US$ 4541.63 million

in 2010-11. The trend in trade between India and

Sri Lanka is given at Table 7.10

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

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 (LDCs).

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 India would allow the LDCs of

SAARC duty free access to its markets. In pursuance

of this, India has reduced its sensitive list for LDCs

from 480 to 25 items and zero custom duty has been

given to all the items removed from the sensitive

Table 7.10Bilateral Trade with Sri Lanka



2006-07 2258.30 470.33 2728.63 1787.97

2007-08 2830.43 634.96 3465.39 2195.47

2008-09 2425.92 356.57 2782.49 2069.35

2009-10 2188.01 392.19 2580.20 1795.82

2010-11 4039.90 501.73 4541.63 3538.17

2010-11 (April-Oct) 1549.11 228.88 1777.99 1320.23

2011-12 (April-Oct) 2500.63 466.25 2966.88 2034.38

Source: DGCI&S

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list vide Notification No.99/2011-Customs dated

9.11.2011. India has thus allowed zero duty access

for the SAARC LDCs for almost 99.7% of the total

tariff lines. Alcohol and Tobacco items will still face

MFN tariff rates, as ‘demerit’ goods. This measure

is expected to help in correction of the trade deficit

with India of the SAARC LDCs.

Agreement on Multilateral Arrangement on

Recognition of Conformity Assessment and the

SAARC Agreement on Implementation of Regional

Standards were signed at during the 17th SAARC

Summit at Maldives in November 6-11, 2011. This

would promote the mutual recognition of activities

of conformity assessment, namely, inspection,

testing and certification. The SAARC Agreement

on Implementation of Regional Standards would

provide a framework as well as the guiding

principles for implementation of SAARC standards.

These understandings shall pave the way for

smoother flow of trade between SAARC members.

The Union Minister for Commerce, Industry and Textiles Shri Anand Sharma with other participants of the SAFTA Ministerial Council (SMC) of SAARC Meeting, at Male, Maldives on June 13, 2011

Agreement on establishing the SAARC Regional

Seed Bank signed during the 17th SAARC Summit

meeting will provide regional support to national

seed security efforts, address regional seed

shortages through collective actions, promote

increase of Seed Replacement Rate and act as

a regional seed security reserve for the Member

States. The Agreement will foster inter-country

partnerships in attaining seed security as a means

to ensure food security, particularly reducing

possible adverse effects of natural calamities.

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 Sixth meeting of the SMC and Seventh meeting

of COE are scheduled to be held on February 14-

16, 2012 at Islamabad in Pakistan.

India has developed a web based portal providing

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detailed information on current and updated

import policies in respect of various products

imported into India has since been developed and

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 given below:-

url:http://compendium.iift.ac.in/index.asp

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 Ninth meeting of Expert Group on

SATIS was held on February 13, 2012 at Islamabad

Table 7.11India’s Trade with SAARC Countries

(Value in US $ Billion)

2006-07 2007-08 2008-09 2009-10 2010-11 2010-11

(April-Oct)2011-12

(April-Oct)

ExportsIndia’s Total 126.41 163.13 185.30 178.75 251.13 123.17 170.11

% share of SAARC countries

5.12 5.91 4.62 4.69 5.13 4.65 3.76

ImportsIndia’s Total 185.74 251.65 303.70 288.37 369.77 208.821 277.26

% share of SAARC countries

0.81 0.84 0.60 0.57 0.59 0.55 0.52

Source:DGCI&S

Box 7.2 Highlights of Trade with SAARC

During April-October 2011-12, Sri Lanka was the largest trading partner of India in SAARC region. •

During April-October 2011-12, India has recorded a negative growth rate of exports with Nepal and •

Pakistan in SAARC region.

During April-October 2011-12, the lowest decline in growth of exports was recorded for Pakistan at •

(-) 34.93%.

Except for Bhutan, India runs a trade surplus with all other trading partners.•

in Pakistan. Negotiations on schedules of specific

commitment, including Initial Request List are

being held by the Expert Group on SATIS. These

negotiations are expected to be completed within

next six months.

II. Trade with Australia and New Zealand

India’s trade with Australia and New Zealand

showed robust growth in recent years India’s trade

with Australia and New Zealand since 2008-09 is

as follows:

Major Commodities of Export & Import – Australia

The principal commodities of export to Australia

are diamonds and diamond jewellery, iron ore,

wind power generating sets, refrigerators, cars,

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Table 7.13

The top 10 Commodities of exports to Australia

S.No. Commodity Values in US $ Million

1 Gems & Jewellary 147.67

2 Machinery and Instruments 111.82

3 Transport Equipments 111.30

4 Drugs,Phrmcutes & Fine Chemls 86.66

5 Manufactures of Metals 80.13

6 Petroleum (Crude & Products) 60.26

7 RMG Cotton Incl Accessories 43.95

8 Cotton Yarn,Fabrics,Madeupsetc 42.27

9 Inorganic/Organic/Agro Chemls 34.90

10 Other Commodities 35.14

Table 7.12India’s trade with Australia and New Zealand (all figures in US$ million)

Country 2008-09 2009-10 2010-112011-12(P)

(Till October, 2011)

Exports Imports Exports Imports Exports Imports Exports Imports

AUSTRALIA 1,439.32 11,098.07 1,384.96 12,407.37 1717.03 10789.0 1192.20 8218.85

NEW ZEALAND 188.62 423.74 255.17 499.21 194 625.21 139.88 425.00

Total 1627.94 11521.81 1640.13 12906.58 1911.03 11414.21 1332.08 8643.85

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 top 10 Commodities of exports to Australia

during the year 2011-12(Till October, 2011) and

their values (US$ Million) are at Table 7.13

The top 10 Commodities of imports from Australia



Major Commodities of Export & Import –New Zealand

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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The top 10 Commodities of exports to New Zealand



Table 7.15

The top 10 Commodities of exports to New Zealand


1. Drugs , Pharmaceuticals & Fine Chemicals 18.59

2. Machinery and Instruments 10.41

3. Transport Equipments 10.32

4. Inorganic/Organic/Agro Chemicals 9.35

5. Gems & Jewellery 9.01

6. Other Commodities 7.56

7. Manufacturers of Metals 7.15

8. Plastic & Linoleum Products 4.6

9. RMG Cotton Inc. Accessories 4.44

10. Cotton Yarn, Febrics, Madeupsetc 4.31

Table 7.14

The top 10 Commodities of imports from Australia


1 Coal, Coke & Briquittes etc. 4,099.04

2 Gold 1,729.21

3 Metalifers Ores & Metal Scrap 1,115.64

4 Petroleum, Crude & Products 422.34

5 Non-Ferrous Metals 211.32

6 Wool, Raw 130.45

7 Pulses 63.64

8 Machinery Except Elec & Electronic 53.65

9 Fertilezers Manufactured 54.17

10 Electronic Goods 35.94

The top 10 ten Commodities of imports from New

Zealand during the year 2011-12(Till October, 2011)

and their values (US$ Million) are at Table 7.16

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Trade Agreements

After the approval of Trade and Economic Relations

Committee on 29.04.2011, India and Australia

started negotiations for a Comprehensive Free

Trade Agreement (FTA). Two rounds of negotiations

between the two countries have been held in July,

2011 and November, 2011. Exchange between

the two countries so far has been of a preliminary

Table 7.16

The top 10 ten Commodities of imports from New Zealand

S.No. Commodity Values in US $ million

1. Wood and Wood Products 133.13

2. Coal, Coke &Briquittes etc. 106.46

3. Milk and Cream 32.61

4. Newsprint 23.76

5. Machinery except Elec. & Electronic 19.94

6. Metalifers Ores &MetalScrap 18.48

7. Wool, Raw 15.02

8. Fruits & Nuts excl. Cashew nuts 13.53

9. Gold 10.07

10. Other commodities 7.14

The Union Minister for Commerce, Industry and Textiles Shri Anand Sharma with the Prime Minister of Australia, Ms. Julia Eileen Gillard, in Canberra, Australia on May 12, 2011

nature. The Third Round is expected to take place

in New Delhi in March, 2012.

India and New Zealand have started negotiations for a Comprehensive Economic Cooperation Agreement (CECA). Seven rounds of negotiations have been held so far. Both the countries have since exchanged offers, requests as well as revised offers in the Goods Sector and are looking forward to exchanging the services offers simultaneously

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in Round Eight. In the other areas, varying parts of Chapter texts have been cleaned up. Both the countries expect to conclude the CECA by the end of financial year 2012. The Eighth Round of negotiations with New Zealand is expected to be held in March, 2012.

Foreign Direct Investment

Total Foreign Direct Investment inflows from

Australia from April, 2000 to November, 2011 are

US$ 485.17 million.

Total Foreign Direct Investment inflows from New

Zealand from April, 2000 to November, 2011 are

US$ 30.04 million.

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

The FT (NAFTA) Division deals with India’s bilateral trade with United States of America, Canada and Mexico. All the three countries are signatories to the North America Free Trade Agreement (NAFTA) (signed in 1994) and form one of the largest and the most important trading blocks of the world.

This Division regularly engages with all the three countries to discuss and resolve bilateral trade related issues of concern. The trade data of NAFTA countries is analysed for identification of important trends and opportunities for our exporters for expansion and consolidation of exports. The various legislations/steps taken by these countries and the possible impact of these measures on Indian exports are analyzed and follow up action is taken in consultation with other Ministries/Departments and our Missions abroad.

This Division coordinates dissemination of trade related information with respect to NAFTA countries with the Apex Chambers of Commerce and Export Promotion Councils (EPCs). Member exporters of Apex Chambers of Commerce and EPCs are provided assistance for participation in fairs/exhibitions, identification of export products and potential market areas for exports, details of

reputed buyers etc. The difficulties faced by Indian exporters in NAFTA countries are regularly taken up with the authorities concerned of these countries through correspondence, video conferences and

bilateral meetings.

Details regarding India’s bilateral trade with the

countries of NAFTA region are given below:

India-US Bilateral Trade

In 2010-11 USA was one of the India’s largest trading partners and export destinations. The bilateral trade figures for the years 2008-09, 2009-10, 2010-11 and 2011-12 (April to September) are given in Table 7.17.

The major items of export from India to the US are gems and jewellery, drugs, pharmaceuticals and fine chemicals, RMG Cotton including accessories, manufactures of metals, machinery and instruments, etc.

The major items of import from USA to India are machinery (except Electric & Electronic), transport equipments, pearls, precious and semiprecious

stones, electronic goods, gold, etc.

India-US Commercial Dialogue

The TOR of the India US Commercial Dialogue was signed on March 23, 2000. The dialogue is an institutional arrangement between US Department of Commerce and India’s Department of Commerce and is aimed 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 four broad categories: (a) exchange of information on standards, (b) exchange of information on antidumping/ trade defence mechanisms, (c) exchange of information on IPR and (d) focus on Small and Medium Enterprises. The ‘Commercial Dialogue’ arrangement is reviewed every two years. While renewing the Dialogue in 2010, India has placed greater emphasis on investment

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opportunities in both countries especially in manufacturing and in areas of high technology, emerging technologies and collaborative research. During the year 2011, two meetings of Commercial Dialogue were held between Commerce Secretary and Under Secretary Sanchez of the US Department of Commerce. The first meeting took place on 17th March, 2011 and the second on 8th November, 2011. Business to Business (B2B) interaction was also held as a part of Commercial Dialogue in November, 2011. The theme of the Business to Business (B2B) interaction was “sharing of Best Practices on promoting Safe and Environmentally Friendly Cold Chain/Supply Chain Technology and

Investment Opportunities.”

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 were

earlier structured around five focus groups: Tariff

and Non-Tariff Barriers; Agriculture; Investment;

Services; Innovation and Creativity.

Ministerial meeting of the TPF was last held in

Washington DC on 21st September 2010. During

Table 7.17India-US Bilateral Trade


Year Exports Percentage Growth Imports Percentage Growth

Trade balance

2008-09 21,149.53 2.02 18,561.42 -11.89 (+)2,588.11

2009-10 19,535.49 -7.63 16,973.68 -8.55 (+)2,561.81

2010-11 25,548.40 30.78 20,050.72 18.13 (+)5497.68

2011-2012(P) (April- September)

16,678.99 40.46 10,977.02 7.46 (+)5,701.97

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.

Since then the approach based on fixed focus

group has been modified to an approach based ad-

hoc groups to be set up as required.

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 recommendations and policy suggestions, 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

Bilateral trade figures between India and Canada

from 2008 - 09 to the current year are given

below.

The major commodities of export to Canada are drugs, pharmaceuticals and fine chemicals, RMG cotton including accessories, manufactures of metals, gems and jewellery, machinery and instruments etc. The major items of import from Canada are pulses, fertilizers manufactured, newsprint, transport equipments, machinery

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(except electrical and electronic), pulp and waste paper etc.

India Show in Canada

Engineering Export Promotion Council (EEPC) India

organised India Show Canada in Toronto during

17-20 October, 2011. Commerce Secretary led an

Indian delegation to participate in the Show.

India-Canada Trade Policy Consultation

The seventh India-Canada Trade Policy Consultation

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

India and Canada have been working to enhance

bilateral cooperation in a number of areas of

mutual importance and are pursuing bilateral

relations through mechanisms like Foreign Office

Consultations and Trade Policy Consultation. Both

the countries have commenced negotiations

towards a Comprehensive Economic Partnership

Agreement (CEPA). Three rounds of negotiations

have already taken place. Third round of CEPA

negotiations between India and Canada was held in

New Delhi from 13-16 December, 2011. During this

round separate discussions were held on Services

(Trade in Services), Sanitary and Phytosanitary

issues (SPS), Rules of Origin, Services (MoNP),

Technical Barriers to Trade (TBT), Financial Services,

Telecommunications and Trade facilitation.

India-Mexico Bilateral Trade

Bilateral trade figures between India and Mexico

from 2008-09 to the current year are given below.

The major commodities of export to Mexico are

transport equipments, drugs, pharmaceuticals

& fine chemicals, electrical goods, RMG cotton

including accessories, manmade yarn, fabrics,

madeups, inorganic/organic/agro chemicals, etc.

The major commodities imported from Mexico are

petroleum (crude and products), electronic goods,

fertilizers manufactured, transport equipments,

iron and steel etc.

India Mexico 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 (BHLG)

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

Table 7.18India-Canada Bilateral Trade

(Value in US $ Million)

Year Exports Percentage Growth

Imports Percentage Growth

Trade balance

2008-09 1,364.41 7.72 2,458.65 24.10 -1,094.24

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

2010-2011 1361.29 21.24 2029.98 -3.21 -668.69


874.24 46.86 1021.50 -6.17 -147.26

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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.

Trade with the EU represents almost 19.26 %

of India’s total trade. EU as a bloc is thus India’s

largest trading partner. The relationship between

the European Union and India has matured

substantially in recent years, from that of an

aid donor-recipient, to one of partnership with

opportunities for mutual benefit. The EU and

India, as the two largest democracies in the world

and global actors in a multi-polar world, today

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 four times between 2000 and 2011.

India and the EU have enjoyed healthy economic

relations. These relations have been built on the

foundations of (i) Cooperation Agreement between

European community and India on Partnership and

Development - 20th December, 1993 (ii) Agreement

on Scientific and Technological Cooperation, 2001

(renewed in 2007), (iii) Agreement on Customs

Cooperation, 2004, (iv) EU-India Horizontal Civil

Aviation Agreement, 2008, (v) Agreement on

nuclear fusion energy research, 2009, (vi) Joint

declaration on Culture in December, 2010. 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

Table 7.19India-Mexico Bilateral Trade


Year Exports Percentage Growth

Imports Percentage Growth

Trade balance

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

2010-11 913.31 53.19 1163.45 10.91 -250.14


606.52 69.96 1036.39 174.09 -429.87

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and protection within 28 countries of Europe,

including 16 countries of EU. Similarly, agreements

for avoidance of double taxation exist with 28

countries of Europe, including 20 countries of EU.

India-EU bilateral relations are periodically reviewed

at the official level by the India-EC Joint Commission,

which held its last meeting on 29th September,

2010 at Brussels. Three Sub-Commissions on

Trade, Economic Cooperation and Development

Cooperation and seven Joint Working Groups on

agriculture and marine products, textiles, steel,

food processing industries, pharmaceuticals & bio-

technology, Customs Cooperation and technical

barriers to trade (TBT)/sanitary and phyto sanitary

(SPS) issues are functioning. In 2011, the meetings

of Sub Commission on Trade, Sub Commission on

Economic Cooperation and Sub Commission on

Development Cooperation were held on 12.7.2011,

13.7.2011 and 4.5.2011 respectively. The eleventh

India-EU Summit was held on 10th December, 2010

at Brussels.

India’s trade with the EU is hampered by sanitary

and phytosanitary standards, technical barriers,

complex system of quota/tariff, anti-dumping/

anti-subsidy measures against Indian products

etc. 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 the Sub-

Commission on Trade. The EU market has stringent

quality norms and standards. Indian trade and

industry also needs 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 2011,

Joint Commission meetings were held with Belgium

& Luxembourg (from among Member States). The

21st India-EU Joint Commission meeting was held

on 6th January, 2012 at New Delhi.

INDIA EU BTIA Negotiations

In order to deepen and strengthen trade and investment relations between India and the EU, negotiations are currently underway for a Broad based 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 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. Thirteen rounds of negotiations have been held. The first round was held on 28th -29th June 2007 at Brussels and the 13th round was held from 31st March to 6th April, 2011 in India. This agreement will lead to an increase in the opportunities for market access in both goods and services for both sides.

Trade and Investment Relations with European Union

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 Liechtenstein. 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 19.63%

of India’s total trade during 2010-11. During

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2011-12 (April –October), India’s trade with

Europe increased by 35.6% as compared to the

corresponding period in 2009-10 with exports

increasing by 33% and imports by 37.3%. 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, electronic

goods. The top five items of India’s imports from

Europe were gold, machinery (except Electrical

& Electronics), pearls/precious & semi-precious

stone, electronic goods and transport equipment.

Trade between India and Europe during the last

five years is at Table 7.20:

Table 7.20Trade with Europe


Year ExportsGrowth rate (%)

ImportsGrowth rate (%)

Total TradeBalance 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

2010-11 50697 31.60 71181 27.76 121878 (-)20484

2010-11 (April-Oct.) 25235 19.97 38917 32.03 64152 (-)13682

2011-12 (April-Sept.)* 33560 32.99 353423 37.27 86983 (-)19862

* Provisional Source: DGCI&S

India Show

Engineering Export Promotion Council (EEPC)

organised India Show at the WIN Fair in Istanbul

on 3-6 February 2011 with partner country

status to promote “Brand India” for Indian

products, Technologies and Services. More than

150 companies participated in the fair. During

the BASELWORLD Fair - a world class watch and

jewellery show, an India Show was organised in

Basel, Switzerland during 24-31 March, 2011.

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, ten rounds of negotiations have been held so far. The last round of negotiations was held during 30 November – 2 December, 2011 during which Trade in Goods, Services, Investment, IPR (Intellectual Property Rights), Customs and Trade Facilitations, Rules of Origin, Sanitary and Phyto-sanitary Measures(SPS), Technical Barriers to Trade(TBT), Trade Defence, Dispute Settlement, Competition, Sustainable Development, Legal and Institutional provisions were discussed.

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India’s trade with EFTA countries has increased from US$ 10,581 million in 2006-07 to US$ 26,708 million in 2010-11, with average annual growth rate of 38% during the last four years.

The 6th Session of India-Greece JEC was held in Athens on 27-28 March 2011. MoS (C&I) co-chaired the meeting with Greek Deputy Minister of Foreign Affairs Mr. Spyros Kouvelis. The issues of mutual interests ranging from cooperation in the areas of tourism, agriculture, shipping, aviation, IT, food processing, etc. were discussed besides looking for ways to promote investment in various sectors.

The 17th Session of India and Finland Joint Commission on Economic Cooperation was held at New Delhi on 24th November 2011. The progress in setting up of Joint Working Groups on Innovation, Clean Technology and Waste Management and Skill Development Training was reviewed. The bilateral cooperation in the area of New and Renewable Energy, IT, Textile, Investment etc. was also discussed in the meeting.

First meeting of India-Finland Joint Working Group

(JWG) on Innovation:- In pursuance to CIM’s

announcement during his Finland visit in March,

2010, the India-Finland JWG on Innovation was set

up and 1st meeting of the JWG was held on 27th

September, 2011 at New Delhi.

The 17th Session of India-Romania Joint Commission

was held on 1-2 February 2012 at Bucharest,

Romania. The Indian delegation was led by Hon’ble

Minister of State, Shri Jyotiraditya M. Scindia. This

JEC being held after eight long years is an effort

to revive and create ties with Romania and the

Romanian people in not only areas of economic

interest, but also in term of people to people

contact. Discussions were held for cooperation

in the areas of Transport and Infrastructure

Development, Banking, Science and Technology,

Textile, IT and ITES, Tourism etc.

V. Trade with Commonwealth of Independent States (CIS)

The Commonwealth of Independent States (CIS)

comprises the Russian Federation, Armenia,

Azerbaijan, Belarus, Georgia, Moldova, Ukraine,

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 the graph below:

Table 7.21Trade with EFTA countries


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

2010-11 939.80 12.49 25,768.34 65.01 26,708.15 (-)24,828.54

2010-11 (April-Oct.)

510.88 6.73 13496.00 84.06 14006.87 (-)12985.14

2011-12 (April –Oct.)*

1072.07 109.85 20447.24 51.51 21519.32 (-)19,375.16

* ProvisionalSource:DGCI&S

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The CIS region had a share of 1.14 per cent in India’s exports and 1.53 per cent in its imports during 2010-11. The principal commodities of exports to the region include drugs and pharmaceuticals & fine chemicals, machinery and instruments, tea, coffee, transport equipments, RMG cotton including accessories, manufactures of metals etc. Important items of imports to India from this region are iron and steel, fertilizers, non-ferrous metals, petroleum, crude & products, silver, synthetic & reclaimed rubber, vegetable oils, newsprint,

Chart 7.5

Bilateral trade with CIS region

project goods, crude minerals, inorganic chemicals, metalifers ores and metal scrap etc.

a) 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 60% of India’s total trade with CIS region

in 2010-11. During 2011-12, following meetings

were held to discuss various issues concerning

bilateral cooperation:

Table 7.22Trade with CIS

(Value in US$ Million)

Year Export Import Total Trade %Growth

2007-08 1740 3788 5528 (+)3.58

2008-09 1925 6627 8552 (+)54.70

2009-10 1688 6104 7792 (-)8.89

2010-11 2863 5664 8527 (+)9.00

2010-2011 (Apr-Sep) 1168 3279 4447 (+)22.00

2011-2012 (Apr-Sep) Provisional 1351 3183 4534 (-) 1.00

(Source: DGCI &S)

127


• 17th Session of the Indo-Russian Inter-

Governmental Commission on Trade,

Economic, Scientific, Technological and

Cultural Cooperation was held on 18th

November, 2011 at Moscow 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.

• 5th Session of India-Russia Forum on

Trade & Investment was held on 10th

November, 2011 at Moscow, under the Co-

Chairpersonship of Shri Anand Sharma,

Minister of Commerce, Industry & Textile

from the Indian side and Mr. Sergei

Borisovich Ivanov, Deputy Chairman of

the Russian Federation Government from

the Russian side.

• 17th Session of the India-Russia Working

Group on Trade & Economic Cooperation

under the aegis of the Indo-Russian Inter-


Economic, Scientific, Technological and

Cultural Cooperation was held on 3rd & 4th

October 2011 at Moscow under the Co-

Chairmanship of Shri Ravi Capoor, 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.

b) 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 2011-12,

following events were held:

• 9th Meeting of India-Kazakhstan Inter-


Economic, Scientific, Technological,

Industrial and Cultural Cooperation was

held on 12th October, 2011 in Astana,

Kazakhstan under the co-chairmanship of

H.E. Mr. R.P.N. Singh, Minister of State for

Petroleum & Natural Gas from Indian side

and H.E. Mr. Sauat Mynbayev, Minister

of Oil & Natural Gas of the Republic of

Kazakhstan from Kazakhstan side.

• 6th Session of India-Tajikistan Joint

Commission on Trade, Economic, Scientific

and Technical Cooperation was held

from 16-17th May, 2011 in Dushanbe,

Tajikistan under the co-chairmanship of

Shri P.K. Chaudhery, Special Secretary,

Department of Commerce from Indian

side and Mr. Farrukh Hamraliev, Minister

of Economic Development & Trade of the

Government of Tajikistan from Tajikistan

side.

• 9th Session of India-Uzbekistan Inter


Economic, Scientific and Technical

Cooperation was held on 4th May, 2011

in Tashkent, Uzbekistan under the co-

chairmanship of Shri. P.K. Chaudhery,

Special Secretary, Department of

Commerce from Indian side and Mr. D.

Turdiev, 1st Deputy Minister, Minister of

Economic of the Republic of Uzbekistan

from Uzbek side.

Other CIS Countries

Other six CIS countries are Armenia, Azerbaijan,

Belarus, Georgia, Moldova and Ukraine. Ukraine

128


is India’s second largest trading partner of the CIS

region accounting for about 27% of India’s total

trade with CIS region in 2010-11. Department of

Commerce is the nodal Department for the Inter-

Governmental Commission (IGC) with Azerbaijan.

During 2011-12, following events were held:

• 5th Session of India-Armenia Inter


Economic, Scientific and Technological,

Cultural and Educational Cooperation was

held from 31st October-1st November

2011 in Yerevan, Armenia under the

co-chairmanship of Shri. Sanjay Singh,

Secretary (East), Minister of External

Affairs from Indian side and Mr. Sergey

Manassarian, Deputy Minister, Ministry

of Foreign Affairs, Republic of Armenia

from Armenian side.

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.

• There is a regular interaction at the

Governmental level for enhancing

bilateral trade and economic cooperation.

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 Cooperation under the Co-Chairmanship of Minister of State for Commerce and Industry.

• India-Uzbekistan Inter-Governmental Commission (IGC) on Trade, Economic, Scientific & Technical Cooperation under the Co-Chairmanship of 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

FT (LAC) Division in Department of Commerce handles general trade and other allied matters with countries of the Latin America and Caribbean region. 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 affecting our trade with this region are: distance, language barriers, lack of information and the absence of direct shipping and air links.

129


The Latin American and Caribbean (LAC) region

comprises 43 countries and accounted for 5.68%

of the total world trade in 2010. There is significant

scope for enhancing trade between India and

the LAC region. Over the years, our exports have

been showing a continuously increasing trend as

indicated below:

Trade with the LAC Region

The total Indian bilateral merchandise trade with the region increased from a modest US$ 1.97 billion in 2001-02 to US$ 24.44 billion in 2010-11. During this period total Indian exports to the region grew from a modest US$ 960.30 million to US$ 10.24 billion, a growth of about 965.86% over these ten years. Similarly our imports grew from about US$ 1.01 billion to US$ 14.21 billion over this period, a growth of about 1312%.

The percentage share of India’s exports to Latin America in its global exports has increased from 2.19% in 2001-02 to 4.08% in 2010-11. In the same period , the percentage of India’s imports from Latin America in its global import has increased from 1.96% to 3.84%. India’s region wise export growth for 2010-11 indicates that Latin America is at third place (after CIS and Southern Africa) with an impressive growth of 64.81%.

Three product groups viz. textiles, engineering products and chemical products constitute nearly half of India’s exports to the region in 2010-11. 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 export potential. In 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

Focus LAC programme aims at focusing on the

Latin American region, with added emphasis on

the major trading partners of the region. The

main objective of the programme is to increase

interaction between the two regions by identifying

potential areas of bilateral trade and investments.

Table 7.23India’s Trade with LAC Region

(Values in US$ million)

YearIndia’s ex-

ports to LAC % growth of

exports

India’s import from

LAC

% growth of imports

Balanceof trade

Total trade

2001-02 960.30 - 1,006.16 - -45.86 1,966.46

2006-07 4,265.41 42.50 6,135.27 130.41 -1,869.86 10,400.68

2007-08 5,673.19 33.00 6,557.34 6.88 -884.16 12,230.53

2008-09 6,172.03 8.79 9,963.96 51.95 -3,791.93 16,135.99

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

2010-11 10,235.43 64.81 14,205.90 36.55 -3,970.46 24,441.33

2011-12 (Apr- Oct.) 7,759.55 36.99 10,169.12 24.79 -2,409.57 17,928.68

(Source: DGCIS, Kolkata)

130


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 the new FTP (2009-

2014), Double Weight Scheme for exports to all

countries of LAC will continue. 16 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 (31). Under the Market Linked Focus Product

Scheme (MLFPS), 13 markets have been identified,

which includes Brazil.

With a view to increase the competitiveness of

Indian exports, Special FMS was introduced in

Table 7.24 (a)Major commodity groups of India’s exports to LAC 2009-10 & 2010-11

(Values in US $ Million)

S.N. Commodity Apr 2009-Mar

2010Apr 2010-Mar

2011(P) % Growth

1. Petroleum (crude & products) 1,834.39 3,852.64 110.02

2. Transport equipments 509.13 1,030.31 102.37

3. Drugs,phrmcutes & fine chemls 651.67 774.58 18.86

4. Manmade yarn,fabrics,madeups 343.45 576.29 67.79

5. Machinery and instruments 426.80 500.66 17.30

6. Inorganic/organic/agro chemls 371.95 465.54 25.16

7. Cotton yarn,fabrics,madeups etc 296.29 412.74 39.30

8. Plastic & linoleum products 150.97 265.65 75.97

9. Prmry & semi-fnshd iron & steel 195.42 258.08 32.07

10. Electronic goods 81.19 216.34 166.48

Table 7.24 (b)Major commodity of India’s exports to LAC 2011-12 (April- Oct)


S.No. Commodity Apr-Oct 2010 Apr-Oct 2011(P)

%Growth

1. Petroleum (Crude & Products) 2,188.44 3,029.70 38.44

2. Transport Equipments 499.79 716.32 43.33

3. Plastic & Linoleum Products 139.61 532.11 281.15

4. Drugs, Phrmcutes & Fine Chemls 485.10 443.17 -8.64

5. Machinery and Instruments 239.97 371.70 54.89

6. Manmade Yarn, Fabrics, Madeups 280.47 345.53 23.20

7. Inorganic/Organic/Agro Chemls 290.81 341.45 17.42

8. Cotton Yarn, Fabrics, Madeups etc 291.99 272.93 -6.53

9. RMG Cotton Incl Accessories 99.57 164.39 65.10

10. Manufactures of Metals 122.79 139.69 13.77

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Table 7.25 (a) Major commodity of India’s imports from LAC 2009-10 & 2010-11


S.N. Commodity Apr 2009-Mar 2010

Apr 2010-Mar 2011(P)

%Growth

1. Petroleum, crude & products 5,400.56 8,715.62 61.38

2. Metalifers ores & metal scrap 1,352.53 1,998.61 47.77

3. Vegetable oils fixed (edible) 687.74 1,008.49 46.64

4. Sugar 1,091.78 477.98 -56.22


6. Iron & steel 306.41 250.41 -18.28

7. Machinery except elec & electronic 126.76 179.66 41.74

8. Organic chemicals 225.97 123.43 -45.38

9. Transport equipments 110.19 115.28 4.62

10. Wood and wood products 77.74 90.74 16.73(Source: DGCIS, Kolkata)

Table 7.25 (b)Major commodity of India’s imports from LAC 2010-11 and 2011-12 (April-Oct)


S.No. Commodity Apr-Oct 2010-11 Apr-Oct 2011-12 (P) %Growth

1. Petroleum, crude & products 5,002.44 6,429.87 28.53

2. Metalifers ores & metal scrap 956.18 1,390.57 45.43

3. Vegetable oils fixed (edible) 736.07 793.68 7.83


5. Gold 10.03 232.58 2,218.40

6. Machry excpt elec & electronic 101.39 108.70 7.22

7. Wood and wood products 49.18 92.23 87.54

8. Iron & steel 90.12 87.69 -2.70

9. Transport equipments 71.31 56.02 -21.44

10. Inorganic chemicals 46.72 54.61 16.87

October, 2011 by this Department, which allows

total duty credit scrip @4%. Under this Special

FMS, twelve (12) countries of the LAC region are

included. Cuba and Mexico are new entrants in this

category.

Brazil, Venezuela, Bahamas, Mexico, Chile,

Argentina, Colombia, Peru, Ecuador and Panama

are India’s top ten trading partners constituting

approximately 95.4% of the total trade with the

region in 2010-11.

Institutional Mechanism

The following institutional arrangements exist with regard to the countries of the Latin American region:

132


(i) Indo-Argentine Joint Commission

(ii) Indo-Argentine Joint Trade Committee

(iii) Indo-Mexican Joint Commission

(iv) Indo-Brazilian Commercial Council

(v) Indo-Cuban Joint Commission

(vi) Indo-Cuban Trade Revival Committee

(vii) Indo-Suriname Joint Commission

(viii) Indo-Guyana Joint Commission

(ix) Indo-Venezuela Joint Commission

(x) India Brazil Trade Monitoring Mechanism

(xi) India – Trinidad 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, Indian Missions are functioning in 14

major countries in the LAC region. Recently, full

fledged commerce posts have been sanctioned by

this Department for the Indian Embassy at Brasilia,

Buenos Aires (Argentina), Santiago (Chile), Bogota

(Colombia) and Mexico City (Mexico) in different

capacities to exclusively manage trade related

matters and to respond queries of exporters and

importers interested to undertake business with

Latin America and vice versa. These posts are

in addition to the existing 10 posts of Marketing

Assistant operating in nine Indian Missions in the

LAC region ( EOI Argentina has two sanctioned

posts of such Marketing Assistants). Efforts are

being made to further strengthen these Missions

for commerce and trade.

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

The CII, FICCI, and Export Promotion Councils (EPCs) are sponsoring trade delegations for promotion of trade with the region, as also organizing seminars/

conferences and sector/ product specific seminars in different cities for the benefit of exporters and to sensitise them about the trade opportunities available in the LAC region. Vigorous efforts are also 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.

Progress during 2011-12

i) 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 August,

2007.

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%.

With the objective to gain optimal benefits and

boost up bilateral trade between two countries,

the expansion of India-Chile PTA is currently in

progress.

ii) 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. Through 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 into operation from 1st June, 2009.

The process of expansion of India-MERCOSUR is

currently in progress with the objective to enhance

benefits from the Agreement through higher trade

coverage.

133


ECGC Cover

The Export Credit Guarantee Corporation of India

(ECGC) periodically undertakes a comprehensive

grading of countries based on the methodology of

risk scoring. As per ECGC Country Risk and Cover

Policy on LAC region (reviewed as on 30.06.2011)

sixteen (16) 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 fourteen

lines of credit to banks/Governments in the LAC

region as given in Table 7.26 (as on 27.12.2011):

Committee on LAC

A Committee has been constituted under

chairmanship of Hon. MoS (Commerce & Industry),

Government of India, to recommend a long

term strategy for proactively engaging with LAC.

Finalization of the report of the Committee is in

progress.

Document on Government policies for acquisition of land/ resources in LAC

Government in consultation with its Latin America

partners is actively looking at evolving policies for

joint development of natural resources for the

benefit of both sides. Private sector stakeholders

have also been consulted.

Important trade promotion events in LAC

(i) Business Seminars were organized by

FICCI in Argentina and Uruguay in May,

2011 coinciding with visit of Hon. MoS

(Commerce & Industry).

(ii) Business Seminars were organized by

EEPC India in association with other

industry/ trade associations in Colombia

and Panama during Aug- Sept, 2011

coinciding with visit of CS.

(iii) Telecom Equipment and Services EPC

(TEPC) participated in Futurecom - 2011

held from 12-14 Sept, 2011 in Sao Paulo

( Brazil).

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

below:

Total trade with countries in SSA Region during

2010-11 amounted to US$ 42,353.19 million

with exports amounting to US$ 1,6291.17 million

and imports at US$ 16062.02 million. The total

provisional trade during April-September, 2011

has been US$ 27019.36 million with exports at

US$ 8939.59 million and imports amounting to

US$18079.77 million. The corresponding figures

during April-September 2010 were US$ 18710.12

million (total trade), US$ 6995.94 million (exports)

and US$ 11714.18 million (imports) respectively.

Bilateral trade with West African countries

was US$ 17,408.32 million during 2010-11 as

compared to US$ 13001.28 million during 2009-

134


10. Drugs, pharmaceuticals & fine chemicals,

transport equipments, machinery and instruments,

electronic goods, petroleum (crude and products),

manufactures of metals were the major items of

export. Petroleum, crude and products, cashew

nuts, metalifers ores and metal scrap, 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$ 13,046 million during 2010-11.

Table 7.26

The EXIM Bank lines of credit (As on 27.12.2011)

S. No. Borrower Amount of Credit Purpose Tenor

USD mn (Years)

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

10.00 General purpose Upto 5 years

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

10.00 General purpose Tranche A:Upto 5 yearsTranche B:Upto 2 years

3 Banco Bradesco S.A., Brazil 10.00 General purpose Tranche A:Upto 5 yearsTranche 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 George-town

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 Ordnance 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

14 Government of Guyana 4.00 Fixed and movable irrigation pumps

Upto 20 years

Bilateral trade with countries in Southern Africa was

US$ 18274.67 million during 2010-11 as compared

to US$ 13500.89 million during 2009-10. Transport

equipments, petroleum crude and products, drugs,

pharmaceuticals and fine chemicals, machinery

and instruments, electronic goods, manufactures

of metals, plastic and linoleum products, primary

and semi finished iron and steel were the major

items of export. Petroleum crude and products,

gold, coal, coke and briquittes etc, metalifers ores

135


and metal scraps, inorganic chemicals, non-ferrous

metals, iron and steel were the major items of

import. South Africa was the top most trading

partner within this region with a trade of US $

11,125 million during 2010-11.

Bilateral trade with countries of East Africa was

US$ 556408 million during 2010-11 as compared

to US$ 3900.68 million during 2009-10. Petroleum

crude and products, drugs, pharmaceuticals & fine

chemicals, machinery and instruments, primary and

semi finished iron and steel, sugar and transport

equipments were the major items of export.

Cashew nuts, pulses, metalifers ores and metal

scrap, inorganic chemicals, leather and spices were

the major items of import. Kenya was the top most

trading partner within this region with a trade of

US $ 2,411 million in 2010-11.

Bilateral trade with countries of Central Africa was

US $ 516.39 million during 2010-11 as compared

to US$ 620.06 million during 2009-10. Drugs,

pharmaceuticals & fine chemicals, transport

equipments, electronic goods, manufactures of

metals and plastic and linoleum products were the

major items of export. Pulses, metalifers ores and

metal scrap, wood and wood products, tea, raw

hides and skins were the major items of import.

Uganda was the top most trading partner within

this region with a trade of US $ 312 million during

2010-11.

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

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

Table 7.27India’s trade with Sub-Saharan Africa Region


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. 2009) 4975.69 8905.20 13880.80

2010-11 16291.17 16062.02 32353.19

2010-11(April-Sept. 2010)(Provisional) 6995.94 11714.18 18710.12

2011-12 (April-Sept. 2011)(Provisional) 8939.59 18079.77 27019.36

(Source: DGCI & S)

136


bilateral trade, investment and general economic cooperation between India and Mauritius is under negotiation.

‘India-Africa Trade Ministers’ Meeting’

Prior to the 2nd Africa-India Forum Summit held in

Addis Ababa, Ethiopia on 24-25 May, 2011, the 1st

‘India-Africa Trade Ministers’ Meeting’ was held

at Addis Ababa, Ethiopia on 21st May, 2011. The

meeting was co-chaired by Hon’ble Minister of

Commerce and Industry (CIM), Govenment of India,

Shri Anand Sharma, and H.E. Francisca Tatchoupe

Belobe, Minister of Economy, Commerce and

Business Development, of the Republic of Equatorial

Guinea. From the African side, the ‘Trade and

Industry Ministers’ of Equatorial Guinea, Ethiopia,

Namibia, Senegal, South Africa and Swaziland and

representatives of many other African countries

and the ‘Regional Economic Communities’ (RECs)

attended the meeting.

Pursuant to the ‘India-Africa Trade Minister Meet’, a

‘Joint Statement of India-Africa Trade Ministers’ was

issued. The Indian and African Ministers expressed

confidence that the bilateral trade between Africa

and India will reach US $ 70 billion by 2015. The

Ministers agreed on having an ‘India-Africa Trade

Ministers’ Dialogue’ as an annual event, and on the

need to strengthen the trade relationship between

the two sides through, inter alia, the building of

trade –related capacity and the conclusion of trade

cooperation agreements between India and African

Regional Economic Communities (RECs)/countries.

They further agreed that effective implementation

of the trade-related initiatives taken by the Indian

Government in Africa, such as the ‘Duty Free Tariff

Preference Scheme’, Cluster Development Studies,

and various Capacity Building and Technical

Assistance Programmes will contribute to the

strengthening of the trade relationship between

Africa and India. The Ministers agreed that they

were committed to the core principles of Special

and Differential (S&D) Treatment and obtaining

more preferential treatment for all LDCs in the WTO

Doha negotiations, acknowledged the common

platform shared by India with the African Group on

the issue of subsidies to cotton farmers in developed

countries, which is of particular importance to four

African countries, namely, Burkina Faso, Benin,

Chad and Mali (the ‘Cotton Four’ or ‘C-4’ group) and

emphasized the development mandate of Doha

Round of negotiations and called for the speedy

conclusion of the Round and the establishment

of a strong multilateral system based on mutually

beneficial and balanced outcomes in agriculture,

NAMA, services and rules. The Ministers also

appreciated the establishment of an ‘India-Africa

Business Council’ and took note of the progress

made towards the setting up of the ‘Africa-India

Institute of Foreign Trade’ in Kampala, Uganda.

Following the ‘India-Africa Trade Ministers’

Meeting’, on 21st May, 2011, a ‘Business Conclave’,

involving interaction of the Indian and African

Trade Ministers with the Indian and African CEOs,

was also held. During the meeting, the Ministers

launched an “India-Africa Investment E-Portal” to

facilitate bilateral investments between the two

regions and also to provide guidance and support

to the investor community.

The ‘Addis Ababa Declaration’, which was issued

at the 2nd Africa-India Forum Summit held at Addis

Ababa, Ethiopia from 24-25 May, 2011 [attended

by the Heads of State representing the continent

of Africa, the representatives of the African Union

(AU) and its institutions and the Prime Minister

of Republic of India] took note with satisfaction

the meeting of the Trade Ministers from African

countries and India in Addis Ababa and took note of

the Joint Statement issued by the Trade Ministers

and lent its support to the ideas enunciated therein

as indicators of our future cooperation.

137


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 and Export Promotion Councils etc. to visit countries in Africa and organize trade fairs and 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 MDA and MAI Scheme.

A mega event, the ‘India Show’, was held in Addis Ababa, Ethiopia from 20th to 22nd May, 2011, prior to 2nd Africa-India Forum Summit. The theme of the ‘India Show’ was “Africa & India: Partners in Progress – Friends Forever”. The Show featured a ‘Trade Exhibition’ titled “Promoting Affordable & Sustainable Technologies” from 20-22 May, a ‘Business Conference’ and a Cultural Programme. The Show was inaugurated by Hon’ble Minister of Commerce and Industry, Shri Anand Sharma on 20th May, 2011. He also released a special publication entitled ‘India-Africa Business Guide’ during the Inaugural session of the India Show. More than 80 Indian companies displayed their products on the occasion, ranging across sectors such as power, manufacturing, infrastructure, finance, IT, automotives, agriculture, irrigation, healthcare, mining and others. CIM also inaugurated on 20th May, 2011, the ‘Handcrafting Hope’ and ‘Multimedia Exhibition’ in the presence of the first lady of Ethiopia, Ms. Azeb Mesfin.’

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 &

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 strengthening trade and economic

partnerships between India and African countries.

High level delegations were led by the Hon’ble

Commerce & Industry Minister for bilateral

meetings with their counterparts in South Africa in

October, 2011; and to Ethiopa in May, 2011, during

which he also met the Ethiopian Prime Minister.

Hon’ble Minister of State of Commerce and Industry

also led an official-cum-business delegation to

Botswana, Zimbabwe and South Africa from 18th

September to 21st September, 2011. During the

visit, MoS(C&I) held bilateral meetings with various

dignitaries in these countries and also addressed

the business seminars/conferences organised in all

the three countries.

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

The West Asia and North Africa (WANA) region

comprises 19 countries. These are:-

(i) Six Gulf Cooperation Council (GCC)

countries ( Bahrain, Kuwait, Oman, Qatar,

Saudi Arabia and United Arab Emirates),

(ii) Six West Asian countries (Iraq, Israel,

Jordan, Lebanon, Yemen and Syria) and

(iii) Seven North African countries (Algeria,

Egypt, Libya, Morocco, North Sudan,

138


The Minister of State for Commerce and Industry, Shri Jyotiraditya Scindia and the Deputy Minister for Trade & Industry, South Africa, Ms. Elizabeth Thabethe, in a bilateral meeting, at Pretoria, South Africa

The Minister of State for Commerce and Industry, Shri Jyotiraditya Scindia at a bilateral meeting with the Minis-ter of Commerce and Industry of Zimbabwe, Mr. W. Nucbe, at Harare on September 20, 2011

139


South Sudan and Tunisia).

India’s exports to the WANA region have gone up from US$ 22,372.07 million during April-September, 2010 to US$ 27,591.25 million during the corresponding period in 2011. Similarly, imports have registered an increase from US$ 45,000.75 million during April-September, 2010 to US$ 61,664.46 million 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 included Saudi Arabia, Israel, Egypt and Kuwait. The details of bilateral trade between India and countries of WANA Region during 2010-11 and 2011-12 (April-September) are given in the table 7.28.

The Principal exports from India to the WANA region comprises of gems and jewellery, petroleum ( crude & products ), manufactures of metals, machinery and instruments, rice-basmati, transport equipments, electronics goods, manmade yarn, fabrics , made ups, meat and preparations, primary and semi-finished iron and 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.

Institutional Arrangements

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 their counterpart organizations in WANA countries.

Recent developments / initiatives:

(a) Free Trade Agreement (FTA) with Israel:

The Trade and Economic Relations Committee (TERC) has approved for initiating negotiations with Israel for entering into a Free Trade Agreement. The first round of negotiations was held at New Delhi during May, 2010, wherein, broad parameters for negotiations were finalized. The second round of negotiations was held at Jerusalem during February, 2011 wherein draft outline of FTA was discussed. The third round of negotiations was held at New Delhi during October, 2011 wherein elaborate discussion was held on Trade in Goods, Trade Defense and Rule of Origin. The fourth round of negotiations is slated to be held in March-April 2012 in Tel Aviv.

(b) Free Trade Agreement (FTA) with GCC (Gulf

Cooperation Council) countries:

The Gulf Cooperation Council consisting of 6 Gulf nations, namely Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and UAE are very significant partners for India in terms of trade and are home to a sizeable Indian diaspora. These countries are critical for ensuring India’s energy security. Given the special nature of our relations with the GCC, Government is exploring the possibility of deepening our trade and economic relations.

(c) India – Morocco Joint Commission Meeting:

4th Session of India – Morocco Joint Commission Meeting ( JCM) was held at New Delhi on 28th – 29th April, 2011. The Commerce and Industry Minister of India co-chaired the JCM. Various trade and investments issue of interest to both the countries were discussed. Many decisions were taken to increase the bilateral co-operation for enhancing the trade and investment between the India and Morroco.

140


Tabl

e 7.

28Bi

late

ral t

rade

bet

wee

n In

dia

and

coun

trie

s of

WA

NA

Reg

ion

duri

ng 2

010-

11 a

nd 2

011-

12 (

Apr

il - S

epte

mbe

r)Va

lues

in U

S $

Mill

ions

S.N

o.Co

untr

y(A

pr -S

ept)

2010

-201

1(A

pr-S

ept)

2011

-201

2(P)

Expo

rts

Impo

rts

Tota

l Tra

deTr

ade

Bal-

ance

Expo

rts

Impo

rts

Tota

l Tra

deTr

ade

Bal-

ance

WA

NA

1A

LGER

IA34

4.25

995.

901,

340.

15-6

51.6

643

9.89

792.

321,

232.

20-3

52.4

3

2BA

HA

RAIN

IS22

2.19

363.

1258

5.31

-140

.94

212.

6543

8.96

651.

6-2

26.3

1

3EG

YPT

A R

P99

5.51

599.

671,

595.

1839

5.84

958.

541,

629.

252,

587.

79-6

70.7

1

4IR

AQ23

1.83

3,40

4.04

3,63

5.87

-3,1

72.2

230

0.1

9,20

1.94

9,50

2.04

-8,9

01.8

4

5IS

RAEL

1,31

6.46

1,07

7.88

2,39

4.34

238.

571,

954.

811,

074.

763,

029.

5788

0.06

6JO

RDA

N15

2.14

516.

6166

8.75

-364

.47

399.

7255

6.11

955.

83-1

56.3

9

7KU

WA

IT87

5.20

4,45

8.98

5,33

4.19

-3,5

83.7

856

9.67

6,57

4.87

7,14

4.54

-6,0

05.2

0

8LE

BAN

ON

84.7

012

.34

97.0

472

.36

95.5

510

.17

105.

7285

.39

9LI

BYA

68.5

844

7.19

515.

76-3

78.6

112

.30.

7713

.07

11.5

3

10M

ORO

CCO

130.

9855

4.53

685.

51-4

23.5

515

9.41

695.

8785

5.28

-536

.46

11O

MA

N37

0.02

1,50

9.98

1,88

0.00

-1,1

39.9

640

6.37

2,08

9.04

2,49

5.41

-1,6

82.6

7

12Q

ATA

R17

0.55

3,39

8.72

3,56

9.27

-3,2

28.1

733

0.85

6,40

1.36

6,73

2.21

-6,0

70.5

1

13SA

UD

I ARA

B2,

221.

959,

807.

9112

,029

.86

-7,5

85.9

53,

025.

0713

,972

.59

16,9

97.6

7-1

0,94

7.52

14SU

DA

N23

0.39

273.

6150

4.00

-43.

2239

2.33

284.

1467

6.47

108.

19

15SY

RIA

196.

0310

.65

206.

6818

5.38

254.

0015

.75

269.

7523

8.24

16TU

NIS

IA11

9.55

213.

8233

3.37

-94.

2612

9.00

68.5

319

7.53

60.4

8

17U

ARA

B EM

TS14

,357

.08

16,2

59.9

830

,617

.05

-1,9

02.9

017

,638

.09

17,6

65.5

535

,303

.64

-27.

46

18YE

MEN

REP

UBL

C28

4.66

1,09

5.82

1,38

0.47

-811

.16

312.

919

2.48

505.

3812

0.42

Tota

l of W

AN

A22

372.

0745

,000

.75

67,3

72.8

0-2

2628

.727

591.

2561

664.

4689

,255

.70

-340

73.1

9

% S

hare

in In

dia’

s to

tal

21.2

625

.52

23.9

2-3

1.81

18.6

526

.34

23.3

6-3

9.55

Indi

a’s

tota

l10

5,24

0.83

176,

360.

0628

1,60

0.89

-71,

119.

2314

7,94

9.13

234,

094.

3638

2,04

3.50

-86,

145.

23

(Dat

a So

urce

: DG

CIS,

Kol

kata

)

chapter-7 - ministry of commerce and industrytogether, account for around 32.3% of india’s trade...

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