ASEAN-India FTA talks in Sept
The Association of South East Asian Nations (ASEAN)-India Trade Negotiating Committee (TNC) is scheduled to hold a new round of talks in Vientiane (Laos) from September 17-19.
The talks are expected to determine whether the leaders from both sides will be able to sign a free trade agreement (FTA) at their summit in Singapore in November.
Meanwhile, keeping such a time frame in focus, they had, at their last summit at Cebu in the Philippines in January, set July as the deadline to complete the prolonged negotiations.
And, when this target date was missed, it was decided to press ahead, without calling off the parleys.
ASEAN Secretary-General Ong Keng Yong told a reputed daily newspaper, over telephone from Kuala Lumpur that the “wide gap” that still divided the two sides, should be bridged.
The “gap” related to the ASEAN expectations about concessions from India over its tariff lines for not only palm oil but also petroleum and related products. Questions regarding “rules of origin” were also not completely settled. And, some ASEAN countries, which did not yet give India their respective “negative lists,” were now rushing to fulfil this requirement, Mr. Ong said.
In a telephonic comment from Manila, after officials from the two sides met there on August 26, Commerce Secretary G.K. Pillai said that the “hope” was to “conclude the negotiations before the end of September.”
The two sides had reached the “last few stages,” with 95 percent of the ground covered, and they were moving “closer” to the proposed FTA, Mr. Pillai added.
Visa curbs hurting Indo-Pak trade Visa restrictions are impeding trade between India and Pakistan, a top Indian trade official has said, adding he would take up the issue with his government, and hopes to get a positive response.
Rajeev Kumar, Director Ministry of Commerce, India, was speaking at the Lahore Chamber of Commerce and Industry recently.
The Indian ministry official agreed with the LCCI office-bearers businessmen from both the sides should be facilitated in securing visas so the volume of trade could touch the required and desired peak.
Kumar also agreed to LCCI suggestion that there should be some distinction between the businessmen who have the chamber recommendation and general visa seekers. He said practical measures should be taken as the volume of informal trade between Pakistan and Indian is going up with every passing day.
He admitted the infrastructure at Wagah and Attari needs to be improved. He also said the Task Force constituted by the Indian premier is looking into the matter of non-tariff barriers.
He invited the LCCI members to take part in exhibitions in India so that they could be able to have first-hand knowledge about the business opportunities.
Speaking on the occasion, LCCI President Shahid Hassan Sheikh appreciated both the governments of Pakistan and India for allowing cross-border movements of trucks and suggested that time allowed for the trucks movement is very short so there should be some special space so that the drivers of each side could take some rest and bring their respective consignment on other day.
He called for early solution of all outstanding issues saying the decades old issues the trade between India and Pakistan has remained stunted. India and Pakistan together have a population of 1.295 billion.
The total international trade of both the sides amounts to $347.55 billion, out of which the trade between the two countries amounts to only $1.095 billion, which works out to 0.315 percent of their total international trade.
He said Pakistan’s access to Indian markets is also denied due to a number of Indian tariffs and non-tariff barriers and problems of clearance at the Wagah border.
Industrial disputes show steady fall Strikes involving large numbers of workers ensure the number of mandays lost does not come down as fast.
The number of strikes and lockouts in the country has witnessed a slow but steady decline over the past decade.
From 1,097 in 1998, the number of such disputes fell by more than half to 440 in 2006, according to the Ministry of Labour and Employment data. And if the trend continues, 2007 may see the number of industrial disputes touch a new low as just 45 cases have been recorded during the first four months of the year.
Interestingly, the Labour Bureau data show that the number of mandays (measurement based on a standard number of manhours in a workday) lost due to disputes has not come down as significantly.
The country, on an average, lost 25.4 million mandays of work annually between 1998 and 2006, which might have affected its industrial output.
“One of the reasons for this can be the strikes in sectors like banking and telecommunications. Even a one-day flash strike means lakhs of employees abstain from work, though it will register as only one strike,” said an official.
Industrial relations experts say the number of labour disputes are falling because of emergence of the new economy, where labour unions are yet to establish themselves. While the unions are strongly entrenched in labour-intensive manufacturing sectors, they are conspicuously absent in fast-growing areas like IT and biotechnology.
“As a result, the unions, which were strong at the time of the manufacturing boom, have become weak. For example, attempts to form unions in the IT sector have met with a very poor response,” said an expert.
Others, however, feel this is because industry has made serious attempts to improve relations with the workers.
Exports show resilience India's exports grew at a slower pace of 18.52 percent in July 2007 as against 40.67 percent a year ago, but showed resilience to the appreciating rupee hitting exporters' margins.
Exports for July this year increased to $ 12.49 billion from $ 10.54 billion in the same month last year, while imports grew by 20.40 percent to $ 17.50 billion as against $ 14.54 billion.
However, in rupee terms exports managed an improvement of only 3.10 percent, while imports were up 4.74 percent.
The faster rise in imports as compared to exports led to a wider trade deficit of $ 5.14 billion from four billion dollars, according to official figures released.
"Export growth of over 18 percent shows resilience of our exporters who are able to compete in the world market against all odds," Commerce Minister Kamal Nath told a news agency.
On sequential basis, exports growth during July is higher than 14 percent in June this year. However, as departmental stores in Europe and the US buy products for Christmas season well in advance, exports in July are usually higher.
Nath expressed confidence that despite a slow down, the export target of $ 160 billion for this fiscal would be met.
Agreeing with Nath, the Federation of Indian Export Organisations (FIEO) said export performance was "good, given the behaviour of rupee." However, it expressed concern over decline in growth of traditional exports.
"Exports of labour-intensive sectors like handicraft, textile and leather remain lacklustre and are area of concern," FIEO President Ganesh K Gupta said.
In April-July, exports went up by 18.22 percent to $ 46.79 billion from $ 39.58 billion in the period in the previous year.
DEPB rate hike to be reviewed The finance ministry had strongly opposed the hike announced by the Commerce Ministry. The hike in the Duty Entitlement Passbook (DEPB) Scheme rates, announced by the commerce ministry in July, is being reviewed after stiff opposition by the finance ministry. The review is to be completed in three weeks, a senior government official has said.
Although in the initial stages, the review may result in the new rates (which have not been implemented yet) being trimmed closer to the earlier levels.
The scheme is used by 30 percent of India’s exporters to neutralise the taxes paid on inputs for making export goods.
Sources said the finance ministry was not happy with the increase and sought to know the method followed by the commerce ministry to arrive at the new rates.
The commerce ministry had hiked the rate by 3 percentage points for nine sectors, including textiles and leather, and by 2 percent for others. This was to cushion the exporters, who have been hit by the appreciating rupee.
The increased rates were announced hours after the finance ministry increased the rates for duty drawback scheme by up to 3 percentage points and decreased the interest rate on export credit by 2 percentage points. The duty drawback rates were increased after a prolonged study by a committee chaired by Saumitra Chaudhuri, a member of the Prime Minister’s Economic Advisory Council.
“The commerce ministry officials gave a presentation to their finance ministry counterparts on the method used to reach at the revised DEPB rates,” said a source. Trade analysts say the revenue implication of the hiked DEPB rates is between Rs 700 crore and Rs 800 crore.
Sources said the members of the duty drawback committee who were present during the presentation were also not convinced by the calculations by the commerce ministry.
India, Chile sign open cargo treaty Chile and India have signed a bilateral agreement establishing an open skies policy for air cargo and liberalizing passenger transport services, Chile's Civil Aeronautic Council (JAC) said recently.
The two countries previously had a more limited agreement, but the new treaty grants cargo transport "unlimited numbers of these services from and to Chile or India, using any type of aircraft and with full traffic rights to, from, or via any intermediary," the government said in a statement.
The statement said rights to cabotage -- the transport of cargo between two points within a country by a foreign carrier -- were excluded.
"We're allowing operators to transport cargo to a gigantic market, whose foreign trade grew 162 percent last year," said Jorge Frei, JAC secretary general, in reference to India.
The government said the agreement would also help to increase air passenger traffic between the two countries.
"It will significantly liberalize air passenger transport, helping airlines to establish operations or sell fares to Chile or India, helping to encourage the arrival of tourists from India," Frei said.
The Chilean government said trade between Chile and India has increased six times in the last five years.
