World Trade Organization Organisation Mondiale du Commerce Organización Mundial del Comercio

China 2:

REPORT BY THE SECRETARIAT

SECTION II: TRADE POLICY REGIME: FRAMEWORK AND OBJECTIVES: (2) TRADE POLICY FORMULATION AND IMPLEMENTATION: Paragraph 14

"India considers trade policy as an instrument to attain its overall economic policy objectives of growth, industrialization, development, and self sufficiency. In its 2004 09 Foreign Trade Policy (FTP), India highlighted the need to expand trade, setting two objectives: (i) to double India's share of global merchandise trade within five years; and (ii) to use trade expansion as a policy to promote economic growth and employment generation. In the context and aftermath of the global economic and financial crisis, India has sought to arrest and reverse the declining trend of exports, and to provide additional support especially to sectors hit badly by the global recession, as asserted in the 2009 14 FTP. India's short term objective, in accordance with the latest FTP, is to achieve annual export growth of 15%; the long term objective is to accelerate the export growth rate to 25% per annum and double India's share in global trade by 2020. In order to meet these objectives, India implements a mix of policies including tax incentives, export promotion (Chapter III(3)(vii), (viii), and (ix)), and credit facilitation (Chapter IV(3)(ii)). The Government is attempting to improve the infrastructure to enhance exports, bringing down transaction costs, and providing full refunds of all indirect taxes and levies. In the latest Budget, the authorities have further expressed the need for supporting wider export market and product diversification."

Has India done any assessment regarding how it has achieved the two objectives set in the 2004 2009 FTP? In order to further achieve the 2009 2014 FTP objectives, are there any useful experiences to draw from the implementation of the 2004 2009 FTP?

Reply: Despite being hit by the global economic recession, India's exports witnessed robust growth to reach a level of US$168 billion in 2008 09 from US$63 billion in 2003 04. India's share of global merchandise trade was 0.83% in 2003; it rose to 1.45% in 2008 as per WTO estimates. The share of global commercial services export was 1.4% in 2003 which rose to 2.8% in 2008. On the employment front, studies have suggested that nearly 14 million jobs were created directly or indirectly as a result of augmented exports in the last five years. It is on the basis of these experiences that India has decided that for the FTP (2009 2014), the Government would provide a policy environment through a mix of policy measures including fiscal incentives, institutional changes, procedural rationalization, enhanced market access across the world and diversification of export markets.