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Background
Proceedings
of Day One
Proceedings of Day Two
Proceedings of Day Three
SLOT
Analysis, Issues and Strategies
Feedback from Participants
List of Participants
List of Resource Persons
1.1
CUTS Centre
for International Trade, Economics & Environment (CUTS-CITEE) has started a
five-year programme of conducting training seminars on WTO (World Trade
Organisation) issues so as to understand and devise suitable policies for making
Indian industries competitive in the emerging global scenario.
1.2
The first in this 5-year series was organised in September 2000 in Jaipur in
collaboration with the London School of Economics and Political Science (LSE),
and well-received by the participants. On 17-19 January 2002, CUTS-CITEE
organised the second in the series, this time in collaboration with the
Administrative Staff College of India, Hyderabad, and with specific emphasis on
India’s textiles
and clothing sector.
1.3
The objective of this training seminar was to educate practising managers and
textile associates in India to tackle issues and problems pertaining to the
textiles and clothing sector. There is considerable anxiety and concern among
manufacturers and exporters in the textiles and clothing sector about the
depressing export scenario, about their own competitiveness against imports, and
about the impact of the provisions of the WTO on their markets. It is these
concerns that were addressed in the three-day Seminar.
2.1
Anil Kumar, former Secretary, Ministry of Textiles, Government of India and E.
A. S. Sarma, Principal, Administrative Staff College of India, Hyderabad
inaugurated the seminar. Sarma started his speech by complimenting CUTS for
organising the event at such an appropriate time. It was appropriate in the
sense that the textiles sector is somehow apprehensive of the post-Doha
situation. He said that the WTO is a complex creature whether you like it or
not. On the face, it is oriented to rich country interests and implementation
issues are still unsettled. But we have to deal with the situation. With respect
to the sector, he was of the opinion that two issues are to be dealt immediately
for making it competitive. One is the cost of power and the second is the cost
of finance.
2.2
Kumar began with the question: whether the growth model in our country is
focussed or not. There is still a debate over whether there should be ‘growth
led export’ or ‘export led growth’. In India exports have not been a
forte. As a member of the WTO, India must make sure that it looks after its own
interests, as well as maximising trade.
2.2.1
The Multi-Fibre Agreement (MFA) will come to an end by 2004. Quotas will be
eliminated, giving India a chance to further improve its exports. There are
opportunities but we also need to address the challenges. There is misplaced
confidence in the sector, as sometimes there was quota-based growth. Often, we
tend to forget or ignore how other countries are performing. For example, in
recent times, textiles and clothing exports from China has grown by 33 percent
and Thailand by 17-19 percent. We need to see how further we can accelerate our
growth.
2.2.2
An issue pertaining to textiles and clothing is how to maintain the
competitiveness of the sector. This is important since it contributes 17-19
percent to the gross domestic product of the country. Another issue is how to
equip industries with safeguard measures and be prepared to defend them if they
are challenged at the WTO.
2.2.3
The structure of the industry plays a major role in its competitiveness. The
Indian textiles industry is not unified. The fragmented structure makes it
difficult for it to unite in the face of any injury. Moreover, there is no or
little modernisation. There are around 5mn looms in India. Many of them are
shuttle-less. There are less than 15,000 modern looms whereas traditional looms
are in large numbers. Our focus had been on types of issues to be taken to Doha
and we haven’t done enough to make our industry strong and viable. Overall
synergy is lacking in order to face emerging challenges.
2.2.4
An analysis of the Textile Policy 2000 revealed that
India has the potential to raise its exports of textiles up to $50bn by 2010. It
identified a few problems that should be addressed, like removing restrictions
in growth. This would require a review of the existing situation. The other
obstacle is the fiscal duty structure, which has created distortions in growth.
The working group of the 10th Plan outlined the need to attract
investment in the textiles sector and said that investment will take place only
if the industry is profitable. It was suggested that India should prepare a
growth-oriented fiscal duty structure. It shouldn’t wait any further,
otherwise it will be too late to attract investment. There is a need to
fine-tune policies for the success of programmes and measures that are taking
place all over the country.
2.3
The first session of the day was on ‘From GATT to WTO: An Overview’. Manoj
Pant, Professor of International Relations of the Jawaharlal Nehru Univerty, New
Delhi and Atul Kaushik, Deputy Secretary of the Cabinet Secretariat of the
Government of India were the resource persons.
2.3.1
Pant provided the following background of the WTO:
¨
There
were less debating parties.
¨
After
the great depression of the 1930’s, most countries were too busy
reconstructing their economies to
concentrate on trade issues.
¨
Trade
was dominated by Commonwealth preferences. The USA gave major tariff concession
without
asking much in return as their objectives were twofold:
first to break into the Imperial Preferences under
which Canada and UK had preferential trade with the
colonies; and second, to bring Japan into the
mainstream of trading nations.
-
The first signs of tensions emerged with the Tokyo Round of 1973.
Developing countries were able to bargain and benefited from the Most
Favoured Nation (MFN) status of tariff reductions in developed countries,
which they did not have to reciprocate (non-reciprocity clause).
-
The main concession obtained by the developed countries was the Multi
Fibre Agreement (MFA) of 1974 and the use of NTBs (commonly known as
Sanitary and Phytosanitary Measures) for developing countries’ Agriculture
exports.
-
The conflict inherent in North-South trade ultimately found its
expressions in the Uruguay Round and the formation of the WTO in 1995.
2.3.2
As far as the Uruguay Round was concerned, the following aspects influenced the
discussions and outcome:
-
Single undertaking nature of agreements;
-
The proliferation of regional trade arrangements (RTAs);
-
The emergence of negotiating groups, like the Cairns Group; and
-
The participation of developing countries was more active than
before.
2.3.3
Some features of the Uruguay Round were:
-
Export subsidy and Aggregate Measure of Support (AMS) with respect to
agriculture commitments were watered down by dirty tariffs and green, blue
and amber boxes.
-
Tariff cuts were on a simple rather than a weighted or product
specific basis. The measure was biased towards low tariffs.
-
In return for phasing out the quota based MFA by 2004, Trade Related
Intellectual Property Rights (TRIPs) and Trade Related Investment Measures (TRIMs)
were established in the interests of developed countries.
-
The most contentious issue in the Uruguay Round was the inclusion of
the Agreement on Agriculture (AoA) and the phasing out of the MFA.
2.3.4
However, there was little unity among the developing countries at the time of
the Uruguay Round negotiations and the following reasons were discussed:
-
RTAs: the EU and NAFTA (North American Free Trade Agreement) are the two
largest RTAs. Both have bilateral preferential arrangements, for example the EU
has preferential arrangements for some African countries whereas NAFTA offers
similar preferential treatment to some Latin American countries.
-
There was a lack of in-house expertise.
-
In the context of the MFA, the countries of East and South East Asia
would no longer benefit from reduced tariffs.
-
For some LDCs like Bangladesh, already have preferential access in
the EU and the removal of the MFN might harm rather help them.
2.4 In his
presentation, Kaushik deliberated on the histury of the multilateral trading
system by placing negotiations into the following stages:
-
First: lowering of tariff was essential and there were attempts to
form coalition through protocols;
-
Second: in the Tokyo Round, the focus was minimisation of tariffs and
developing countries were
excluded from tariff bounds;
-
Third: non-tariff barriers were brought into the negotiations; and
-
Fourth: agriculture was included in the negotiations.
2.5
The second session dealt with issues of trade and international relations. Arun
Goyal, Director of Academy of Business Studies, New Delhi and Manoj Pant,
Professor of International Relations, Jawaharlal Nehru University, New Delhi
were the resource persons. The following issues/points were deliberated upon and
discussed.
-
The government should continue to play an effective role in sectors
like health and education.
-
India fears globalisation because of the problems of unskilled labour
and lack of foreign direct investment, which reduce the bargaining power and
competitiveness of the country. Weak labour standards are only helpful in
the short term (for lowering costs) but will not be beneficial in the long
run.
-
Studies have shown that the gap between developed and developing
countries is reducing, but the gap between developing and least developed
countries is increasing.
-
To be competitive in the long run, a country needs to have skilled
labour, and advanced technology.
-
There is a lack of continuity of work in the garment sector. This
sector works only in winter, and not in summer. Labour should work
continuously throughout the year even if it means switching from one sector
to another.
-
Wages are low and the wage rate is a function of demand.
-
In terms of labour, India is competitive in a relative sense but
lacks skills.
-
India produces all sorts of yarns. It could provide variety in
fashion world and supply to niche markets.
-
The economy should have a market driven system.
2.6
The last session of the day was on the future of the multilateral trading
system. Dr. Paramita Dasgupta, Chairperson of the Economic Area of the
Administrative Staff College of India was the resource person. Main points of
her presentation were:
-
40 percent of developing country exports now go to other developing
countries.
-
Developing countries as a group achieved a fast expansion of trade
and as a result, some have
become
important global players and important in each others market.
-
In these countries, there have also been changes in production
processes and a rapid expansion of
intra-industry trade.
-
A few developing countries have dominated while others have lagged
behind.
-
There has been a growing trend towards increased use of anti-dumping
measures, both by developed
and developing countries.
-
Developing countries had agreed to participate in the Uruguay Round
only because they were assured
of greater market access in areas like textiles and agriculture.
-
There is backloading of WTO commitments vis-à-vis textiles and
clothing as made in the Uruguay
Round. Integration has not happened.
-
The spread of Regional Trading Arrangements is seen as being
detrimental to the world trading system.
-
Protection remains concentrated in the areas where trade would be of
interest to developing countries.
-
Even after quotas are finally dismantled in 2005, manufacturers may
have to deal with high tariffs on
textiles.
-
Tariff peaks in other labour intensive products should be brought
down.
-
Developing countries are hindered in the implementation of Agreements
by a lack of institutional
capacity and financial resources.
-
The major bone of contention is the lack of greater market access for
developing countries.
-
There are large number of small units of production in the textiles
and clothing sector. We need to
articulate which areas need technical assistance. There is a need to
confront issues at the domestic
level.
-
Systematic
articulation of the needs of specific sectors is critical at this stage. It
doesn’t matter that
there are different political parties because this has become a
national issue and industry should push
and confront it at the macro level.
3.1
The first session of the day was on the WTO Agreement on Textiles and Clothing.
P. K. Anand, former Director of the Ministry of Textiles, Government of India
and Samar Varma, Senior Fellow of the Indian Council for Research on
International Economic Relations, New Delhi were the resource persons. The
following are main points of discussion:
-
A country may wish to increase its exports to raise income or foreign
exchange.
-
It has been estimated that an increase in the share of trade of a
country by one percentage point is
associated with an increase of 0.85 percent in income per person.
-
India faces a stiffer challenge in increasing its share of
international trade in the garments sector than it
does for textiles.
-
National Textile Policy 2000 aims for Indian textiles and garments
exports to reach the $50bn level by
2010 of which the share of garments should be $25bn.
-
By December 2004, the Agreement on Textiles and Clothing (ATC) is
supposed to lead to full
liberalisation of textile and garment trade akin to that in other
commodities.
-
There is persisting suspicious among textiles and clothing exporting
countries, like India about whether
importing countries will actually give up their restrictions at the
end of 2004, in line with the ATC
provisions.
-
The ATC also provides, under Article 6, for the application of
safeguard mechanisms for restraining
products on the basis of stipulations similar to the MFA guidelines
on restraints.
-
India has been subjected to fresh restraints on three garment items
after the establishment of the ATC.
all the three restraints were put on woollen garments covered under
men’s coats, women’s coats and
shirts & blouses.
-
Anti-dumping measures have become quite frequent against Indian
textiles and clothing exports.
-
Unlike the MFA, the roadmap of the ATC is clear. Product coverage in
the ATC is very comprehensive.
-
Under the Growth on Growth Provision in the ATC, the growth rate
would be automatically upgraded
over the 30 years of its existence. Despite this developing countries
complain of developed countries
backloading quotas. But constraints to exports pose bigger problems.
-
It should be note that in 2005, there will not be free trade, but
quota-free trade and tariffs may remain
high.
-
The Transitional Safeguard Mechanism (TSM) provides provision for
imposition of quotas. Article 19
says that under very strict circumstances, a quota could be imposed
in a discriminatory manner. So
quotas might come through different channels and could still be a
threat. However, TSM is a more
sophisticated and polished mechanism.
-
Regional Trade Blocks are growing and strengthening. They import
70-80 percent of the world’s textiles
& clothing. Countries want to export their products but their markets are
disappearing.
-
Under the Byrd agreement in the US, the US committee on Anti-dumping
collects money raised from
anti-dumping duties and distributes it to affected domestic
industries, in the form of an incentive.
similar
steps should be adopted by developing countries.
-
The policy makers of industrial sectors should go through the WTO
agreement thoroughly and find out
where opportunities lie.
-
Sector should look for foreign collaboration. India is a huge
exporter of yarn so it should look for fabric
manufacturers as a way to penetrate overseas markets.
-
NAFTA, the EU and ASEAN are capturing trade. India is not a member of
any of these, which is a
matter of great concern.
-
Industry and Government have to work together and the Government
should be a facilitator. It should
allocate funds to fighting trade cases against other countries.
-
Rules of Origin have been getting in the way of free trade. An
example is the case of the US clothing
industry. Clothing is labour intensive and lower wages in developing
countries mean that they have a
comparative advantage over the US. The US has attempted to protect
its own markets through the use
of Rules of Origin. However this is not in its long-term interests
since it will result in higher prices for
importers, retailers and consumers. Already, the US is facing
difficulties in maintaining these policies.
-
The country needs to look forward, as our planing is often myopic in
nature.
3.2
The second session dealt with WTO rules, like anti-dumping measures etc. Sharad
Bhansali, Advisor to the Strategic Law Group, New Delhi and A. Jayagovind,
Professor of Law, National Law School University of India were the resource
persons. Their presentations cover the following issues/points:
-
There are three methods of trade protection in the WTO--
-
Anti-dumping duties: the economic definition says that when a product
is sold in a foreign market at a price which is less than the price in the
domestic market, it is called dumping. Duties imposed on these products are
called anti-dumping duties. The WTO definition says that if goods are sold
at a price that is less than the price in the domestic market and it is
causing injury to the domestic market, the product is liable to anti-dumping
duties.
-
countervailing duties: when subsidised goods are sold in a foreign
market, the home country can impose countervailing duties on the products.
These are equivalent to excise duties.
-
safeguard measures: these measures are used to block or restrict
imports for a certain time period.
-
Anti-dumping provisions are based on Article VI of GATT.
-
Dumping is a common occurrence due to duty differences, but it is a
matter of concern when it affects
domestic markets.
-
Generally, injury and causal link should be established to show
dumping has taken place, but they are
secondary to the legal definition.
-
To prove an act of dumping, it is necessary to determine the
‘margin of dumping’ which is the difference
between the Normal value and the Export price, which is a very
complex job. The Normal value is the
selling price in the domestic market, which should be greater than
the cost of production.
-
Dumping is proved if the normal value in exporting market is greater
than the export price.
-
Another method is to compare the import price of the ‘dumped’
good with a third country export price.
-
The investigation process requires the following steps:
Application & preliminary screening,
Initiation
Access to information & confidentiality,
Provisional findings,
Provisional duties,
Oral evidence and public hearing,
Disclosure of relevant Information, and
Final findings and imposition of duties.
-
Inequities and biases are found in the entire WTO Agreement. Article
11.4 states that an anti-dumping
duty should be terminated after 5 years, but it is not mandatory.
Moreover, the WTO itself says that a
panel’s decision should not reversed unless it is found that facts
were not evaluated properly.
-
There are protective measures and protectionist measures.
Anti-dumping duty is a protective measure
but when it is used as a non-tariff barrier, it becomes protectionist
measure.
-
An authority should be created in India to handle cases of dumping in
the domestic market and protect
consumer interests.
3.3
S. Narayanan, former Indian Ambassador to the WTO took the next session and the
topic was ‘International Trading System and the WTO: Rules of the Game. He
made the following points.
-
The WTO is a powerful organisation. Whereas GATT only dealt with
import tariffs, a number of new issues have been introduced to the WTO.
-
The WTO is a rules-based system. Whatever agreements are in place
have been brought in by consensus. Some developing country members say that
they did not understand the agreements but they were brought in legally.
-
In GATT, panels were established to address the issues, but the
privilege of not accepting a decision was available to the loosing party. So
in a way there was no legal binding to abide by its decisions, but in the
WTO, Panels and Appellate body are set up by the Dispute Settlement System (DSS),
and all the members have to abide by their decisions, either by positive
consensus or negative consensus. The procedures under the DSS have to take
place within the timeframe assigned to it under the WTO.
-
The emergence and evolution of the WTO has coincided with the
economic phenomenon of globalisation, and the political phenomena of the
collapse of the Soviet Union and the spread of market-based economy.
-
Against the background described above, by 2005, textiles and
clothing will be fully integrated into the international/multinational
trading system.
-
Though developing countries have been fighting for 40 years they have
not been able to get normal access in these markets.
-
The real issue with industries is whether they are competitive or
not. If they are not, quotas will not help them and if they are competitive,
quotas will constrain them. In either case it is better for India not to
have quotas.
-
We need to bring develop trade in the pharmaceutical sector, as it
could be of enormous significance. Industry should work towards a totally
competitive environment.
-
There were a lot of apprehensions and predictions during the phasing
out of Quantitative Restrictions (QRs). We had a virtual ban on imports for
40 years in the form of QRs as India was facing a Balance of Payment (BOP)
problem. Eventually, the US complained that India was no longer suffering
from a BOP problem and QRs were removed. As a result, industries have had to
prepare themselves to face external competition.
-
Tariff peaks and tariff escalations should be reduced.
-
The preferential trade agreements of the EU and the US are a major
problem. The US market is captured by Mexico, Canada and the Caribbean
nations. It is difficult for us to prevent preferential arrangements.
-
Industry should study the implications of preferential agreements and
to what extent they are affecting their markets, because even if the quota
system goes away, problems will still persist.
-
India is a potential competitor both in Textiles & Clothing and
Agriculture hence it should not be protectionist, but prepare to face
competition.
-
Industry should provide feedback and suggestions to the Government.
There will be a lot of pressure to reduce industrial tariffs. Industry
should negotiate and agree to tariff reductions with a proviso that they
will be given access to export markets in return.
-
The global trading system is changing. It is not possible to survive
outside the WTO. China has made many sacrifices than India could make. It is
utterly irresponsible to suggest leaving the WTO.
-
The WTO is a negotiating forum. India has the intellectual ability to
negotiate. 90 percent of its problems can be attributed to the domestic
set-up and only 10 percent to the WTO.
-
There are many aspects of the WTO that are not legitimate. We need to
be informed and discuss issues among ourselves. Industry should take a lead
in this.
-
Developing
countries have to deal with their own problems themselves. To be competitive
in international markets, they will first have to create competitive
domestic markets. The WTO can’t help in this regard.
4.1
Dispute settlement of the WTO was the topic of the first session and R.
Parthasarathy, Legal Expert of Laxmi Kumaran & Sridharan, New Delhi was the
resource person. His presentation was based on the following points:
-
The DSS has been important for the workings of the WTO.
-
If any country does not fulfil its obligations under any agreements
of the WTO, thus impairing trade prospects of another, the aggrieved member
can rectify the situation through the DSS.
-
The Dispute Settlement Mechanism covers GATT 1947 (legal text), GATT
1994 (modified GATT 1947), dispute Settlement Understanding and Special or
Additional Rules & Procedures in WTO Agreements.
-
Disputes may arise when a country has been discriminating between
imported goods and domestic goods or imposing licenses for importing goods
(this violates Article XI) i.e. a country places a restriction that some
percentage of domestic resources have to be used in imported products.
-
Between 1995 and 2001, 242 disputes have been brought before the
Dispute Settlement Body (DSB).
-
Dispute Settlement Understanding covers Coverage, Dispute Settlement
Body, Dispute Settlement panels and Appellate Body.
The
functioning of the Dispute Settlement Body--
-
The first stage is a consultation phase i.e. parties attempt to solve
the dispute amongst themselves within 60 days, if they fail, a panel is
appointed.
-
There is a panel and appellate body. The panel makes its
ruling/recommendation within 6 months. The panel submits the descriptive
(factual and argument) sections of its report to the two sides for comments
and gives them one week to ask for review.
-
Both the parties can appeal against the report by rejecting it in
consensus. The appeal should be based on the point of Law and not factual
details.
-
The appellate body hears the appeal. The appeal can uphold, modify or
reverse the panel’s legal findings. The DSB has the authority to accept or
reject the appellate report within 30 days through consensus.
-
The report has to be accepted by the losing party.
4.2
The next session was on non-tariff barriers and market access, with particular
focus on textiles and clothing sector. P. K. Anand, former Director of the
Ministry of Textiles, Government of India and Samar Varma, Senior Fellow of the
Indian Council for Research on International Economic Relations, New Delhi were
the resource persons. The following points were discussed.
Indian
textiles and clothing exports have faced a number of Non-Tariff Barriers (NTBs) owing to the unjust use of certain
WTO instruments. For instance--
¨
inflammability test against ghaghra skirts in 1994
¨
alleged child labour in carpet making
¨
anti-dumping investigations by the EU into Indian cotton fabrics,
bed-linen and polyester staple fibre.
-
Developing countries are still facing a lot of problems in terms of trade
and many of them are pertaining to
non-tariff barriers.
·
Some of the factors needed to boost textile and garment market access
have been identified as--
¨
Technological upgrade,
¨
Economies of scale,
¨
Stronger fibre base, higher crop productivity,
¨
Removal of infrastructure bottlenecks and reduction of power and other
costs,
¨
Taxation and EXIM policy changes,
¨
Efficiency oriented labour laws, and
¨
Creation of Integrated Apparel Export Parks.
-
After 2005, there won’t be a free trade regime, rather a quota-free
trade regime. Tariffs will remain.
-
If we look at the figures/data for the global trade in Textiles &
Clothing, we can see where our opportunities
lie i.e. in niche areas where India can expand its trade.
-
Data of the top importers and exporters of apparel shows that 90 percent
of the world’s exports are from the
EU, the US, Germany, Japan, Hong Kong and the UK. The EU and the US
account for 60 percent of the
world’s imports of clothing.
-
Generally the WTO is blamed for the poor performance of Textiles &
Clothing exports in India but it is the
domestic set-up that needs to be rectified.
-
After 2005, more changes in global industry will take place. New formal
and informal requirements like
general labelling and care labelling (baby garments) will be imposed.
-
Competitive advantage ultimately results from an effective combination of
national circumstances and
company strategy.
4.3
The third session was on domestic policies and import competition. Yousuf Ahmed,
Independent Consultant and T. S. Vishwanath, Consultant to the Confederation of
Indian Industry were the resource persons. Discussions were based on the
following points:
-
Indian industry has the potential to be globally competitive.
Multinational Corporations (MNCs) are already using its resources. For
instance, Sri Lanka imports yarn from India and produces better cloth, for
better prices.
-
The Textiles and Clothing industry is going through a complex time.
Its structure is very fragmented and there is a very big untapped domestic
market.
-
Fabric produced in India has major drawbacks, like cloth often has a
weaving defect.
-
Developing countries are working to cross-purposes. Its time that
someone asserted what our country wants and what it doesn’t.
-
India is not working to increase its productivity, neither has it
developed any new technology. There is a lack of planned marketing.
-
India has a large market for apparel and clothing. It has the
potential to thrive and compete with the many foreign brands that have
penetrated into India.
-
The excise duty structure is in bad shape. We are moving in the right
direction but we need to be more focused.
-
The textile industry adds 14 percent to industrial production and
five percent to GDP. It provides direct employment to 35mn people (it is
second largest employment provider, after agriculture).
-
Indian industry is the world’s 3rd largest producer of
cotton yarn and 5th largest producer of synthetic fibre.
-
Despite this strong presence, India’s share in world trade is a
meagre 3.11 percent.
-
Indian industry needs restructuring to reduce excess capacity. We
need strategies to be export driven.
-
We have very limited exploitation of economies of scale, low
utilisation of resources and a large technology gap with developed
countries. We need to develop commercial intelligence like China, Sri Lanka
and Bangladesh, which have all shown tremendous improvement.
-
We need to understand the world market and what it wants. India has a
very high self-sufficiency index, so it could easily achieve higher exports.
-
There is a need for companies to produce goods for middle class
markets (between rban and rural markets).
-
The share of advertising and Research and Development (R&D)
spending is very low in textiles. There is a need to take steps to improve
efficiency and leverage on domestic strengths.
-
The industry should look for new markets like the market for
winter-wear. Today, lifestyles are changing, but India is aware of this.
-
Companies should focus on mass markets. Areas should be created where
all stages of production can take place together.
-
A position should be created to raise awareness about the needs of
the Textiles & Clothing sector.
4.4
Tejendra Khanna, former Commerce Secretary of India took the final session of
the day and the topic was global scenario and export competitiveness. He started
the session by asking feedback from the participants, which were as follows:
-
Increased investment in modernisation is required.
-
There is a need to bring down tariff rates/escalation.
-
Industry is not worried about competition but competitiveness. Larger
companies have greater access
to funding bodies whereas the small and weak are neglected. There are
a lot of structural problems to
be addressed.
-
We need to have a mechanism to find out which markets we can be
competitive in.
-
Unsuccessful and weak sectors should be decentralised.
4.4.1
Based on these feedback, the following points were made:
-
India should open up its markets because its consumers should have the right
to the best of products. this will ultimately raise their standard of
living. Good quality products will save their disposable income.
-
It was pointed out that WTO tariffs can be expected to fall with
time, as they did in the case of ASEAN.
-
Productivity is one of the most important factors for promoting
growth.
-
We need to add value to our businesses and for this infrastructure
has to be taken care of.
-
Poor infrastructure and high transaction costs are the major
obstacles to FDI.
-
We need to mend our system and fight corruption. No foreign
technology can help in this regard.
-
Despite the removal of QRs, there was no surge in imports. The reason
for this is that Indian consumers are very discerning and conscious of value
for money.
-
It is very important to have a strong market place. We have potential
to provide services for which there are huge demands.
·
To be globally competitive, industry needs the following--
¨
Modern cutting edge methods,
¨
Low labour costs,
¨
The best technology,
¨
Links with scientists doing research for the future,
¨
Improved
quality of Government. Industry needs to press for greater transparency in the
system (e.g. public evaluation of public servant performance).
Strengths
1.
Cheap Labour
2.
SSI (small-scale industry) reservation
3.
Abundance of raw material
4.
Development of small owners
5.
High export value of Indian traditional dresses
6.
Strong Handloom base which has high export value
7.
Skilled Human resource
8.
Reasonably accepted quality
9.
Big Domestic Market
Limitations
1. |
