Myiris, April 07, 2014
India’s new foreign trade policy, which is on the anvil, will have to be fashioned to produce value-added diversified products and make inroads into new markets such as the CIS, East and West Asia and Latin America, Rajeev Kher, Commerce Secretary, said.
Delivering the CUTS 30th anniversary thought leadership lecture, organized by cuts international in partnership with FICCI, Kher said, “Manufacturing at high levels of value and raising the scale of operations will be vital if the gains from mass production and riding on to the global and regional value chains have to be realized.”
He said exports have now become a necessary ingredient of economic policy and therefore the export strategy would have to be mainstreamed in the governance structures of the Government. Most of the ministries and departments of the government do not realize this imperative and it is time that they recognized that production was important not for the domestic market but as important for export, he added.
Inherent competitiveness, Kher said, comes from a country’s economic strength and addressing transactional issues, and these have to be addressed squarely. These were areas where the State Governments need to get involved.
Mainstreaming the States in meeting the trade policy objectives was therefore necessary, even if it meant incentivizing them on the basis of their contribution to the export effort. The Commerce Secretary sought to dispel the impression that FTAs were inherently faulty policy instruments to promote trade.
“FTA’s offer an institutional mechanism for trade and it was important to know how these have been negotiated and whether industry was able to take advantages flowing out of such agreements,” he said, adding that studies have shown that in the case of the India-Korea FTA, only 20% of it had been made use of by industry.