Welcome Remarks by Mr. Sutanu Ghosh, President, The Bengal Chamber at the Chamber’s Exim Summit
It is my pleasure to extend a very warm welcome to all of you today in Kolkata at the ‘BCC&I EXIM Summit 2016,’ which is the Inaugural Edition in the International Trade sector of the Chamber.
In consonance with the revival exhibited by exports last month, during October 2016 exports have shown a positive growth of 9.59% in Dollar terms (12.43% higher in Rupee term). During October,2016 exports were valued at US$ 23512.70 million (Rs.156941.86 crore) as compared to US$ 21456.11 million (Rs.139589.17 crore) during October,2015. Cumulative value of exports for the period April-October 2016-17 was US$ 154913.20 million (Rs.1036417.49 crore) as against US$ 155179.35 million (Rs.998211.69 crore) in October 2015-16, registering a negative growth of 0.17 per cent in Dollar terms and positive growth of 3.83 per cent in Rupee terms.
Imports during October 2016 were valued at US$ 33673.53 million (Rs.224763.10 crore) which was 8.11 per cent higher in Dollar terms and 10.91 per cent higher in Rupee terms over the level of imports valued at US$ 31148.33 million (Rs.202644.79) in October, 2015. Cumulative value of imports for the period April-October 2016-17 was US$ 208083.15 million (Rs.1392221.35 crore) as against US$ 233417.95 million (Rs.1501290.90 crore) registering a negative growth of 10.85 per cent in Dollar terms and 7.27 per cent in Rupee terms over the same period last year.
Overall the trade balance has improved. Taking merchandise and services together, overall trade deficit for April- October 2016-17 is estimated at US$ 20811.95 million which is 52.91 percent lower in Dollar terms than the level of US$ 44196.60 million during April-October 2015-16.
Speaking to a business forum in Sydney, Treasurer Scott Morrison in a recent conference reiterated that the government was keen to conclude trade negotiations with India. Negotiations were started in 2011 to seal an agreement to cut tariffs, improve trade in services and make it easier to invest. So far the two sides had almost nine rounds negotiations on Free Trade Agreement.
As per the Department of Industrial Policy and Promotion, Ministry of Commerce and Industry, the total FDI inflows from April 2000 to September 2016 in computer software, electronics and telecommunications sectors from China is of the order of USD 22.47 million.
The volume of annual bilateral trade between India and Indonesia is set to touch a whopping USD 50 billion in next nine years from the present USD 9 billion, as per a vision document prepared by an Eminent Persons Group tasked to identify areas for deeper two-way engagement.
India and the US have reached a deal for the first bilateral advance pricing agreement, a move that will enable American firms to ascertain tax liabilities beforehand, Hon’ble Finance Minister Shri Arun Jaitley said. The two nations have resolved over 100 cases of tax disputes involving a tax of about Rs 5,000 crore through Mutual Agreement Procedure (MAP), he said.
On the other hand, the impact of US president-elect Donald Trump’s announcement to withdraw from the Trans-Pacific Partnership (TPP) after assuming office in January is being felt in India’s trade pact talks with 15 other countries under the Regional Comprehensive Economic Partnership (RCEP). Experts feel that with TPP unlikely to move as expected, developed countries have pinned their hopes on RCEP for some preferential treatment and trade concessions. With Trump’s statements on trade, an anti-trade sentiment was engulfing everyone.
A five-year foreign trade policy structurally represents a medium-term economic plan aiming to achieve key goals. The macroeconomic goal is to increase India’s share in world merchandise and services exports from 2% at present to 3.5%. Translated in numbers, the increase would imply doubling exports from just under $500 billion to close to $1 trillion over a five-year period with annual average increases of roughly 20%. Around 65% of India’s current export earnings are from merchandise exports, while the rest is from services. It is not clear whether the total increase proposed by the policy assumes this current ratio to be maintained over time. If it does then it entails annual increases of around $65 billion and $35 billion respectively in merchandise and service exports from their baseline levels.
India is not a global producer of necessities. It does not have ample resources of oil, gas, minerals and nuclear material for feeding the rest of the world. Nor does it have as broad a manufacturing base producing as cheap and varied items as China. Its exports can crack the world market only if they are efficient, say, for example, from cheap production, or from unique features, like design or other specific attributes like environment-friendly features. The problem is that it is not only Indian producers that are aiming to secure efficiency-based comparative advantages. Most of the rest of the world is. And India does not appear to be doing too well in this regard.
In the future benchmarking the Logistics services would be instrumental in determining the growth of the sector. We would also focus on Trade Finance in part B of our Inaugural Session.
The overall aims of the Summit is to analyze the impact of the New FT Policy and understand the state of trade finance and how benchmarking logistics services would be instrumental in creating a boost in the export market.