Industry feedback on non-tariff barriers a must: Dept of Commerce

With industry responses dwindling for negotiations on free trade agreements (FTA), especially with the European Union (EU) and European Free Trade Association (EFTA) countries, the Department of Commerce has called for feedbacks and inputs on sensitive products.

"Feedback from industry on sensitive products is necessary for firming up India's negotiating position on FTA with EU and EFTA countries, and industry has to come forward with their inputs," observed Ajay Srivastava, director, Department of Commerce, Government of India, who was in town for a industry consultation programme on FTA with EU adn EFTA jointly organised by FICCI and Centre for WTO Studies. Srivastava, however, opined that the reduction in responses indicated a higher level of confidence in the Indian industry.

"In the absence of country-specific, product-specific concrete feedback from the business, market access for our exports in the world market cannot be realized upto their true potential, Although at present FTAs account for less than 10 per cent of India's exports and less than 3 per cent of the total imports coming into the country, with the coming in of major FTAs like EU, Japan, Korea, ASEAN and EFTA, these figures would significantly go up and more than 80 per cent of India’s exports would be affected," Srivastava pointed out.

Showcasing Gujarat's perspective on FTAs and highlighting main sectors of interest to the state, Chandan Chatterjee, general manager, iNDEXTb, Government of Gujarat said, "it is important to leverage Gujarat’s existing strengths in sectors such as textiles, engineering goods, chemicals & petrochemicals, paper, and pharma, among others."

The meeting focused on face-to-face consultation between Department of Commerce officials and industry representatives on a possible 'sensitive list' of products regarding India-EFTA free trade agreement, and also identification of products that are in India's export interest to these countries. "Sensitive list refers to such products that will not be subjected to elimination or drastic reduction of import tariff that is typically done under any FTA," said Rajgopal Sharma, director, Department of Commerce, Government of India.

According to the Department of Commerce, EU is India's largest trading partner and total bilateral trade stood at over $70 billion in 2008-09. India is also negotiating an FTA with EFTA that includes Switzerland, Norway, Iceland and Liechtenstein. India-EFTA two-way merchandize trade touched $4.1 billion in 2008. Some of the major items imported by EFTA from India are organic chemicals, precious stones, textiles & clothing, machinery and mechanical appliances, among other things.

"Although India’s trade with EFTA has been growing over the years, exports to EFTA countries were $ 936 million in April-Feb 2008-09 with a miniscule share of 0.6 per cent in our global exports. Hence there is a need to diversify India’s trade basket which would be helpful in expanding India’s exports to EFTA. India mainly imports electrical machinery, precious stones, chemicals and pharmaceuticals, plastics, optical, medical and surgical instruments from EFTA," said Sharma.