Prabhu Stresses More Saarc Trade

Commerce secretary P P Prabhu has emphasised the need to enhance trade among the member-countries of South Asian Association for Regional Co-operation (Saarc) which is now stagnating at 5 per cent of the global trade volume despite tremendous scope for enlarging the products range.

Calling for urgent steps to boost trade within South Asia, Prabhu told a delegation of the Associated Chambers of Commerce & Industry (Assocham) that measures had to be devised not only to mitigate the impact of the reversal of trade flows to South East Asian nations but also to give a shot in the arm to India's overall export efforts.

India's export growth in 1997-98 and in the first quarter of the current financial year had suffered a severe setback since 30 per cent of the country's total exports were destined for South East Asian countries which were still in the grip of a currency crisis, he said.

The commerce secretary disclosed that in the global trading matrix, "India has no presence in 75 per cent of the items. In 50 per cent of the products we do not effect exports and even the product diversification is narrow".

The need of the hour, according to Prabhu, was to alter the composition of the export basket with the inclusion of new products in which world trade was growing.

He exhorted industry to take advantage of the trade trends to give a fillip to India's exports. He mentioned that the importance of rice as an export item in world trade had been rapidly growing.

Concurring with Assocham president L Lakshman's statement that emphasis must be given to agricultural and allied products, gems & jewellery, leather goods and garments _ which constitute 69 per cent of India's exports _ the commerce secretary said: "In the short term, we have to concentrate on the items in which we have a comparative advantage."

He said India must cash in on its competitive edge in gems & jewellery and some segments of engineering products, leather and garments.

While conceding that the current financial year was expected to be difficult in view of the recession in the global economy, Prabhu said the trade deficit _ expected to touch $7 billion _ would be manageable because of the cushion of remittances from invisibles.

When Lakshman pointed out that exporters still faced procedural complexities, Prabhu said that while administrative efficiency of rules and procedures was important, the fact that exporters tended to misuse the facilities compelled the government to design complex procedures to discourage these practices.

Nevertheless, he said the government was committed to creating a hassle-free administrative procedures and had already computerised export documentation in six major ports which would be extended to other ports soon.