Ficci For Clear Policy On Counter-Trade Policy

The importance of counter trade needs to be recognised. It is estimated that over 20 per cent of the world trade is currently being accounted for by this mode of transaction. In case of India, counter trade is expected to provide quick and tangible benefit.

Such a mechanism will help make use of our bulk buying power for promoting exports, the chamber said in a position paper prepared for a round table on measures to accelerate export growth to be held on November 11.

The policy should have a provision to earmark a part of the canalised products as well as restricted items for counter trading even by non-PSUs.

 

It stated enough attention has not been paid to attract foreign investment to step up exports and generate forex earnings. Indias foreign investment policy too needs to be remodeled with a view to focusing attention on export oriented foreign investment.

This can be brought about not by imposition of any compulsion, which can not be done in any case under the WTO, but by providing built-in incentives such as opening up of those sectors which have large export potentials for foreign investment, some of which are reserved for SSIs, it added. According to Ficci, despite its strategic location and potential to play in many ways a complementary as well as a supplementary role, India has not yet aligned itself effectively with any of the economic groupings which are surfacing the world trading scene in one form or the other.

The Saarc, of which India is a founder member, is a loose entit and, as things are, it will take longer time than is currently visualised to become a trading bloc in the real sense, the agreement on Sapta and the proposed Safta notwithstanding.

It must be realised that notwithstanding the multilateral framework being evolved under WTO for the economic groupings, the non-member countries will be at a considerable disadvantage in years to come. It is against this broader perspective, a more realistic policy need to be evolved and meaningful business ties ought to be forged.

The success of export effort is very much dependent on regular flow of information with regard to business opportunities overseas existing and emerging and a clear understanding of the strengthes and strategies of our competitors and market trends.

Our diplomatic missions abroad are no doubt gearing themselves to take up the challenges of strengthening our information base and participating actively in economic and commercial diplomacy. We are, however, still far behind countries like Japan, Republic of

Korea and even Thailand and Myanmar. We have, therefore, to activise and strengthen this area. Our diplomatic missions are presently under-staffed and ill-equipped, the paper said.

Their effort, therefore, has to be backed up by setting up exclusive trade information centres at key points, establishing closer linkages with sourcing companies and also leading department stores overseas, and at the same time, enlarging the telecommunication network across the globe.