Foreign Trade Policy of India Foreign Trade Policy of India Implementation Evidence from Indian States 1

India and Trade Liberalisation  Pre 1990 scenario: Closed economy; average tariffs exceeded 200 percent; extensive quantitative restrictions on imports; stringent restrictions on foreign investment  Post 1990 scenario: Peak duties down from 400% to 45%, phasing out of QRs; investment liberalisation  GDP per capita has increased from US$ 374 in 1990 to US$ 1192 in 2009 (World Bank, World Development Indicators, July 2011) 2

India and World Trade  Critical role in Doha Development Agenda  Major push for liberal global trade regime especially in services  Marked shift from protecting ‘producers’ to benefiting ‘consumers’ ("India: Foreign Trade Policy, "International Economics and Trade-South Asia", World Bank, 2011) This is reflected in India’s National Foreign Trade Policy which aims to double India’s share in global trade by

Why NFTP as a Theme?  Mainstreaming international trade into national development strategy  Inclusive growth The objectives of NFTP ( ) are to:  double exports by  generate more employment 4

Major Export Promotion Schemes  ASIDE - Assistance to States for Infrastructure Development of Exports  MAI - Market Access Initiative  MDA - Marketing Development Assistance  TEE - Promotion of Towns of Export Excellence  VKGUY - Vishesh Krishi and Gram Udyog Yojana  FMS - Focus Market Scheme  FPS - Focus Product Scheme 5

GRANITE Project Objective Enhance economic literacy at the grassroots, foster accountability in economic governance and raise a coherent civil society voice Duration 3 Years ( ) States Andhra Pradesh, Maharastra, Uttar Pradesh, Tamil Nadu, Karnataka, Orissa, Rajasthan and West Bengal 6

Activities  To examine the involvement of state government and other stakeholders in the formation and implementation of NFTP  To find out how the NTFP is impacting the livelihoods of stakeholders in specific product categories  To advocate for a pro poor, pro development trade policy 7

Case Studies  To understand the impact of NFTP on exports of specific products  To explore various channels through which benefits of international trade can trickle down to the grassroots stakeholders 8

Scope StatesProducts Andhra PradeshTurmeric, Chillies KarnatakaSpices, Coffee MaharashtraGrapes, Pomegranate OrissaGinger, Niger Seeds RajasthanGems & Jewellery, Kota Doria Sarees Tamil NaduMarine Products, Leather Products Uttar PradeshChikan Craft, Zardozi Products West BengalMango, Tea 9

Methodology  Questionnaires directed to KEY STAKEHOLDERS such as State Government Officials, Farmers, Manufacturers, Trading Houses, Exporters, Workers  Interview and focused group discussion to discuss relevant issues 10

Impact of NFTP Exports US$ 63 bnUS$ 168 bn Share in Global Merchandize Trade 0.83%1.45% Share in Global Services Trade 1.4%2.8% Share in Total Global Trade (goods + services) 1.4%2.8%

Product Specific Growth 12 Export Performance of the Selected Products/Sectors Products Average Annual Growth  Leather Tea Coffee Kota Doria Sarees Chillies Pomegranate Niger Seeds Zardosi Products Source: Trade Map, International Trade Centre Geneva  Average year-to-year change in percentage 1 Included in chapter 9 HS Code (091011) 2 Included in chapter 8 HS Code (081110) 3 Included in chapter 63 HS Code (630290)

Limitations of NFTP  Centralised in nature – state governments are not involved, Inter-State Trade Council is dysfunctional  Lack of political awareness on issues and will for reform  Lack of reflection of grassroot demands in formulated trade policy  Absence of representation of the civil society in the Board of Trade  Lack of specific consideration for small producers  Lack of necessary export infrastructures and R&D 13

CUTS Recommendations  The policy making process should be more inclusive and consultative with special attention to grassroot stakeholders  Special schemes should be targeted towards small producers - technical assistance and capacity building programmes for small producers need to be undertaken more frequently  Information dissemination mechanisms need to be more extensive and better structured continued 14

CUTS Recommendations  Schemes should be made less complex and more transparent  More attention needs to effective implementation of schemes – sustainability impact assessment  NFTP should provide a mechanism to achieve better coordination among various stakeholders in the supply chain 15

Thank You 16