Non Agriculture Market Access: Interests of SMEs © Federation of Indian Micro and Small & Medium Enterprises Non-Agricultural Market Access : interests of SMEs By : Anil Bhardwaj Federation of Indian Micro and Small & Medium Enterprises (FISME) New Delhi

Non Agriculture Market Access: Interests of SMEs © Federation of Indian Micro and Small & Medium Enterprises Over view of the SSI sector Historical data  > 8000 products  contribution: 35% to exports, 40% to Industrial Production  Employment : second largest after agriculture census on SSIs ( )  10.5 mn units (1.4 mn* regd, 9.1 mn** un-regd)  Total employment: 25 Mn  Total gross output : Rs. 2.8 Trillion *Census figure; ** Survey figure

Non Agriculture Market Access: Interests of SMEs © Federation of Indian Micro and Small & Medium Enterprises Overview…contd Trade Policy: Pre & post reform period Pre-reform: Protection from / by  Intl competition / High Tariff wall & QRs  Domestic / Reservation Policy (<1200 products of 8000) Post reform : Tariff lowered (inverted in many sectors) QRs removed; free imports Reservation policy continues (~500 products) but redundant

Non Agriculture Market Access: Interests of SMEs © Federation of Indian Micro and Small & Medium Enterprises Agreements on Mkt. Access and SSIs - I Uruguay Round : Industrial products General : - 67% tariff lines bound, 33% unbound - Tariff lines > those at 40% bound at 40% & < 40% bound at 25% SSIs : - No. of SSI rsrvd. items (8 digit HS) : 2016* - Majority falls in three chapters : Ch-39: Plastics (137 items); Ch-62: Apparel/Clothing (366 items) Ch-84 : Machinery parts (223 items) - Uruguay Round: 1336 Bound; 680 unbound - Majority of rsrvd. items (922) were bound at 40% - Applied MFN 15% on most SSI products (2005) *RIS 2001

Non Agriculture Market Access: Interests of SMEs © Federation of Indian Micro and Small & Medium Enterprises Current multilateral negotiations Doha Mandate: (Para 16; Doha Declaration) Market Access for Non-Agriculture products* > Reduction or elimination of tariff/ peaks by agreed modalities > Product coverage comprehensive; without a priori exclusion > Less than full reciprocity ( per Art XXVIII GATT – S&DT) Current discussions : > Reduction through Swiss Type formula (various variants under consideration) > Sectoral approach : e.g proposal for 7 sectors * Products under HS Chapters 25 to 97 & certain fish and fish products in HSChapters 3, 5, 15, 16 and 23.

Non Agriculture Market Access: Interests of SMEs © Federation of Indian Micro and Small & Medium Enterprises GoI approach so far.. Reflects developing country sentiments Aims moderate Tariff cuts Pairing of Tariffs peaks Progress on NTBs/ ETBs Against ‘package’ deal on NAMA, Agriculture etc.

Non Agriculture Market Access: Interests of SMEs © Federation of Indian Micro and Small & Medium Enterprises GoI approach : a critique Infant industry protection is not sustainable India : a developing country? Is NAMA about protection to domestic industry only or also about Mkt. Access for Indian firms also ? Which are our markets? Who are our competitors? ASEAN? West ? Higher Tariff regime: greater discretion > encourage lobbying> more Tariff distortions after FTAs/ PTAs

Non Agriculture Market Access: Interests of SMEs © Federation of Indian Micro and Small & Medium Enterprises FISME’s views on NAMA  Negotiate for ambitious cuts to open up opportunities in developing country markets for Indian products; will address FTA distortions too.  Negotiate hard on NTBs/ ETBs and Tariff peaks  Make up mind for Sectoral approach; if ready, have a plan for ‘0’ duties on inputs  Ensure exclusion of industrial inputs from lists for less than formula cuts/ unbound items (July package para 8)

Non Agriculture Market Access: Interests of SMEs © Federation of Indian Micro and Small & Medium Enterprises Thank you Welcome to see you at :