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India:ASSOCHAM Study puts country’s trade with
SAARC at Rs.100,000cr by 2013 |
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2005-2-22
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With the introduction of Free Trade Agreements (FTAs) among SAARC nations from 1st January 2006, India’s trade with them is expected to touch Rs.50,000 crore by 2009 and subsequently rise to Rs.100,000 crore by 2013 from its current trade level of Rs.21,000 crore, according to a Study carried out by The Associated Chambers of Commerce and Industry of India (ASSOCHAM).
Releasing findings of the comprehensive Study here on South Asian Free Trade Area: India’s Trade and Investment Opportunities, ASSOCHAM President, Mr. Mahendra K. Sanghi said, “India has huge potential of doubling its trade every five year provided business communities of the region exhibit determination and explore investment opportunities with collective efforts”.
India’s trade with SAARC nations in the post-liberalisation era has been growing at CAGR of 19.99% as compared with world’s trade at 18.7%, indicating that India’s trade with SAARC countries is increasing at a high rate than world.
It was observed that hitherto India’s trade with SAARC nations was confined to 5 products. The 5 prominent items of India’s exports include cotton yarn fabrics, made-ups etc, transport equipment, rice (other than basmati), machinery and instruments and drugs, pharma and fine chemicals. The share of five prominent items in India’s exports is around 51% which include cotton yarn fabrics made-ups etc (21), transport equipment (10%), rice other than basmati (9%), machinery and instruments (6%), drugs pharma and fine chemicals (5%).
Similarly, 5 prominent items of India’s imports from the SAARC countries include fruits and nuts, sugar, textile yarn, made-up articles, jute raw and inorganic share. The share of these items is around 48% which include sugar (14%), fruits and nuts (11%), textile yarn, made-ups articles (8%), jute raw (8%) and inorganic chemicals (7).
The study has suggested that India should expand its trade basket and widen its trade concentration in products like textile, rubber, leather, jute, tea, natural resources, energy and tourism. There is also a need for evolving strategies which at present are too inadequate. It is difficult for exporters to successfully penetrate into the SAARC markets.
It is also essential to encourage Foreign Direct Investment in bringing infrastructure to international standards for facilitating trade flows between the trading partners. These efforts are required in support of expanding trade and investment flows at the level of private enterprises in the concerned countries.
It is desired that communication system be improved; ideal capacities of various products be utilised; credit facilities be extended; imports restrictions from SAARC countries be lowered; SAARC trade fairs be organised; external SAARC trade be negotiated collectively as group; joint ventures be encouraged; and there is a need to introduce complementarities of trade between India and SAARC countries.
In the category of individual countries CAGR was high with Bhutan (74.44%), followed by Nepal (24.05%) and Sri Lanka (20.14%) during the post-liberalisation period. The main reason behind this may be the preferential and bilateral trade relations with Bhutan, Nepal and Sri Lanka. However, growth was high with Bangladesh (29.29%), followed by Maldvies (21.88) and Pakistan (17.69%) during the pre-liberalisation period.
The Study further reveals that in the year 1991-92 India’s trade with SAARC countries was Rs.17914.7 million (exports Rs.15289.5 million & imports Rs.2625.2 million) which went up in the year 2003-04 to Rs.214347 (exports Rs.184976 million & Rs.29371 million). India’s exports and imports from world in 1991-92 was Rs.440410 million and Rs.478510 million which went up to Rs.2915820 million and Rs.3539760 million.
It has identified India’s investment opportunities and possible joint ventures with individual countries of SAARC as per which the Sri Lanka has been spotted as the leading country for joint ventures in 21 areas followed by Bangaldesh with whom the joint venture agreements can be worked out in 15 areas. Similarly, Pakistan, Nepal, Bhutan and Maldives are identified for establishing joint venture projects in 12, 11, 10 and 9 areas.
Exploration of JVs investment opportunities as suggested between India and Sri Lanka include : Computer software, cotton industries, educational institutes, food processing, leather, engineering products, medical facilities, tea, tourism, floriculture, horticulture, pharmaceuticals, services, consumer durables, consultancy, coconut and coir products, gems and jewellery, industrial chemicals, rubber products, salt and spices.
India and Bangladesh can jointly work in : Computer software, cotton industries, cement, educational institutes, fisheries, food processing, information exchange, infrastructure, leather, engineering products, medical facilities, natural gas, seed production, tea and tourism.
The area identified with Pakistan include: Computer software, cotton industries, educational institutions, fisheries, food processing, information exchange, leather, engineering products, tourism, floriculture, horticulture and services.
India and Nepal can worked together in products :Cotton industries, educational institutes, information exchange, leather, medical facilities, tea, tourism, jute, pharmaceuticals, services and sericulture.
With India Bhutan the suggested joint collaborations include: Educational institutes, information exchange, infrastructure, medical facilities, tea, tourism, floriculture, horticulture, forest based products and mineral based industries.
Investment opportunities between Maldives and India in areas: Educational institutes, information exchange, infrastructure, medical facilities, tourism, floriculture, horticulture, agro processing and hydro power. |
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