India’s new trade policy: An action plan for promoting exports from the states

Indian enterprises, financial institutions and government agencies must invest in the acquisition and analysis of knowledge and information on target markets 

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India's trade policy

Knowledge is power. To effectively promote Indian prosperity through trade in goods, services and technology in the next decade, we need to adopt a ‘whole of society’ approach. India’s new trade policy must ensure the promotion of sunrise and new-age manufacturing, technology absorption and application, creation of value in goods and services for domestic use or exports, ensure imports of capital goods and machinery as well as inputs, spare parts and ancillaries required for energy output, manufactures, agriculture, infrastructure, ecology and processing, etc., for local use or to integrate into international supply and value chains.

It must examine and eliminate “inverted pyramid” import duty structures, simplify procedures and processes to ensure seamless integration of imported inputs into production processes, discourage the import of finished products that can be made in India, or undercut Indian manufactures, whether industrial or traditional. It must protect artisanal and traditional rural industry and products while encouraging steady modernization of the economy. It must reduce our dependence on imported energy. It must not discourage potential entrepreneurs of investors but encourage foreign direct investment in all sectors to bring in modern processing techniques and technology while protecting intellectual property rights.

Overall, it must contribute significantly to the realization of Atmanirbhar Bharat and propel us steadily and strongly towards achieving a USD five trillion economy to lift our deprived millions out of poverty, hunger, unemployment, disease and low access to healthcare, education, financial and social services.

GDP growth is the only means of multiplying per capita income and enabling India to become a middle-income country in the next decade, upgrading our housing, utilities, infrastructure and facilities to realize Mahatma Gandhi’s dream of a self-sufficient village economy, much like those that exist in the Organization for Economic Co-operation and Development (OECD) countries. Our exporters, entrepreneurs and potential investors must be equipped with deep, accurate and current knowledge of the target markets that they plan to enter, penetrate, establish themselves and eventually become significant players in.

This requires investment in study and analysis of each territory and further action by all stakeholders so that a concerted push can be made by civil society, enterprise and state agencies to facilitate Indian economic engagement, market development, risk mitigation and value realization to maximize the realization of revenues by India in exports of goods & services as well as investment in the territories as well as the creation of/ entry into value and supply chains which ensure steady and incremental business with BIMSTEC and ASEAN, both as collective entities as well as with their member states individually.

Studies must be done and kept continually updated, both of the collective trade and investment regimes of each bloc as well as of India’s export potential to each member state, to identify opportunities in the near, medium and long terms for increasing Indian revenue realization from these target markets. These studies must identify not just the revenue potential but also the cost/liability profiles for investment, the risk levels and the means for their mitigation.

A deep understanding of the countries concerned and their operational motives, modes and systems are necessary, which requires investment in the acquisition of knowledge, languages, social mores and practices, in which process our educational institutions and travel promoters can play a significant role in developing cultural and business mediators. These mediators can help our entrepreneurs, service providers and investors engage more easily and effectively with their overseas counterparts to create lasting business partnerships between eastern India and the Southeast Asian and Himalayan neighbors.

Hence, Indian enterprises, financial institutions and government agencies must invest in the acquisition and analysis of knowledge and information on target markets by competent, independent and impartial organizations in both state and private sectors and promote detailed market research both on the potential for increasing Indian exports as well as our capabilities and capacities for realizing it effectively and increasing our national income thereby. It is not the business of the government to take market risks to facilitate exports but to know and take measures to mitigate the risks which must be borne by the entrepreneurs, not the taxpayers.

Therefore, I propose the following Action Plan for consideration, discussion, acceptance and implementation by the states and the union government to take India’s trade in goods, services and technology to the next level. This Action Plan is a Government-led PPP model for identifying goods and services with export potential and promoting their sale to any target export market, like the Association of Southeast Asian Nations (ASEAN), European Union (EU), Bangladesh, Bhutan, India, Nepal (BBIN) Initiative, Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (BIMSTEC), Shanghai Cooperation Organization (SCO), etc. It requires a concerted effort by all stakeholders, with some initial funding by the government, to enable think tanks or consultants to develop feasibility reports.

If acceptable, the government may involve other stakeholders and task them appropriately. Action points for each stakeholder are given below. The list may not be exhaustive.

Action points for stakeholders in promoting exports:
 
1. Governments

Liaise with Indian Missions and trade offices to promote Indian brands and goods

Create database and advisories on export opportunities and compliance needs for exporters

Ensure equivalence of product/service standards and quality assurance with import markets

Examine Customs and import rules to ensure the elimination of inverted pyramids in duty structures

Facilitate input imports to enable re-exports as well as to participate in international supply and value chains.

Facilitate financial services and access to credit and insurance of trading operations

Analyze upgrading needs of Indian facilities for processing, packing & labeling exportable goods

Establish technical, financial and infrastructure requirements  for upgrading facilities

Create  proposals for sustainable  private sector investment in such upgradation

Establish air cargo hubs and encourage freight services

Group export warehousing, processing, packaging labeling and shipment facilities through airport
pre-shipment inspection services to ensure compliance with importer standards

Publicity and marketing of Indian exportables in ASEAN etc markets

Ease export of educational services by State and private universities

Facilitate full utilization of foreign student quota

Ensure upkeep of foreign student facilities at acceptable international standards

Ensure international standards of hospitality services

Provide trade and tourism information

Ensure safety and security of travelers with dedicated and effective distress response services

2. Think tanks

Analyze target market import basket data by sector, country and value

Analyze target market import standards - compare with BIS standards

Analyze target market import  price data

Identify strength areas in India

Establish a list of Indian exportables by sector and HS Codes

Establish relative competitiveness of Indian goods on CIF ASEAN ports basis

Develop a cadre of Interpreters & translators of target languages in Kolkata

Analyze discussions and reports emanating from target market fora and disseminate emerging opportunities

3. Universities

Promote the teaching of Area studies and languages

Disseminate opportunities in placement and career counseling

Develop and utilize institutional links with foreign universities

Promote research about target countries in all possible disciplines

Develop systems to broadcast MOOC and other courses to the target region

4. Chambers of Commerce, trade associations and EPCs
                                          
 Establish active relationships with target counterparts

Support Indian Missions and trade offices to disseminate our export capabilities

Analyze upgrading needs of competitive items to meet import standards at competitive rates

Analyze import packaging types and standards for bulk imports, wholesale and retail sale

Develop sector-wise database for exporters

Develop/modify goods according to target market traditions and cultural norms

Train exporters in target market business culture & practices

Develop e-commerce aimed at target countries

Develop non-traditional  exports such as in education, skill development, art, floriculture

Collective trade promotion in ASEAN trade fairs through ITPO/FICCI etc.

Develop/activate institutional links with ASEAN counterparts

Establish Eastern CEOs Forum with ASEAN

5. Legal and Consultancy services

Promote business advisory services for ASEAN markets

Establish model contracts for different business operations based on bilateral compliance needs

Establish and publicize financial services available & requirements  for dealing with each country

Establish inter-operable accounting practices and standards

Optimize effective dissemination and use of Lines of Credit & international project financing

Develop SOPs, marketable studies and handholding systems

Speedy Arbitration & dispute resolution mechanisms

Promote  engineering & technical service exports, particularly to CMLV

6. Logistics 

Establish & publicize regional multimodal transport & shipping services & operators from WB ports

Create air cargo and passenger services including air ambulance

Create a packaging and palletizing  services to international standards

7. Tourism & Hospitality

Tourism and hospitality promotion- Buddhist Heritage Tours, etc

Art & Cultural promotion to create Indian brand awareness

Sponsor ASEAN cultural events in India and vice versa

8. Media

Carry stories of market opportunities and market developments

Develop weblogs and sites

9. IT, cable and TV services

Subtitle films in target languages for export

Translate web content into target languages and upload

Carry foreign TV Channels on cable networks

Promote carriage of Indian broadcasting on foreign networks

(The writer is a former Indian ambassador. The views expressed are personal.  He can be reached at sarva.chakravarti@yahoo.co.uk)