India an unnatural nation, it has been proved and accepted at various fronts either national or international, any country around the world do not has a society so large, so diverse, so disperse and so fragmented been constituted under a single political roof. One cannot forget what had happened at the Economic level in the first 30 years, after Independence, when economy was growing at 3.5 percent. Even at that time the growth rate was always been a source of criticism, however, the population was growing at the rate of 2.5 percent, which has left India with no solution how to uplift the standard of the living of the people.


Nearly after 43 years of Independence the changes in the policy in 1991 were introduced, this has set the path for growth, by liberalizing and globalizing the Indian economy. Bold actions and steps were taken by the political leadership and bureaucrats which, led to a major transformation of Indias economy, resulting in obtaining positive results. The growth rate reached a little under six percent between 1995 and 2000 became seven percent between 2000 and 2006 and finally reaching to 8.5 and nine percent subsequently.


After all, the growth rate has always been in between eight or nine percent, last few years, given the size of economy, India should be proud of that. Simultaneously, India was finding share in the global economy in terms of exports. Though it is just 1.3 percent currently, however, one should not forget that it was merely 0.6 percent a few decades back. So, there has been a significant achievement not only in terms of growth rate, but, also, foreign exchange reserves which were about $ 250 billion now, and never came into picture because there was a time when the nation of one million was struggling with the reserve of just two to five billion dollars has increased substantially.


Considering all these factors and the rapid pace of Indias rise, Country still have certain solid pillars of growth which were always been helpful to further increase importance of India at World stage . Some of them are as follows:


  • It is one of the largest economies in the world.
  • India has a very significant skilled manpower and a professional cadre.
  • India was getting much more global in terms of manufacturing knowledge.
  • India has one of the largest pools of scientists, technicians, engineers and managers in the world today.
  • India in 2008 had graduate 500,000 engineers which if we compare with United States and Germany the figure will be around 75,000 and 25,000 engineers.
  • India has one of the youngest populations in the world, which has been a huge strategic advantage.


New Government:


Amid when the whole world is trying to combat the economic crisis, India one of the largest democracies of the world were going through a time to elect the new leadership for the Nation. Although, India fared much better than others in terms of crises, however, it cannot deny the fact that it was also affected by the problem which requires solution at the global level.


The new government comes to power at a very difficult time, however, Government was aware that the country has proved to be less immune to the global economic crisis than was originally supposed; stimulus packages and populist policies have left the country with a disturbingly high deficit. However, the government was more confident, the reasons were, there will be not much opposition from allies thanks to the positive election results. The initial signs look promising from the new government towards their agenda for growth, for example starting a national urban poverty mission to complement the last terms rural employment guarantee scheme, spurt the revenue of government by disinvesting select state owned enterprises, also, reduction in lending rates to poor and farmers and Auction of 3G and Wimax licenses to spur further growth in the broadband Internet business.


 

There is no doubt at national and international level that the new leadership with Politicians, Technocrats and Bureaucrats will deliver bottom line results. With ministers like Shri. S.M.Krishna-a surprising choice as minister for external affairs, 78-year old former chief minister of Karnataka who has been recognized with building up Bangalore, Karnatakas state capital and IT centre, in the 1990s. Shri Shashi Tharoor former top United Nations official who was Indias contender for UN secretary generals job was given opportunity for minister of state in the Ministry of External Affairs. Understanding the importance of Climate and Environment issues Shri Jairam Ramesh has been appointed as Minister of State (with independent charge) for environment and forests-previously in industry and power, and a top party adviser, he is likely to break the track record of many of his predecessors and bring in straightforward policies aimed primarily at streamlining environmental controls, instead of pursuing other agendas. Needless to mention the renowned names like Shri Anand Sharma, Smt. Ambika Soni, Shri Kapil Sibbal were some of the important people with holding important positions in the government to bring a positive change in India.


It was comprehensible that Indias own historical experience has been proving and playing a pivotal role in the management of change. The reason behind the change was, also, due to the nature of relationship which has been established between the "Aam Admi" and the government which will surely result in inclusive growth of this astonishing nation called India.


Negotiations:


The reason to cover this typical topic of negotiations was to highlight the fact that with new ministers in the government, very good decisions have came from various ministries out of which some I have already touched, however, the important was to understand the new negotiations and agreements form Ministry of Commerce and Industry.


Shri Anand Sharma took over as the Union Minister of Commerce and Industry on May 29th 2009. During his interaction with the Commerce Secretary, Shri G.K. Pillai; Secretary, Department of Industrial Policy and Promotion (DIPP), Shri Ajai Shankar; the major issues discussed were about the present foreign trade and industrial scenario, including issues relating to the World Trade Organisation (WTO). His first interaction with the media persons was about the Foreign Trade Policy which will be announced during August 2009 and his confidence regarding huge flows from FIIs. He has also expressed satisfaction over the Foreign Direct Investment inflows of about US$ 27 billion during 2008-09, the Minister hoped that the momentum will continue.


Within a small time frame as Shri Sharma took over, the Board of Approval of the Special Economic Zones (SEZs) informed that they will be meeting to consider proposals for setting up of Special Economic Zones and also to approve other miscellaneous requests pertaining to SEZs. The Chairman of board of approval informed Total export of Rs.99,689 crore have been made from SEZs during the financial year 2008-09 registering a growth of about 50% over the exports made during the year 2007-08.


Then came into effect the India- MERCOSUR PTA from 1st June, 2009, India with a total trade of US$ 4773.39 million with MERCOSUR during 2007-08, had exports of about US$ 2904.8 million during 2007-08 while imports stood at about US$ 1868.39 million during the same period. Four countries formed Argentina, Brazil, Paraguay and Uruguay in 1991 with taking European Union as role model and objective of free movement of goods, services, capital and people and became a customs union in January 1995.


A Framework Agreement had been signed between India and MERCOSUR on 17th June 2003 at Asuncion, Paraguay. The aim of this Framework Agreement was to create conditions and mechanisms for negotiations in the first stage, by granting reciprocal tariff preferences and in the second stage, to negotiate a free trade area between the two parties. Through this PTA, India and MERCOSUR have agreed to give tariff concessions, ranging from 10% to 100% to the other side on 450 and 452 tariff lines respectively.

 

However a special issue on which the whole world was waiting for Indias response came at the Ministers special address to the Cairns group, in Bali Shri Anand Sharma, has reiterated the Indian commitment to the successful conclusion of the Doha process through a constructive engagement. He emphasized the resumption of negotiations based on the draft reports on Agriculture and NAMA, also aspirations of all developing countries for a fair trading regime must be recognized.


And then the 18th meeting of the BIMSTEC Trade Negotiating Committee (TNC) which was held in Phuket, Thailand, from the 2nd to 4th June, 2009 with the primary aim of bringing the discussions on the text of the Agreement on Trade in Goods to a closure and expedite the way towards an early implementation of the BIMSTEC Free Trade Agreement. The meeting was a success to the extent that all contentious issues in the FTA text were resolved to the mutual satisfaction of all participants.


Now with positive communications coming from various ministries at the global arena whether the Kyoto, G-20, BRIC and various other conferences Indias candidature was accepted and considered significant for world trade making this south Asian tiger roaring his views to the World.


Required Paradigm Shift:


Now when ball is in the court of developing countries, this is high time to join hands and avoid protectionist tendencies which some developed countries in times of economic downturn have adopted.


Secondly it's time to finish the Doha Round and a consensus should be formed among the nations to do it ASAP. After several years of arduous negotiations under the auspices of the Doha Round if it was implemented the various important accomplishments will begin reforming world trade in agriculture, bringing distorting domestic policies as well as trade policies regarding agriculture, however, then it will become much more modest which originally hoped and provides for a long adjustment period before countries have to do much about reforming their domestic agricultural programs.


Thirdly, one should not forget that around the world diplomacy and bureaucracy have actually joined hands to fight against financial crises and terrorism, which shows the interest of various nations to solve problems by joining hands not that one nation taking a stand.


Finally, it is important to emphasize again the value of trading agreements which everyone is sure that provide global trade liberalization and yields substantially larger economic benefits, including benefits to agriculture. Thus, it becomes important to rejuvenate among the nations a trust and avoid measures like protectionism etc while increasing them will emerge as an element of less trade and hit by and large the current international political economy, which is not a desirable outcome in itself.


The views mentioned are personal.


Source: Press Release Ministry of Commerce and Industry, Ministry of External Affairs and various newspapers.