Increase In Trade Deficit

GOVERNMENT OF INDIA

MINISTRY OF  COMMERCE AND INDUSTRY

STARRED QUESTION NO-401

ANSWERED ON-21.12.2011

a) whether it is a fact that the country''s trade deficit has increased to a four year high;

b) if so, the details thereof; and

c) the steps/measures taken by Government to contain the trade deficit?

ANSWER

MINISTER OF COMMERCE AND INDUSTRY
(SHRI ANAND SHARMA)


a) to c): A Statement is laid on the Table of the House.

ANNEXURE 

STATEMENT REFERRED TO IN REPLY TO PARTS (a) TO (c) OF  RAJYA SABHA STARRED QUESTION NO. 401 FOR ANSWER ON 21ST DECEMBER 2011 REGARDING “INCREASE IN TRADE DEFICIT”

(a)Yes Sir.  

(b)The details of the country’s trade deficit for the last four years and the current year are as under:

Year	Export	Import	Trade deficit
2007-08	163	252	89
2008-09	185	304	119
2009-10	179	288	109
2010-11	251	370	119
2011-12 (April – November) Provisional	193	310	117

The Trade Deficit for the 8 month periods April-November has been the highest compared to the corresponding periods in the last 3 years.

(c)    The rate of growth of exports for 2009-10 has been -3.5% and for 2010-11 it has been 40.4%.  For the period April-November, 2011 the growth rate has been 33.2% which is quite robust.   However, imports have also been growing both because of higher prices of importables and increased demand.  The prices of petroleum, fertilizers, gold, edible oil, gems & jewellery have increased.  Their demand also has increased.   These lead to a higher value of imports.   Despite a very challenging global environment, measures taken by Government have not only arrested the decline of export, it has also been successful in reversing it.  Anticipating that the situation is likely to be adverse, Government had announced a package on 13th October, 2011.  In addition a strategy paper to double our exports by 2013-14 was released in May 2011.  Earlier measures taken by the Government and RBI include the announcements made in the Budget 2009-10 and 2010-11; in the Foreign Trade Policy (FTP) 2009-14; thereafter in January / March 2010; in the Annual Supplement to FTP released on 23rd August, 2010; and in announcements made in February, 2011.   To increase our share in various export markets and to diversify our market and products, incentives have been provided under schemes viz. Focus Product Scheme, Focus Market Scheme, Market linked Focus Product Scheme and Vishesh Krishi and Gram Udyog Yojana. 

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Review Of Financial Assistance Schemes Under APEDA

MINISTRY OF COMMERCE AND INDUSTRY  

STARRED

QUESTION NO . 316 

ANSWERED ON 01.12.2010

Will the Minister of COMMERCE AND INDUSTRY be pleased to state :-
(a) the details of financial assistance schemes that are available under Agriculture and Processed Food Products Export Development Authority (APEDA);
(b) whether Government has undertaken any review to ensure that the financial assistance schemes serve the purpose for which they are intended;
(c) if so, the details thereof; and
(d) the monitoring mechanism in place in the Ministry to oversee the whole gamut of schemes that are being implemented?

ANSWER

MINISTER OF COMMERCE AND INDUSTRY
(SHRI ANAND SHARMA)
a) to d): A Statement is laid on the Table of the House.
STATEMENT REFERRED TO IN REPLY TO PARTS (a) TO (d) OF RAJYA SABHA STARRED QUESTION NO.316 FOR ANSWER ON 1ST DECEMBER 2010 REGARDING “REVIEW OF FINANCIAL ASSISTANCE SCHEMES UNDER APEDA”
(a) Agricultural and Processed Food Products Export Development Authority (APEDA) is operating five plan schemes to extend financial assistance to the eligible exporters registered with it, namely; i) Scheme for Market Development; ii) Scheme for Quality Development; iii) Scheme for Infrastructure Development; iv) Scheme for Research and Development; and v) Transport Assistance Scheme.
(b&c) The Government undertakes review of the performance of APEDA including each of these schemes from time to time. During the last five years, APEDA has fully utilized its plan funds towards the implementation of its schemes, resulting in almost doubling the export value of APEDA products to Rs.34686.87 crores in 2009-10 which constitutes 46% of total agri exports from the country.
(d) The performance of APEDA schemes is monitored periodically and especially at the time of formulation of Annual Plan, preparation of Budget Estimates/Revised Estimates etc. Component wise reports on physical and financial achievements against the targets fixed by APEDA for each scheme are also reviewed by the Ministry. These schemes are again scrutinised while reviewing the overall performance of APEDA. 

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Effect Of FTAs With Neighboring Countries

MINISTRY OF COMMERCE AND INDUSTRY

STARRED

QUESTION NO . 30

ANSWERED ON 10.11.2010

Will the Minister of  COMMERCE AND INDUSTRY be pleased to state :- 

(a) the details of Free Trade Agreements (FTAs) entered into with the neighbouring countries and the impact of such agreements on domestic industry;

(b) whether Government has kept any provision for protecting and promoting the domestic industry in FTAs;

(c) if so, the details thereof; and

(d) the mechanism of reviewing FTAs from time to time with the intention of ensuring protection of domestic industry?

ANSWER

MINISTER OF COMMERCE AND INDUSTRY

(SHRI ANAND SHARMA)

a) to d): A Statement is laid on the Table of the House.

S. No	Name of Agreement	Partner Country(s)
1	Asia Pacific Trade Agreement (APTA)	Bangladesh, China, Lao PDR, South Korea, Sri Lanka
2	Global System of Trade Preferences (GSTP)	44 developing countries/least developed countries
3	India-Sri Lanka FTA	Sri Lanka
4	India-Afghanistan PTA	Afghanistan
5	India-Thailand Early Harvest Scheme	Thailand
6	South Asian Free Trade Agreement (SAFTA)	Afghanistan, Bangladesh, Bhutan, Maldives, Nepal, Pakistan, Sri Lanka
7	India-MERCOSUR PTA	Argentina, Brazil, Paraguay, Uruguay
8	India-Singapore Comprehensive Economic Cooperation Agreement	Singapore
9	India-Chile Preferential Trade Agreement	Chile
10	Indi India-Bhutan Agreement on Trade Commerce and Transit	Bhutan
11	India-Nepal Treaty of Trade	N
12	India-Korea Comprehensive Economic Partnership Agreement	South Korea
13	India-ASEAN Free Trade Agreement	Brunei Darussalam, Cambodia, Indonesia, Lao PDR, Malaysia, Myanmar, Philippines, Singapore, Thailand, Vietnam

(b) and (c)      Yes. Before deciding on entering into an FTA with any country, a feasibility study is conducted by a Joint Study Group (JSG) comprising of officials from both sides. The JSG examines inter-alia, trade and tariff profiles, issues of complementarities, likely benefits and areas of mutual interests. A considered view on whether to go ahead to an FTA is taken by the Government based on the report of the JSG.

Before commencement of negotiations, extensive studies are undertaken by the Department of Commerce through various academic institutions. Negotiations are done after detailed consultations with industry stakeholders as well as the administrative Ministries and Departments to protect as well as to promote the interests of the Indian industry and agriculture. Representatives from these Ministries and Departments also participate in the negotiations. Protection is provided by way of keeping sensitive items in a negative list on which no tariff concessions are given.

In addition to these measures, all the FTAs have provision for initiating safeguard action. Safeguard measures can be invoked if there is a sudden surge of imports of a particular item from the FTA partner which causes injury to domestic industry. This is done by suspending or withdrawing the tariff concession on that item so that the effect of the preferential treatment is nullified.

(d)       All the FTAs have provision for review after specific periods. During the review process negotiations are held to improve market access as well as to address concerns that may arise in the implementation of the agreement.

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