Export Growth in Andhra Pradesh

Andhra has huge export potential but challenges remain

FIEO in association with the Andhra Pradesh Trade Corporation Ltd (APTPC) organized a seminar on Export Growth in Andhra Pradesh Potential, Opportunities and Challenges at Hyderabad on May 13, 2013. Dr D. Purandeswari, Union Minister of State for Commerce & Industry, was the chief guest. Dr J. Geetha Reddy, Minister for Major Industries, Sugar, Commerce & Export Promotion, Government of Andhra Pradesh, was the guest of honour. More than 400 exporters attended the programme. Mr Walter DSouza, Regional Chairman, FIEO (Southern Region) while addressing the gathering said the Foreign Trade Policy is absolutely clear and has two ambitious goals before it. One, to take Indias merchandise export trade to $500 billion by the year 2015, and secondly to double Indias share in world trade by 2020. He said Andhra Pradesh has a competitive advantage in agro exports. The sector needs a thrust so that commodities like rice, spices, pulses, tobacco, and horticulture produce are exported with value additions. Policy makers need to strike a delicate right balance between ensuring the countrys food security and exports of these essential commodities while framing policies and that such policies should be consistent and have a long-term horizon. Last year India lost at least $2 billion in terms of non-compliance of wheat exports as FCI failed to meet the target of 4.25 million tonnes. The Regional Chairman emphasized the refund of levies and taxes by the State Government to the exporters should be within the stipulated time frame as this is one of the factors that decide if our exports remain competitive or not. A World Bank study says a 10% simplification in procedures can pave way for about 15% growth in exports and therefore State Government have a key role to play in streamlining procedures. Dr Purandeswari, while inaugurating the seminar, remarked that from a handful of emerging economies in the Middle East and South East Asia during the mid-1990s, the scope of the term has now expanded to include economies from Latin America, Africa, Eastern and Central Europe as well. These emerging markets are holding up the global GDP today despite the global slowdown in 2008 and the euro zone crisis in 2010. She said India is seized with a huge current account deficit which can be mainly addressed in two ways i.e. either by inviting investments into the country or by improving the exports from India. FDI in retail will ensure creation of the backend infrastructure as the new FDI policy clearly outlines that 30% of total investment must be in the backend infrastructure in the form of cold storages, refrigerated mobile vans etc and this measure would arrest wastage during transportation which currently is estimated at 30-40% of total perishable produce. She further emphasized that the FDI policy makes it mandatory that 30% of the sourcing must be from Indian SMEs and this would surely give a fillip to the much neglected manufacturing sector from the country. Speaking about the ebiz portal, the pilot project initiative of the Ministry of Commerce & Industry, she said the portal would bring together all the relevant departments on a common platform and facilitate singlepoint clearances of all the forms and registrations required by an investor. Mr Ajay Sahai, Director General & CEO, FIEO, while addressing the participants said FIEO estimates world trade which is presently $37 trillion to be in the order of $62 trillion by 2020. Therefore, India with a target of 4% of world trade is looking at achieving an exim trade of $2500 billion by the end of the current

decade. Exports may be in the range of $1000-1200 billion and imports at $1300-1500 billion. This would require that new entrepreneurs take up exports in a big way with active support from State Governments. Deliberating on the role of State Governments in facilitating exports, Mr Sahai said exports registered a negative growth of -1.76% in 2012-13 after clocking 37.5% in 2010-11 and 21% in 2011-12, reaching $300.57 billion against a target of $360 billion for 2012-13. Though the Government of India has not yet set a target for the current fiscal but assuming a growth of 10-15% India may achieve $340 billion in exports during the current year. He highlighted that the exim trade contributes to over 57% of GDP and every additional exports of $10 billion creates roughly 1 million jobs. Therefore States can by promoting exports create more employment opportunities, leading to inclusive growth for balanced development. Mr Sahai in his presentation set out the principle strategies that the State Government needs to implement for promotion of exports from the State: a. Identify potential products of exports from the region and evaluate constraints affecting exports of potential products b. Identify markets for such products and study the nontariff barriers c. Identify major competitors in target markets d. Mapping and strengthening trade related Infrastructure e. Capacity building with industry partnership f. Policy support by way of export promotion policies Mr K. Pradeep Chandra, Principal Secretary, Commerce & Industries Department, Government of Andhra Pradesh, in his address said exports are a way to assess where our products stand in the world both in terms of quality and technology. He said international markets are dynamic, and this dynamism makes the availability of information critical. The big export houses can have their own market research units and funds to gather commercial intelligence data but MSME units may not have access to such information, thus losing their competitiveness. The State Government is deliberating on creating an export facilitation cell in the Industries Department which would be able to provide market information over a period of time. Dr Reddy said Andhra Pradesh is endowed with many advantages that facilitate exports. As the global market is shifting from West to East the State has major advantages that can help it become the gateway to the East and South East Asia. Andhras exports have been growing tremendously at the rate of 31.47% with contributions from a gamut of all sizes of industries, ranging from big national and international business houses to MSME units. The State has a sound port infrastructure; Visakhapatnam port is the second largest cargo handling port in the country and the Centre has announced sanctioning of one more major port in the State. She informed that a long pending demand of the State has been the establishment of the Indian Institute of Foreign Trade in Andhra and requested Dr Purandeswari to pursue the case with the Ministry of Commerce and Industry. During the technical session Mr S.B.S. Reddy, Jt. DGFT, Hyderabad, made a presentation on Foreign Trade Policy.

Ms Priya Goel, Dy. Commissioner of Customs, Air Cargo Complex, Shamshabad, spoke on the role of Customs as a facilitator. Dr P.V. Appaji, Director General, Pharmexcil, made a presentation on Opportunities in Pharma Exports. A Handbook on Export Promotion, Andhra Pradesh Exporters Directory and Andhra Pradesh Trade Journal were released during the event by the Ministers and distributed among all the participants on the occasion. The programme ended with the presentation of a vote of thanks by Mr M. Sadhu Sundar, Managing Director, APTPC.