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Chairman Mr. Kamal M. Morarka Vice Chairmen Mr. Vijay G. Kalantri Capt. Somesh C. Batra Mr. Sharad P. Upasani Executive Director Mr. Y. R. Warerkar Editorial Board Mr. Y. R. Warerkar, Editor/Publisher Ms. Debjani Chowdhury, Joint Director-Research Mr. A. O. Kuruvila, Deputy Director-Research Mr. Bhalchandra Akut, Deputy Director-Finance & Accounts Ms. Khyati Naravane, Assistant Director-Trade Promotion Ms. Rohini Salve, Sr. Officer-Legal & Secretarial The information contained in this Journal has been reviewed for accuracy and is deemed reliable but is not necessarily complete and cannot be guaranteed. The views expressed in the articles appearing in this Journal are those of the authors and do not necessary reflect the views of the Centre Printed at Union Press 13 Homji Street, 16 Horniman Circle, Fort, Mumbai 400 001. Editorial Office M. Visvesvaraya Industrial Research and Development Centre (Member : World Trade Centres Association Inc.) Centre 1, 31st Floor, World Trade Centre Cuffe Parade, Mumbai 400 005 (India) Tel. : 6638 7272 Fax : 91-22-2218 8385 E-mail : research@wtcmumbai.org Web : www.wtcmumbai.org For Private Circulation
Contents
EDITORIAL FOCUS National Manufacturing Policy CURRENT RESEARCH WORLD ECONOMY INDIA & WORLD MARKETS INDIAN ECONOMY INDIAS FOREIGN TRADE WTO HIGHLIGHTS WTC MUMBAI EVENTS 11 19 21 25 27 30 33 2 3
Y. R. Warerkar
Focus
Salient Features of the National Manufacturing Policy
The Government of India has announced a national manufacturing policy with the objective of enhancing the share of manufacturing in GDP to 25% within a decade and creating 100 million jobs. It also seeks to empower rural youth by imparting necessary skill sets to make them employable. Sustainable development is integral to the spirit of the policy and technological value addition in manufacturing has received special focus. The share of manufacturing in Indias GDP has stagnated at 15-16% since 1980 while the share in comparable economies in Asia is much higher at 25 to 34%. Inadequate physical infrastructure, complex regulatory environment and inadequate availability of skilled manpower have constrained the growth of manufacturing in India. Recognizing that the manufacturing sector has a multiplier effect on the creation of jobs, even in allied sectors, the government has brought out this policy. The policy is based on the principle of industrial growth in partnership with the States. The Central Government will create the enabling policy frame work, provide incentives for infrastructure development on a Public Private Partnership (PPP) basis through appropriate financing instruments, and State Governments will be encouraged to adopt the instrumentalities provided in the policy. The proposals in the policy are generally sector neutral, location neutral and technology neutral except incentivization of green technology. While the National Investment and Manufacturing Zones (NIMZs) are an important instrumentality, the proposals contained in the Policy apply to manufacturing industry throughout the country including wherever industry is able to organize itself into clusters and adopt a model of selfregulation as enunciated. The National Manufacturing Policy is to bring about a quantitative and qualitative change with the following six objectives: i. Increase manufacturing sector growth to 12-14% over the medium term to make it the engine of growth for the economy. The 2 to 4 % differential over the medium term growth rate of the overall economy will enable manufacturing to contribute at least 25% of the National GDP by 2022. Increase the rate of job creation in manufacturing to create 100 million additional jobs by 2022. v. Enhance global competitiveness of Indian manufacturing through appropriate policy support.
vi. Ensure sustainability of growth, particularly with regard to the environment including energy efficiency, optimal utilization of natural resources and restoration of damaged/ degraded eco-systems. In order to achieve these goals:i. Foreign investments and technologies will be welcomed while leveraging the countrys expanding market for manufactured goods to induce the building of more manufacturing capabilities and technologies within the country; Competitiveness of enterprises in the country will be the guiding principle in the design and implementation of policies and programmes;
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iii. Creation of appropriate skill sets among the rural migrant and urban poor to make growth inclusive. iv. Increase domestic value addition and technological depth in manufacturing.
iii. Compliance burden on industry arising out of procedural and regulatory formalities will be reduced through rationalization of business regulations. iv. Innovation will be encouraged for augmenting productivity, quality, and growth of enterprises; and v. Effective consultative mechanism with all stake
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holders will be instituted to ensure mid-course corrections. The following industry verticals will be given special attention: i. Employment intensive industries: Adequate support will be given to promote and strengthen employment intensive industries to ensure job creation. Special attention will be given in respect of textiles and garments; leather and footwear; gems and jewellery; and food processing industries ii. Capital Goods: A robust economic growth would necessitate a strong demand for capital goods. Such growth would create a strong and continuing demand for capital goods. The capital goods industry, which is the mother industry for manufacturing has not grown at the desired pace. A special focus will be given to machine tools; heavy electrical equipments; heavy transport, earth moving and mining equipments. iii. Time bound programmes will be initiated for building strong capacities with R&D facilities and also to encourage growth and development of these capacities in the private sector while strategically strengthening the public sector to complement the private initiatives where essential.
capabilities to make India a major force in sectors like aerospace; shipping; IT hardware and electronics; telecommunication equipment; defence equipment; and solar energy. Mission mode projects will be conceptualised in each of these sectors, recognizing the fact that a mission on solar energy has already been launched under the National Action Plan on Climate Change. v. Industries where India enjoys a competitive advantage: Indias large domestic market coupled with a strong engineering base has created indigenous expertise and cost effective manufacturing in automobiles; pharmaceuticals; and medical equipment. The concerned ministries will be formulating special programmes to consolidate strong industry base to retain the global leadership position. vi. Small and Medium Enterprises : The SME sector contributes about 45% to the manufacturing output, 40% of the total exports, and offers employment opportunities both for self-employment and jobs, across diverse geographies. A healthy rate of growth shall be ensured for the overall growth of the manufacturing sector as also the national economy by policy interventions in areas like manufacturing management, including accelerated adoption of Information technology; skill development; access to capital; marketing; procedural
simplification and governance reform. vii. The National Manufacturing Competitiveness Programme, being implemented by M/o MSME will be strengthened, and the recommendations of Task Force on MSME for creation of a separate fund with SIDBI, strengthening of NSIC, modification of lending norms and inclusion of lending to MSMEs under priority sector lending will be given due regard in taking appropriate measures. viii. Public Sector Enterprises: Public Sector Undertakings, especially those in Defence and Energy sectors, continue to play a major role in the growth of manufacturing as well as of the national economy. A suitable policy framework will be formulated in this regard to make PSUs competitive while ensuring functional autonomy. Specific policy instruments have been conceptualized to achieve the objectives stated above. These instruments which are outlined in greater detail in Part-B of the Policy document broadly cover the following areas:i. Rationalization and simplification of business regulations;
iv. Industries
significance:
with
strategic
FOCUS
A strategic requirement of the country would warrant the launch of programmes to build national
ii. Simple and expeditious exit mechanism for closure of sick units while protecting labour interests; iii. Financial and institutional mechanisms for technology
OCTOBER - DECEMBER 2011 | 4
development, including green technologies; iv. Industrial training and skill up gradation measures; v. Incentives for SMEs; vi. Special Focus Sectors; vii. Leveraging infrastructure deficit and government procurement - including defence; viii. Clustering and aggregation : National Investment and Manufacturing Zones (NIMZs); ix. Trade Policy. Global experience of manufacturing has shown the advantages of clustering and agglomeration as it enhances supply chain responsiveness provides easier access to market, talent and substantially lowers logistic costs. Though the government has been executing multiple schemes for promoting industrial clusters, full benefits of agglomeration are yet to be realized. One of the key instruments to catalyze the growth of manufacturing will be establishment of National Investment and Manufacturing Zones (NIMZs) which will be developed in the nature of green field industrial townships, benchmarked with the best manufacturing hubs in the world. These will also help us to meet the increasing demand for creating world-class urban centres in India, while will also absorb surplus
labour by providing them gainful employment opportunities. These NIMZs will seek to address the infrastructural bottleneck which has been cited as a constraining factor for the growth of manufacturing. A comprehensive exit policy will be put in place which will promote productivity while providing flexibility by removing rigidity in the labour market and ensuring protection of workers rights as laid down in the statute. The growth of manufacturing has to come hand in hand with the concerted thrust on skill development programme. The National Skill Development Initiative launched by the Government of India has provided a renewed thrust to build productive capacities. This Policy seeks to make skill development integral to productive enterprise in the country which would be supported by robust government institutions. The thrust with regard to labour management will be to encourage unions and employers to develop better institutional arrangements in the states, and within production units, through dialogue and consultation. The stress will be on rationalisation in employment laws and in shop floor practices. Manufacturing management will be given a focused attention as it will facilitate improvement of productivity, quality and competitiveness of manufacturing enterprise. Industry will be
encouraged to collaborate with higher educational institutions to develop curricula for grooming graduate engineers and supervisory managers for various facets of manufacturing. In the context of sustainable development and in order to drive the greening of manufacturing operations and to explore the emerging technologies in this area, which offer opportunities to build local and global leadership, the government will take recourse to both regulatory as well as market based policy interventions. Government would prescribe emission and discharge standards, excluding green house gas emissions, and the choice of technologies to meet the standards would be decided by the project promoters. The Government will provide continuous incentives, monetary and otherwise, to encourage polluting entities to reduce releases of harmful pollutants to ensure that the standards are complied with. Land has emerged as a major constraint for industrial growth in recent years. The Government will take measures to make industrial land available, which is critical for sustained industrial growth through creation of land banks by States; digitization of land and resources maps; and programmes for utilization of lands locked under non productive uses, including defunct or sick industries.
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Manufacturing and technology development are closely interconnected as technologies become useful when they are converted into products through manufacturing and the feedback from manufacturing fosters continuing technology development. By leveraging the strength of our large market, policies and measures will be taken to ensure access for Indian companies to foreign technologies as well as development of advanced indigenous technologies. These would include: i. Incentives, in the form of tax concessions and government subsidies, for indigenous development of technology; Partnerships between industries and government laboratories;
of technologies within the country and v. Joint ventures between foreign companies and Indian partners. Trade and investment policy are inextricably linked with manufacturing policy to ensure greater harmony of objectives. While India will continue to integrate itself with the globalised world through bilateral and regional free trade agreements/ comprehensive economic partnership agreements, it will be ensured that such agreements do not have a detrimental effect on domestic manufacturing in India. The government will also consider use of public procurement in specified sectors with stipulation of local value addition in areas of critical technologies and wherever necessary such as solar energy equipment, electronic hardware, fuel efficient transport equipment and IT based security systems. The growth of manufacturing at over 12 percent per annum over the medium to long term would exert a lot of pressure on raw materials markets. Arrangements for assured supply of such materials over the long term will be put in place. Acquisition of advanced technology companies would facilitate transfer of technology to the parent manufacturing
company, while acquisition of companies enjoying better brand value or strategic location advantages would enhance market access of Indian firms. For these to be achieved a clear set of policy guidelines will be put in place by the Government. Implementation of the policy is as important as policy making itself, as unless properly implemented, the policy by itself will not deliver the desired result. In order to ensure effective implementation of the Policy, a manufacturing policy review mechanism will be instituted and a high-level committee chaired by Secretary, Department of Industrial Policy and Promotion will monitor the implementation on a regular basis. A Manufacturing Industry Promotion Board (MIPB) at the level of Union Minister of Commerce and Industry will be constituted to ensure coordination amongst Central Ministries and State Governments. State Governments would need to be equal partners in giving effect to this policy and the State Industry Ministers Conference will be convened on a half-yearly basis to initiate a dialogue for giving a focused thrust to manufacturing.
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iii. Preferential purchases by government agencies of indigenously developed products and technologies; iv. Judicious development of an Intellectual Property regime to enable more collaborative innovation, as well as more indigenous innovation and improved access to environmentally friendly technologies. India will be very cautious about further expansions beyond the present TRIPS regime which could have implications on development and ownership
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Key Objectives
The NMP is based on the following four key objectives: 1. To promote investments in the manufacturing sector and to make the country a hub for both domestic and international markets 2. To increase the sectoral share of manufacturing in GDP by 25 per cent in 2022
FOCUS
Anecdotal evidence suggests that India may well be on its way to becoming a global manufacturing hub. The pace seems to have increased at a time when the Western economies have yet to witness a pick up investments in their own economies.
FOCUS
Entrepreneurial Spirit
India is known for its entrepreneurship and there are millions of entrepreneurs largely in the small-scale sector.However Indias manufacturing growth pales into insignificance. Any manufacturing policy is not worth its salt if it does not care for taking advantage of this entrepreneurial spirit. It is heartening to know that the government plans to exempt the sales of a house or any other asset from capital gains tax if the proceeds are used to set up a business. Such a concession in the proposed manufacturing policy would only help to swell the number of entrepreneurs. NMP is likely to prove a dream-cumtrue for the small and medium-scale entrepreneurs (SMEs). It is all set to make their life a little easy. If NMP sets out to do what it has stated, SMEs will see a reduced burden of regularity compliances, will have better access to technology and finance and would enjoy select incentives.
How this will help SMEs? Granting the priority sector status will require banks to mandatorily allocate a certain proportion of their priority lending to this segment thus improving borrowing prospects of SMEs. The policy will also give a boost to SMEs in using improved technology. SMEs will have access to patent pool created by the government through Technology Acquisition & Development Fund. SMEs may also choose to get reimbursement for technologies that they acquire up to Rs 20 lakh. Land which is a crucial resource for SMEs to carry out their manufacturing business is too expensive especially in areas which have infrastructure access. The proposed clusters of special manufacturing zones may if the state concerned desires so allot a certain percentage of land in the zones to SMEs. Such space whether leased out of sold can be expected to be fairly priced compared to the existing market rates. The pooled infrastructure facilities already available in such zones will also reduce fixed costs for small players. The policy also sets out to reduce the burden of SMEs in complying with regulations by setting up organizations that will look into compliance of routine issues such as provident fund, employees state insurance pension schemes and so on for a small fee. While the above are some of the direct benefits that manufacturing policy expects to provide, budding entrepreneurs will also do well to look
out the business opportunities arising from this policy. Industries that make LED, solar energy equipment, fuel- efficient transport system, IT hardware, IT-based security system and hybrid electric automobiles will stand to gain from the governments procurement policy, provided there is local value additions/ use of technology by the companies. An uptick in demand arising from government procurement may provide room for more players. The policy will also provide incentives for production of certain equipment and devices. equipment to This will include reduce energy
consumption such as energyconservative lighting technologies, smart-grid solutions equipment to produce renewable energy, from solar, wind, hydro or geo-thermal sources. Production of energy-storages for use with electric or hybrid motor vehicles and those used for water conservation will also be encouraged. Besides an incentive of 10 per cent subsidy on capital cost and five per cent interest reimbursement on nominal rates charged by lenders will be given. While these are not necessarily targeted at SMEs some of the businesses may well be compact enough to and fit in SME bill. Together with thrust of on increased financing options, these technology-intensive industries may become more penetrable segments of SMEs. Since National Manufacturing Policy have their state manufacturing
FOCUS
policies, NMP is poised to create more jobs and help to de-risk a unemployment. Incremental job security could be coupled with and new workers. degree of differentiation between old
The manufacturing policy, when approved for implementation should also have provisions for rationalization and simplification of business negotiations, simple and expeditious exit mechanism for closure of sick units, financial and institutional
mechanisms
for technology
development and skill up gradation, incentives for small industries, government procurement including defence and trade policy.
Current Research
Industrial Development and Environmental Issues
Dr S.C.Lahiry* New areas have been brought under industrialization after independence of our country as per the policy of the Govt of India (GOI) for balanced regional development. The establishment of industries at locations has no doubt, brought about material wealth. Besides, these units have provided direct employment opportunities, modern amenities, better health and education facilities to the local population. However, the industrialization has led to the degradation of environment due to industrial pollution. With the operating industries, a cent per cent pollution free environment is a myth. It is neither possible nor necessary. It is imperative, to ensure, that each of these industrial units does cause, the least possible pollution. A number of industries in the public sector and corporate sector have adopted effective pollution control measures while a significant number of industries especially small and tiny sectors have yet to adopt adequate pollution control devices. innovative recycling techniques. Products like flyash cement, fly ash block, recycled tiles, recycled aluminium, recycled steel, environment friendly paints, bamboo based products,etc are available in India.It is, therefore, of paramount importance to step up commercial utilization of industrial waste which could be accomplished by involving the industries, users, concerned State and Central Govt. Departments. Industries have to be made responsible to do recycling of their waste, on a regular basis, through legislation and strict enforcement. Hazardous industrial waste presents immediate or long-term risks to humans, animals, plants, or the environment. It requires special handling for detoxification or safe disposal. conventional building. The concept of Green Building is pacing up, some projects go Green to get a cutting edge in the market over others, while some go green for tax incentives offered by the Govt, and some largely for a growing environmental concern.
Green Technology
Time has come to preserve our environment and replenish those which have been destroyed. People are more conscious about the environment now and are aware of the different kinds of environmental hazards that could affect our future. The rising sense of green among people has led to cost savings and creating sustainable living. According to the Indian Green Building Council: A green building is one which uses and provides healthier spaces for occupants as compared to
Utilization of Waste
The problems of accumulation of industrial waste have assumed significant proportions while their utilization aspects had been neglected for quite long. Some headway in this regard has since been reported. Scientists have been researching worldwide towards development of
(FBC) / gasification and so on have been underway. The GOI has launched supercritical power programme on the lines of the USA, Japan, Germany, Korea and Russia. Currently SCT is under installation at Sipat (Bilaspur) and Barh (Bihar) thermal power plants of National Thermal Power Corporation (NTPC). NTPC and State Power Utilities in addition, have proposed to set up a no of 600/800 MW power stations based on SCT. Its advantage is higher efficiency and saving fuel resources.
House Gas (GHG) concentrations in the atmosphere at a level that would minimize interference with the climate system. The major feature of the Kyoto Protocol is that it sets binding targets for 37 industrialized countries and the European community for reducing GHG emissions .These amount to an average of five per cent against 1990 levels over the five-year period 20082012. India is not required to reduce emission of GHG under the Protocol. However, India is vulnerable to climate change and is striving for having a fair and equitable global agreement for minimizing the risk of climate change. It may be noted that former Environment Minister of India Mr.Jairam Ramesh had announced that India would reduce the emissions
intensity of its GDP by 20-25 percent over the 2005 levels by the year 2020, through pursuit of proactive policies. However Indias more flexible approach has not worked in pursuing developed countries undertaking emission mitigation commitments. In the ensuing Durban Summit( to be held in Dec2011) on Climate Change, let developed countries pledge strong emission reduction targets given in Kyoto Protocol agreements before ourselves taking on greater responsibility of a legally binding nature. *Dr S.C.Lahiry was former Chief Executive in Haryana Environmental Management Society.
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1. Economy
The Maltese economy has weathered the global recession relatively well, as recognized by the International Monetary Fund in its latest Article IV Consultation Report. The brief recession experienced in Malta in 2009 was mainly due to the exogenous shocks that affected negatively domestic developments in light of the openness of the local economy. The developments in the Maltese financial sector have been underpinned by conservative funding models and modest leverage ratios, consequently the Central Bank of Malta did not have to intervene in any financial institutions. The Government was very prompt to set up a task force to assist the companies that were experiencing difficulties due to the recession to invest in new lines of operations and retrain their workers to ensure their sustainability. Through such action, the effects of the crisis were largely contained and Malta managed to keep its unemployment levels at one of the lowest rates in the EU whilst it returned to economic growth almost immediately. As part of its strategy, the Government identified a number of key pillars of the economy such as tourism, high value added manufacturing including
electronics and pharmaceuticals, ICT, financial services, education and training, aviation, creative arts and gaming, as well as healthcare and provides tailor-made assistance to ensure the sectors in question maintain their positive performance. The assistance provided includes a myriad of incentives and schemes to facilitate investment, as well as capacity building not only in terms of infrastructure but also in terms of education and training to ensure a highly-skilled workforce is always available. During the second quarter of 2011, the Maltese economy in real terms expanded by 2.8 per cent, on an annual basis. This rate of economic growth was slightly higher than that recorded in the first quarter of 2011, which stood at 2.3 per cent. The real growth rate recorded by the Maltese economy for the second quarter was 1.1 percentage points higher than the average real growth rate recorded in the EU27, which amounted to 1.7%.
previous year. Nevertheless, Malta remains with a trade balance deficit in view of the fact that it has limited natural resources and thus most of the required goods or materials have to be imported. The value of imports to Malta in 2010 stood at 3.7 billion, up from 3.1 billion in the previous year. Maltas main trading partners are found within the European region, particularly within the EU of which Malta is also a member state. Other important markets are located in Asia, but also in North Africa and the Middle East. The services industry is by far the major contributor to the economy in Malta. Indeed, the various sectors within the services industry collectively generated 78.8 per cent of the countrys Gross Value Added in 2010. On the other hand, the manufacturing industry contributed 15.8 per cent of the Gross Value Added generated in Malta in the past year. Malta will seek to strengthen and promote relations with existing and emerging major economies, with the aim of increasing the presence of Maltas goods and services in these markets and attracting inward investment to Malta. Efforts will focus on consolidating Maltas economic
CURRENT RESEARCH
and political relationships with existing major economies such as the EU and the US, but also targeting new and emerging economies such as India, China, Brazil and South Africa. Besides opening the way for a Single Home European Market of over 500 million consumers, upon EU membership Malta also subscribed to the EUs Commercial Policy and became party to all of the EUs preferential third country trade agreements. Of particular importance to Malta are the Free Trade Agreements that the EU has negotiated with the Euro-Med region - Algeria, Morocco, Tunisia, Egypt, Israel, Lebanon, Palestinian Authority, Jordan, Syria, and Turkey, the latter via-a-vis Customs Union arrangement. Other free Trade Agreements include those with the Western Balkans, Norway and Switzerland, South Africa, Mexico and South Korea. In addition, the EU is negotiating Free Trade Agreements with MERCOSUR and has also resumed talks with the aim of concluding Free Trade Agreements with the Gulf Cooperation Council. Talks are also underway for the EU to negotiate Free Trade Agreements with various other countries including Ukraine, India, Malaysia and other ASEAN countries. As an EU member, Malta also grants preferences to imports originating in developing countries including India and in least developed countries through the Generalised System of Preferences.
Maltas major exports were electrical machinery and equipment, which exceeded 1 billion in 2010. Other major sectors for exports included pharmaceutical products, mineral fuels and oils or products thereof, printed books and newspapers, as well as toys, games and sports requisites. In view of the fact that most goods exported by Malta are characterized by a high level of import content, the main sectors for imports are rather similar and comprise either raw materials or else the base product which is then used in the value adding processes applied in Malta. Indeed, during the past year most imports were within sectors such as electrical machinery and equipment, mineral fuels and oils or products thereof, aircraft and parts thereof, machinery and mechanical appliances, as well as plastics.
embassy in Tripoli, Libya. It also has an Honorary Consulate in Valletta. Despite the considerable geographical and demographic differences, Malta and India share a parallel in history and both have English as an official language. In addition, the two democracies share common values and sit together in several multilateral fora, such as Commonwealth, the United Nations and other agencies for the promotion of international peace and stability. Over the years, there has been substantial interaction between Malta and India, which has helped in identifying common objectives and aspirations. The two countries are appreciative of the multitude of opportunities that arise through greater co-operation. This interaction includes regular political and trade visits between the two countries. Malta and India enjoy a number of similarities in the economic dimension. As India excels in technological areas such as ICT, pharmaceuticals and health care, Malta is also a prominent European hub in such fields. In fact, avenues for co-operation such as business and research exchanges stimulate both sides. Throughout the years relations between Malta and India have led to growing converging interests which helped in laying down solid foundations for the build-up of a strong continuous and friendly relationship.
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CURRENT RESEARCH
amongst those that can most benefit from this factor by taking advantage of Maltas high propensity to trade, which has throughout the years enabled it to develop excellent facilities including extensive transhipment, maritime and aviation services, as well as enacting legislation facilitating increased exchanges. Indeed, despite its small size Malta has a dynamic economy based on international trade and international business, with a welldiversified offering based on export trade, a vast services industry including ICT, financial services and a well-developed tourist industry, as well as an advanced manufacturing base that amongst others comprises a sound pharmaceutical industry and bio-medical technologies. More than 200 international companies have established manufacturing operations in Malta, with their continued investment providing enough proof to the quality and productivity levels that can be achieved and to the countrys capability to adapt to demands of high technology production methods. Malta has also devised economic plans which are designed to provoke greater economic activity by incentivising work and stimulating demand, placing the flexibility, innovation capabilities and adaptability of its workforce at the core of its strategy. Amongst others, Maltas targets are to
achieve higher productivity and greater competitiveness; cut down on bureaucracy and improve efficiency to further enhance the business-friendly environment; improve existing levels of education and training; as well as move up the value chain with greater focus on higher-value-added goods and services. The Government is also committed to place the environment at the centre of its policies, working with both the private sector and civil society to instil a sustained national environmental conscience. The fact that many international companies have chosen Malta as their relocation base signifies that Malta has its cards in order to attract high value added yielding operations to its shores. One good testimony to describing Malta as a reliable investment location is to highlight the success stories operating in Malta the track record of some high profile companies, like the German companies Playmobil and Lufthansa Technik, consolidates the argument that Malta is truly the place to do business.
5. Important Policies
Maltas foreign policy sets out the aim of contributing in a world that has shrunk into a global village through creative participation in a way that brings long-term prosperity and welfare to all countries, particularly those bordering the Mediterranean Sea. With its strategic location in close proximity to Europe, North Africa and the Middle East, Malta is seeking to exploit other new opportunities which have arisen from the context of EU membership and the increased visibility it has given Malta by harnessing its geo-political relevance and position itself as a dual gateway to its neighbouring markets. New emerging major economies such as India and China are
While the corporate tax rate in Malta stands at 35% - which is also the maximum rate for individuals - Malta has a single imputation system through which, upon distribution of dividends, shareholders may benefit from a
OCTOBER - DECEMBER 2011 | 15
CURRENT RESEARCH
6. Investment Opportunities
refund that effectively reduces their tax rate to 5%. Tax liability can be further reduced through a mechanism of tax credits that Malta Enterprise grants to enterprises in selected sectors. Such companies may claim tax credits equivalent to 30% or 50% (depending on its size) of either the cost of capital investment including plant, machine and equipment or of employees wages. Additionally, Malta has signed double taxation agreements with almost 60 other countries, including India. The Business Promotion Act and the Malta Enterprise Act are also noteworthy as they provide for the wide range of assistance, schemes and incentives available for investors who wish to set up and who operate in Malta, while the Small Business Act which is currently being drafted will seek to improve even further the business-friendly environment for SMEs. Malta Enterprise the Governments Corporation responsible for the promotion of trade and investment as well as economic development in Malta administers a wide range of schemes and incentives aimed at enhancing even further the business-friendly environment and encourage investment, increased application of R&D and innovation processes, assist in the internationalisation efforts and sustain competitiveness.
Additionally, the Corporation also assists enterprises operating in the country through European programmes or networks it represents Malta. Among others, it also manages European funds which Malta obtains for the local enterprises. For a full list of schemes and incentives, visit http://support.maltaenterprise.com There are no limitations on the repatriation of profits from Malta. Moreover, repatriation of profits is tax free as Malta does not charge any withholding taxes on payment of dividends to non-residents. In addition, interest and royalties paid to non-residents are also free of tax, increasing the potential for efficient tax planning. The absence of transfer-pricing rules, thin capitalization regulations, CFC regulations or annual wealth taxes is an added bonus to investors.
efficient tax system, competitive cost structures with low social costs and competitive labour costs, as well as an attractive incentives package all within a country renowned for its excellent quality of life and safe environment.
8.
Important Contacts
1. Malta Enterprise Head Office W : www.maltaenterprise.com T : +356 25420000 E : info@maltaenterprise.com 2. Malta Enterprise India Office 13, Business Centre, 1st Floor, Centre One Building, World Trade Centre, Cuffe Parade, Mumbai-400005 T : +91 2266387350 E : india@maltaenterprise.com 3. Malta High Commission in India N60, Panchsheel Park, New Delhi 110 017, India T : +91 1147674900 E : maltahighcommission.newdelhi@gov.mt
4. Indian High Commission accredited to Malta Nafleen Area, Near Fashloom Roundabout, PO Box 3150, Tripoli, Libya T : +218 (21) 340 9288/89 E : indembtrip@hotmail.com 5. Hon. Consulate of India in Malta 67, Canon Road, Santa Venera, SVR 9037 T : +356 21222346 E : info@india.org.mt
CURRENT RESEARCH
Introduction
Indias economic engagement with the European Union (EU), the 27-nation bloc., is time-tested and based on shared complementarities. The EU is Indias foremost trading partner and together India and the EU constitute a huge 1.7 billion market. India EU economic co-operation spans in diverse areas and continues to expand with considerable gains for both sides. Both India and the EU have now decided to formalize a Free Trade Agreement with a view to steer our bilateral co-operation to the next higher level.
markets and by the stimulus the agreement will give to the transfer of technology and know-how and to inward investment in agriculture, manufacturing, services and infrastructure. The Agreement will support Indias own agenda for export growth, inclusive development, modernization and closer integration into global markets.
of FDI for India. However, the FDI inflows from the EU to India declined from Euro 4 billion in 2007 to euro 3 billion in 2010. India has also emerged as a major investor in the EU countries with total investment from India increasing from euro 1 billion in the year 2007 to Euro 3.69 billion in 2008. However, Indian inward investment to EU in 2010 declined to 0.6 billion. It is hoped that the FTA would strengthen FDI inflows between India and the EU in the coming years.
Bilateral Trade
Bilateral trade between the European Union and India continues to rise steadily. Total two way trade in goods and services in 2010 reached 86 billion. Some 80% of bilateral trade is in goods; it increased by 28% in 2010 to reach a value of 68 billion. The rest is trade in services, which increased less quickly in 2010- but still at a double digit rate of 12% - to reach 18 billion. 2010 therefore marked a strong recovery in bilateral trade flows from the slow-down seen in 2009, which was largely triggered by the global economic crisis. Moreover, the positive trend has been maintained in the first half of the current year with two- way trade in goods reaching 41 billion, an increase of no less than 23% over the first half of 2010. Indian exporters are also benefiting from this trend-so it would seem that for now the slower rate of recovery in Europe from the global crisis is not negatively impacting demand for Indian goods.
EU India FTA
India is hopeful of concluding a comprehensive free trade agreement with the European Union in the near future, perhaps early 2012, as the negotiations are in advanced stage with the 27-nation bloc. India is in talks with the EU since June 2007 for liberalizing trade in goods, services and investments through a Broadbased Trade and Investment Agreement (BTIA). The FTA would involve slashing of duties on over 90 per cent of the trade and opening up of the mutual markets for services and investment. The FTA is a potential game-changer and a key tool for enhancing two-way trade and investment and bringing the bilateral relationship to a new level. Undoubtedly, over time India will gain from better access to European
FDI
The EU is one of the largest sources
CURRENT RESEARCH
Under the framework of New INDIGO, a project sponsored by the Ministry of Science & Technology, Government of India and several EU partner countries both India and EU will work together to create coherent synergy in Europes partnership with India in Science, Research & Technology. Regarding Indias rising importance not only in economical and political terms , but also from a scientific point of view, India has been identified a strategic target country by the European Commission. Long standing cooperation between India and certain European countries, especially France, Germany and the UK is vigorous and fruitful. Despite these facts relationships with India in R&D have not been harmonized so far at a European level. There is little multilateral Science & Technology cooperation between the European Union and India and there is no dedicated programme of cooperation between these two scientific poles. The aim of New INDIGO is to help bridge these gaps and ultimately provide the most relevant framework
to allow the scientific community and institutions of India to access the European Research and Science & Technology area.
stress has moved from smaller economies in the 17-nation eurozone to some of the larger countries and shaken world markets. Eurozone is frantically attempting Greeces bail out and a strategy to recapitalize the regions banks. At a recent meeting, the Group of G-20 finance ministers called upon the Eurozone to arrange a credible plan for the recapitalization of Europes banks and install a mechanism to protect other countries from Greeces woes. While global economy is beginning to feel the impact of the crisis, there is little doubt Eurozone crisis will hurt Indias trade and economic co-operation for some time to come. Indian policy-makers need to carefully watch the developments in Europe and strategise to minimize the damages to Indian businesses. While this may be so in the short run, Europe remains an important hub for India to look at for greater engagement in trade, investments, services and transfer of technology.
Infrastructure
There is enormous scope for India, EU cooperation in the infrastructure sector. Indias economic growth in the future will be propelled by infrastructure. The government of India has undertaken an ambitious programme to develop Indias infrastructure, namely roads, railways, ports, airports, telecom and urban infrastructure with mammoth investment of $500 billion in the next few years. This opens up excellent opportunities for joint India-EU partnerships in various infrastructure projects in India.
Eurozone Crisis
Eurozone is in the grip of acute sovereign debt crisis. The crisis, with its epicentre Greece, is gradually spilling over to other nations in the Eurozone. Greece remains the most contentious issue. The sovereign
CURRENT RESEARCH
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World Economy
Euro Crisis Solution still Elusive
Europe stood divided on December 9 in a historic rift over building a fiscal union to preserve the euro, with a large majority of countries led by German and France agreeing to move ahead with a separate treaty, leaving Britain isolated. Twenty-three of the 27 leaders agreed to pursue higher integration with stricter budget rules for the single currency area, but Britain said it could not accept proposed amendments in the EU treaty after failing to secure concession for itself. After 10 hours of talk, all 17 members of the euro zone and six countries that aspire to join resolved to negotiate a new agreement, alongside the EU treaty, with a tougher deficit and debt regime to insulate euro zone against the debt crisis European Central Bank (ECB) feels the decision a step forward for stricter budget rules, which is necessary if the 17-nation euro zone is to emerge stronger from two years of market turmoil. Its going to be the basis for a good fiscal compact and more discipline in economic policy in the euro area members. November for the first time since February 2009 as the property market cooled and Europes turmoil cut export demand. In Britain and the 17-nation euro area, manufacturing shrank at the fastest face in about two-and-half month as the region edged towards recession. There is more evidence that the global economic recovery is running out of steam. It is clear that manufacturing across a range of countries is being effected by a renewed slowdown in global trade. Manufacturers are suffering as the global economy cools. The Organization for Economic and Development (OECD) said that trade in merchandise stalled in most major economies in the third quarter. The OECD cut growth forecasts for its 34 member-states during December to reflect doubts that European monetary union will survive the crisis. While production slows in Asia and Europe, it probably grew in November in the U.S. at the fastest rate in five months showing factories will keep supporting expansion through the end of the year. The ISMs factory index rose to 51.8 in November from 50.8 in October. Fifty is the dividing line between growth and contraction. Manufacturing declined across Europe, according to December 1st reports. In the U.K., a gauge of factory output based on a survey by Market Economies and the Chartered Institute of Purchasing and Supply fell to 47.6 from 47.8 in October. New orders fell for a fifth month. A manufacturing gauge based on survey of purchasing managers in the euro region fell to 46.4, the lowest since July 2009. European companies are under increasing pressure to cut across to protect earnings as faltering global demand erodes exports jut as euro region governments toughen spending cuts. Unemployment rose to 10.3 per cent in October, the highest in more than 13 years and the manufacturers were most pessimistic in almost two years in November. Norways manufacturing contracted for the first time in almost two years, while Sweden slumped for a fourth consecutive month as the exportdependent Nordic countries suffer from falling demand for their products. In Asia, the Purchasing Managers Index for China fell to 49.0 in November from 50.4 in October, according to the Federation of Logistics and Purchasing. Chinas central bank on the night of November 30 announced the first cut in banks reserves requirements since 2008, moving two hours before the US Federal Reserve led a global effort s to ease Europes debt crisis. The move will add about 370 billion yuan (US$ 58 billion) to the financial system and more reductions may follow as the government seeks to boost growth.
reading of 99.8, down from 99.9. Among other emerging market economies, Brazils CLI fell to 94.0 from 95.1 while Indias reading decreased to 93.8 from 94.4. In a report last month, the OECD slashed its 2012 growth estimate for the US to 1.8%.
affiliated body. Expansions in Asian nations from China to South Korea to the Philippines are already showing signs of cooling. International Monetary Fund said that Japan needed to swiftly implement reconstruction spending. It is predicted that the pace of growth will dip below 2% in the first half of 2012. Japans economic growth will remain elevated, mainly on domestic demand. Companies plan to cut machinery orders in the quarter ending December 31, a government survey showed, a sign growth may slow even as government spending for reconstruction takes effect.
WORLD ECONOMY
Economic momentum in the United States eased only slightly, according to the OECDs indicator, which fell to 101.2 from 101.5. The Chinese economy also showed only marginally weaker activity with a
of South African President Mr. Jacob Zuma to India in June, 2010. A revised bilateral trade target of US $ 15 billion has been set for the year 2014 during the meeting of Minister of Commerce and Industry, Govt. of India and the Minister of Trade and Industry, Govt. of South Africa held on 10th January, 2011. The bilateral trade has shown a growth of 21 % in the first four months of the current Financial Year 2011-12, viz. April to July, 2011. Bilateral Trade during this period has reached US $ 4.77 bn, with Indias exports to South Africa as US $ 1,703 mn and imports from South Africa as US $ 3,069 mn. The trade balance was at present heavily in favour of South Africa, and there is need for reducing the same while making all efforts towards achieving the bilateral trade target. The proposed finalization of the IndiaSACU Preferential Trade Agreement (PTA), will give a considerable boost to the bilateral trade, and with the Southern African region as a whole. There is also substantial and healthy growth in two way investment flows. As regards South Africa, the cumulative value of FDI stock (Indian Investment in South Africa) would be over US$ 6.7 billion. The South African investments in India are also rising steadily and are around US$ 2 billion. There is need the two countries to focus on specific sectors like auto engineering, pharmaceuticals, IT, diamond and mining sectors in order to further enhance the growth in the bilateral trade and investment.
There exists growing trade and investment between the two countries in the face of the global financial slowdown (except in the year 200910). Indo-Belgium trade in 2010-11 was US$ 14.90 billion which saw a growth 52.44% over 2009-10. Exports to Belgium in 2010-11 have registered a growth of 67.49% at US $6.29 billion and imports have a growth of 43.04% at US $8.60 billion as compared to 2009-10. The balance of trade continues to be in favour of Belgium. The top sectors of exports which witnessed growth in F.Y. 2010-11 are gems & jewellery, primary & semifinished iron and steel, petroleum, readymade cotton, transport equipments etc. The primary & semifinished iron and steel (1264%) and petroleum (78.33%) saw the maximum growth. The top sectors of imports from Belgium are Pearls precious and semi precious stone, machinery, iron & steel, organic chemicals, artificial resins, plastic materials etc. The non ferrous metals (49.29%) and pearls precious and semi precious stone (48.37%) saw the maximum growth. The trade between the two countries is dominated at present by the gems and jewellery sector which accounts for about 61% of our bilateral trade and in this sector diamonds accounts for a large part of this trade, much of which happens with the city of Antwerp which is located in the Flemish region. Govt. of India feels that there is a need to diversify the trade to new areas. These promising areas include communication, pharmaceuticals, biotechnology, chemicals and automotive parts, energy, ports, dredging, construction, banking and
finance, electronics and software, chemicals and fertilizers, renewable energy and biotechnology. Regarding investment India pointed out the opportunities in Infrastructure that cover the whole gamut of infrastructure including highways, power plants, railways, airports, ports, waterways, industrial facilities etc. The government is committed to developing infrastructure on a big scale with active involvement of the private sector working under a predictable and stable regulatory environment. India too is an important investor in Flanders (northern part of Belgium that contains Brussels, Bruges, Ghent and Antwerp). India has invested about (1.2 billion euros) and has over 50 Indian companies. Indian investment includes greenfield investments, acquisitions and joint ventures. Year 2010 saw 8 new investment projects. Indian investment is seen across sector like ICT, pharma, transport & machinery and equipment.
India
by
Taking the first step towards granting the most favoured nation (MFN) status to India, Pakistan has agreed to allow import of all items, barring a few hundred on the negative list that will be ready by February 2012. This list, too, will be phased out by the end of year, resulting in grant of MFN status. However, the joint statement issued at the end of two-day trade secretarylevel talks did not say so in as many words. The negative list will be finalised and ratified by February 2012. Thereafter, all items other than those on the
negative list shall be freely exportable from India to Pakistan. Grant of MFN status would require Pakistan to put India on a par with other countries and allow import of all items, instead of just 1,933 items currently in the positive list, India had given MFN status to Pakistan in 1996. Both sides have also agreed to move towards, enhancing the preferential trading arrangements under the SAFTA process by extending tariff concessions on products of commercial interest. Both India and Pakistan are signatories of SAFTA, but have not given significant concessions to each other under it. India can export a host of items, including petroleum products, textile machinery, farm products, chemicals, pharmaceuticals and a whole range of consumer goods once it gets MFN status.
2010, the US services exports to India more than tripled, rising to more than $10.3 billion in 2010. If trade continues to expand at its current pace, total two-way trade in goods and services will surpass $100 billion in 2011 for the first year on record. Reflecting on the two-way nature of our relationship, India is also a growing source of foreign direct investment into the US. Total stock of FDI has grown at a compound annual growth rate of 35 per cent from 20042009, making India the 7th fastestgrowing source of investment in the US. With business-to-business engagement at the vanguard of our relations, these statistics point to the potential for even greater innovation and business development between the two knowledge-based societies. Outside of bilateral relationship, the US saw India as a major player on the global scene and is making a strategic bet on Indias future. The bet is that Indias greater role on the world stage will enhance peace and security, that opening Indias markets to the world will pave the way for greater regional and global prosperity and that Indias advances in science and technology will improve lives everywhere and Indias pluralistic democracy will produce results in terms of improvements for the lives of its citizens to inspire others to follow.
and also invite more Japanese investments into the country. India-Japan bilateral trade increased to $13.82 billion in 2010-11 from $10.36 billion in the previous fiscal. Although Japan has agreed to give Indian generics national treatment, it will only help in timely processing of applications as other rules that make Japan a difficult market remain unchanged. Indian pharmaceutical producers will still need to test their drugs in Japan despite testing them at home using international guidelines. India has not managed to penetrate even 1% of Japanese pharmaceuticals market, estimated at $100 billion a year. India and Japan signed a comprehensive economic pact to liberalise markets in goods and services and ease investment rules in February 2011 which came into force in August 2011. Japan has reduced tariffs on 82% of products including sea food, textiles, liquor, spices, cement and jewellery imported by it to zero with immediate effect. India will eliminate tariffs on about 90% of items and Japan on 97% items over the next ten years. Since Japan can import goods into India at concessional rates, it makes more sense for Japanese investors to invest in the country now. Under the CEPA, Japan has agreed to consider opening the market for nurses and caregivers for India by mutually recognising qualifications earned in the other country. Both countries are also working on an agreement for exempting workers of a country working for a short period in the other from contributing to the latters social security schemes. Developments on
India to seek Greater Market Access for Domestic Generic Drugs in Japan
India will seek greater market access for Indian generic medicines in Japan through dilution of non-tariff barriers
Sovereign wealth fund has expressed keen interest in investing in India. India will be investing US$ 1 trillion in infrastructure over the next 5 years and huge opportunities exist which include investment along the Delhi Mumbai Industrial Corridor. Returns on infrastructure in India are amongst the highest in the world. The DMIC projects, which are being de-risked before bidding by obtaining all necessary regulatory approvals, might appeal to ADIA for investments as such investments are likely to be profitable. Besides, the huge pent up demand for infrastructure in India makes most PPP projects viable and thus offers huge opportunities for investments. UAE is the topmost trading partner of India in the entire West Asia & North Africa (WANA) Region representing about 63% of Indias total trade with GCC countries 2010-11. Bilateral trade has registered an increase over 300% in the last five years. The total trade in 2010 has been US$ 60.357 billion. The exports from India have been US$ 29.456 and imports have been US$ 30.9 billion. Bilateral trade between January to November 2011 has been US $ 66.564 billion. The bilateral trade does not reflect the full potential and can be further exploited to mutual advantage of both the countries.
India would also assist Zimbabwe in bridging the technological gaps being faced by the country. Indian team would be visiting shortly to discuss the proposal for LOC of US $ 100 million for strengthening of health infrastructure. India will assist Zimbabwe in reviving its textile sector. This assurance was given by the commerce Minister of India during his meeting at Harare with the Ministry of Industry & Commerce of Zimbabwe. India will provide skills training and also help in the development of textiles clusters. Indo-Zimbabwe ties would further strengthened through the setting up of a Rural Technology Park and a Food Testing Laboratory in Zimbabwe by India. This was one of the commitments made by India during the India-Africa Forum Summit held at Addis Ababa in May 2011. The National Institute of Design (NID) India is undertaking a project for training and exposure to craftswomen of rural Africa to empower them through design intervention in basketry making, as part of the India-Africa Forum Summit Action Plan. The initiative will cover five African countries at a cost of US $ one million over a period of three years. The project will be launched in Zimbabwe in February 2012 with the team from NID visiting Zimbabwe for identification of 25 craftswomen, who would be later trained in India, in collaboration with New Basket Workshop Foundation, an African NGO. The project aims at women empowerment through skill enhancement and appropriate marketing through leading Indian brands like Fab-India.
In recent years many IT and mining companies have been investing in Australia in a big way. Housing has been another sector attracting Indian investment.
Indian Economy
Food Processing may Triple to $900 Billion by 2020: Study
The food processing industry is set to triple to reach $900 billion by 2020 according to, FICCI-BCG (Boston Consulting Group) study. Accounting for 16 per cent of the world population and 12 per cent of the world food production, today India is one of the largest producers and consumers of food in the world. According to the study, Indians spend approximately 35 per cent of their total spend on food a whopping $330 billion a year which will grow to approximately $900 billion by 2020. But food processing levels are substantially lower than most emerging and developed economies. Only 6 per cent of the agricultural produce in India is properly processed which is much lower than the 40 per cent in China and 80 per cent in Malaysia. The study further states that unlocking the potential of this sector will have significant social and economic impact both direct and indirect. It will increase and stabilise farmer incomes; provide greater variety, better and (potentially) cheaper products to consumers, create widescale employment, drive growth of several ancillary industries and potentially improve exports. The sector today is held back by several constraints an inconsistent and restrictive regulatory environment, lack of scale throughout the value chain, poor post harvest infrastructure leading to high levels of wastage, and insufficient soft infrastructure such as R&D capabilities and skilled manpower. The study highlights four main themes. These are focusing on: Key growth opportunities perishables, tertiary processing and fortification. Streamlining the supply chain - farm level productivity and pricing, simpler supply chain, adequate storage and transport infrastructure. Driving competitiveness - through technology, skill development, and driving scale and plant productivity. Policy priorities - reducing inconsistencies between the Centre and the State laws and regulations, building the right fiscal environment, and focus on execution. Indian food processing has the potential to be a driving force in Indias economic development and a catalyst of inclusive growth. It can increase farmer incomes by 20-40 per cent, create between 50-100 million jobs and dramatically improve nutrition levels. Success will require careful focus, strong commitment, tight execution and the willingness to make bold moves. Governments and industry alike will need to acknowledge the constraints holding back the sector and take joint initiative for driving this important agenda. grew at 8.8 percent in the last fiscal. A recovery in global activity and the associated boost to Indian export demand, as well as improving domestic sentiment, are not expected to support a marked pick-up in growth until late 2012, the report noted. A larger-than-anticipated fall in external demand or protracted weakness in the domestic sentiment could lead to a sharp slowing in growth. Even though the economy is slowing, persistent high inflation limits the room to relax monetary policy stance. It would be prudent to wait for clear signs that inflation is falling back to more comfortable levels, which is not expected until late 2012, before reducing interest rates, it said. As per its projections, India would see a growth of 7.7 percent growth in 2011, way below 9.9 percent expansion witnessed last year.
increased FDI into the country. The economy has remained steady at a robust 8.1 per cent and this positive consumer sentiment is seen reflected in the survey. In terms of gains, two countries-India and South Africa gained maximum economic confidence by five points and six points, respectively. Individually, Saudi Arabia experienced a six-point drop to 83 per cent but continued to hold its pole position, followed by India (75 per cent), Sweden (69 per cent), Canada (66 per cent) and China (65 per cent). The countries at the bottom of the heap were Hungary which lost two points and was at 2 per cent, Spain gained 2 points but was low at 5 per cent, and Japan further lost two points to stand at 6 per cent.
from 1.8 million MT in 2009-2010, registering a growth of over 28 per cent. This is predicted to reach 4 Million MT by 2014.Seventy five per cent of the forging business was domestic. By offering innovative products, the forging industry is seeking to increase the overall exports from 25 per cent. Significantly, the domestic opportunity itself is pretty huge.
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INDIA ECONOMY
For the fourth straight year, India has narrowly edged out China to emerge to as the worlds top receiver of officially recorded remittances. According to the latest issue of the World Banks migration and development brief released on October 31 and containing estimates for 2011 remittances, India is expected to receive $ 58 billion this year, followed by $ 57 billion flowing to China, and $ 24 billion in Mexico. Worldwide remittances, including those of high income countries, will reach $405 billion in 2011. Despite the global economic crisis that has impacted the private capital flows, remittance flows to developing countries have remained resilient, posting an estimated growth of eight per cent in 2011, says a release of the World Bank. Indias inward remittances have grown from $ 13 billion in 2000 to $58 billion this year, while remittances to China have jumped from $ 5 billion to $ 57 billion during the same period. However, the report noted that persistent unemployment in Europe and the United States was affecting employment prospects of existing migrants and hardening political attitudes s towards s new immigration in these regions.
FACILITIES
TENANT SERVICES CONFERENCE/MEETING ROOMS TEMPORARY OFFICES EXHIBITION FACILITIES SHOPPING ARCADE
Electronics Automobiles Computer and software based smart engineering. Environmental products;
green technology and highvalue engineering products. High end areas in electronics, aerospace, and engineering products.
1.2 Promote light manufacturing exports with high value addition leather products and textiles
realize the ambitious export targets for 2013-14 and beyond is: Stable schemes Preferential access to new markets: putting in place conducive trading arrangements policy environment:
of markets and new products in these new Markets Retain presence and market share in our old developed country markets;
markets
The list of items under MLFPS has been extended to cover new items to specified countries. It has been decided to extend MLFPS for exports of Agricultural tractors greater than 1800cc capacity which would now be eligible for duty credit for exports made to Turkey. Sugar machinery & high-pressure boilers would be eligible for Brazil, Kenya, South Africa, Tanzania and Egypt. The scheme has also been extended to all existing MLFPS Countries for printing inks, writing ink, etc. The items covered under MLFPS are entitled to get duty credit scrip @ 2% of FOB value of exports. Benefits under MLFPS have been extended for export of ready-made garments to USA and EU. (v) EDI initiatives: In furtherance of the EDI initiatives, online message exchange of DFIA Authorization with Customs has started from 13.10.2011. Therefore, now Advance Authorization, EPCG and DFIA are completely EDI enabled. In order to reduce the interface of exporters with the Regional Authorities of DGFT, the application of IEC (Import-Export Code) has been made online w.e.f. 1.1.2011. C. Reduction in Transaction Cost
approximately
Rs.2100
crore.
Permanent reduction of transaction cost through these initiatives will have a long term positive impact on the competitiveness of Indias exports.
Textiles, Handicrafts, Engineering and Electronics sector. The items covered under FPS are entitled for Duty Credit Scrip equivalent to 2% of FOB value of exports. (iv) Market Linked Focus Products Scheme [MLFPS]: The Task Force on Transaction Cost in Exports identified 44 issues and taken up with the relevant Ministries and after consultations with them, it was agreed to implement 32 of these issues. It is expected that implementation of 23 issues is likely to mitigate the transaction cost by
machinery, 27% (US $ 22.8 billion), electronics, 21% (US $ 22.3 billion). Vegetable oil, 55% (US $ 6.7 billion); Iron & steel 8% (US $ 7.7 billion); Fertilizer 17% 6.6 billion); Coal 61% at (US $ 11.3 billion); Organic & inorganic chemicals 23% at (US $ 12.5 billion); Ores and scraps US $ 8.7 billion registering the growth of 41%.
the first three quarters of 2011 from Europe, especially Italy, which is the largest market for Indian coffee. The instant coffee exports were up by 25.5 per cent at 45,596 tonne to the previous year. Karnataka Planters Association notes that the Robusta variety, especially, registered a very good crop at in 2011. There was also shortage internationally as Brazil had an offyear and Columbia witnessed a shortfall in production. The demand was robust from Europe in the first half of the year. The prices were also very high during the January-March quarter of 2011. During 2011, in terms of value, Indian exporters earned Rs 4,859.45 crore as against Rs 2,963.60 crore in earlier year, showing a rise of 64 per cent. On its part, Coffee Board of India had estimated the 2010-11 coffee crop size at 321,000 tonne as against 301,000 tonne in previous year. That is a 6.6 per cent growth. Good rains across the major growing areas in the country, like Karnataka and Tamil Nadu, have resulted in higher yield. The growth has come largely from the Arabica variety, which was pegged at 104,000 tonne. Robusta is expected to be 212,000 tonne as against 207,000 tonne in the previous year. compared
Orders from Italy and Spain have almost become nil and could reduce Indias total apparel exports by 15 per cent. Indias total textiles exports, however, are around $ 25 billion. Of this apparel alone contributes $ 13 billion and the rest $ 12 billion comprises yarn, fabrics and made-ups. the current fiscal. Europe is the largest buyer of Indian apparels. The European market is in doldrums which is affecting exports. Italy and Spain are buying much less. The U.S.is a bit better than Europe and there has been some recovery in demand. According Apparel Export Promoting Council India is expecting a 25 per cent drop in apparel export. Orders for mens category of garments which generally comprise the bulk of orders, have come down significantly. There are orders for womens products which, however, is not huge. While China has been a dominant player in the global textile market, Bangladesh and Vietnam, in recent months, have been outdoing India in value-added products, although the Indian textile industry is better integrated with backward linkages. A lower in-hour cost has been their strength. China is facing the risk of currency appreciation and a rising production cost despite manageable inflation rates. Fabric export is expected to be down by 5 per cent in
WTO Highlights
Working Party seals the Deal on Russias Membership Negotiations
On 10 November 2011, the Working Party on Russias accession, chaired by Ambassador Stefn Jhannesson (Iceland), agreed, ad referendum, on the terms of the countrys membership to the WTO by adopting the package containing reforms to Russias trade regime, and the commitments that Russia undertook to implement as part of its WTO accession. It has been a long journey, but today Russia has taken a big step towards its destination of membership in the WTO. In acceding to the WTO, Russia embraces a series of rules and commitments that are the foundation of an open, transparent and nondiscriminatory global trading system. This system provides important guarantees for Russia and for the 153 other Members of our organization. This win-win result will bring Russia more firmly into the global economy and make it a more attractive place to do business. For the WTO, it comes as a most welcome deliverable for the upcoming WTO Ministerial Conference and signals anew the relevance and vibrancy of the WTO as an instrument for international cooperation, said Director-General Pascal Lamy. It is gratifying to see that after 18 years of sometimes uneasy negotiations the process of WTO accession is completed today. The agreement as negotiated brings us into the system of multilateral trading rules, creating new opportunities for our traders and investors and enabling us to protect their commercial interests even more effectively than before, said Maxim Medvedkov, chief negotiator for the Russian Federation. also provide Montenegro with the WTO label, which is so important to attract investors, said WTO DirectorGeneral Pascal Lamy. This is a big step forward in integrating the multilateral trading system. WTO membership is one of the main priorities of the government. This accession also shows Montenegros ability to integrate into the international community, said Dr Vladimir Kavari, Montenegros Minister of the Economy.
WTO Panel Report Confirms that the Philippines Tax Regime Discriminates EU Imports of Distilled Spirits
The WTO panel report has confirmed that the excise tax applied on distilled spirits in the Philippines discriminates against imported spirits and is therefore in violation of the principle of non-discrimination enshrined in the General Agreement on Tariffs and Trade (GATT). The EU had raised the issue with the Philippines repeatedly over the past years without success, and WTO consultations held with the Philippines in Manila in October 2009 had failed to lead to a satisfactory solution. EU Trade Spokesman John Clancy said: The panel report is the confirmation of what is a clear case of tax discrimination which has been and still is an important obstacle to imports into the Philippines. In light of the clear findings of the panel, we hope the Philippines will take the necessary steps to remedy this longstanding situation without further ado. The taxes applied on imported distilled spirits are ten to 50 times higher than those applied on spirits manufactured in the Philippines. It was estimated that, from 2004 to 2007, EU exports of spirits to the Philippines had more than halved (from around 37 million to 18 million) due to the Excise Tax Regime, notably since a new legislation introduced in 2004 aggravated the tax discrimination. The Philippine market for distilled spirits has an important potential, with a steady increase in demand over the last years. However, the discriminatory taxation system has led to a decline of overall consumption of imported spirits since 2005, while consumption of local spirits has significantly grown in the same period.
Imported spirits have been experiencing a longstanding discriminatory excise taxation regime in the Philippines market. According to this regime, spirits produced from certain raw materials are taxed at a flat specific rate. This category of products corresponds essentially to domestically produced spirits. All other spirits (mostly imported) are subject to a system of price bands at substantially higher taxes. On 29 July 2009, the European Union requested WTO consultations with the Philippines. Consultations were held in Manila on 8 October 2009, with the United States participating as a third party. These consultations did not lead to a satisfactory solution. Therefore, the EU in December 2009 requested the WTO to establish a dispute settlement panel. The US filed a similar case in March 2010. A single panel to deal with the two cases was established on 20 April 2010 and composed by the WTO Director General on 5 July 2010. The final report of the panel, confirms the EU and US allegations that the excise tax regime on distilled spirits of the Philippines is in clear violation of article III: 2 of the GATT. The panel report will be adopted by the WTO Dispute Settlement Body within 60 days, unless the Philippines introduce an appeal against the report within this period.
stringent, giving U.S. livestock an unfair advantage over imports from Mexico and Canada. The panel said the U.S. rules, called country of origin labeling, or COOL, violated WTO rules on technical barriers to trade. When the United States implemented COOL, the impact on the Canadian and American livestock industry was immediately negative, Canadian Agriculture Minister Gerry Ritz said. The WTOs final report marks a clear win for Canadian livestock producers. The law came into effect in 2008, driving up costs for U.S. packers through the need to segregate imported animals and the extra expense of labeling products. It also prompted a sharp drop in U.S. cattle and hog imports. Canadian cattle shipments to the United States have fallen by more than half and hog exports to the United States are down 40 percent so far in 2011 from the volumes three years ago. Following the WTO ruling, the U.S. Trade Representatives Office said it was considering all options, including an appeal. Although the panel disagreed with the specifics of how the United States designed those requirements, we remain committed to providing consumers with accurate and relevant information with respect to the origin of meat products that they buy at the retail level, the USTR said. The United States has 60 days to appeal the ruling. The American Meat Institute, which represents meat packers, welcomed the ruling, saying the law is costly and cumbersome, and a violation of WTO obligations.
WTO HIGHLIGHTS
The Canadian meat industry is not seeking a repeal of the law, just changes, said Martin Rice, executive director of the Canadian Pork Council. One possible solution would be changing the rules so that an imported live animal becomes a product of the United States once it is processed, Rice said. Many U.S. meat-packing plants, especially those near the U.S.-Canada border, either stopped accepting Canadian livestock or bought less due to the increased costs. Changing the law would most affect packing plants that were once big buyers of Canadian animals, including those owned by JBS , Tyson Foods , Cargill Inc, Hormel Foods , and Smithfield Foods , Canadian farm industry officials said. U.S. farmers did not benefit from COOL and some ranchers who feed imported cattle suffered, the National Cattlemens Beef Association said in a statement. The WTO ruling affects only meat from imported livestock, but the U.S. labeling law covers a wide range of foods from meats to vegetables to nuts. It requires grocers to put labels on cuts of beef, pork, lamb, chicken and ground meat, or post signs that list the origin of the meat. Labeling also is required for seafood, fruits, vegetables, ginseng and peanuts, pecans and macadamia nuts.
member 30 days after the ratification. With Vanuatu the WTO receives a least-developed country into the family. Its membership will strengthen the multilateral trading system and provide this country with a stable and predictable trade environment. Vanuatus accession brings the WTO one step closer to our goal of universal membership declared WTO DirectorGeneral Pascal Lamy. Vanuatus Deputy Prime Minister and Minister of Trade, Commerce, Industry and Tourism, Ham Lini Vanuaroroa, declared: This is a happy moment of historical significance for Vanuatu. This accession will bring substantial gains to our country.Vanuatu applied for WTO membership in 1995 and the Working Party concluded the negotiations on 2 May 2011. Vanuatus accession package contains the Working Party report outlining its reformed trade regime and its commitments as a WTO member, the market access schedules on goods and services, the General Council Decision and the Protocol of Accession.
such duties on other steel products on the ground that the basis for calculating domestic prices of steel for imposing penalties was faulty. Commerce secretary Rahul Khullar, is likely to ask the US to begin consultations with India on the issue. We have had our legal firms examine the issue and we are sure that the basis for their calculation of the penal levies is faulty, a government official said. Once bilateral consultations begin, India will give its legal views to the US on the issue and if the talks are unsuccesful, it could take the next step of discussing the issue at the WTO. If bilateral consultations at all levels fail, a country can then ask for setting up of a dispute settlement panel to settle the issue. The US is continuing its practice of faulty pricing calculations and if not checked India will never be able to export any steel products to the country, said a representative from a steel company that has stopped all exports to the US. The US has been imposing countervailing duties or CVD, a levy to neutralise government subsidies, on steel for the last decade. Duties on Indian companies range from about 18% on Essar to over 500% for companies such as Tata and Jindal. It also imposes antidumping duties, a penal levy on imports that are sold at higher prices in the home market of the exporter, of over 20%. India wants to challenge the US department of commerces assumption that the iron ore sourced by Indian steel makers from NMDC is supplied at subsidised rate because it is a public body. This is a wrong assumption as NMDC always sells at the prevailing market prices which is determined by their exports to Japan and South Korea, the official said.
Before Knocking on WTO Doors, India Seeks Talks with US on Steel Duty
India has decided to seek consultations with the US on the wrongful imposition of penal duties on its steel exports, a first step that a country takes before dragging another to the dispute settlement mechanism of the World Trade Organsiation or WTO. The US imposes steep penal levies in the form of countervailing and anti-dumping duties on Indian steel companies such as Essar, Tata, Jindal and Sail making exports from these companies unviable. Earlier, the US initiated fresh investigation against steel pipes from India despite New Delhi objecting to
WTO HIGHLIGHTS
WTC Mumbai Honors New US Consul General in Mumbai, Mr. Peter Hass
WTC Mumbai and AIAI hosted a reception on 31st October 2011, to welcome the new US Consul General Mr. Peter Haas and his spouse. In his address, Mr. Haas said There is tremendous promise of growing trade and investment ties. The US and India will be two of the worlds three largest economies by 2030. US Businesses are attracted to investment destinations based on investment climate, transparency, and ease of doing business. Over past twenty years, Indian Government has made enormous strides to open its economy but there remain key-challenges. Restrictions in the amount of investment in retail, insurance, defence and other key areas continue to limit expansion and investment of US firms, and limit possibility for joint ventures between US and Indian firms in India. India has become the 7th fastest-growing source of investment in the US, creating well-paid jobs for thousands of Americans. Recognizing the importance of FDI and to improve ease of investing in US, President Obama recently announced the creation of Select USA, a government wide initiative to encourage, facilitate and accelerate business investment by both domestic and foreign firms. Businesses worldwide invest in US because of Americas pro-growth business climate, productive workforce, open-banking and financial sectors, and innovative culture. What is new in recent years is inbound investment to the US from India, said Mr. Haas. WTC Chairman Mr. Kamal Morarka and Mr. Vijay Kalantri, WTC Vice-Chairman & Director WTCA NY and President AIAI, also addressed the guests which included high-profile dignitaries, consular corps and over 200 leading industrialists. Government of Maharashtra Ministers Shri Anil Deshmukh (Food, Civil Supplies & Consumer Protection) and Shri Suresh Shetty (Public Health, Family Welfare & Protocol) were the Guests of Honour on this occasion.
Mr. Scott Wang, WTCA Business Development Executive for Asia has Interactive Meeting with WTC Mumbai Directors
Mr. Scott Wang, WTCA Business Development Executive for Asia, visited WTC Mumbai on 1st November 2011 and had fruitful meeting with WTC Mumbais Board Directors. A detailed presentation was made to Mr. Wang on WTC Mumbai, Indian Economy and the WTCs forthcoming Futurallia event Indiallia 2012. During the discussions, Mr. Wang shared on the WTCAs latest initiatives and the importance of WTCA Live. He also offered full support for WTC Mumbais future events. A meeting was also organized with the Licensee of WTC Port Louis (Mauritius), Mr. Kedar Limaye, MRICS, Additional Vice PresidentBusiness Development of Patel Realty (Les Salines Development Ltd., Mauritius) to discuss further development on the WTC project.
H.E. Mr. Rafal Baniak, Polands Deputy Minister of Economy Visits WTC Mumbai
WTC Mumbai hosted a luncheon meet for H.E. Mr. Rafal Baniak, Deputy Minister of Economy, Republic of Poland, and Polands Ambassador in India H.E. Prof.Piotr Klodowski, during their visit to the WTC on 9th November 2011. In his interaction, Mr. Baniak said Poland is a single market of 455 million having free movement of
goods, services, capital and labour. There is rise of production, increase in FDI having transparent legal system and Polands EU fund is US$87.5bn with GDP growth of 3.8%. Poland is a great destination for investment direct and indirect having Special Economic Zones, and will have 14 SEZs by 2020 with eligibility for various tax exemptions and facilities to provide land and services at concessional rates. Polands 26 Industrial parks have single-window clearance with various exemptions. Bilateral trade between Poland and India increased to $1392 million in 2010. Indias exports to Poland in 2010 were US $1035mn. The scope is to take trade to US$3000 bn by 2012. Polands exports to India are steel products, steel, mechanical & electrical equipment, chemical, food products etc, while imports from India are clothing, knitwear, chemical products, cars, constructions etc. There is tremendous opportunity for future cooperation in areas of coal, mining, automotive industry, agriculture and
food-processing, energy, water management and R&D. Prof. Klodowski in his address said Poland is a part of the EU having good manufacturing, technical and man power and is seen as an attractive gateway for goods and services to the vast EU and CIS markets. Poland is already Indias largest trading partner and export destination in the Central European region. ....contd.on pg.35
Mr. Vijay Kalantri, WTC Vice Chairman and President-IPCCI said Trade relations between India and Poland are halfcentury old. Poland joined the EU in 2004 and is presenting itself as an attractive investment destination based on its economic growth and reforms, divestment programme and position as a supply base to East Europe. He also said Poland and India have signed a cooperation agreement aimed at boosting trade and investment between the two countries. Also present at the meeting were Mr. Janusz Wach, Consul General of Poland, Mr. Sebastian Domzalski, Economic Counsellor, Embassy of Poland, Ms. Rupa Naik, Executive Director-IPCCI and Mr. Sharad Saraf, President- EU Chamber of Commerce.
7% growth has become a role model for its economic recovery despite global financial crisis. For Indian compa-
may consider starting banking operations in Mozambique, to further enhance bilateral economic co-operation'. He added that these traditional links have grown from strength to strength over the years, as a result of which India and Mozambique today find many common grounds to cooperate with each other for their mutual benefit. India consistently lent its support to Mozambique in the latter's freedom struggle. Mozambique achieved its independence in 1975 and diplomatic relations between the two countries were established in the same year. India was, in fact, among the first countries to open its Embassy in Mozambique immediately after independence.
H.E. Mr. Pedro Freitas, Consul for India in Rio De Janeiro and Mr. Ronaldo Veirano, Senior Partner of Veirano Advogados Visit WTC Mumbai
WTC Mumbai and AIAI jointly organized a luncheon meeting with H.E. Mr. Pedro Freitas, Consul for India in Rio de Janeiro and Mr. Ronaldo Veirano, Senior Partner of Veirano Advogados, on 18th November 2011 at the WTC. Speaking on the occasion, His Excellency Mr. Freitas said that there has been frequent exchange of VVIP, Ministerial and official-level visits in recent years resulting in strengthening of bilateral relationship in various fields. The shared vision is of the evolving global order and this has enabled the forging of close co-operation in the multilateral arena. Mr. Josal Luiz Pellegrino, Honble Consul General of Brazil in Mumbai, in his address said Bilateral trade between India and Brazil has reached an unprecedented figure of US dollar 8.1 billion in the first ten months January to October of 2011 and he added that there has been two-way investment between India and Brazil. While Brazilian companies have invested in automobiles, IT, mining, energy, bio-fuels, footwear sectors in India, the Indian companies have invested in IT, pharmaceutical, energy, agri-business, mining and engineering/auto sectors. Several dignitaries including leading industrialists and business persons had fruitful interaction with the delegates at this meeting. The visit was a follow-up of the WTC Mumbai delegates meeting with His Excellency in Rio de Janeiro during October 2011.
Interactive Meeting Organized at WTC Mumbai with Mr. Mikhail A. Rapota, Trade Commissioner of Russian Federation in India, New Delhi and H.E. Mr. Alexey A. Novikov, Consul General of the Russian Federation in Mumbai
Speaking at an Interactive Meeting on Rising Business Opportunities for Indian Businessmen in Russia and Prospects of Co-operation between India & Russia organized jointly by WTC Mumbai, the All India Association of Industries (AIAI) and IndiaCIS Chamber of Commerce & Industry (ICISCCI) at the WTC on 24th November ....contd.on pg.37
2011, Mr. Mikhail A. Rapota, Trade Commissioner of the Russian Federation in India, New Delhi, said India has always been one of Russias closest and most reliable friends and partners. The Government and business leaders of both the countries are committed to deepening co-operation in economic, trade and investment areas for the sake of growth and welfare of the people of our countries. Referring to Russian investment prospects in India, he said many leading Russian industrial and financial groups and companies have come to India and are successfully developing their business in this country. Indian companies are also quite active in the Russian market. India actively invests in gas and oil industry, pharmaceuticals, real estate, retail, banking and other sectors of Russian economy. Referring to bilateral trade, he indicated that the Governments of Russia and India agreed to make necessary efforts for increasing the volume of mutual turnover up to US$ 20 billion by year 2015. Earlier, in his welcome address, Mr Rajan Madhu, President-ICISCCI expressed that over the years Russia has emerged as one of the leading players in the global arena drawing upon its vast natural resources and technological expertise in manufacturing and services. Positive changes occurring in Russia today as well as its key investment advantages as compared to other markets attract foreign companies to that country. Together India and Russia are developing the framework to foster an environment conducive to technological innovation and collaboration, as well as greater bilateral investments flow. The year of Russia in India in 2008 and the year of India in 2009 have demonstrated the growing strategic partnership between both countries, he said. Mr. Vijay Kalantri, WTC Vice Chairman & President-AIAI described Russia as True friend of India. As two leading economies of the BRIC group, India and Russia need to work together closely, he said. The two countries co-operate in diverse spheres, including defence, civil, nuclear energy, space, science and technology, hydrocarbons, trade and investment, cultural and humanitarian fields. Mr Kalantri emphasized the need for enhancing co-operation in specific sectors namely pharmaceutics, chemicals, engineering and technology and reminded that some years ago Indian tea enjoyed a very good market in Russia. Though Indian tea market has shrunk over the years, both countries must make concerted efforts to revive Indias presence in the tea market of Russia. Guest of Honour, Mr. Alexey A. Novikov, Consul General of the Russian Federation in Mumbai, informed the gathering that to facilitate travel to Russia, the Russian government has initiated steps to ease visa regulations and give up to 5 years multiple entry visa to business community. This will encourage the Indian private sector and medium and small entrepreneurs to establish links with Russia. Around 50 members from trade and industry, including high profile government officials and foreign diplomats in Mumbai, were present at the meeting. Also present were Dr. B.B.L Madhukar, Co-Chairman-ICISCI and Dr. Jyotsna Choudhri, General Secretary, ICISCI. Mr. Y. R. Warerkar, WTC Executive Director, proposed the vote of thanks. A reception followed, in the WTCs Centrum hall.
India has achieved 84% growth in the trade to Sri Lanka last year and there is no reason to doubt that the bilateral trade of India and Sri Lanka can very well reach to US $15 billion mark by 2015. Capt. Somesh Batra, while giving his final remarks said that his personal experience with Sri Lanka was very pleasant and more efforts are needed from both the parts to increase the trade further in the coming years. H.E.Upekkha Samratunga, Consul General, Sri Lanka Consulate General, proposed vote of thanks. Corporate leaders, CEOs of export houses, members of media attended meeting in large numbers.
Indias Deputy Chairman-Planning Commission Dr. Montek Singh Ahluwalia delivers Third M. Visvesvaraya Memorial Lecture
WTC Mumbai organized the Third M.Visvesvaraya Memorial Lecture on Two decades of Economic Reforms in India: Gains and Reflections at the WTC on December 21, 2011. Delivering the commemorative lecture, Dr. Montek Singh Ahluwalia, Deputy Chairman-Planning Commission of India was hopeful of 7% economic growth in 2011-12 despite deceleration. He said, Current year is a tough one and growth has fallen because of both global and domestic factors. Country has to put its acts together and put a system to reverse the process to reach 9% growth trajectory, also ensuring supply capacity to spur growth. Planning Commission had also stressed the need to attain higher literacy rates, improved child nutrition and better healthcare. He admitted Indias growth story would continue because of its demographic advantage. India was the only country with large pool of working-group people. If government and private sector provide a helping hand to improve their skills, productivity would see a quantum leap. According to Dr.Ahluwalia, foreign investment in India is bound to happen as the country at 7% growth has much higher growth than other regions like Africa, Latin America and other Asian countries. Outlining a three-pronged strategy, Dr.Ahluwalia said Government should bring down the fiscal deficit. Government is already working out introduction of goods and services tax (GST) as part of reforms in indirect taxes. Secondly, Government needs to cut down on subsidies by one to two percent and should end oil subsidy to offset additional subsidy burden arising out of the new Food Security Bill. Thirdly, Productivity has to be improved since labour-force will rise in next 7 years or more. Skilled development and Education in comparison with other developing countries, is imperative. Looking ahead, Dr.Ahluwalia emphasized three major areas: First, Energy Conservation. Growth of 6% in energy sector is not enough to sustain 9% growth-rate of the economy. Energy is getting scarce worldover and nations are growing. Industries should think seriously and consider renewable energy. Second is Water, which is getting scarce. Water is required in both agri and non-agri sector. The huge supplydemand gap needs to be dealt with and awareness created. Third factor is Land, as there will be a move away from agri to non-agri sector. If growth reaches 9%, 20% of the population will be shifted to urban area. It is time the Cities are empowered to expand to contain this, he said. WTC Chairman Mr. Kamal Morarka in his welcome address recalled the outstanding achievements of Bharat Ratna Dr.M.Visvesvaraya stating that as one of the greatest patriots of modern India, Dr.Visvesvarayas life is a splendid example of utmost devotion and dedication to ones country and countrymen. WTC Mumbai was established in 1970 to realize Dr.Visvesvarayas vision to build a dedicated Centre at Mumbai, for promotion of Indian industry and foreign trade. Mr. Vijay Kalantri, WTC Vice-Chairman and Director-WTCA while proposing the vote of thanks mentioned the need of short-term as well as long-term economic policy for Government. Also, MSMEs need to be empowered to meet future challenges of the economy. Over 200 delegates from consulates, business, trade, industry and media attended the lecture.
WTC Mumbai Organized Interactive Session with Secretary General of Izmir Development Agency, Turkey
WTC Mumbai and All India Association of Industries (AIAI) organized an Interactive Session on Gateway to Turkey with Dr. Ergder CAN, Secretary General, Izmir Development Agency along with Investment Support Experts, Mr. Evren Uygur and Mr. Kksal Aykol, at the WTC on December 22, 2011, in which 20 members participated. Mr. Uygur made a presentation on Investment opportunities available and Izmirs EXPO 2020. Izmir Development Agency is one of Turkeys two pilot agencies established in charge of investment promotion. One of IZKAs main functions is to attract FDI to Izmir by working as one-stop-shop and official organization informing and guiding potential investors and promote the investment opportunities of Izmir. Izmir is the third most developed city in the socioeconomic development and competitiveness index of Turkey and is also a significant industrial base. Izmir holds 9.3% of Turkeys total industrial production, 4.2% of total imports and 5.8% of the total exports of Turkey, creating 48% of Aegean Regions GDP and has approximately 1500 International companies. Izmir has two free zones and 15 organized industrial zones ready for investments, where there is excellent infrastructure and various advantages. Potential sectors for investments from India to Izmir would be manufacturing of automotive and motor vehicles, renewable energy, chemicals, industrial equipments, non-automotive transport equipments, ICT, agricultural industry and textile. Izmir offers quality of life, proximity to markets, young and skilled workforce, incentives, qualified manufacturing infrastructure and easy access to raw materials. During the meeting, a Memorandum of Understanding was signed between Izmir Development Agency and WTC Mumbai, for co-operation to strengthen trade and economic relations.