Foreign Trade Nuggets for Preliminary Examination 2007

Foreign Trade Nuggets for Prelims

· The year 2006 witnessed unprecedented growth in India’s merchandise exports which crossed the landmark figure of US $ 100 billion and reached US $ 103 billion during the year, recording a growth rate of 24%.
· At 24 per cent growth in 2005-06 and 27 per cent growth in 2004-05, exports are currently growing three times faster than GDP growth.
· Exports as a share of GDP is more than 13% currently compared with a share of only 6% in 1990-91.
· The high rate of growth during 2006 will ensure that the export target of $ 125 billion for this fiscal (2006-07) will be reached
· exports during April-November 2006 have already reached US $ 80 billion, with a record growth rate of about 39%.
· India has set itself a target of exports of US $ 150 billion by 2008-09 and achievement of this export target is likely to generate 136 lakh (i.e., 13.6 million) new jobs in the economy
· 7th India-European Union Summit held in Helsinki in October 2006, India and the EU agreed to launch negotiations for a broad-based Bilateral Trade and Investment Agreement.

Focus Area export promotion programmes in specific regions abroad like
· Focus LAC
· Focus Africa
· Focus CIS and
· Focus ASEAN+ 2 programmes

Objectives of Special Economic Zones

1. generation of additional economic activity
2. development of infrastructure facilities
3. creation of employment opportunities
4. promotion of investment from domestic and foreign sources; and
5. promotion of exports of goods and services.

237 SEZs have been formally approved and 51 SEZs were notified during 2006. SEZ success stories of 2006 are:

1. Nokia SEZ in Tamil Nadu
2. Apache SEZ (Adidas Group) in Andhra Pradesh
3. Flextronics SEZ in Tamil Nadu
4. Quark City SEZ in Chandigarh, expected to have FDI of around US $ 0.5 billion, providing employment to 35,000 persons; and
5. Motorola and Foxconn setting up electronic hardware manufacturing units in the SIPCOT SEZ in Chennai with an investment of over US $ 200 Million.

Initiatives in the area of Regional Trade Agreements (RTAs)

· implementation of agreement on South Asian Free Trade Area (SAFTA) with effect from July 1, 2006
· implementation of an expanded list of preferential goods under the Bangkok Agreement with effect from September 1, 2006
· initiation of the process of working out a Comprehensive Economic Partnership Agreement (CEPA) with South Korea