Download Grassroots Reachout of the Foreign Trade Policy Evidence from

Foreign Trade Policy of India
Implementation Evidence
from Indian States
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India and Trade Liberalisation
 Pre 1990 scenario: Closed economy; average tariffs exceeded 200
percent; extensive quantitative restrictions on imports; stringent
restrictions on foreign investment
 Post 1990 scenario: Peak duties down from 400% to 45%,
phasing out of QRs; investment liberalisation
 GDP per capita has increased from US$ 374 in 1990 to US$
1192 in 2009 (World Bank, World Development Indicators, July 2011)
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India and World Trade
 Critical role in Doha Development Agenda
 Major push for liberal global trade regime especially in services
 Marked shift from protecting ‘producers’ to benefiting
‘consumers’ ("India: Foreign Trade Policy, "International Economics and
Trade-South Asia", World Bank, 2011)
This is reflected in India’s National Foreign Trade Policy which aims to
double India’s share in global trade by 2020.
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Why NFTP as a Theme?


Mainstreaming international trade into national
development strategy
Inclusive growth
The objectives of NFTP (2009-14) are to:
 double exports by 2013-14
 generate more employment
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Major Export Promotion Schemes

ASIDE - Assistance to States for Infrastructure
Development of Exports

MAI - Market Access Initiative

MDA - Marketing Development Assistance

TEE - Promotion of Towns of Export Excellence

VKGUY - Vishesh Krishi and Gram Udyog Yojana

FMS - Focus Market Scheme

FPS - Focus Product Scheme
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GRANITE Project
Objective
Enhance economic literacy at the grassroots, foster accountability
in economic governance and raise a coherent civil society voice
Duration
3 Years (2007-2010)
States
Andhra Pradesh, Maharastra, Uttar Pradesh, Tamil Nadu,
Karnataka, Orissa, Rajasthan and West Bengal
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Activities

To examine the involvement of state government and
other stakeholders in the formation and
implementation of NFTP

To find out how the NTFP is impacting the
livelihoods of stakeholders in specific product
categories

To advocate for a pro poor, pro development trade
policy
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Case Studies

To understand the impact of NFTP on exports of specific
products

To explore various channels through which benefits of
international trade can trickle down to the grassroots
stakeholders
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Scope
States
Products
Andhra Pradesh
Turmeric, Chillies
Karnataka
Spices, Coffee
Maharashtra
Grapes, Pomegranate
Orissa
Ginger, Niger Seeds
Rajasthan
Uttar Pradesh
Gems & Jewellery, Kota Doria
Sarees
Marine Products, Leather
Products
Chikan Craft, Zardozi Products
West Bengal
Mango, Tea
Tamil Nadu
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Methodology

Questionnaires directed to KEY STAKEHOLDERS
such as State Government Officials, Farmers,
Manufacturers, Trading Houses, Exporters, Workers

Interview and focused group discussion to discuss
relevant issues
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Impact of NFTP
2003-2004
2008-2009
US$ 63 bn
US$ 168 bn
Share in Global Merchandize Trade
0.83%
1.45%
Share in Global Services Trade
1.4%
2.8%
Share in Total Global Trade (goods +
services)
1.4%
2.8%
Exports
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Product Specific Growth
Export Performance of the Selected Products/Sectors
Average Annual Growth
Products
2002-04
2005-08
Leather
0.90
13.66
Tea
3.32
10.61
Coffee
1.95
28.08
Kota Doria Sarees
1.40
17.03
Chillies1
7.94
31.68
Pomegranate2
16.00
23.37
Niger Seeds
21.41
26.17
Zardosi Products3
12.38
30.31
Source: Trade Map, International Trade Centre Geneva
 Average year-to-year change in percentage
1
Included in chapter 9 HS Code (091011)
2
Included in chapter 8 HS Code (081110)
3
Included in chapter 63 HS Code (630290)
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Limitations of NFTP






Centralised in nature – state governments are not
involved, Inter-State Trade Council is dysfunctional
Lack of political awareness on issues and will for reform
Lack of reflection of grassroot demands in formulated
trade policy
Absence of representation of the civil society in the
Board of Trade
Lack of specific consideration for small producers
Lack of necessary export infrastructures and R&D
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CUTS Recommendations

The policy making process should be more inclusive and
consultative with special attention to grassroot
stakeholders

Special schemes should be targeted towards small
producers - technical assistance and capacity building
programmes for small producers need to be undertaken
more frequently

Information dissemination mechanisms need to be more
extensive and better structured
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CUTS Recommendations

Schemes should be made less complex and more transparent

More attention needs to effective implementation of
schemes – sustainability impact assessment

NFTP should provide a mechanism to achieve better
coordination among various stakeholders in the supply chain
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Thank You
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