Sustainability aspects of foreign trade policy are crucial for India’s development

July 02, 2008, New Delhi
“When the Foreign Trade Policy of India was introduced in 2004 it was a welcome departure from the conventional Export-Import Policy. After four years of its implementation it is to be seen whether it has achieved its objective of generating new employment opportunities,” said J. George of the Faculty of Economics and Development Planning, Haryana Institute of Public Administration. He was addressing a workshop organised by CUTS in New Delhi on 1-2 July. It was organised as part of a project entitled Grassroots Reachout and Networking in India on Trade and Economics, which is implemented in eight states with support from the Royal Norwegian Embassy in India and Oxfam Novib of the Netherlands.

“A lot has changed in India since mid-80s and it would be interesting to learn and share the international perspective on India’s reforms especially in comparison with China and even Russia,” said Arne Melchior, Senior Researcher of the Norwegian Institute for International Affairs, which is an institutional partner of this project.

More than 50 stakeholders from various parts of the country assembled to discuss and debate the findings of research carried out on the level of stakeholders’ participation, particularly those at the grassroots, in the formulation and implementation of India’s foreign trade policy. Jayati Srivastava of Jawaharlal Nehru University and the principal researcher of this work argued that there is not much awareness among the stakeholders, particularly primary producers, on various benefits that this policy can generate. “While large exporters are aware of various schemes, the Government has to ensure a better linkage between this policy and small exporters and primary producers,” she said. In future this policy should be formulated by following a process of wider consultations with the primary producers, community-based organisations and civil society organisations, and the state governments, she emphasised.

According to R. S. Ratna, Professor at the Centre for WTO Studies of the Indian Institute of Foreign Trade, “While this initiative to conduct policy research is unique and commendable, the focus of future research, apart from linking this analysis to social dimension, must be on the economic impact of this policy.” He affirmed that while the role of the civil society organisations is recognised by the Government as essential, the need is for them to conduct and present the research findings with facts and figures so that the Government takes them seriously. He supported the demand for including the civil society’s voice the formulation and implementation of the next foreign trade policy, which is due in 2009.

The presentations at the workshop highlighted that the 5-year Foreign Trade Policy of India was adopted when it was realised that Indian products have to be made more competitive in the global market. “The focus must be on encouraging the production of exportable commodities; not just for exports,” said Sanjeev Chopra, Secretary of the Department of Agriculture of the Government of West Bengal.Analysing the export trends of targeted products under the foreign trade policy, Siddhartha Mitra, Research Director of CUTS said that while primate facie it appears that the economic impact of this policy in terms of generating new exports is positive, much in-depth research is required to understand its social and environmental sustainability.
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