Grassroots Reachout & Networking in India on Trade & Economics (GRANITE)

Tamil Nadu First Outreach Meeting
Coimbatore, August 7, 2005

The first outreach meeting of the GRANITE Project in Tamil Nadu was held in Coimbatore, on August 7, 2005.

J M K Sekar, Chief Commissioner, Central Excise, Coimbatore, while inaugurating the meeting said that it is important that every civil society organisation (CSO) should engage in issues related to World Trade Organisation (WTO) and globalisation as it has overarching implications for all the sectors. A M Swaminathan, I A S (Retired), in his keynote address said that India was neither prepared nor aware of the implications of signing the various agreements in 1995. We have come a long way and in order for India to reap the benefits of such multilateral agreements, civil society must push the government to perform better for the people.

N Raveendran, Director, Centre for Agriculture and Rural Development Studies, Tamil Nadu presented an analysis of the agriculture sector in Tamil Nadu. Following his presentation, farmers raised some important perceptions and questions and responses to these have been documented below:

  • Groundnut production in Tamil Nadu had been badly hit – reason for this is the bound rate for this commodity is very low.
  • Post globalisation, traditional rice varieties have been ignored, whereas these hold a lot of promise in the export market.
  • Tamil Nadu’s rice export potential is very low. This is because of high cost of production including high labour costs and seed cost. The Tamil Nadu Government must do something about this if Tamil Nadu has to gain some benefits out of export.
  • In the pulses segment too, Tamil Nadu is weak as the prices fluctuate and have very poor technological support.
  • 20-30 percent of agriculture exports are marine exports but this potential is not enhanced as fisheries are ignored.
  • Does India have to reduce subsidies? The common perception that India has to reduce subsidies under the WTO regime is a myth as WTO allows developing countries to increase subsidies for certain essential commodities and there are certain mechanisms by which we can camouflage subsidies. The example of US cotton farmers being given heavy subsidies was discussed. This provision has not been utilised by India for its own benefit. Another important point is that India does not have enough resources to provide for more subsidies to its farmers.
  • Indian industries should gear up to meet the requirements of the global market. India has a good opportunity in exporting semi-processed food items such as mango pulp, etc.
  • India needs to maintain similar standards for both domestic and export markets.
  • Indian industries and the Indian Government should constantly survey the international market and update their producers and small-scale industries.
  • Some products that have a good export potential are sugar, fruits, tea (which is not doing well now), coffee, turmeric, groundnut, medicinal plants, etc.
  • If India does not improve its domestic industry capacities, it will lose to other developing countries.
  • Indigenous seed varieties and their prominent qualities must be documented so that we can protect them. We need to use the seeds bill to our best advantage. Seed varieties must be registered with Regional seed registrars so that we can protect our marginalised communities.
  • Tamil Nadu must think of ways to reduce its high cost of production as inter state competition will stifle our export potential. Agriculture needs to be more professionalised.
  • Reason for Tamil Nadu’s water pollution problems is not because of WTO and globalisation but because of poor enforcement of pollution control norms.
  • Options presented by organic farming must be explored as this might help in bringing down the high cost of production.
  • Globalisation is not the only reason for farmer suicides. Heavy borrowing, improper agriculture practices such as over-use of pesticides, etc are also factors that contribute to crop failure. One must keep in mind that India has been importing seeds from other countries for more than a decade.
P Saravanan, Director-in-charge of the Sardar Vallabhai Patel Institute of Textiles Management, Coimbatore presented the situation in the textiles and clothing (T&C) segment in Tamil Nadu. The discussion has been documented below:
  • China is a big threat to Indian textile sector because fund allocation for research and development (R&D) in textile in India is very low. This has to be increased in order to make the Indian industry competitive.
  • India has a high export potential in the textile segment and is compelled to export due to its high capacity. Therefore, percentage of Indian export in world export is also high. We need to be more competitive in order to retain our position in the world market.
  • The end of the quota regime has opened many avenues for Indian export. Indian market is the destination for many foreign countries.
  • Heavy fluctuations in yarn prices have affected the weavers tremendously. This is because government policies are volatile and are subject to frequent changes.
  • Heavy tax on cotton throughout the production cycle has also affected the weavers and exporters.
  • Textile segment has very high environmental costs. Eco-friendly options need to be explored if Indian producers want to expand their markets.
  • Handloom sector has to be given more incentive and focus, as there is need for hand-made products.
In a nutshell, following are some points that summarise the day’s deliberations:
  • Clearly, there are both external and internal factors that affect the Indian industries. We as civil society and producers need to know which of these factors affect in what ways and deal with them in the best manner possible.
  • India has concentrate its energies on the following important aspects-
Technology, innovation, research and development, marketing, labour reforms We need to handle all of the above-mentioned areas in a professional manner


  • WTO and globalisation offer a wide range of opportunities and it is up to India to make best use of these opportunities for growth and development.
  • In agriculture as well as T&C segment, both the government and CSOs have to provide market related inputs to producers on a timely basis.
  • Indian Government has to protect Indian industries and agriculture by safeguarding our indigenous designs, seeds, traditional knowledge, etc.
  • There are many misconceptions amongst producer groups and civil society about trade-related issues and there is urgency in tackling the same.