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Press Releases
Jan, 2007

Press Information Bureau
Government of India
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CORUS REFLECTS INDIA’S ECONOMIC STRENGTH: KAMAL NATH

 New Delhi, 31 January, 2007

        Shri Kamal Nath, Commerce and Industry Minister, has said that Tata’s win “reflects India’s economic and fundamental strength”. 

       “Our industry has gained in terms of scale and global competitiveness as it consolidates. The acquisition of Corus marks the country’s entry into the league of global steel majors”, he added.

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EXPORT SURGE CONTINUES
INDIA’S FOREIGN TRADE DATA FOR APRIL-DECEMBER 2006-2007 

New Delhi: January 27, 2007

The cumulative value of India’s merchandise exports in the first nine months (April-December) of the current financial year 2006-07 was US $ 89489.08 million  (US $ 89 billion) or Rs.408394.10 Crore as against US $ 65668.36 million (Rs.290411.21 crore) during the same period last year, indicating a growth of 36% over April-December 2005-06, according to the provisional data available from Directorate General of Commercial Intelligence & Statistics (DGCI&S).   Exports during the month of December were valued at US $ 9902.03 million (Rs.44197.83 crore) during the month of December 2006 compared to US $ 8283.70 million (Rs.37807.74 Crore) in December 2005.   

The cumulative value of India’s imports during the month of December, 2006 were valued at US $ 15581.12 million (Rs.69546.47Crore) compared with US $ 10985.94 million (Rs.50141.02 Crore) in December, 2005.  Cumulative value of imports during April-December, 2006 was US $ 131212.46 million   (Rs.598286.68 Crore), which was higher than imports at US $ 96263.95 million (Rs.425666.55 Crore) during April-December, 2005.  

Crude Oil imports were valued at US $ 4817.29 million in December 2006 compared with US$ 3717.48 million in the corresponding period last year thus registering a growth of 29.58%. Crude Oil imports during April-December 2006 were valued at US $ 43816.61 million, which was 39.23% higher than Crude Oil imports of US $ 31470.99 million in the corresponding period last year.  

Non-oil imports were estimated at US $ 10763.83 million during December 2006, which was 31.81% higher than the value of non-oil imports at US $ 8166.00 million in December 2005. Non-oil imports during April-December, 2006 were valued at US $ 87395.85 million which was 18.67% higher than the level of such imports valued at US $ 73647.68 million in April- December 2005. 

The trade deficit for April-December, 2006 was estimated at US $ 41723.38 million, which was higher than the deficit of US $ 30595.5 million during April-December, 2005.

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DEPARTMENT OF COMMERCE
IMPORTS & EXPORTS : (PROVISIONAL)                                                                                      (US $ Million)
	December		April - December
	Provisional	Provisionally Revised**	Provisional	Provisionally Revised**
EXPORTS(incl.re-exports)
2005-2006*	8283.70	9190.17	65668.36	73362.28
2006-2007	9902.03		89489.08
%Growth 2006-2007/2005-2006	19.54	7.75	36.27	21.98
IMPORTS
2005-2006*	10985.94	11883.49	96263.95	105118.68
2006-2007	15581.12		131212.46
%Growth 2006-2007/2005-2006	41.83	31.12	36.30	24.82
TRADE BALANCE
2005-2006*	-2702.24	-2693.32	-30595.59	-31756.40
2006-2007	-5679.09		-41723.38
*Provisional figures reported in Press Note for December 2005. **Provisionally Revised figures are the  unadjusted for the late returns

 

DEPARTMENT OF COMMERCE
IMPORTS & EXPORTS : (PROVISIONAL)                                                                                              (Rs Crores)
	December		April-December
	Provisional	Provisionally Revised**	Provisional	Provisionally Revised**
EXPORTS (incl.re-exports)
2005-2006*	37807.74	41944.94	290411.21	324572.34
2006-2007	44197.83		408394.10
%Growth 2006-2007/2005-2006	16.90	5.37	40.63	25.83
IMPORTS
2005-2006*	50141.02	54237.54	425666.55	464866.02
2006-2007	69546.47		598286.68
%Growth 2006-2007/2005-2006	38.70	28.23	40.55	28.70
TRADE BALANCE
2005-2006*	-12333.28	-12292.6	-135255.34	-140293.68
2006-2007	-25348.64		-189892.58
*Provisional figures reported in Press Note for December 2005.  **Provisionally Revised figures are the unadjusted for the late returns

 

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 INDUSTRIAL PRODUCTION RECORDS A GROWTH
OF 14.4% IN NOVEMBER 2006 - HIGHEST IN OVER A DECADE

New Delhi:    January 25, 2007 

          As per the Quick Estimates of Industrial Production released by the Central Statistical Organization, the industrial production registered a high growth of 14.4% in November 2006, as compared to the level in the month of November 2005.  This is the highest growth in over a decade.  Industrial growth during the first 8 months (April 2006 to November 2006) of the current financial year is up by 10.6% as compared to 8.3% registered in the same period last year. 

          The Manufacturing Sector which has the highest weight in the Index of Industrial Production basket has shown an impressive performance with a robust growth of 15.7% in November 2006.  It had grown by 16.1% in May 1996 and in the recent past the closest high growth has been registered in July 2006 at 14.3%.The Mining and Quarrying Sector has shown a growth of 7.0%, while as the Electricity Sector has registered a growth of 8.7% during November 2006 as compared to November 2005.   

          The industries that have performed well in November 2006 include ‘Basic Metal & Alloy Industries (25.4%), ‘Rubber, Plastic, Petroleum and Coal Products’ (23.2%) , ‘Transport Equipment and Parts’ (21.8%), ‘Other Manufacturing Industries’(19.8%), ‘Cotton Textiles’ (18.3%), ‘Wool, Silk and man-made Fibre Textiles’ (18.2%), ‘Leather and Leather & Fur Products’(17.7%), ‘Non-Metallic Mineral Products' (17.7%), ‘Machinery and Equipment other than Transport Equipment’ (17.3%), ‘Textile Products (including Wearing Apparel)’(16.0% ) and Paper & Paper Products and Printing, Publishing & Allied Industries (15.6% ).  

          Among the use-base economic sub-groups, Capital Goods have registered an impressive growth of 25.3% during November 2006 over November 2005.  The Intermediate Goods have also recorded a high growth of 16.7%.  This augurs well for the future growth of the Indian industry.

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ENGINEERING EXPORTS TO TOUCH RECORD HIGH OF US $ 24 BILLION CLOCKING 40%
GROWTH THIS FISCAL: KAMAL NATH 

PRESIDENT LAUNCHES EEPC GOLDEN JUBILEE CELEBRATIONS 

 

New Delhi: January 23, 2007 

            Shri Kamal Nath, Union Minister of Commerce & Industry, while speaking at the Golden Jubilee Celebrations of Engineering Export Promotion Council (EEPC) here today, lauded the efforts of the Indian engineering sector which constitutes one of the largest sectors in the Indian industry.    “The sector has performed exceedingly well on the export front.   The total export earnings were US $ 20 billion in 2005-06 and is set to grow to US $ 24 billion in the current year clocking a growth of 40%”, he informed.   Dr. A.P.J. Abdul Kalam President of India inaugurated the Golden Jubilee Celebrations marking the 50 years of EEPC. 

            Commenting on the emerging area of Engineering Process Outsourcing (EPO) services from India, Shri Kamal Nath stated that the EPO market in India has a potential to exceed US $ 40 billion by 2020, raising India’s share in the EPO market from the current 12% to 30%.       

To mark the Golden Jubilee, the EEPC, the apex body of engineering exporters, organised three day India Engineering Meet & Exhibition from 22^nd to 24^th January 2007, at India Expo Centre, New Delhi-Greater Noida Expressway. 82 buyers from Africa, 15 from USA and Canada, 30 from Europe, 50 from Latin America, 80 from ASEAN, Australia, New Zealand and 50 from CIS countries who intend to outsource their engineering requirements from India are participating in the event.   Around 150 Indian companies including Maruti Udyog Ltd, NALCO, Forbes Gokak, RITES, TVS Motors, Bharat Earth Movers Ltd, Exide Batteries, Batliboi International, Mundhra SEZ, West Bengal Industrial Development Corporation, Finolex Cables etc. are participating. 

The engineering goods constitute the largest segment of the Indian industrial sector.  India has a well-developed and diversified capital goods/ base capable of manufacturing the entire range of industrial machinery.  The industry has also managed to successfully develop advanced manufacturing technology over the years.  According to a strategy paper it has the potential to grow at a rate of 30% per annum for the next 5 years.    Another important feature is that 40% of our engineering exports are routed to two most quality-conscious destinations, USA and European Community. This indicates that India’s engineering products and services are of internationally acceptable quality. 

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INDIA AND FINLAND TO FURTHER STRENGTHEN ECONOMIC TIES

New Delhi: January 23, 2007 

          India and Finland have expressed great satisfaction at the strong economic ties between the two countries and expressed hope that the relations would gain further momentum.  Speaking at the Business Luncheon Meeting with the President of Finland Ms. Tarja Halonen, here today, Shri Kamal Nath, Union Minister of Commerce & Industry, also sought Finland’s help in voicing the concerns of India and the developing world in the Doha negotiations.  The Finnish President agreed that in multilateral trading framework, trade has to be not only free but also fair.  The meeting was organised jointly by CII, FICCI and Assocham. 

          The Minister recalled his visit to Helsinki in October 2006 for the India-EU Summit held under the Finnish Presidency and appreciated the efforts of Finnish leadership for the successful outcome of the Summit.    The Summit decided that India and EU should move towards negotiations for a broad based trade and investment agreement. 

          Earlier, Mr. Mauri Pekkarinen, Minister of Trade and Industry of Finland, offered Finland’s help to India in areas of infrastructure, environment technology and power.

          The total exports from India to Finland in 2005-06 were US $ 202 million and imports were US $ 580 million.    In 2004-05, the Indian exports were US $ 144 million while imports were US $ 389 million.    Major items of export to Finland include readymade garments, drugs & pharmaceuticals and machinery and instruments while major import items are machinery except electronics and electrical, electronic goods and computer software.

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NEW SEZ APPROVAL ABEYANCE ONLY TEMPORARY – EGOM EXPECTED TO MEET
SHORTLY – GOVERNMENT ASSURES INVESTORS 

New Delhi: January 23, 2007 

          Apprehensions have been expressed by the SEZ Developers and other stakeholders regarding the future of investments made by them in relation to the SEZ projects. The apprehensions are primarily based on media reports highlighting the decisions of the Empowered Group of Ministers (EGOM) . However, as highlighted in some of the media reports, the EGOM meeting held on 22nd January 2007 to review the status of SEZ approvals (as per decision taken in 23rd August 2006 EGOM meeting) was inconclusive. It is only pending decision by the EGOM that the new approvals and notifications have been temporarily held in abeyance. The EGOM is expected to meet shortly and final decisions would then be taken on all pending issues.

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KAMAL NATH TO LEAD INDIAN DELEGATION TO DAVOS 

New Delhi: January 21, 2007           

Commerce and Industry Minister, Shri Kamal Nath will lead over 100-member strong Indian delegation to the World Economic Forum’s Annual Meeting in Davos, Switzerland later this month. The delegation comprises Central and State government, CEOs, and Civil Society representatives.  

This year’s Annual Meeting of the Forum will see record participation by business leaders who will convene along-with over 200 public figures and representatives from academia, the media and civil society in Davos. Over 2,000 participants will discuss issues pertaining to Economics, Geopolitics, Technology and Society over the 5-day period under the overarching theme of “The Shifting Power Equation”. 

The Indian Government delegation comprises Mr Kamal Nath, Minister of Commerce and Industry, Dr Montek Ahluwalia, Deputy Chairman, Planning Commission, Mr Ashwani Kumar, Minister of State for Industry, and Dr Ajay Dua, Secretary, Department of Industrial Policy and Promotion.  

A 50-member strong business delegation led by R Seshasayee, President, CII, will ensure an Indian perspective in various sessions of the official programme. Prominent names include Rahul Bajaj, N R Narayana Murthy, Anil Ambani, Jamshyd and Adi Godrej, Vijay Mallya, K V Kamath, Anand Mahindra, Baba Kalyani, Azim Premji, S Ramadorai, B Ramalinga Raju, Dhruv Sawhney, Gautam Thapar, Uday Kotak, among others. In fact, India is one of only a handful of countries fielding a high number of participants at the 2007 Annual Meeting.  

Infosys and Reliance are Strategic Partners and Wipro, Ranbaxy & ICICI Bank are Industry Partners to the Forum. Sunil Bharti Mittal, Chairman and Group Managing Director, Bharti Enterprises and Vice President, CII will join five other global CEOs as one of the Co-Chairs of the Meeting. He joins a select group of Indian CEOs who have Co-chaired the meeting in the past, the most recent being Mukesh Ambani, Chairman of Reliance Industries, in 2006. 

India’s participation will feature daily sessions with select Indian Public Figures on issues ranging from innovation hosted by Wipro, to India’s economic power hosted by Deutsche Bank, to involving society in industrialization hosted by Tata Steel besides meetings with select CEOs and media hosted by India Brand Equity Foundation (IBEF).  

Apart from these private India-related events, a host of sessions focusing on India will keep up the momentum of the “India Everywhere” project that began in Davos exactly a year ago. Following a deliberate strategy of ensuring premium mindspace among the global business elite, each day of the 5-day event will feature a variety of Indian events around Davos.  The Ministry of Tourism will have 19 hoardings all over Zurich and Davos highlighting the message on “Incredible India”.

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ENGINEERING GOODS EMERGE AS LARGEST CONTRIBUTOR
TO INDIA’S MERCHANDISE EXPORTS 

GOLDEN JUBILEE CELEBRATIONS OF EEPC TO BE ADDRESSED
BY PRESIDENT ON 23 JANUARY 

New Delhi: January 21, 2007

          The engineering sector has emerged as the largest contributor to India’s merchandise exports, even ahead of gems and jewellery. Export of engineering goods crossed US $13 billion during April to October in 2006-07, an increase of 29% compared to corresponding period last year. At this rate, engineering exports would touch $ 24 billion in 2006-07 and this would be the highest among all items in overall merchandise exports from India, Shri Rakesh Shah, Chairman, Engineering Export Promotion Council (EEPC), has said. 

          During 2005-06, engineering exports registered a growth of 25.5% amounting to US$ 20.34 billion compared to US$ 16.2 billion engineering exports in 2004-05.  

The Council will also be celebrating its Golden Jubilee here on Tuesday, 23^rd January 2007.  The President of India, Dr A P J Abdul Kalam will be the Chief Guest at this function which will also be attended by Shri Kamal Nath, Minister for Commerce & Industry, who is also Patron-in-Chief of EEPC Golden Jubilee.  More than 300 foreign delegates and Indian participants will be present at this function. On this occasion, Council’s Past and Present Chairmen and Executive Directors will be felicitated by the President of India for their commendable services. 

To mark the Golden Jubilee, the EEPC, the apex body of engineering exporters, is organising three day India Engineering Meet & Exhibition from 22^nd to 24^th January 2007, which will be inaugurated by Shri G K Pillai, Commerce Secretary, at India Expo Centre, New Delhi-Greater Noida Expressway. 82 buyers from Africa, 15 from USA and Canada, 30 from Europe, 50 from Latin America, 80 from ASEAN, Australia, New Zealand and 50 from CIS countries who intend to outsource their engineering requirements from India will participate in the event.   Around 150 Indian companies will participate including Maruti Udyog Ltd, NALCO, Forbes Gokak, RITES, TVS Motors, Bharat Earth Movers Ltd, Exide Batteries, Batliboi International, Mundhra SEZ, West Bengal Industrial Development Corporation, Finolex Cables etc. 

The exhibition will witness a buyer-seller meet on the second day between Indian companies and buyers from Europe, USA and Canada, while on the third day, 100 buyers from CIS and Latin America will hold buyer-seller meets with their Indian counterparts. 

During the last five decades, Council has played a pivotal role in transforming the profile of Indian engineering exports. Engineering exports which were a meagre US$ 10 million in 1956-57 have now reached US$ 20.34 billion in 2005-06. The share of engineering goods in the total merchandise exports from India has also gone up from mere 0.5% to 20% during this period which is also the largest among all product groups, while the membership strength of the Council has increased from 40 in 1955 to 12415 in 2006. 

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SEZs TO BOOST EMPLOYMENT, EXPORTS AND LEAD TO FASTER GROWTH OF LABOUR INTENSIVE MANUFACTURING AND SERVICES IN INDIA, SAYS KAMAL NATH

 

KAMAL NATH GIVES AWAY AWARDS FOR OUTSTANDING EXPORT PERFOMANCE OF SEZs AND EOU UNITS 

New Delhi: January 19, 2007         

          Shri Kamal Nath, Union Minister of Commerce & Industry, said today that Special Economic Zones (SEZs) are a vital instrument not only for boosting the country’s exports but also for generation of employment, creation of world-class infrastructure and attracting foreign direct investment (FDI) into the country.  Addressing the Awards functions of the Export Promotion Council for Export Oriented Units (EOUs) and SEZs here this evening, Shri Kamal Nath said that establishment of SEZs would lead to faster growth of labour-intensive manufacturing and services in the country.   

       “In the next 5 years, if all the projects get implemented, investments by SEZ Developers are expected to be over US $ 60 billion (Rs.3,00,000 crore).  By December 2007, it is expected that investments of Rs.1,00,000 crore including Rs.25,000 crore FDI will take place in the SEZs.  SEZs are expected to employ 5 lakh people by December 2007.  Many of these SEZs are recruiting people from rural areas and providing them training for operations in the SEZs, as we have seen from Gem & Jewellery SEZ in Hyderabad, Textiles units in Mahindra SEZ in Chennai and other new SEZs like Nokia, Flextronics in Chennai, Apache SEZ, Brandix Apparel SEZ, Divvy’s Laboratories in Andhra Pradesh and Rajiv Gandhi Technology Park in Chandigarh”, he said.  

       The Minister also indicated that there could be further simplification of SEZ procedures following the Workshop to be chaired by the Commerce Secretary Shri G.K. Pillai here tomorrow to discuss suggestions which had been received from all the stakeholders, especially in the context of SEZ Rules which had been in operation for nearly a year now and are in need of continuous updating.  

       Referring to the issue of rehabilitation and land acquisition, Shri Kamal Nath underlined that the State governments had a proactive role in implementing the SEZ scheme and said:  “In the recent days, concerns have been raised about the diversion of prime agricultural land for SEZ purpose and the inadequate compensation and rehabilitation problems faced by the affected farmers.  This issue was discussed in the SEZ Board of Approval meeting and the general consensus emerged that mainly waste and barren land and if necessary single crop agricultural land alone should be acquired for the SEZs.  It was also discussed with the State Government representatives that if perforce a portion of double cropped agricultural land has to be acquired to meet the minimum area requirements, the same should not exceed 10% of the total land acquired for the SEZs.   The Board of Approval would be strictly following these guidelines while considering fresh applications for SEZs”.   

          Shri Kamal Nath assured the EOUs that he had been strongly taking up the issue of removal of the sunset clause, which was yet to be resolved, and said that he was personally convinced that this clause needed to be removed in order to provide continuity to the time-tested EOU scheme.    “I assure you that I will take up this issue again”, he said.   (Sunset clause refers to the issue of tax benefits for EOUs beyond 2009).  

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EEPC Golden Jubilee Celebration to be addressed by President of India
Three day Buyer-Seller Meet with more than 300 foreign buyers

 New Delhi 18^th January 2007

The President of India, Dr A P J Abdul Kalam will be the Chief Guest on the Golden Jubilee celebrations of Engineering Export Promotion Council (EEPC), here on 23^rd January 2007. Shri Kamal Nath, Minister for Commerce & Industry, will also attend the function.   Meanwhile, to mark the occasion, a 3-day (22-24 January) India Engineering Meet & Exhibition will be inaugurated by Shri G K Pillai, Commerce Secretary, on 22^nd January 2007 at India Expo Centre, New Delhi-Greater Noida Expressway.

Shri Rakesh Shah, Chairman, EEPC, at a press briefing here, said that “the 3-day event will provide a unique opportunity and platform for exporters of engineering products and services to build business contacts with over 300 leading importers, buyers, dealers, distributors and wholesalers of engineering products from America, Europe, Africa, Latin America, ASEAN, Australia, New Zealand and CIS countries. Shri Shah informed that “we have confirmed participation from 82 buyers from Africa, 15 buyers from USA and Canada, 30 from Europe, 50 from Latin America, 80 from ASEAN, Australia, New Zealand and 50 from CIS countries who intend to outsource their engineering requirements from India for the event.

The event will showcase a mammoth exhibition of Capital Goods including cement machinery, textile machinery, water treatment plants, cars, two & three wheelers, machine tools & accessories, commercial vehicles, construction/ sugar/ knitting/ pharma/industrial machinery; Primary Iron & Steel and related items such as fasteners, bright bars, electrodes, ferrous hollowware, forgings, steel utensils, railway track materials, sanitary castings, steel pipes & tubes etc; Non-Ferrous Metals & Products including aluminium products; Consumer Durables like air compressors, auto parts, bicycle & parts, cutting tools, hand tools, dry & storage batteries, electric fans & parts, I.C. Engines & parts, mechanical pumps, mica & mica products office/scientific/surgical equipments, sewing machines & needles and other engineering products.

Engineering sector has emerged as the largest contributor to India’s total merchandise exports, even ahead of gems and jewellery. Export of engineering goods crossed US $13 billion during April to October in 2006-07, an increase of 29% compared to corresponding period last year. During the fiscal 2005-06, engineering exports registered a growth of 25.5% amounting to US$ 20.34 billion compared to US$ 16.2 billion engineering exports in 2004-05.

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FDI INFLOWS UP BY 117 % IN APRIL-NOVEMBER 2006 - $12 BILLION EQUITY INFLOWS
 EXPECTED THIS FISCAL: KAMAL NATH AT PARTNERSHIP SUMMIT 2007 

New Delhi: 18 January, 2007 

Inflows of foreign direct investment (FDI) equity alone into India cumulatively between April and November 2006 amounted to US $ 7.3 billion compared to FDI equity inflows of US $ 3.5 billion during April – November 2005, representing a record increase of 117% over the previous year. FDI equity inflows in the month of November 2006 were US $ 1.15 billion, compared to US $ 0.73 billion in November 2005, that is an increase of 54%. This was indicated by Shri Kamal Nath, Commerce and Industry Minister, at a news conference during the Partnership Summit 2007 in Bangalore last evening.  

With this trend, the Minister hoped that the figure of FDI inflows into India by March 2007 – equity only – could touch US $ 12 billion i.e., 120 % more than last year’s US $ 5.5 billion. With retained earnings that are reinvested, it could come to US $ 15 billion. This would thus become the first year when FDI inflows have grown so fast and experts anticipate that FDI this year may exceed foreign institutional investment (FII) for the first time ever. 

Meanwhile, at a largely attended luncheon session at the CII organized Partnership Summit 2007 in Bangalore, Dr. Ajay Dua, Secretary, Department of Industrial Policy and Promotion (DIPP), Ministry of Commerce and Industry, made a very comprehensive presentation on Investing in India. Highlighting the prospects of growth in India, he stated that all the macro-fundamentals of the economy were healthy with a growth rate of 9%, an average inflation rate of 4.5 % per annum and foreign exchange reserves of over US $ 175 billion, enough to cover 15 months of imports. This had been achieved through a process of calibrated liberalization in terms of import duties and opening up of activities and sectors to FDI. He listed automobiles and auto components, pharmaceuticals and health care, biotechnology and food processing, besides telecommunications as the sectors with the highest potential for investment.  

Amongst the issues which remained to be addressed were on making the growth process more inclusive and less urban-centric. Creating more job opportunities especially in the rapidly growing manufacturing sector; removing bottlenecks to growth arising out of physical infrastructural constraints; spending more on creation of social infrastructure of primary education, healthcare and rural connectivity and hastening the pace of agricultural growth are likely to receive higher attention in the next few years. Dr. Dua also pointed out that if India is to maintain its comparative advantage in manpower in the years to come, much greater effort would need to be expended on the development of skills.

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HIGH LEVEL FRENCH DELEGATION MEETS ASHWANI KUMAR 

New Delhi: January 16, 2007 

        A high-level French delegation led by Mr. Jean Burelle, President of MEDEF International (the French Business Confederation) met Dr. Ashwani Kumar, Minister of State for Industry, here today.  The discussions pertain to the growing economic ties between India and France particularly in the domain of industrial growth.  The Minister highlighted the potential of investing in India’s different sectors such as infrastructure, food processing, pharmaceuticals, banking, civil nuclear energy etc.   He called upon the French industry in particular the medium scale enterprises to look at India with greater focus and thrust. 

        Mr. Burelle also highlighted the importance of economic ties between the two countries and hoped that Indian industry and business would also look to invest in France in a big way.   He cited sectors such as energy, financial services, food processing, electronics as areas in which the French know-how can be used for mutual advantage of both countries.  The delegation consisted top executives from leading French companies such as Alstom, Areva, BNP Paribas, Suez, etc. 

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KAMAL NATH TO PARTICIPATE IN PARTNERSHIP SUMMIT 2007 IN BANGALORE – TO ALSO INAUGURATE INTERNATIONAL FLOWER AUCTION CENTRE

 New Delhi: January 16, 2007 

          Shri Kamal Nath, Union Minister of Commerce and Industry, will participate in the 3-day Partnership Summit 2007 being organised by the Confederation of Indian Industry (CII) in Bangalore from 17-19 January with the theme of “Emergent India: New roles and responsibilities”  

          The Summit will be a high-level platform to promote India as a profitable and stable investment destination and would provide a valuable networking forum for Indian business leaders to meet overseas trade delegations and nearly 700 delegates from different countries.     

          Among the principal invitees this time will be the President of Portugal Anibal Antonio Cavaco Silvia and among the key speakers are the UK Chancellor of the Exchequer Mr. Gordon Brown. 

          The other eminent participants and speakers include: UK’s Secretary of State, Trade and Industry, Alistair Darling; WTO Director General, Pascal Lamy; former Hungarian Prime Minister, Peter Medgyessey; Minister for Foreign Affairs of Singapore, George Yong-Boon Yeo; Chairman of Knowlede Commission, Sam Pitroda; Sri Lanka’s Minister for Enterprise Development, Rohitha Bogollagama, Minister for Economy of Chile, Alejandro Ferreiro and Minister of Industry of France, Francois Loos.   

          Some of the key topics to be discussed at various sessions include Multilateral Trade Vs Regional Trade Agreements (RTAs); Globalisation; and a Session on whether the 21^st century will belong to Asia? 

          Apart from the Partnership Summit, Shri Kamal Nath is also scheduled to inaugurate an International Flower Auction Centre in Bangalore on 18^th January, as part of a major initiative by the government to boost floriculture exports from Karnataka. 

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INDIA, HUNGARY TO STEP UP TRADE & INVESTMENT COOPERATION

 New Delhi: January 15, 2007

           India and Hungary have agreed to cooperate in a wide range of sectors with a view to stepping up trade and investment cooperation.   This is indicated in the Protocol of the Session of the Indo-Hungarian Inter-Governmental Commission on Economic Cooperation which was signed here today by Dr. Ashwani Kumar, Minister of State for Industry, and Dr. Janos Veres, Finance Minister of Hungary.   The Session was co-chaired by Dr. Kumar along with Dr. Veres. 

          The Protocol underlined the resolve on both sides to cooperate in several spheres of mutual interest.    It was decided that both sides would facilitate exchange of business delegations and interactions besides participation in trade fairs and international exhibitions in order to help create a mutually beneficial partnership, particularly in automobiles, automotive components, healthcare, pharmaceuticals, machine tools, agriculture machinery, non-conventional energy and electrical equipments. Cooperation was also sought in the field of IT and e-Governance.  

          Speaking on the occasion, Dr. Ashwani Kumar advised the Hungarian side about the positive investment climate in India as also the investment opportunities of US$ 350 billion in infrastructure and other sectors  

          Wide range of issues including bilateral trade and investments and cooperation in industrial and scientific fields between the two countries were taken up during the session. It was emphasized that the level of economic engagement between the two countries, in terms of trade and investment relations, should increase. India’s export to Hungary was US$ 84.2 million in 2005-06 while its import was US$ 31.6 million. India has received FDI of US$ 3.05 million from Hungary so far. Some of the major Hungarian companies that have investments in India are Gedeon Richter, Wire & Coil Company, Dunakiliti Konzer Yuzemkft and Ganz Steel Structure Company. Indian investment in Hungary amounts to US $ 7.4 million up till now. Prominent Indian names in Hungary are TCS, Telco, Wipro and McNally Bharat.  

          The Hungarian delegation also included Mr. Peter Medgyessy, former Prime Minister and Dr. Abel Garamhegyi, Deputy Minister for Economy & Transport, besides a host of officials from Ministry of Health, Ministry of Finance, Ministry of Foreign Affairs, Ministry of Economy & Transport, Ministry of Environment & Water, Eximbank of Hungary, National Office for Research & Technology and Hungarian Investment & Trade Development Agency, and businessmen. The official Indian delegation included representatives from the Ministry of Commerce & Industry, Ministry of External Affairs, Ministry of Finance, Ministry of Heavy Industries & Public Enterprises, Ministry of Power, Ministry of Chemicals & Fertilizers, Ministry of Agriculture, Ministry of Small Scale Industries and others. The Hungarian business delegation, headed by Mr. Peter Szekely, President of the Hungarian Chamber of Commerce, comprised of representatives from Kerox, Mediker, Arnitel, ECC Consulting, Multi Marketing Group, Garuda Trade and Multipolaris. The Indian business side was organized by the apex Industry Association, FICCI and included speakers like Mr. Onkar S. Kanwar, Former President of FICCI and Mr. Rajan Kohli, Deputy Secretary General of FICCI.  

          The Indo-Hungarian Joint Commission was established in 1973. The Commission has held 11 sessions, the last one being held in Budapest on 1^st October 2003. Following Hungary’s accession to the European Union in May 2004, India and Hungary signed a new Agreement in Budapest on 23^rd June 2005 whereby it was decided to establish the Joint Commission afresh to discuss the development of, identify new possibilities for and draw up suggestions and proposals for economic cooperation. The Inter-Governmental meeting on 15^th January 2007 is the first session after signing of the 2005 Agreement.  

          On the sidelines of the Session of the Inter-Governmental Commission, the 15^th Session of the Indo-Hungarian Joint Business Council also took place.

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    G-33 BLASTS DRAFT WORLD BANK PAPER ON SPECIAL PRODUCTS
AS ANTI-DEVELOPMENT

 

New Delhi: January 12, 2007 

          The G-33 group of 46 developing countries had sent a detailed critique on the initial draft paper authored by Maros Ivanic and Will Martin for the World Bank, pointing out that the paper was fundamentally flawed in its assumptions and methodology, ignored the reality of the prevailing agrarian structures in most developing countries and misinterpreted the proposed operation and impact of Special Products (SPs).  The G-33 had conveyed to the World Bank that there would be a serious reputation risk for the World Bank in promoting such a paper that had inferred on the basis of unwarranted assumptions that raising agricultural prices substantially through SPs “would create large increases in poverty - sufficient in some cases to undo decades of development progress – and push the already poor deeper into poverty”.  The G-33 Group of countries (including India), which is pushing for SPs in the WTO agriculture negotiations, has cautioned that such a misleading paper could have adverse consequences for the Doha Round negotiations in the WTO.  (The initial draft paper titled “Potential Implications of Agricultural Special Products for Poverty in Low-Income Countries”, was presented by the authors to the World Bank President in October 2006.  The paper was subsequently revised by the authors). 

                G-33 is dismayed that even the revised draft paper remains essentially the same, with the slight difference that instead of assuming a direct price increase of 50%, it assumes unjustifiably high import substitution elasticities to get a similar effect on prices.  Clearly, the objective of the instrument of SPs has not been understood by the authors.  The G-33 has repeatedly explained that the aim of SPs is not to raise prices of qualifying products over an extended period of time.  Rather, SPs are a flexibility intended to enable developing countries to address externally generated shocks that could disrupt incomes and food security, particularly for low income and resource poor agricultural producers. 

          The paper makes a sweeping generalization that if poverty is to be successfully reduced, there is a need for caution in using the flexibility provided by SPs.  This is despite the fact that the G-33 critique had clearly mentioned that the product coverage in the study was very narrow, its scope was confined to only four countries, and that the situations which were sought to be simulated were completely arbitrary.     

          The G-33 has pointed out that the Ivanic-Martin paper ignores the reality of price declines, price volatility and predatory competition, including dumping of heavily subsidized products, which raises the risk levels of developing countries without providing an adequate safety mechanism or flexibility to deal with the adverse impacts of trade policy changes for their vulnerable agricultural sectors.  

          In this context, the G-33 has also cited an independent evaluation of World Bank Research, 1998-2005, carried out on behalf of the Bank by Angus Deaton of Princeton University along with two other distinguished academics of MIT and Harvard and a representative of UNDP, which sharply criticized the use of questionable evidence, the drawing of conclusions that are not supported by evidence, in order to “… proselytize on behalf of Bank policy, often without taking a balanced view of the evidence, and without expressing appropriate skepticism.  Internal research that was favourable to Bank positions was given great prominence, and unfavourable research ignored.  … The evaluators repeatedly found that too large a fraction of Bank research … had neither great relevance to policy nor claim to academic distinction … The concern was that large fraction of papers that, on reading, did not seem to be very useful from the perspective of, either an academic or a policymaker”.  It is noteworthy that the external audit has been critical of the research done by the Bank on Globalization, growth and poverty, and has concluded that “… much of this line of research appears to have such deep flaws that, at present, the results cannot be regarded as remotely reliable, much as one might want to believe the results.  There is a deeper problem here than simply a wrong assessment of provocative new research results.  The problem is that … it proselytized the new work without appropriate caveats on its reliability … and as new results come in, it is becoming clear that the Bank seriously over-reached in prematurely putting its globalization, aid and poverty publications on a pedestal.  Nor has it corrected itself to this date”.        

          Conveying their serious concerns on the revised draft paper, the G-33 has urged the World Bank to undertake a more useful study that examines these phenomena, but does not seek to generalize misleading findings.  At the very least, the G-33 has urged the World Bank to substantially modify this fundamentally flawed paper as a matter of priority. 

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      ASEAN ACCEPTS INDIA’s NEGATIVE LIST
KAMAL NATH ATTENDS ASEAN ECONOMIC MINISTERS – INDIA CONSULTATION MEETING AT
 CEBU 

New Delhi: January 12, 2007 

          Shri Kamal Nath, Commerce & Industry Minister, participated in AEM-India Consultation Meeting held at Cebu (Philippines) yesterday.  Trade Ministers of Malaysia, Philippines, Cambodia, Brunei, Lao, Indonesia, Myanmar, Singapore, Thailand and Vietnam took stock of the current status of negotiations under India-ASEAN-FTA and discussed broad principles pertaining to modalities for tariff elimination and tariff reduction.   

          Shri Kamal Nath mentioned that India had already offered proposal for tariff concessions which provided satisfactory market access to ASEAN countries. Shri Nath called upon ASEAN member countries to provide reciprocal market access for India’s exports.  He also expressed concern about ASEAN’s Sensitive Lists and urged ASEAN to review and reduce it.  

          ASEAN agreed to India’s proposal for maintaining a Negative List of 490 items with trade coverage not exceeding 5% by both sides.   

          During the meeting, there was a broad consensus among the Ministers that ASEAN-India FTA needs to be concluded early not merely for reasons of bilateral trade but also for larger strategic reasons.  It was agreed that negotiators would meet and resolve the remaining outstanding issues preferably by July 2007.   

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KAMAL NATH ATTENDS ASEAN ECONOMIC MINISTERS – INDIA CONSULTATION MEETING
AT CEBU

 

New Delhi: January 11, 2007 

          Shri Kamal Nath, Commerce & Industry Minister, participated in AEM-India Consultation Meeting held at Cebu (Philippines) today.  Trade Ministers of Malaysia, Philippines, Cambodia, Brunei, Lao, Indonesia, Myanmar, Singapore, Thailand and Vietnam. 

          The Ministers took stock of the current status of negotiations under India-ASEAN-FTA and discussed broad principles pertaining to modalities for tariff elimination and tariff reduction.   

          Shri Kamal Nath mentioned that India had already offered proposal for tariff concessions which provided satisfactory market access to ASEAN countries. Shri Nath called upon ASEAN member countries to provide reciprocal market access for India’s exports.  He also expressed concern about ASEAN’s Sensitive Lists and urged ASEAN to review and reduce it.  

          ASEAN agreed to India’s proposal for maintaining a Negative List of 490 items with trade coverage not exceeding 5% by both sides.   

          During the meeting, there was a broad consensus among the Ministers that ASEAN-India FTA needs to be concluded early not merely for reasons of bilateral trade but also for larger strategic reasons.  It was agreed that negotiators would meet and resolve the remaining outstanding issues preferably by July 2007.   

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FIRST INTERNATIONAL CONFERENCE ON KNOWLEDGE MANAGEMENT
 FOR PRODUCTIVITY AND COMPETITIVENESS BEGINS 

New Delhi: January 11, 2007 

            The first International Conference on Knowledge Management for Productivity and Competitiveness was inaugurated here today by Dr. Ajay Dua, Secretary, Department of Industrial Policy & Promotion (DIPP), Ministry of Commerce & Industry.   The 2-day Conference is being jointly organised by the National Productivity Council (NPC) along with SPIM (USA) and supported by DIPP, Ministry of Commerce & Industry, Ministry of IT & Communication; Asian Productivity Organisation/Tokyo; Indian Institute of Technology (Roorkee and Madras); and the International Management Institute (IMI)/New Delhi.    

            Dr. Dua underlined the paramount importance of knowledge management for enhancing the competitiveness of Indian industry as also the importance of strategies to leverage the strengths of Asian economies in the emerging knowledge paradigm.  Shri N.A. Viswanathan, Director General of NPC, said that the deliberations of the Conference would augur well for India’s dream of becoming a knowledge economy and reaching the status of a developed country by 2020. 

 Knowledge is increasingly becoming a valuable asset along with the traditional factors of production such as labour and capital.  The twenty first century is characterised by the world economies dominated by knowledge led development for wealth creation and distribution and India is the emerging leader in the knowledge economy, given the stupendous growth rate of the Indian economy primarily due to knowledge workers, Dr. Dua said.  He commended the work of NPC as a national level body to promote productivity culture in the country, including in the new areas of knowledge economy.   

            The two-day Conference is being attended by 41 international and national experts.   In addition, many illustrious international delegates including well-known International experts on Knowledge Management like Prof. Ravinder Zutzhi, University of Long Island, USA, Prof. Arie Nagel, Eindhoven Technological University and Prof. Tan Wee Liang are participating. 

 The objective of the Conference is to present a status report of the knowledge management efforts taking place in the country, to help prepare implementation guidelines on the identified areas and encourage execution of projects by stakeholders. The Conference will help identify specific subjects for further research and facilitate development of specific implementable modules adaptable by the industries / organisations of the Asian region.

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KAMAL NATH LEAVES FOR PHILIPPINES ASEAN SUMMIT

 

New Delhi: January 11, 2007 

          Shri Kamal Nath, Union Minister of Commerce & Industry, left last night for the Philippines ahead of the Prime Minister’s visit in connection with the 5^th ASEAN-India Summit scheduled to be held at Cebu in the Philippines on 14^th and 15^th January, 2006. 

          Preceding the Summit, Shri Kamal Nath is scheduled to attend the ASEAN-India Economic Ministers Meeting being held in the Philippines today, 11^th January, 2007.  He is also scheduled to have interactions with the ASEAN plus the economic ministers of Australia, China, Japan, New Zealand and the Republic of Korea at a luncheon meeting on 12^th January.   Shri G.K. Pillai, Commerce Secretary, is accompanying the Minister. 

Background  

          The Association of South East Nations (ASEAN) consists of Brunei, Cambodia, Indonesia, Lao PDR, Malaysia, Myanmar, Philippines, Singapore, Thailand and Vietnam.   

          Regional Trade Agreements or Free Trade Agreements (RTAs or FTAs) broadly involve mutual granting of concessions in tariffs on agreed items of trade, specific rules of origin to determine eligibility of these concessions (value addition, change of tariff heading etc.) and negative / sensitive lists to exclude certain items from such tariff concessions. 

          FTAs in general are expected to make available greater market access for exports from India.   Further, the increased flow of trade in goods and services provides additional benefits to the economy. 

          A Framework Agreement on a Comprehensive Economic Cooperation Agreement (CECA) between India and the ASEAN was signed in October 2003 at Bali in Indonesia, and the negotiations for concluding the CECA have been going on.   The key elements of the Framework Agreement on the India-ASEAN CECA cover FTA in goods, services and investment as well as economic cooperation in identified areas. For trade in goods, the negotiations commenced in January 2004 but the Agreement could not be implemented by the stipulated timeframe due to differences of opinion on rules of origin, tariff concessions etc.  According to the new timeframe for FTA in goods, the ASEAN-India FTA was to commence from 1^st January, 2007 and the negotiations were to be concluded by June 2006.  While agreement has been reached on the Rules of Origin, the Negative or Sensitive List, modality for tariff reduction and elimination etc. are being negotiated by the ASEAN-India Trade Negotiating Committee (TNC) which has held several meetings so far.  Negotiations in trade in services and investments are expected to begin shortly.   

          India’s bilateral trade with ASEAN countries has more than doubled in just 3 years, having increased from a level of $ 9.7 billion 2002-03 to over $ 21 billion in 2005-06.  

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KAMAL NATH RELEASES INDIA RETAIL REPORT 2007
EXPANSION OF ORGANISED RETAIL TO GENERATE 10 TO 15 MILLION
 JOBS OVER THE NEXT 5 YEARS – BOTH FARMERS AND CONSUMERS TO GAIN 

New Delhi: January 9, 2007 

Shri Kamal Nath, Union Minister of Commerce & Industry, released the India Retail report 2007 and launched the portal: www.indiaretailing.com at a function here today.  Terming retail as a sunrise sector, Shri Kamal Nath said that the organised retail sector was expected to generate 10 to 15 million jobs over the next 5 years, and that the value of the organised retail sector in India by 2010 would be around Rs.2,00,000 crore or US $ 45 billion. Dr. Ashwani Kumar, Minister of State for Industry and Dr. Ajay Dua, Secretary (Industrial Policy & Promotion), Ministry of Commerce & Industry were present at a high-powered industry and media meet marking the release of the Report. 

According to the Report, organised retail in India has the potential to generate some 2.5 million direct jobs through retail operation and over at least 10 million additional jobs in retain support activities including contract production and processing, supply chain and logistics, retail real estate development and management etc.                 

Stating that the retail sector in India is undergoing a revolution, Shri Kamal Nath said that the phenomenal increase was stemming from the growing purchasing power of the people, which had led to a significant growth in the demand for a variety of goods, both consumables and durables.  Apart from consumers, farmers will also benefit from the retail expansion, he said, citing the examples of several states which were allowing retailers direct access to farm produce, introducing a new revolution in rural India. “After centuries of economic exploitation, they are today dealing directly with companies without the involvement of middlemen or intermediaries…. Organised retailing is thus set to boost infrastructure growth and create efficient backward linkages. In the process, the sector will also create efficiencies, reducing marketing cost, wastages and redundancies”, he said.     

The Indian format of retailing is going to retain its own touch, with numerous small retailers and other traders being located in the city centres and the large organized retailers coming up in the suburbs of the metropolitan cities.   

The Minister complimented the India Retail Forum for compiling this well-timed publication on a vital sector of the economy.   Under the aegis of the India Retail Forum, for the first time, the entire retail industry, Images F&R Research and some of the world’s top global research & consulting firms like AT Kearney, Ernst & Young, Price Waterhouse-Cooper, Technopak, KPMG, ICICI, AC Nielson-ORG Marg, Synovate, Cushman & Wakefield etc. has come together for a detailed study of the Indian retail industry. 

The Report 

Ø                  After leading the IT bandwagon, India is poised to grow as a Retail hub. It is imperative to sustain the modernization of the retail sector and dispel the myth that the game is big Vs small or traditional Vs modern or organized Vs unorganized or local Vs foreign. What is needed is to create an appropriate environment to propel retail where all benefit. 

Ø                  India has a huge population that has the potential to consume if given the power of spending and that is only possible through large scale development, generating employment which is already happening.  

Ø                  Escalating real estate cost, scarcity of skilled workforce and structured supply of merchandise are the key challenge areas for the retail growth.

 Ø                  Revealing key figures from the India Retail Report 2007, Amitabh Taneja, Chief Convenor of India Retail Forum said that the organised sector accounted for Rs.55,000 crore ($12.4 billion) business at current prices in the calendar year 2006 increasing its share to 4.6% of the total Indian Retail Value that stood at Rs.12,00,000 crore ($270 billion). Going by the current growth trend and considering the fact that existing prominent players in organised retail have stepped up their expansion drive with Reliance announcing big plans and other Indian corporate houses too evincing keenness on investing heavily in this sector as also the inking of the joint-venture between the world's largest retailer Wal-Mart and Bharti – the organised retail in India has indeed gained top speed and is now on the verge of take-off. 

Ø                  Of the Rs.12,00,000 crore retail market, Food & Grocery retail is by far the single largest block estimated to be worth a whopping Rs.7,43,900 crore, but the share of organised sector in this is miniscule. Clothing, textiles and fashion accessories constitute the second largest block, but the largest segment as far organised retailing is concerned is the timewear sector with nearly 46 per cent share of the segment being organised. Moving forward, organized retailing is projected to grow at the rate of about 37 per cent in 2007 and 42 per cent in 2008. 

Ø                  As India emerges as one of the most potential markets for global brands and retailers and retail reinvents the way modern Indians celebrate their spending power, India that takes pride in its rich culture, heritage, art, craft and variety of wares must capitalize on this ever escalating trend and channelise the spending towards healthy consumption for overall development of the country, Shri R.S. Roy, Editorial Director of India Retail Forum, said. 

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MULTI-PRONGED STRATEGY FOR INCLUSIVE GROWTH – KAMAL NATH ADDRESSES FICCI
AGM 

New Delhi: January 9, 2007 

          Addressing a Special Session with senior leaders of major political parties at the 79^th Annual General Meeting (AGM) of Federation of Indian Chambers of Commerce & Industry (FICCI) here this morning, Shri Kamal Nath, Union Minister of Commerce and Industry, emphasised the need to take along all segments of the society in India’s growth process and suggested a multi-pronged strategy to fulfil this objective.   

          Shri Kamal Nath said the strategy should include the following: increasing employment in the non-farm sector in the rural areas; increasing wage levels in rural employment by undertaking various measures to improve productivity levels, promote entrepreneurship among the weaker sections of society; promote industrialization of rural areas with significant backward population; attaining improvement in standards of education at all levels; uplifting infrastructure; and courses and quality of instruction in the vocational education system by stressing on industry-education linkage and providing greater opportunity to the backward sections of the society in employment.  “The industry must be sensitive to the needs and aspirations of the poor and marginalised”, he said.                            

          Underlining the performance of the government, Shri Kamal Nath said: “India’s economy registered an average rate of growth exceeding 8 per cent during the last 3 years.  In the first six months of the current year the GDP growth was 9.1 per cent, which is a record in itself.  India’s industrial production grew at 10.3 per cent and manufacturing sector at 11.2 during the current year (upto October), which is the fastest pace in a decade.  Exports are growing at three times the growth of GDP at around 25 per cent during the last four years.  In 2005-06 exports crossed the landmark figure of US$ 103 billion almost doubling over a four-year period.  Merchandise exports along with service exports together account for around 20 per cent of GDP”.  

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KAMAL NATH TO RELEASE INDIA RETAIL REPORT TOMORROW 

New Delhi: January 8, 2007 

 

          Shri Kamal Nath, Union Minister of Commerce and Industry, will release the India Retail Report 2007 here tomorrow. On this occasion, he will also launch the portal www.indiaretailing.com  

 

          For the first time, the entire retail industry, Images F&R Research and  some of the world’s top global research & consulting firms like AT Kearney, Ernst & Young, Price Waterhouse-Cooper, Technopak, KPMG, ICICI, AC Nielson-ORG Marg, Synovate, Cushman & Wakefield etc. came together for a detailed study of the Indian retail industry.    “The last two years have seen a lot happening on the Indian retail front and it was time to update the retail world with the second edition of India Retail Report”, the Forum says. 

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ITALIAN TRADE MINISTER DISCUSSES BILATERAL TRADE WITH KAMAL NATH – BOTH
URGE FORWARD MOVEMENT ON NEGOTIATIONS FOR INDO-EU TRADE AND INVESTMENT
AGREEMENT

New Delhi: January 5, 2007 

          Ms. Emma Bonino, the Italian Minister for International Trade and European Affairs, had an extensive bilateral meeting with Shri Kamal Nath, Union Minister of Commerce & Industry, here today, with both sides underlining the scope for a much higher level of trade and economic engagement between India and Italy.   Ms. Bonino’s visit is intended to lay the groundwork for the visit of the Italian Prime Minister to India next month with a 400 strong Italian business delegation.     

          Both the Ministers agreed on the need to move forward to commence negotiations for a Trade and Investment Agreement between India and the European Union (EU), as was decided at the Helsinki Summit in October 2006. Ms. Bonino endorsed Shri Kamal Nath’s observation that the agreement was meant strictly for trade and investment and, therefore, extraneous elements should not be brought into it as there were other bodies to deal with such issues.    

 From the Indian side, Shri Kamal Nath raised the issue of difficulties faced by Indian professionals and businessmen in obtaining visas and work permits in Italy to which Ms. Bonino assured that the matter would be resolved soon.  The Italian Minister in turn drew Shri Kamal Nath’s attention to the delay in issue of visas to businessmen and visitors to India from Italy.  Stressing the importance of infrastructure in India as a big business opportunity, Shri Kamal Nath urged the early setting up of a Joint Working Group on Infrastructure. The Italian Minister indicated that cooperation in infrastructure would indeed be a focus area during the Italian Prime Minister’s visit. 

Shri Kamal Nath said India would welcome Italian investment in setting up Institutes of Design, especially in the textile, leather and jewellery sector which would enable both sides to capitalise on their synergies by upgrading design capabilities in these key areas.  The vast scope for strengthening cooperation at the level of small and medium enterprises (SMEs) was noted.   The two Ministers also had an exchange of views on the status of the Doha Round. 

          Shri G.K. Pillai, Commerce Secretary; Dr. Ajay Dua, Secretary, Department of Industrial Policy & Promotion (DIPP) and Shri Rahul Khullar, Additional Secretary (Europe), Ministry of Commerce & Industry participated in the meeting from the Indian side.  Participants from the Italian side accompanying Ms. Bonino were: Dr. Gianfranco Caprioli, Director General, Ministry of International Trade; Dr. Massimo Memberti, Director General, Italian Trade Commission (ICE); Mr. Antonio Armellini, Ambassador of Italy to India; Mr. Giancarlo Lamio, Italian Trade Commissioner; Mr. Mario Cospito, Diplomatic Advisor to Ms. Bonino and Dr. Pacio Reboani, Head of the Minister’s Secretariat. 

Background: 

          Italy is India’s fourth largest trading partner in the EU.  The first three being UK, Germany and Belgium.    Bilateral trade between the two countries has shown a robust growth of about 20% for the past two years.   In 2005-06, bilateral trade was of the order of US $ 4.3 billion.  There is potential to enhance bilateral trade as the percentage share of trade is less than 1% of global trade on both sides. 

          The sectors being focussed upon for enhanced cooperation are leather, agro-food, gems & jewellery, auto-components and textiles and garments.  There are strong complementarities on both sides in these sectors creating a huge potential for increased bilateral trade and investment flows in these sectors.  

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IMPORT OF SENSITIVE ITEMS DURING APRIL- NOVEMBER 2006 

New Delhi: 5th January 2007 

        The total import of sensitive items for the period April-November 2006 has been Rs 13075 crores as compared to Rs 12126 crores during the corresponding period last year thereby showing an increase of 7.8%. The gross import of all commodity during same period of current year was Rs 528740 crores as compared to Rs 373006 crores during the same period of last year. Thus import of sensitive items constitute 3.3% and 2.5% of the gross imports during last year and current year respectively.   

        Imports of fruits & vegetables (including nuts) and tea & coffee have shown a decline at broad group level during the period. Imports of items viz. edible oil, cotton & silk, food grains, products of SSI, rubber, marble & Granite, Alcoholic beverages, spices, automobiles and milk & milk products have shown increase during the period under reference. 

        In the edible oil segment, the imports has increased from Rs.6497 crore last year to Rs 6926 crore for the corresponding period of this year. A significant feature of edible oil import is that import of crude oil has gone up by 14.8% and that of refined oil have gone down by 49.6%.  The growth in edible oil import is mainly due to significant increase in import of Crude Palm Oil and its fractions which has gone up by 36%.  

        Imports of sensitive items from Indonesia, Argentina, Australia, United States of America, China P RP, Malaysia, Russia, Japan, Sri Lanka DSR, Cote D’ Ivory, Germany, Ghana etc. have gone up while those from Brazil, Guinea Bissau, Egypt A RP, Benin etc. have shown a decrease.

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Index of Six Infrastructure Industries (Base: 1993-94=100) –
 November 2006

PRESS  NOTE

The Index of Six core-infrastructure industries having a combined weight of 26.7 per cent in the Index of Industrial Production (IIP) with base 1993-94 stood at 221.6 (provisional) in November 2006 and registered a growth of 9.5% (provisional) compared to a growth of 5.7 % in November 2005.  During April-November 2006-07, six core-infrastructure industries registered a growth of 7.8%(provisional) as against 5.2% during the corresponding period of the previous year.

Crude Petroleum

Crude petroleum production (weight of 4.17% in the IIP) registered a growth of 10.1% (provisional) in November 2006 compared to a negative growth rate of 8.5% in November 2005.  The Crude petroleum production registered a growth of 5.5% (provisional) during April-November 2006-07 compared to (-) 5.7% during the same period of 2005-06.

Petroleum Refinery Products

Petroleum refinery production  (weight of 2.00% in the IIP) registered a growth of 16.4% (provisional) in November 2006 compared to growth of 1.5% in November 2005. The Petroleum refinery production registered a growth of 13.5% (provisional) during April-November 2006-07 compared to (-) 0.6% during the same period of 2005-06.

Coal

Coal production (weight of 3.22% in the IIP) registered a growth of 4.9% (provisional) in November 2006 compared to a growth rate 6.9% in November 2005. Coal production grew by 4.8% (provisional) during April-November 2006-07 compared to an increase of 6.1% during the same period of 2005-06. 

Electricity

Electricity generation (weight of 10.17% in the IIP) registered a growth of 8.8% (provisional) in November 2006 compared to a growth rate 3.4% in November 2005. Electricity generation grew by 7.3% (provisional) during April-November 2006-07 compared to an increase of 4.9% during the same period of 2005-06.

Cement

Cement production (weight of 1.99% in the IIP) registered a growth of 11.5% (provisional) in November 2006 compared to 7.8% in November 2005. Cement Production grew by 10.2% (provisional) during April-November 2006-07 compared to an increase of 10.6% during the same period of 2005-06.  .

Finished (carbon) steel

Finished (carbon) Steel production (weight of 5.13% in the IIP) registered a growth of 9.0% (provisional) in November 2006 compared to 14.8% (estimated) in November 2005. Finished (carbon) Steel production grew by 7.6% (provisional) during April-November 2006-07 compared to an increase of 10.0% during the same period of 2005-06. 

N.B: Data are provisional. Revision has been made based on revised data obtained.

 

PERFORMANCE OF SIX INFRASTRUCTURE INDUSTRIES November 2006 (Weight in IIP: 26.68 %)
Base Year: 1993-94
Sector-wise Growth Rate (%) in Production
Sector	Weight (%)	Nov 05	Nov 06	Apr-Nov 2005-06	Apr-Nov 2006-07
Crude Petroleum	4.17	-8.5	10.1	-5.7	5.5
Petroleum Refinery Products	2.00	1.5	16.4	-0.6	13.5
Coal	3.22	6.9	4.9	6.1	4.8
Electricity	10.17	3.4	8.8	4.9	7.3
Cement	1.99	7.8	11.5	10.6	10.2
Finished steel (carbon)	5.13	14.8	9.0	10.0	7.6
Overall	26.68	5.7	9.5	5.2	7.8
Source of data: Concerned Ministries/Departments/Organization(s)

 

 

 

 

 

 

 

 

 

 

Month	INDEX			Growth Rates (%)
	2004-05	2005-06	2006-07	2005-06	2006-07
April	186.2	195.8	208.1	5.2	6.3
May	188.5	200.9	213.6	6.6	6.3
June	183.5	196.7	210.3	7.2	6.9
July	192.4	193.3	212.5	0.5	9.9
August	185.8	198.4	208.2	6.8	4.9
September	188.3	192.9	211.5	2.4	9.6
October	193.1	207.3	226.0	7.4	9.0
November	191.4	202.4	221.6	5.7	9.5
December	199.8	214.6		7.4
January	202.9	220.1		8.5
February	188.1	205.7		9.4
March	216.0	231.2		7.0
Apr -Nov	188.6	198.4	213.9	5.2	7.8

N.B: Indices and Growth rates are provisional

CRUDE PETROLEUM PRODUCTION
Weight: 4.17%
Month	Production (in Thousand tonnes)			Growth Rates (%)
	2004-05	2005-06	2006-07	2005-06	2006-07
April	2814	2802	2752	-0.4	-1.8
May	2886	2830	2857	-1.9	1.0
June	2783	2792	2826	0.3	1.2
July	2864	2751	2863	-3.9	4.1
August	2874	2411	2702	-16.1	12.1
September	2777	2572	2813	-7.4	9.4
October	2881	2679	2928	-7.0	9.3
November	2801	2563	2821	-8.5	10.1
December	2876	2642		-8.1
January	2913	2774		-4.8
February	2596	2542		-2.1
March	2917	2845		-2.5
Cumulative Total (Apr-Nov)	22680	21392	22567	-5.7	5.5
Note: 1. Cumulative total may not tally with monthly total;            2. Production data and Growth rates are provisional. Source: Ministry of Petroleum & Natural Gas

  

OUTPUT OF PETROLEUM REFINERY PRODUCTS
Weight: 2.00%
Month	Output (in Thousand Tonnes)						Growth Rates (%)
	2004-05	2005-06		2006-07			2005-06		2006-07
April	9694		8947		10118	-7.7		13.1
May	10234		9624		10784	-6.0		12.1
June	10002		9896		10940	-1.1		10.5
July	9745		10096		11370	3.6		12.6
August	9797		10042		11257	2.5		12.1
September	9317		9776		11083	4.9		13.4
October	9958		9719		11473	-2.4		18.1
November	9708		9853		11468	1.5		16.4
December	9846		10754			9.2
January	10295		10857			5.5
February	9484		10098			6.5
March	10136		11089			9.4
Cumulative Total (Apr-Nov)	78456		77953		88493	-0.6		13.5
Note: 1. Cumulative total may not tally with monthly total           2. Output and Growth rates are provisional. 3.  The figure are estimated on the basis of data on refinery production (in terms of crude throughput) Source: Ministry of Petroleum & Natural Gas

  

COAL PRODUCTION
Weight: 3.22%
Month	Production (in Million tones)						Growth Rates (%)
	2004-05		2005-06	2006-07			2005-06	2006-07
April	28.20	30.50			31.54	8.2			3.4
May	27.58	30.67			33.15	11.2			8.1
June	27.60	28.54			31.95	3.4			11.9
July	28.60	28.14			31.12	-1.6			10.6
August	26.25	29.03			29.09	10.6			0.2
September	28.20	29.42			29.23	4.3			-0.6
October	31.07	32.96			33.65	6.1			2.1
November	32.46	34.69			36.38	6.9			4.9
December	35.98	38.37				6.6
January	35.40	39.10				10.5
February	34.53	37.75				9.3
March	40.81	43.77				7.2
Cumulative Total (Apr-Nov)	230.00	244.00			255.67	6.1			4.8
Note : 1. Cumulative total may not tally with monthly total            2. Production data and Growth rates are provisional. Source : Department of Coal

  

ELECTRICITY GENERATION
WEIGHT: 10.17%
Month	Generation (in Gwh)			Growth Rates (%)
	2004-05	2005-06	2006-07	2005-06	2006-07
April	48930.0	50413.2	53387.7	3.0	5.9
May	47981.0	52943.4	55630.8	10.3	5.1
June	46570.0	50948.9	53450.6	9.4	4.9
July	50283.0	49781.1	54224.2	-1.0	8.9
August	48325.0	52145.2	54295.8	7.9	4.1
September	49059.0	48694.5	54289.3	-0.7	11.5
October	48484.0	52217.7	57292.5	7.7	9.7
November	47792.0	49405.3	53745.3	3.4	8.8
December	50543.0	52257.1		3.4
January	50525.8	53759.6		6.4
February	46015.8	50225.4		9.1
March	52923.5	54719.8		3.4
Cumulative Total (Apr-Nov)	387424.0	406541.1	436323.3	4.9	7.3
Note : 1. Cumulative total may not tally with monthly total;            2. Generation and Growth rates are provisional.           3. Electricity generation data includes also imports from Bhutan   Source: Ministry of Power

  

CEMENT PRODUCTION
Weight: 1.99%
Month	Production (Thousand Tonnes)			Growth Rates (%)
	2004-05	2005-06	2006-07	2005-06	2006-07
April	11140	12240	13674	9.9	11.7
May	10950	12630	13437	15.3	6.4
June	10300	12010	13364	16.6	11.3
July	10768	11160	12663	3.6	13.5
August	9355	11160	11422	19.3	2.3
September	10340	10845	12585	4.9	16.0
October	11253	12218	13333	8.6	9.1
November	10764	11599	12930	7.8	11.5
December	11433	12968		13.4
January	11760	13571		15.4
February	10971	12757		16.3
March	12525	14648		17.0
Cumulative Total (Apr-Nov)	84870	93862	103408	10.6	10.2
Note : 1. Cumulative total may not tally with monthly total;            2. Production and Growth rates are provisional  Source : Department of Industrial Policy & Promotion

  

FINISHED   (CARBON) STEEL PRODUCTION
Weight: 5.13%
Month	Production (in Thousand Tonnes)			Growth Rates (%)
	2004-05	2005-06	2006-07	2005-06	2006-07
April	3022	3414	3643	13.0	6.7
May	3210	3370	3632	5.0	7.8
June	3155	3414	3662	8.2	7.3
July	3300	3398	3771	3.0	11.0
August	3278	3639	3777	11.0	3.8
September	3294	3574	3840	8.5	7.4
October	3337	3874	4170	16.1	7.6
November	3350	3847	4194	14.8	9.0
December	3395	3961		16.7
January	3514	4017		14.3
February	3316	3728		12.4
March	3884	4308		10.9
Cumulative Total (Apr-Nov)	25946	28530	30689	10.0	7.6
Note : 1. Cumulative total May not tally with monthly total; 2.     Production Data and Growth rates are provisional.   Source: Ministry of Steel

  

Department of Industrial Policy & Promotion, Ministry of Commerce & Industry

New Delhi, dated 2^nd January, 2007

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ENHANCEMENT OF FDI CEILING FROM 49% TO 74% IN TELECOM SECTOR – AMENDMENT
TO PRESS NOTE 5 (2005 SERIES) 

PRESS NOTE

           The Government, vide Press Note 5 (2005 Series) dated 3.11.2005, had notified the enhancement of Foreign Direct Investment (FDI) limits in the Telecom Sector subject to specified conditions.  In terms of para 4 of the said Press Note, an initial correction time of 4 months from the date of issue of the Press Note was allowed to the existing licensee companies for adherence of the conditions. The correction time was extended from time to time and the last extension was allowed up to 2^nd January 2007 vide Press Note 7 (2006 Series) dated 3.10.2006.                    

          It is notified for the benefit of investors that the Government has decided to further extend the time period for the telecom service provider companies to comply with the conditions set out in Press Note 5 (2005 Series) by three months w.e.f 3.1.2007 up to 2^nd April 2007. 

          Press Note 5 (2005 Series) dated 3.11.2005 stands modified to the above extent. 

Department of Industrial Policy & Promotion, Ministry of Commerce & Industry

New Delhi, 2^nd January, 2007

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INDIA TO DEVELOP LONG-TERM SOURCES
OF ROUGH DIAMONDS: JAIRAM RAMESH 

New Delhi: January 1, 2007 

India is a world-leader in the gems and jewellery industry but its exports are dependent entirely on imports of rough diamonds, gold and other coloured gemstones.  The Minister of State for Commerce, Shri Jairam Ramesh who has been in regular interaction with the Gems & Jewellery Export Promotion Council (GJEPC) to discuss various issues facing the industry has held that the Security of supply of raw materials is thus an important issue for the sustainability of the industry. India imports close to $ 8 billion of rough diamonds.  

With a view to ensure regular supply of rough diamonds, the Minister has held detailed discussions over the past three months with the Ambassadors of a number of countries including Russia, Canada, Australia, South Africa, Namibia,  Lesotho, Botswana, Ghana, Angola, Azerbaijan, Armenia, Uzbekistan and  Venezuela. 

In his meetings with African countries, Shri Ramesh has stressed India’s commitment to ensuring “win-win” partnerships for both sides with India helping African countries build their local industry through technical assistance, while securing access to sources of rough diamonds.  Further, negotiations between MMTC and Alrosa of Russia are in an advanced stage and a joint venture is expected to be finalized in 2007. The forthcoming visit of President Putin to India will added an extra momentum to this process.

           On the domestic front, the preliminary explorations carried out by global companies in Madhya Pradesh, Chattisgarh and Andhra Pradesh have revealed good prospects for diamonds and coloured gemstones. Over the next decade with aggressive exploration and development, Indian sources could also be developed. 

In his interactions with the GJEPC, Shri Jairam Ramesh has highlighted the importance of the diamond sector particularly which today accounts for 80% of total exports of gems and jewellery and is estimated to employ close to 10 lakh artisans and workers, both directly and indirectly. This industry is concentrated mainly in Maharashtra and Gujarat. The gold jewellery industry accounts for 15% of gems and jewellery exports and has expanded impressively in Maharashtra, Delhi, Bangalore, Kolkata, Chennai and Hyderabad. The coloured gemstone industry is also growing fast in Rajasthan, Maharashtra and Delhi. The Minister has also complimented the Gems and Jewellery Export Promotion Council (GJEPC) for preparing the Vision-2015 roadmap for the gems and jewellery industry in collaboration with KPMG. The Vision Document had outlined threats and opportunities in great detail. Growing competition from China, rise of new materials like palladium and steel, development of synthetic diamonds, consolidation in the world diamond industry and growth of new cost-effective cutting techniques are all possible scenarios which India has to plan for systematically. Shri Ramesh has called the Vision Document as an excellent blueprint which will be implemented by the Ministry of Commerce in all seriousness and sense of purpose.  

Shri Ramesh has also asked the GJEPC to develop new areas for the industry within the country. As for example, thousands of workers from Orissa work in the diamond cutting and polishing industry in Surat. He has asked the GJEPC to explore how backward states like Orissa can generate employment and value-addition in the gems and jewellery industry. The Commerce Ministry has provided extensive assistance to establish the Indian Institute of Gems and Jewellery in  Mumbai and the Sardar Vallabhbhai Institute for Jewellery Design and Manufacture in Surat. An expansion of the Indian Diamond Institute in Surat is also on the anvil. Maikanchan SEZ in Kolkata is the first-ever project in this industry and another SEZ is being developed in Sitapura near Jaipur.  

Meanwhile, the M.R. Sivaraman Committee set up by the Finance Ministry at the initiative of the Commerce Ministry to recommend a growth-oriented fiscal regime for the gems and jewellery industry has recently submitted its report. The fiscal regime seeks to strengthen India’s global position and make Mumbai the world hub, replacing Antwerp.  

India’s position in the world gems and jewellery industry has earned it the prestigious position of Vice-Chairman of the Kimberly process with the possibility of being Chairman in 2008. The Kimberly Process is a global initiative to certify that shipments of rough diamonds are free from “conflict diamonds”.  India will provide technical assistance to African countries to ensure that they meet with the Kimberly Process certification standards.  

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