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Non-Agricultural Market Access : interests of SMEs By : Anil Bhardwaj

Non-Agricultural Market Access : interests of SMEs By : Anil Bhardwaj Federation of Indian Micro and Small & Medium Enterprises (FISME) New Delhi. Over view of the SSI sector Historical data > 8000 products contribution: 35% to exports, 40% to Industrial Production

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Non-Agricultural Market Access : interests of SMEs By : Anil Bhardwaj

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  1. Non-Agricultural Market Access : interests of SMEs By : Anil Bhardwaj Federation of Indian Micro and Small & Medium Enterprises (FISME) New Delhi

  2. Over view of the SSI sector Historical data • > 8000 products • contribution: 35% to exports, 40% to Industrial Production • Employment : second largest after agriculture census on SSIs (2001-02) • 10.5 mn units (1.4 mn* regd, 9.1 mn** un-regd) • Total employment: 25 Mn • Total gross output : Rs. 2.8 Trillion *Census figure; ** Survey figure

  3. Overview…contd Trade Policy: Pre & post reform period Pre-reform: Protection from / by • Intl competition / High Tariff wall & QRs • Domestic / Reservation Policy (<1200 products of 8000) Post reform : • Tariff lowered (inverted in many sectors) • QRs removed; free imports • Reservation policy continues (~500 products) but redundant

  4. Agreements on Mkt. Access and SSIs - I Uruguay Round : Industrial products General : - 67% tariff lines bound, 33% unbound -Tariff lines > those at 40% bound at 40% & < 40% bound at 25% SSIs : - No. of SSI rsrvd. items (8 digit HS) : 2016* -Majority falls in three chapters : Ch-39: Plastics(137 items); Ch-62: Apparel/Clothing (366 items) Ch-84 : Machinery parts (223 items) -Uruguay Round: 1336 Bound; 680 unbound -Majority of rsrvd. items (922) were bound at 40% - Applied MFN 15% on most SSI products (2005) *RIS 2001

  5. Current multilateral negotiations Doha Mandate: (Para 16; Doha Declaration) Market Access for Non-Agriculture products* > Reduction or elimination of tariff/ peaks by agreed modalities > Product coverage comprehensive; without a priori exclusion > Less than full reciprocity ( per Art XXVIII GATT – S&DT) Current discussions : > Reduction through Swiss Type formula (various variants under consideration) >Sectoral approach : e.g. 0-4-0 proposal for 7 sectors * Products under HS Chapters 25 to 97 & certain fish and fish products in HSChapters 3, 5, 15, 16 and 23.

  6. GoI approach so far.. • Reflects developing country sentiments • Aims moderate Tariff cuts • Pairing of Tariffs peaks • Progress on NTBs/ ETBs • Against ‘package’ deal on NAMA, • Agriculture etc.

  7. GoI approach : a critique • Infant industry protection is not sustainable • India : a developing country? • Is NAMA about protection to domestic • industry only or also about Mkt. Access for Indian firms also ? • Which are our markets? Who are our • competitors? ASEAN? West ? • Higher Tariff regime: greater discretion > encourage lobbying> more Tariff distortions after FTAs/ PTAs

  8. FISME’s views on NAMA • Negotiate for ambitious cuts to open up opportunities in developing country markets for Indian products; will address FTA distortions too. • Negotiate hard on NTBs/ ETBs and Tariff peaks • Make up mind for Sectoral approach; if ready, have a plan for ‘0’ duties on inputs • Ensure exclusion of industrial inputs from lists for less than formula cuts/ unbound items (July package para 8)

  9. Thank you Welcome to see you at : http://www.fisme.org.in

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