Reactions to Manmohan Singh’s choice for Commerce Minister: Anand Sharma
Anand Sharma is India’s new Commerce minister. How is this news being received?
Former commerce minister Kamal Nath will head the much sought after road transport and highways ministry in place of the DMK’s TR Baalu. Kamal Nath had made no secret of his desire to move out of commerce to a ministry with strong domestic content.
This infrastructure ministry forms a key part of the prime minister’s strategy to revive the economy. Under Baalu, road development did not make good progress and the prime minister wants to reverse this.Singh, however, surprised many with his choice of Sharma as the new minister for commerce. It is a huge elevation for Sharma, who was only one of two ministers of state in the external affairs ministry earlier. Jyotiraditya Scindia is the minister of state for commerce.
Swapan Dasgupta in a CNN-IBN debate:
Political heavyweights have been inducted in infrastructure and social sector, is that the tone of the governance that we will see in this new Government?
“That is difficult to say but the move of Kamal Nath away from Commerce is very interesting. He in fact did not want Road Transport and Highways, he wanted a bigger portfolio. But the fact is that he has got an important ministry which is about infrastructure. The point is that in Commerce we have Anand Sharma and there might have to be adjustments made with WTO in the international scale and that could be one of the reasons,” Adhikari said.
Is that a possible climbdown by the new Government?
“India has taken certain positions which are completely at odds with the US. Now the WTO position was equated with Kamal Nath. He was standing up to American protectionism. So it will be interesting to see what stand the Government will take,” Dasgupta said.
The Economic Times:
Commerce ministry, under Anand Sharma, has been entrusted with the task of taking urgent steps to boost exports. The minister has the dual task of giving suggestions to the finance ministry for budget formulation as well as finalising the foreign trade policy for 2009-10, a senior official in the ministry said.
The free trade agreements with Asean and South Korea are also waiting for final touches to be given by Mr Sharma, he added.
Speaking to ET, Mr Sharma said; “I am humbled by this responsibility that is entrusted upon me at this critical juncture when globally commerce and industry is challenged by the ongoing downturn.”
He also hinted that India will remain aggressive at multilateral trade negotiations. “I will look at all possible measures to ensure and enhance our commercial engagements with the world and contribute in creating a global economy which will be more trusting and not creating protectionist barriers,” he said.
NEW DELHI: It was at 9.30pm on Thursday that news finally came – the portfolios were out. At first look it seemed along expected lines, but then a few surprises surfaced: there was a new commerce minister in Anand Sharma with the previous one, Kamal Nath, being moved to surface transport. …
The delay in announcing portfolios betrayed that allocation of jobs wasn’t easy. As Sonia Gandhi said, it was a balancing act. Political considerations had to be married with merit to create a team that will deliver. And as Manmohan Singh said, people expected efficiency from the government; “business as usual” would not do.
Will the team deliver? Well, here are its key players. For a government for which rural upliftment is a stated priority, the man on the spot is newcomer C P Joshi who has been given the rural development ministry. Another priority, infrastructure, has the effective Kamal Nath in charge of surface transport (although there were whispers about him being being removed from “glamorous” commerce), and Sushil K Shinde as power minister.
…If Anand Sharma looked pleased after his elevation as cabinet minister, being named commerce and industry ministry should make him beam. He is now in the big league. Perhaps a background in international law and diplomacy weighed in his favour for a ministry where global trade talks are among top concerns.
…Jairam Ramesh, the man behind Congress’s poll campaign, is expected to play a crucial role as environment minister as important negotiations on global warming are on the agenda later this year.
…
Industry reactions as quoted in the Economic Times:
India Inc hails PM’s ministerial team
28 May 2009, 2300 hrs IST, PTINEW DELHI: India Inc on Thursday welcomed Prime Minister Manmohan Singh’s new ministerial team and expressed hope that they will live up to the expectations.
"People and industry have great aspirations … We hope this team will work committedly to come up with their expectations," Assocham Secretary General D S Rawat said.
Ficci Secretary General Amit Mitra said, "It is a team of experience, excellency and balance."
Commenting on the new Commerce and Industry Minister Anand Sharma, Mitra said he has good international networks which will help him in dealing with the critical and important issues of the World Trade Organisation.
"He will make an excellent negotiation as he has great diplomatic experience at the global level," Mitra added.
Confederation Of Indian Industry (CII) said: "There is a shuffle which is fine as we have worked with them earlier and looking forward to closely work with them. We are happy to see the portfolio distribution."
"Kamal Nath is known to be a person of great skills … there are great expectations from him … highways development should be highest priority for the economy," CII Director General Chandrajit Banerjee said.
Nath, who was previously the Commerce and Industry Minister will now hold Road Transport and Highways portfolio.
Sharma, who was the junior foreign minister in the previous government and has his roots in youth politics, has little experience of economic portfolios and is likely to toe the line set by his reformist boss, Prime Minister Manmohan Singh.
Sharma is an articulate speaker and defended a controversial nuclear deal with the United States in parliament last year.
India is a leading negotiator for emerging nations in the struggling Doha round of talks, and its efforts to protect poor farmers have been one of the stumbling blocks to an agreement.
Sharma is unlikely to soften India’s pro-farmer stand at the talks but could be flexible in giving market access in other sectors, analysts said.
While the global financial crisis may have made market reforms unfashionable, it is the ruling Congress party itself that may prove a bigger obstacle to deep change.
Congress won the election not only because of four years of rapid growth but also because of a pro-farm policy that may make it difficult for the government to make a radical shift in its position at the Doha talks.
India expects the next round of negotiations at the World Trade Organisation (WTO) to start in January or February 2010.
The appointment of Kamal Nath, who is seen as pro-business, as road transport and highways minister signals the government’s intention to speed up the implementation of infrastructure projects which had slowed under the previous government.
India’s new Commerce Minister: Anand Sharma
Well, the wait got over last night and we now know who the new commerce and industry minister is.
Here is a profile of Anand Sharma, (a lawyer incidentally) the new man in charge of India’s WTO negotiations:
Profiles: Anand Sharma is Mr Popular
Press Trust Of India
New Delhi: Anand Sharma, 56, who served the Congress Party as a spokesman for years, will now be India’s chief spokesman at multilateral trade bodies like World Trade Organisation seeking fair deal for the country.
His well-measured words and oratory skills, which got polished as the Minister of State for External Affairs, must have weighed heavily on Prime Minister Manmohan Singh’s decision to give him the Commerce portfolio.
That is not enough. As a combined portfolio of Commerce and Industry, Sharma would also be in-charge of attracting foreign direct investment into the country at a time when money is hard to come.
He will also be presiding over policies that have to be friendly to the global investors and the fledgling domestic industry.
Sharma’s key challenge would be to put India’s shrinking exports back on track. Exports have been declining sharply for the last six months under the impact of the global meltdown.
Many believe he has been rewarded for his services to the Congress, particularly his election campaign strategies.
Congress leader from Himachal Pradesh, Sharma was part of the party’s ‘War Room’, which had been set up to spearhead the party’s election campaign.
It was his idea of using the ‘Jai Ho’ song from Oscar winning movie Slumdog Millionaire during campaigning to strike a chord with the masses. It apparently served the purpose, even though rival BJP tried to counter it with Bhay Ho slogan.
A well-known face of the Congress, he has been the party spokesman for several years when the party was in the Opposition and some time after it came to power in 2004.
He was made Minister of State for External Affairs in the outgoing government in 2006. After PR Dasmunsi fell critically ill last year and was indisposed indefinitely, Sharma was given additional charge of Minister of State for Information and Broadcasting.
A lawyer by profession, Sharma is a member of Rajya Sabha. He has been the member of the Upper House on four occasions earlier also. He has also been member of the Defence as well as Business Advisory Committees.
A prominent leader of the student and youth movement in the country, he was one of the founders of Congress’ students wing NSUI.
Sharma first came to limelight during Rajiv Gandhi days as chief of the Indian Youth Congress, which was a period when the youth body was proactive on the issue of apartheid in South Africa, which is now a thing of the past. Incidentally his wife Zenobia is from South Africa.
Kamal Nath is now cabinet minister for road transport and highways. He will now be more engaged with domestic infrastructural development rather than negotiations at the international stage. I will do a follow-up post on reactions to this news.
Kamal Nath might not be commerce minister
Moneycontrol is quoting CNBC-TV18:
Will Kamal Nath get Commerce Ministry this time?
Published on Wed, May 27, 2009 at 20:48 , Updated at Wed, May 27, 2009 at 21:51
Source : CNBC-TV18Kamal Nath has been a high profile minister of Commerce and Industry, and has made a name for himself as a tough trade negotiator. But he may not return to Udyog Bhavan. CNBC-TV18’s Economic Policy Editor Vivian Fernandes reports.
Here is a verbatim transcript of Vivian Fernandes’ comments on CNBC-TV18. Also watch the accompanying video.
We do not know where the previous Commerce Minister Kamal Nath is going but we know where he is not going. He is not going to be in Udyog Bhavan. Now Kamal Nath had made a name for himself as a tough trade negotiator. The WTO talks broke down in Geneva last July because of the tough stand he had taken to protect Indian farmers and there is a feeling that India might have to make a climb-down and Kamal Nath would not like to be that person. But more than that I think Kamal Nath is a mass leader, he would like to be recognized as a politician of consequence which is why he wants a large domestic footprint.
There was talk of the industry portfolio being carved out as a separate ministry with additional charge of small and medium enterprises and heavy industry portfolio being added to it but such a minister sounds large but it is not weighty enough. So I think Kamal Nath wanted the Rural Development Ministry but we understand that, that is going to go to CP Joshi who is the Congress President in Rajasthan.
The other ministry that Kamal Nath fancied was the Infrastructure Ministry where there is a lot of broken things to be mended, for example, surface transport or even power and he would not be averse to the idea of being HRD Minister as well.
But I spoke to him, and he played his cards very close to his chest. He said that he would be comfortable with whatever Sonia Gandhi and Prime Minister Manmohan Singh deemed suitable for him.
Commerce Ministry to be split into industry and trade? Kamal Nath might not get trade ministry?
The Economic Times reports that the new Cabinet might have separate ministers for industry and trade departing from the usual practice of one ministry looking after both industry and commerce including trade. There were hints earlier about an imminent restructuring of the commerce ministry. This might be a good move, as both trade and industry are big enough responsibilities to deserve separate ministers. How will this affect the influence of industry on trade negotiations? This might also mean that Kamal Nath might not be the trade minister. Another name being mentioned is Mr. Kapil Sibal, a lawyer turned politician who was minister for science and technology in the previous cabinet. Here is the report in full:
Commerce, industry likely to part ways
26 May 2009, 0241 hrs IST, Amiti Sen, ET BureauNEW DELHI: The government is looking at splitting the commerce and industry ministry into two ministries with two full Cabinet ministers. The commerce ministry will deal primarily with all trade-related areas previously under the commerce department, and the responsibilities of the industry ministry will be much more than what was earlier held by the department of industrial policy and promotion, a government official has said.
In addition to the administration and monitoring of industrial growth and laying down of foreign direct investment guidelines, new sectors, such as heavy industry and micro, small & medium enterprises, will also come under the purview of the new industry ministry being considered.
“The government is seriously considering dividing the commerce and industry ministry into two. Names of the Cabinet ministers, who will head the two separate ministries, are likely to be announced on Tuesday,” an official, who did not wish to be named, said.
Former commerce and industry minister Kamal Nath is a likely candidate for the industry ministry, another official said on conditions of anonymity. The front-runners for the commerce ministry include Salman Khursheed and Kapil Sibal.
If Kamal Nath is not satisfied with the industry ministry, despite the added responsibilities, he could be given the human resources development ministry, the second official added.
Commerce, as an individual ministry, will continue to hold a lot of weight, as important areas, such as export-import policy, bilateral trade negotiations, the World Trade Organisation and the special economic zones (SEZs), will fall under its purview.
With senior politicians in the UPA scrambling for important portfolios, the split in the commerce and industry ministry can also be looked at as a move to accommodate more.
The Indian Express reports:
Kapil Sibal, Kamal Nath and Moily are chief stars of every ministry speculator, having been assigned almost every important ministry below Raisina Hill. Kamal Nath, who was hoping to go up the Hill, is now slightly disappointed and is learnt to have held lengthy meetings with Finance Minister Pranab Mukherjee but came out with no firm answer. In fact, at one point, Defence Ministry mandarins had the bio-data of both A K Antony and Kamal Nath ready while the suspense was on.
Berths now being tossed around between the three are Law, Commerce, Roads, Shipping and Transport, Human Resource Development, even Environment and Forests. While Kamal Nath is said to be not so keen to return to his old beat despite the persuasion, Sibal makes no bones about the fact that he will not accept the Law portfolio.
Moily, incidentally, has no such preference but does not particularly like being in the dark. “I am more eager than you to know what is my ministry, but no phone call has come,” he said.
Last night CNN-IBN was reporting:
CP Joshi, the Rajasthan Congress President, will be the new Rural Development Minister, Kamal Nath will get Commerce and Company Affairs, Kapil Sibbal is likely to get either HRD or Commerce portfolios while Ambika Soni, the tourism minister in the previous government, could now be the new Health Minister.
Media: Commerce minister most likely Kamal Nath
Todays media reports are giving stronger indications that Kamal Nath is likely to be named commerce and industry minister in the new cabinet. We will of course know for sure in a few hours.
The Business Standard:
Manmohan Singh is a lucky Prime Minister, for about a half of his old 29-member Cabinet has deserted him. It is not just that Lalu Prasad and Ram Vilas Paswan walked out of the United Progressive Alliance, as did Anbumani Ramdoss of the PMK, but also that some ministers whom he may have wanted to drop have conveniently lost their elections. That and his willingness to be rid of manifest non-performers like Arjun Singh explain why Dr Singh has been able to bring seven new faces into his Cabinet of 19 colleagues. However, people like SM Krishna, Veerappa Moily and Mamata Banerjee are not “new” faces in Indian politics. So the primary message from Friday evening’s swearing-in was not change but continuity—a fact confirmed by the half-dozen portfolios announced on Saturday. Pranab Mukheree at finance, P.Chidambaram at home and AK Antony at defence are natural choices, and Mamata Banerjee has been at Rail Bhavan before (though her first comments suggest that she has not improved her economic literacy). In addition, if Sharad Pawar stays in Krishi Bhavan though with agriculture (food seems to have been taken away, perhaps because it includes sugar), Kamal Nath in Udyog Bhavan, and Murli Deora in Shastri Bhavan (with petroleum and natural gas), the continuity principle will be seen as over-riding the change agenda. The natural question then would be whether that is enough to give the government a new wind. The answer is that, when half the old slate had been wiped clean, there should have been more evidence of substantive change.
The Telegraph (India):
In line with a plan to keep as many infrastructure ministries as possible with the Congress, M. Veerappa Moily could get surface transport, highways and shipping; Sibal is tipped to get human resource development; C.P. Joshi, a new face, could be given rural development; Ghulam Nabi Azad is being considered for parliamentary affairs, which he has held before, and steel; B.K. Handique could get heavy industries; Kamal Nath is expected to retain commerce and Jaipal Reddy urban development; Anand Sharma, who had held independent charge of information and broadcasting as junior minister after Priya Ranjan Das Munshi fell ill, could keep the portfolio; Ambika Soni could either get health and family welfare or retain tourism and culture; and Meira Kumar is expected to return to social justice and environment.
DNA:
As more ministers get allocated portfolios over the week, statements made by individuals of key ministries like finance, commerce and oil would be closely watched, say experts.
Deepak Jasani, head of retail research, HDFC Securities, says the market would watch other appointments to the cabinet.
It’s back to basics as political dust settles
"Telecom, infrastructure power and commerce would be the key ministries."
"One area to watch out is the commerce ministry. Kamal Nath was holding the portfolio. But nothing was announced. It is a key portfolio as exports are under pressure," says Gopal Agrawal, head of equities at Mirae Asset Management.
Kamal Nath speech at National University of Singapore
Here is an interesting speech by India’s former Commerce and Industry minister Kamal Nath at the National University of Singapore in 2008. Mr. Nath might well be India’s Commerce Minister for another 5 year term …
Kamal Nath on Doha round prospects, Indian reforms, export stimulus measures and more …
We still don’t know who will be given charge of India’s commerce ministry, but this announcement can be expected by Tuesday. My sense is that Mr Kamal Nath himself is keen on continuing as Commerce minister and conclude the unfinished Doha round as well as FDI and other industrial sector reforms.
In an interview to CNN-IBN (see the text here) Mr. Nath spoke about the prospects of the Doha round:
Rajdeep Sardesai: Between 2004-09, Kamal Nath came to be identified with the World Trade Organisation (WTO) talks. Do you believe that with this clear mandate you will have a freer hand in the sense negotiating at the WTO you should be the commerce minister. Do you see a quick completion of the Doha round?
Kamal Nath: I think India needs to have a rule based multilateral system, we have a big stake in that. But today I think the Western countries who are bigger proponents of this are the ones getting cold feet and not India.
Rajdeep Sardesai: Yes, exactly that is why the US democratic administration seems protectionist.
Kamal Nath: That is what I am saying, they are getting cold feet not us.
On FDI:
Rajdeep Sardesai: Just before the elections, you had amended the Foreign Direct Investment (FDI) policy through a press note. Now investments made by a company registered in India in which a foreign company has a less than 50 per cent stake will not be considered as FDI. Some believe this has allowed foreign companies to breach sectoral limits, was this the objective to open up?
Kamal Nath: When we have a global recession, we have to make India a good investment destination. I want to separate ownership and control and this seeks to do that and get more investment.
On FDI in retail:
Rajdeep Sardesai: In your first tenure, between 2004-09 there was this ghost of Left which was always haunting you. This time it doesn’t even exist, will there be FDI in the multi-sector retailing or do you believe that this might affect the kiranewalla (small grocery shop) and that might be a concern that your fellow Cabinet Ministers will against you?
Kamal Nath: It is not FDI, it is big versus small and if it is big you can have a multi-brand Indian company, you have Reliance, ITC etc.
Rajdeep Sardesai: Will you allow FDI?
Kamal Nath: No, I am not talking about retail. As long as FDI doesn’t displace existing employment it is good but talking about the retail sector it is a very grey area.
Rajdeep Sardesai: You see it as a grey area, I thought at one point of time you believed that it would help Indian agriculture.
Kamal Nath: No, we cannot generalise on retail. Retail is not cement and motor, it is technology. If we can have access to retail technology and in fact we must not be looking at man at the moment, we must be looking for the niece and the son and the daughter. And that is the key thing to look at.
On liberalisation (FDI) in education:
Rajdeep Sardesai: The Commerce Ministry had also been wanting to liberalise high education but the HRD Ministry previously under Arjun Singh was not helpful. He is no more there but the fact is that will it happen now?
Kamal Nath: I can’t say that this will happen, I can only say that we have to ensure that our youngsters have the access to the best education in India. Why are we sending thousands of youngsters abroad, why can’t they stay here and study at a fraction of the cost?
On the need for export stimulus measures:
Rajdeep Sardesai: Exports, a critical area again. The export sector has been badly hit by recession. Your (Commerce) ministry had proposed a one year exemption in the payment of the fringe tax to these export oriented companies. Will we see that?
Kamal Nath: Exemption is about competitiveness and cost. Today, if the economy is in recession we can’t plan a package for Europe or the US. We are going to ensure that all levies and taxes are refunded and are not there for export.
Rajdeep Sardesai: But the aam aadmi is the one who is being hit. Do you think the time has come for a comprehensive package for the export sector?
Kamal Nath: There is a need for a comprehensive package to refund taxes, levies on anything that is being exported. Today you go anywhere in the world and you buy something from a shop, you refund immediately. So, you must have all taxes and levies because no taxes and levies are exported.
On differences between the Commerce and the Finance ministeries (in the previous administration the Commerce and Finance ministries had differed over SEZs and over sops for exporters):
Rajdeep Sardesai: Last time there was a feeling that the Commerce Ministry and the Finance Ministry were not on the same track. Will it be different this time with Pranab Mukherjee as the Finance Minister?
Kamal Nath: Well, I think the job of the Finance Ministry is to collect the revenue and see that they do resource management so any Finance Ministry would do that. But you need to weigh it off, you may not export and you may be having an economic impact because of that.
On financial sector liberalisation:
Rajdeep Sardesai: The new Government this time is largely free of the pressures of allies and therefore you will expected to push it with reforms. Last time, every time you were asked about reform you said look my hands are tide. Your hands are no longer tide, will it be different this time?
Kamal Nath: Let’s not say that there were no reforms in the last government. There were reforms in the financial sector which we didn’t do but let us recognise this. We should remember that the reforms that were asked by those financial icons of the Western world, the ones which were wound up.
Rajdeep Sardesai: So, are you among those who think that it is good to be cautious about financial sector liberalisation?
Kamal Nath: No, it depends which reforms we are talking about. We are looking at the reforms which are India specific; we can’t be talking about reforms all over the world. Today the most important reform is the reform in the governance. Reform in our Labour Act, the labour laws must be made employment generating.
On labour law reforms:
Rajdeep Sardesai: So, you would support reforms in labour laws which allow companies to hire and fire easily?
Kamal Nath: We must recognise this that for example if a textile company wants to hire some people to complete an order in four months but they can’t take that order because he can’t hire them for four months. So at that point of time, we are losing on that amount of employment.
Rajdeep Sardesai: But will the politicians allow this kind of labour laws reform? The problem is this is where the politics seem to clash with good economics.
Kamal Nath: No, I am all for the reform in labour laws which generate employment, provide employment security. We have to have this because employment generation is our No 1 priority with the young population.
On Special Economic Zones:
Rajdeep Sardesai: But let’s look at land because there has been controversy over Kamal Nath’s policies as commerce minister when it came to the Economic Zones. You were looked at someone who was liberally granting Special Economic Zones (SEZs), some suggested that it was little more than a land scam. And now you have got Mamata Banerjee who after Nandigram and Singur is going to get tough with any attempts made to liberalise land acquisitions.
Kamal Nath: Let us not talk in the abstract. There are SEZs today on the ground, you can measure easily how much investment is coming to the nearest rupee. We can measure how much employment has been generated, how much export has happened so all that are stories of the past. There are concerns in high density states.
Rajdeep Sardesai: But after Singur and Nandigram, won’t there be pressure to sort of modify your land acquisition policies, your own minister will suggest that.
Kamal Nath: I am all for that and that is what I am suggesting that there was a Cabinet committee, there was a group of ministers selected for that. That has moved the new land acquisition rehabilitation suggestive policy and that parliament had approved that and now this Parliament will take it up.
The videos of this interview (in 5 parts) can be watched here.
Who will be India’s new commerce minister?
With Dr. Manmohan Singh’s new cabinet due to be sworn in tomorrow, speculation is on about who will get which ministry portfolio. Readers of this blog would be interested in whether Kamal Nath will continue as Commerce minister. The Commerce minister is responsible for India’s WTO and other trade negotiations.
Until yesterday, the buzz was that Mr. Nath might be promoted to external affairs minister, leaving the commerce ministry for someone else. One name being mentioned was that of Mr. Jairam Ramesh who was the junior minister for commerce under Kamal Nath.
Todays papers however seem to indicate that Mr Nath might continue with commerce and that Mr. Ramesh might become power minister.
The Hindu reports:
The Commerce Ministry is to be restructured but could well still be headed by Kamal Nath.
This is interesting news. How will the commerce ministry get restructured?
Meanwhile the Times of India expresses the hope that freed from the demands of the left parties, the new administration might pursue a “more reasonable line” in the Doha negotiations. An extract:
With trade, India adopted the spoiler’s role at World Trade Organisation conferences, playing the victim of rapacious developed countries. The rhetoric employed was from another era, when India played a prominent role in the Group of 77, the commercial foil of the Non-aligned Movement. Without the Left calling the shots, its acolytes in the Congress-led ruling coalition will find themselves adrift. It is likely that India will pursue a more reasonable line.
This is what Kamal Nath told the Washington Post:
"We now have the mandate for a renewed push for economic reforms," said Kamal Nath, a senior leader of the Congress party who served as commerce minister in the previous government. "We have to open up more and take some hard steps to spur the economy because of the global recession."
Meanwhile the Economic Times carries an article on how the Commerce ministry bureaucrats are preparing for the new minister to take charge. This is one very enthusiastic ministry. Here is the report in full:
Commerce babus just can’t wait to revive work
21 May 2009, 0236 hrs IST, Amiti Sen, ET BureauNEW DELHI: Though the last word on Kamal Nath retaining his commerce and industry portfolio is still to be heard, it seems that the bureaucracy has got down to business.
Commerce department officials are giving finishing touches to presentations on issues ranging from falling trade to the stimulus packages to the annual foreign trade policy to India’s WTO stand to free trade agreements (FTAs). The aim is to give the new minister a fair idea of the happenings in the department and the road ahead, a senior commerce ministry official said.
"All officials dealing with various issues falling under the purview of the commerce department had been asked to bring out capsules on what has been happening in various sectors and what remains to be done. The work is almost finished," the official who did not want to be named said.
With exports falling for seven straight months and the situation not expected to improve till September, some quick decisions are called for by the new government.
"The situation is grave. We have ensured that the new minister will be updated on the global economic situation and the effect on domestic business without any loss of time, this will also enable the new minister to come up with an effective foreign trade policy," the official added.
Issues like extension of the interest rate subvention or discount given to exporters from select labour-intensive sectors beyond September 30 and continuation of the higher reimbursements given to exporters under the DEPB (import duty reimbursement) scheme beyond June 30 need to be decided. The government also needs to take a call on whether more sectors and countries need to be covered under the focus-product and focus-market schemes, where cash incentives are given to exporters.
On the overseas front, there are two bilateral agreements that are waiting to be signed. Signing of the FTA with ten-member ASEAN, which had been pushed by Prime Minister Manmohan Singh, is long overdue. The FTA with South Korea too needs to be signed without delay.
Special economic zones (SEZs) is another area that needs immediate attention. With the slowdown hitting SEZ investments, investors who have asked for more time to execute projects need to be dealt with sympathetically. There is also a need to settle issues such as giving infrastructure status to the zones.
Does the WTO oblige India to liberalise legal services? Media gets it wrong again.
An article in the DNA gets it wrong when its writes:
India, under the WTO obligations, is required to open up its legal sector, as this comes under ’services’ category.
Another example of how Indian media reporting on WTO issues can get things completely wrong. The GATS negotiation on services do not “require” India to open up legal services. Here, I am not on the issue of whether liberalisation of trade in legal services would be beneficial as such to the Indian legal industry, Indian businesses or to the Indian economy. But any GATS commitment by India on legal services would be entirely voluntary.
Direct effect of WTO law in India
Here is an interesting SSRN paper on the issue of the status of WTO law within the Indian legal system.
Chowdhury, Nupur,The (Absence of) Direct Effect of WTO Law – Current Developments within the Indian Legal System(May 20, 2008). Available at SSRN: http://ssrn.com/abstract=1136585
Abstract:
This chapter gives an overview of the status of international law under the Indian Constitution and its implications for the status of the WTO Agreement and the covered agreements within the Indian legal system. The Indian legal system is dualistic and international legal instruments ratified by the country become part of the national system only when it is transposed into national law. However such a strict interpretation has often been circumvented by the Courts in favor of a direct applicability of international law on the basis of the principle of consistent interpretation as provided for in the Constitution. In that sense it is interesting to note that notwithstanding the dualistic nature of the legal system, the Courts have applied the consistent interpretation, supremacy and the (in)direct effect principles in a varied number of cases to strengthen the conformity of national law with international law. In that sense, the relationship between these principles is dynamic and can be temporally located within the different trends of judicial activism in the Indian courts. Amongst the WTO agreement it is the TRIPS agreement that has been at the center of most legal disputes. Given the considerable economic interests of the Indian biotechnology sector (drugs and pharmaceuticals) and therefore the high stakes, in concomitance with the considerable textual ambiguity, which the TRIPS amendment has created, this is not surprising. It also underlines the currency of such a debate on the application of the principle of direct effect in the present context of the Indian legal system.
