The shutting of doors to Indian exports is seen as a retaliatory measure, or as to garner more items on the negotiating table while both sides meet again in the ongoing bilateral talks. The case in point for the payback is that India does not allow transit facilities to Pakistan’s exports to Nepal and Bhutan.

At a glance, the accord hugely favours Pakistan as its goods gain access through Afghanistan to Central Asian countries including lucrative markets of Tajikistan and Uzbekistan. The amended trade deal was signed by Pakistan Commerce Minister Amin Fahim and his Afghan counterpart Anwarul Haq in the presence of Pakistan Prime Minister Yousuf Raza Gilani and the US Secretary of State Hillary Clinton.

Islamabad has for long resisted pressure from Kabul to allow the export of Indian goods by land through Pakistani territory. However, this long-standing demand by both Afghanistan and India seemed to impact more the poor of the region than the governments of the nations involved.

The failures of protracted farcical talks between India and Pakistan continue to push every possible event to be used as a tool to blatantly demonstrate displeasure with one another’s actions. Lately, while Islamabad refuses to give India the Most Favoured Nation status, Delhi has raised both tariff and non-tariff barriers to restrict Pakistan’s exports.

It is yet to be seen whether Clinton would be able to play a meaningful role in the region to re-weld the two nuclear states for ushering in peace and prosperity to the region. But given the frequent border tensions and unrest in Kashmir after a respite indicate that any time in near future it is unlikely the two governments giving in to allow each other land transit rights.

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Albeit the renewable power generation is relatively new to the mountainous south Asian country, it is upbeat about the commencement of the project by early next year. Mewang Gyeltshen, chief engineer from the Ministry of Economic Affairs of Bhutan told Recharge that energy demand was increasing by 12 percent, and country had sufficient supplies but remote households needed a sustainable standalone off-grid system.

On the other hand, India’s energy fund is aimed at developing a South Asian regional power grid, with focus on renewable sectors such as hydro, solar and wind. It will comprise of Bhutan with investment of about $850mn (3,000 MW), a 400-kv transmission line at $50mn with Nepal, a 1,000 MW HVDC link with Sri Lanka costing $415mn and a 1,000-MW HVDC back-to-back link with Bangladesh at $220mn.

It should be recalled the Tala Hydro power project in Bhutan, a joint venture by Indian firms, has been successfully commissioned in September 2006 and transmits power to North India. The project has mutually helped, Bhutan to jack up its economy while India to reduce power shortages in its northern parts.

The success of Tala has prompted other Indian energy firms to foray into Bhutan. Last month, the THDC India Ltd, a Govt. of India undertaking, has signed a MoU with Bhutan for the Detailed Project Report (DPR) of 180 MW Bunakha hydroelectric project in Bhutan. The Bunakha project is a part of the Indian government’s initiative to develop 10,000 MW of hydro power in Bhutan by the year 2020.

Bhutan sells hydropower to India at a price of $0.04 per kW, making 100 percent profit from a production cost of $0.02 per KW. Since it is estimated that for every one percent GDP growth more than the same percentage of energy production is required, Indo-Bhutan energy co-operation is likely to be a long-term one.

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The agencies including Agricultural and Processed Food Products Export Development Authority (APEDA) and Export Inspection Council (EIC) have provided necessary technical inputs and financial assistance in supporting export growth in perishable items. The release indicated APEDA through its schemes for Infrastructure Development Scheme for Quality Development, Scheme for Market Development and the Scheme for Research & Development has been making efforts to expand export of products including processed food items.

The exports of perishable items have increased from $1.78bn in 2006-07 to $2.69bn during 2008-09, and a similar projectile has been able to witness in April to November 2009 period by recording more than $1.5bn. APEDA and Directorate General of Commercial Intelligence and Statistics (DGCI&S) under the Ministry of Commerce, Government of India have compiled the export data.

As per the release, the vegetables exports from India during 2007 – 08 were about $341mn and the same was worth around $560mn in 2008 – 09 fiscal. In contrast, floriculture continued to idle with 82.5mn in 2008 – 09 and $76mn in 2007 – 08 as compared to 2006 – 2007 fiscal’s $146mn. The export of perishable items is permitted freely under the Foreign Trade Policy (FTP).

India’s perishable merchandise is largely comprised of vegetables, fruits, groundnuts, floriculture and livestock products. The latest figures show that fruits, groundnuts and livestock products have grown by about 10 – 20 percent.

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Agriculture Minister of India Sharad Pawar is reported to have informed his Russian counterpart Yelena Skrynnik that his country had the capability to meet those demands as and when they emerged. While both ministers met at the sidelines of the BRIC Agriculture Ministerial Meet, Skrynnik told that though abundant stocks of poultry products were available at the moment, we would turn to India whenever a requirement sprang up.

A sudden demand for poultry in Russia has resulted due to the ban imposed on the US and Brazilian poultry as imports from these countries did not meet Russian poultry standards. According to sources, Russian sanitary standards are quite stringent than internationally accepted ones. The Russian poultry imports from the US at some point of time had even risen up to 80 percent in the past but the new sanitary requirements enforced since Jan 1 have completely stopped all imports from the US.

It should be recalled that India too faced several import bans including the existing one from Russia on its meat and poultry products. Nevertheless, a Russian expert group is expected to visit India shortly to review this long-standing export ban.

Pawar said India was exporting bovine meat and poultry products to 60 countries, including Europe, and there was “enormous potential” for exports to Russia as well. Likewise, Skrynnik apprised that Russia last year had imported 600,000 tonnes of poultry and one million tonnes of meat.

However, it is not known that the good news to the poultry and meat industry of India would turn sour to domestic consumers like that of Turkey as it has been feared in Turkey that the export approval for 500,000 tonnes of white meat to Russia could jack up domestic poultry prices significantly. Besides, the Turkish consumers are worried that the new orders from Russia would even cause severe poultry shortage in the country even though Turkish Agriculture Minister, Mehdi Eker argues that production for exports and domestic needs are met separately.

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Along with changes in trade policies which would help exports from developing countries the Chinese manufacturers also will get incentives to maintain price competitiveness in the global markets. China’s exports, which experienced robust growth of more than 25 percent before 2008, dropped by 16 percent last year.

Chinese Commerce Minister Chen Deming at the sidelines of the meet stated all China’s financial policies, including its devalued status of yuan/renminbi, were part of China’s stimulus package comprehensively designed to counter global economic meltdown. He also defended the subsidies, claiming the stimulus incentives “abide by the rule of the World Trade Organisation and bear no protectionism.”

While announcing the policy statement, China admitted that it would “eliminate unreasonable restrictions” on the import front. A re-look at this policy comes after repeated complaints from India to its Chinese counterparts at every platform they met. The policy statement said “imports from developing countries will be expanded so as to satisfy domestic demand on the one hand, and promote mutual benefits and common development on the other.”

Zhang Zhigang, a member of the CPPCC said that if the country wanted to encourage consumption, exports were “vital”. Likewise, Chen said that export-related sectors provide at least 90mn jobs – about 7 percent of the national population – and therefore affect consumption.

Barring surprises, most members during the meet felt export was key to China’s economy indicating the most censured yuan’s low currency value that is tied to the Chinese export advantage would be moreover the same for the coming months until it gets even with its early 2008 export growth. Chen statement corroborates that fact as he said “although yuan faces appreciation pressure, China still plans to keep the exchange rate of yuan stable”.

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Sicily Kariuki, the MD of Tea Board of Kenya said at a recent Kenya-UAE Trade Symposium held in Nairobi that her country had dislodged Sri Lanka as the leading tea exporter last year and hoped it would continue maintaining the same position in the coming years. She also informed Kenya weathered in the global tea market despite severe drought and oversupply price pressure owing to country’s efforts in research and development which produced 50 varieties of tea suitable to be grown in the seven growing regions.

On the contrary, last season’s tea production in Sri Lanka was badly affected by parched weather that damaged crop and wage dispute. However, Sri Lankan Tea Board is reported to be positive about this year’s yield and exports as the climate is forecasted to be conducive for tea plantations across the country.

Though India produces more tea than Kenya, the former is most unlikely to beat the latter in exports as its domestic needs are quite higher than what is available for external supplies, just about 25 percent of the total. The Kenyan tea has been exported to the UK, Pakistan, Egypt and Sudan apart from other 43 countries.

Tea which has attained the new image in Kenya as the highest revenue earner is believed to be attracting many into this field. About 150,000 hectares of land are currently under the crop yielding, and produces an average of 11,000 kg of green leaf per hectare. At the meet, Kariuki apprised that out of the 40 percent of all global tea bags used in making the popular beverage, at least 10 percent of its content came from Kenya.

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Sharma who was in China to attend the eighth Joint Economic Group dialogue urged the host country to remove tariff and non-tariff barriers on import of Indian rice, fruits and vegetables. He also requested to facilitate landing rights for Indian TV channels in China, and the import of more Indian films.

Sharma informed that New Delhi had doubled its foreign workers visa quota to 40, a decision that likely to help more Chinese firms than any other. However, the number of immigrant workers is still not allowed to exceed more than one percent of the total number of workers employed in any project. While China’s Commerce Minister Chen Demin reciprocated by saying that Indian workers would also get visas on liberal basis.

During the meet, Wen showed keen interest in improving bilateral ties with India and said that only if India and China shared common development platform that they could translate this century into an Asian one. Similarly, Sharma said the time for exclusivity in the international governance structure was over; and both nations would have to be at the front of a new global governance architecture.

After meeting several Chinese leaders, Sharma claimed the meet was very positive and substantive as it covered every component of the bilateral ties. He said that he received assurance from Beijing to encourage the Indian firms in the information technology, pharmaceutical and construction sectors to work with local partners to have ‘more presence and access’ in China.

In 2008–09, China exports to India stood at about $27bn while India’s remained around $11bn. China and India plan to take advantage of its vast consumer base of about 2.5bn people which could be larger than any bloc or region excluded of these two nations.

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Earlier in February this year before the approval of the $787bn stimulus bill, the Senate tabled a draft which stipulated the use of the US-made iron and steel in all public-works projects, and planned to extend the same to all manufactured goods. But this was later removed from the bill as the US feared protectionism would spark off trade retaliations from its trading partners.

But the recent 5000-strong protest march with banners of ‘Buy American’ and ‘Rebuild American Manufacturing’ are bringing back the demand for stopping imports which takes the American jobs. The rally appealed to put an end to the policies of the successive governments that led to the downfall of the US economy, and for forfeiting their jobs to the foreigners.

Thousands of Indian steel pipes have found their way to the steel town of Illinois for the building of 1,600-mile Keystone Pipeline from Alberta to Oklahoma to carry oil to the US refineries from the Canadian oil fields. In 2006, when TransCanada, the energy powerhouse from Canada decided to buy 560,000 tons of large-diameter pipe the US economic problems were confined to sub-prime crisis but today it has impinged into almost all areas of the economy.

The trade union workers alleged that the US subsidies have helped the Indian and Chinese manufacturers to dump steel products for lower prices. Last week the union had filed an anti-dumping lawsuit against tubular and pipe steel imported from China. Probably, this is the first time an Indian made product being targeted for anti-dumping in the US.

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The participants in the survey admitted the primary reason for the decline in demand from all regions was owing to the current global economic crises. About 56 percent of the respondents said the rupee depreciation had only moderate positive effect, whereas 14 percent opined that it had a huge positive impact.

AK Jain of Ipca Laboratories Ltd, the leader in anti-malarials stated a major cause of concern among the exporters was the price fluctuation of the currency. The Indian pharma export industry is confident of maintaining its growth despite economic slowdown, and the reason for that is the expenditure on medicines is relatively inelastic to changes in income levels.

Department of Pharmaceuticals of India in its latest release stated the pharma exports had grown by 22 percent from about $4.7bn in 2006-07 to around $6bn in 2007-08. The US is the largest market for Indian pharma exports, and India produces 8 percent of the pharma requirements of the world and absorbs about 2 percent in value.

The India is regarded as the largest global pharma outsourcing market. The country’s significant growth in this field is chiefly attributed for producing high quality medicines and drugs at very low prices to the international market. Experts find that the pharma exports of the country will continue to grow at a reasonable pace of 15-18 percent for few more years as the industry do not envisage any competitors in terms of quality or price in the near future.

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