Non Agriculture Market Access: Interests of SMEs © Federation of Indian Micro and Small & Medium Enterprises

 

Non-Agricultural Market Access :

interests of SMEs

By :

Anil Bhardwaj

Federation of Indian Micro and Small & Medium Enterprises (FISME)

New Delhi

Non Agriculture Market Access: Interests of SMEs © Federation of Indian Micro and Small & Medium Enterprises

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

Non Agriculture Market Access: Interests of SMEs © Federation of Indian Micro and Small & Medium Enterprises

Overview…contd

Trade Policy: Pre & post reform periodPre-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

Non Agriculture Market Access: Interests of SMEs © Federation of Indian Micro and Small & Medium Enterprises

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

Non Agriculture Market Access: Interests of SMEs © Federation of Indian Micro and Small & Medium Enterprises

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.

Non Agriculture Market Access: Interests of SMEs © Federation of Indian Micro and Small & Medium Enterprises

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.

Non Agriculture Market Access: Interests of SMEs © Federation of Indian Micro and Small & Medium Enterprises

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

Non Agriculture Market Access: Interests of SMEs © Federation of Indian Micro and Small & Medium Enterprises

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)

Non Agriculture Market Access: Interests of SMEs © Federation of Indian Micro and Small & Medium Enterprises

Thank you

Welcome to see you at :

http://www.fisme.org.in