Recognising the need to turnaround the Indian Textiles and Clothing Industry, FICCI today suggested a five year policy to revitalise and restructure Indian textiles industry. The Policy “Indian Textiles & Clothing Industry : 2015″ aims to neutralise the impact of economic crisis on Indian textiles industry; diversify our export and domestic market; encourage consolidation of SME enterprises; encourage maximum value addition in the country; deepening fibre consumption of India; building of 20 global brands of India; promote manufacturing of high-tech fibres and technical textiles; encouraging energy efficient and emission reduction technologies; increased indigenisation of textile equipments and increased technological support, FICCI said. The need for such a new policy arises in the wake of changing global economic scenario in which a number of countries like Vietnam, Bangladesh, Pakistan, Turkey etc are giving fierce competition to Indian textiles and also to provide inherent strength to the industry, FICCI pointed-out. Also, some of these countries have introduced ambitious textiles policies last year only. FICCI said that there is a need to infuse confidence, through policy, in the industry which has suffered the most because of economic crisis and rupee appreciation in the past.

The policy, FICCI said, targets steady growth of 15% per annum of domestic textile industry and 20% per annum growth in our exports for the next five years in order to enable us to double our share in world textiles and clothing exports (Hence the name ‘20-15′ for the policy). FICCI noted that if we are able to achieve 20% growth in our textiles exports per annum and 15% growth per annum in domestic production then our domestic textile market size would be $ 106 billion by 2015 and exports would be around $ 66 billion. Given the long term growth of 7% in world trade in textiles, India’s share would be around 6.6% in 2015 at a growth of 20% per annum, which would be almost double of India’s current share of 3.4%. FICCI said that the Indian textiles sector’s growth has been lagging behind the growth of the manufacturing sector as a whole. In the last six years the average growth of the manufacturing sector was 8.3% whereas that of textiles sector was only 5.3%. During April-November 2009, while the manufacturing sector registered a growth of 7.7%, the textiles sector grew by only 5.8% (see table at the end of press release).

Elaborating the main components of “20-15 Policy”, FICCI said that the growth of garment sector, which has maximum scope for value addition, is today hampered because of number of constraints. FICCI noted that despite the fact that in India the total production cost of ring-spinning and knitting and weaving of ring yarn fabrics are the lowest in the world, India does not have a significant share in value added garments in global trade (only 3%). The suggested policy, according to FICCI, should focus on making India a manufacturing hub of value added garments and ensure that country is able to cultivate 20 internationally famous brands. The aim of the policy would be to achieve 15 to 20% share of these branded items in our exports in next five years, FICCI said.

On fibre consumption, FICCI said that there is need to deepen our fibre consumption which remains very low. Today, the average world per capita fibre consumption is around 10.8 kg and that of India is around 5 to 6 kg only. Whereas, FICCI noted that per capita fibre consumption in China is 14.6 kg, in North America it is 38 kg and in Thailand it is 19.8 kg. Within this, our per capita consumption of man-made fibre remains very low at around 2 kg compared to 12 kg in China and 11 kg in EU, FICCI observed. The policy should try to achieve higher fibre consumption by increasing domestic textile demand, expanding reach in rural areas and exploring new products, FICCI pointed-out. The target should be to at least double the fibre consumption in next five years.

Another main task of this policy would be to align the fibre consumption ratio (ratio of man-made fibre to natural fibre in consumption) of India, which is currently around 40:60, to the world norms (60:40), FICCI stated. Emphasising the need for this, FICCI said that globally market share of cotton decreased from 62.4% in 1960s to 39.5% in 2008. Most of the decline in consumption of cotton occurred in developing countries where the market share of cotton fell from 60% in early 1980s to 35% in 2008. However, in India the market share of cotton has come down from 69% in 1996 to 62% in 2008. FICCI said that in India this ratio is almost the reverse of the world ratio. Long term projections indicate that consumption of other fibres is projected to grow faster than cotton consumption and market share of cotton is expected to decline to 30.5% in 2020, FICCI observed. In this context, FICCI said that it is important to adjust our policies so as to increase the consumption of man-made fibres in the country.

Also, the policy should try to achieve maximum consolidation of small and medium enterprises in the textiles and garment sector so that country can reap the benefits of economies of scale in the global supply chain, FICCI emphasised. Currently, the domestic industry is dominated by small and medium enterprises and a number of them in the unorganised sector. Consolidation will help the industry in realising its true potential, FICCI said. Another important aspect of the policy would be to achieve greater energy efficiency and emission reduction in textile industry. For this, industry would require greater technological support to achieve lower emission and higher energy efficiency targets and to eliminate out dated technologies.

Further, FICCI said that the policy should also aim at indigenisation of high technology textile equipments. Currently, industry is dependent largely on imports of machinery and equipments. Government needs to provide technological support and enhance innovation efforts to encourage domestic production of equipments and machinery.

In order to neutralise the impact of economic crisis on textile sector, the policy should continue some of the policy measures provided so as to maintain steady growth of textiles sector in the long run, added FICCI.

FICCI ON STIMULUS PACKAGE & FISCAL MEASURES FOR TEXTILES INDUSTRY

Concerned over the fragile recovery in textiles sector and apprehensive of the impact of Rupee appreciation in 2010, FICCI has demanded continuation of Stimulus Package for textiles industry for the year 2010. FICCI said that India’s exports to US were lowest in the month of November in the year 2009. Retail sales of clothing & clothing accessories in US were $17.6 billion in October 2009, $17.5 billion in November 2009 and $17.4 billion in December 2009 indicating that demand for textiles and garment in US remain subdued. US accounts for around 25% of India’s textiles exports and is the largest destination of India’s textiles exports country-wise. In addition to other measures, FICCI wants that the Government should extend the interest subvention of 2% provided to textiles sector for another year beyond 31st March 2010 and the reduced excise duty of 8% (previously 10%) on textile machinery should also continue.

Besides continuation of stimulus measures, FICCI has sought extensive concessions from the Ministry of Finance for the captive generation of power by textile producers in view of the problems faced by industry due to erratic power supply. FICCI has submitted that excise duty on Liquid Fuels extensively used by textile manufacturing units for running their gensets for augmenting their power requirements, should be brought down from 14% to 4% and in addition service tax paid by textile units for erection and commissioning as well as on repairs and maintenance of wind mills may be treated as tax paid on “input services” under Cenvat Credit Rules and should be given credit for such service tax.

Further, FICCI has urged the Government to provide reduced rate of interest for Dollar credit at LIBOR plus 1% (currently, it is provided at LIBOR plus 3.5%); reduce Custom duty on Titanium Dioxide (TIO2) and Spin Finish oil from the 10% and 7.5% respectively to 5% as currently these items are being 100% imported and are proprietary items of technology and machinery suppliers; exemption of all export related services from payment of service taxes instead of refunds as is the practice currently; and working capital for purchase of cotton may be provided to mills at 7 percent interest rate, and against 10 percent margin money (currently at 25%) and for a period of 9 months (currently 3-4 months).

With regard to TUFS (Technology Upgradation Fund Scheme), FICCI said that technical textiles alone may require Rs 300 crore in the year 2010-11 under TUFS. So far only Rs 37 crore has been consumed under TUFS by the technical textiles sector. But given the interest shown by investors (both domestic and foreign) and keeping in mind the fact that demand for technical textile products is likely to grow fast (11% per annum) in the coming years adequate allocation under TUFS is required to facilitate investments in this sector. The Government should therefore, FICCI emphasised, provide for a total allocation of Rs 3300 crore for the year 2010 in addition to any amount that may have to be reserved for the North Eastern Region. Another Rs.2000 crore should be made for TUFS in the Revised Estimates for the current year (2009-10).

FICCI is also apprehensive of the impact of Rupee appreciation on textiles industry. Further monetary tightening by the Government in months to come could result in rupee appreciation thereby affecting the troubled sector further. Rupee has appreciated by over 7% since April 2009 and in the past textiles industry had suffered significantly due to Rupee appreciation, observed FICCI. In 2007-08 when Rupee appreciated steeply, the growth rate of textiles had come down from around 11% in 2006-07 to 6%, noted FICCI. Elaborating further on India’s textiles exports, FICCI pointed-out that during April- September 2009, India’s total textiles exports plunged by 14.7% compared to the same period last year. The US textiles and clothing imports from the world have fallen by 14.4% during January-November 2009 compared to the same period last year. Although, India’s textiles & clothing exports to US have fallen at a lower rate (11.7%) than the global textiles import of US, but the fall is steep when compared to Pakistan, China, Vietnam and Bangladesh whose textiles exports fell by 10.8%, 5.4%, 2.2% and 0.25% respectively during January-November 2009. In EU, FICCI noted that during January-July 2009 India’s textiles Exports to EU27 had fallen by 17.4%. Whereas, textiles exports of China and Pakistan to EU27 fell at a relatively lower rate of 10.8% and 9.2% respectively. During January-July 2009, clothing exports of India to EU27 grew by 8.1% but clothing exports of China increased by 12.3%, that of Sri Lanka increased by 12.4% and of Bangladesh increased by a whopping 18.4% during the same period.

FICCI observed that share of textiles sector in total exports of India has been falling since 2005-06. In 2005-06, textiles exports constituted 16.4% of India’s total exports but by 2008-09, the sector’s share has fallen down to 11% of India’s total exports. In such a scenario it would be premature to withdraw the stimulus measures and the forthcoming budget should not withdraw any export related and excise duty concessions given to textiles industry as a part of stimulus package of the Government, FICCI emphasised.

Source: http://www.ficci.com/PressRelease/552/Release-Textile.pdf

The RBI’s Third Quarter Review of Monetary Policy 2009-10 is disappointing. The industry was expecting a positive direction in Policy from RBI for reduction in interest rates. However, the Repo Rate and Reverse Repo Rate and Bank Rates have been left untouched.

The RBI has increased Cash Reserve Ration (CRR) by 75 basis points from 5.0 percent to 5.75 percent in two stages. The first stage of increase of 50 basis points from 13th February 2010 and the second stage of increase of 25 basis points from 27th February 2010, which will remove about Rs.36,000 crore from the system which will result in a credit squeeze.

It may be recalled that the interest rates did not come down when the inflation rates went down in the last one year. It is surprising to note that RBI has chosen to tighten the norms due to expected higher inflation which will be mainly due to a lower base of last year.

Our Chamber has already written to Hon’ble Union Finance Minister that the Stimulus Package should be continued for one more year. We also expect the RBI to support the industry which is slowly coming up from the recession so that the recovery will be faster, by working towards liquidity at easier terms.

Source: http://www.indianchamber.in/pr_10_rbi_3rd_review_of_monetary_policy.html

Indian Merchants’ Chamber has welcomed the RBI’s new credit & monetary policy stance, which is broadly in line with the Chamber’s expectations. The RBI has hiked the CRR rate from the existing level of 5% to 5.75%, but refrained from raising the key policy rates.

In a press statement issued here today, IMC President Mr Gul Kripalani said that the banks had enough liquidity and elbowroom to comply with the new CRR rate, which was being enforced in two phases, i.e., 0.5% from February 13 and a further 0.25% from February 27, together sucking out about Rs.36,000 crores from the banking system.

Mr Kripalani said that the RBI also wisely refrained from raising the policy rates at this critical juncture of managing growth recovery, which could have caused setback to industrial growth, especially when the growth rate of the farm sector had sunk to near-zero.

He shared the RBI’s concern at rising inflation, which is likely to be 8.5% by March – end 2010, as against 6.5% projected earlier. He endorsed the policy of RBI that it would have to shift its stance from ‘managing the crisis’ so far to ‘managing the recovery.’

“The RBI’s statement that inflation spiral could be reined in only after July 2010 leaves little room for comfort,” he said.

Source: https://www.imcnet.org/aboutIMC_news.asp?newsid=391

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Commenting on the third quarterly review of monetary policy by the Reserve Bank of India, Shri A Sakthivel, President, Federation of Indian Export Organisations (FIEO) said that hike in the cash reserve ratio by 75 basis pointraising it from 5% to 5.75% is higher than what the industry and exporters expected.Shri Sakthivel added that banks should absorb the hike without increasing the interest rates which otherwise will impact the economic growth.Interest rates in India, said FIEO President,are much above the international benchmark for any MSME exporters and increase in prime lending rate consequent to hike in CRR, if it happens, will give a jolt to exports which have turned positive from last two months as growth in advance economy will remain sluggish due to higher employment levels, increase in fiscal deficit and continued credit crunch.

Source:http://fieo.org/view_Press_Releases_detail.php?lang=0&id=0,21&dcd=485&did=1264754634e2dpjgceuijhds0nebec3cvjq7

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The Franchising Association of India (FAI), the apex body representing the interests of the franchising community led a Franchise Trade Mission of Indian entrepreneurs and businessmen to the United States of America on April 11, 2008 along with the US Commercial Services, India. The 25-member Trade Delegation attended the International Franchise Expo 2008 (IFE’08) organised by the MFV Expo and sponsored by International Franchise Association at Washington DC from April 11 to 13, 2008.
Mumbai, Maharashtra, India PRwire/ — At the Expo, FAI held a Panel Discussion on “Franchising in India”. The panel was focused towards encouraging US franchisors to consider expansion in India. The attendees were given previous issues of Franchising Focus, an FAI publication as well as useful information for franchising in India. The panel was moderated by Mr. Sunil Dewan a senior franchise professional, Mr. Lakshmi Narayanan of REBI, Mr. Dave Koch of Plave Koch, Ms. Smita Joshi of the USCS and Mr. Rajeev Manchanda of Franchising Association of India concluded the discussion by mentioning that while India does not have any franchise law, it has an astute franchise legislation.

Mr. Dewan kick-started the discussions by saying that while most Americans would discuss the weather in general when they meet, in contrast to Indians that prefer to talk business. 30-50% of the 600 million Indians are the target audience for most international brands. Thus, needless to say, India has to be on the radar of every international expansion initiative. He also pointed out that there are 200 million potential customers in India as compared to 65 million in China. Mr. Dave Koch informed the audience that India is a better market than China because Indians have a more formal approach towards commercial matters. Mr. Rajeev Manchanda said that India is a very diverse country and it is very important to provide support to the Franchisee. He also mentioned that McDonalds had a customized food recipe for Indians and thus it is very important to adapt your product offering to suit the consumers taste buds. He also stated that inspite of all the hurdles related to infrastructure in India, Dominos’ Pizza still manages to deliver pizzas in 30 minutes!

Ms Smita Joshi pointed out that due diligence of your master franchise partner is a must for a successful partnership. The US Commercial Services (USCS) has 7 offices across India. Its very important to conduct market research and reference checks while entering a new market place like India. International Franchisors could consider appointing regional licensees / franchisees to facilitate it.

Mr. Lakshmi Narayan, who is a real estate expert pointed out that getting good locations in India continues to be a challenge. While the infrastructure is poor, Indians are loyal and smart employees.

The Panel Discussion ended with an encouraging note and there were several interest that was generated amongst the participants, who were mainly Foreign Nationals. Franchising Association of India had also taken up a booth to assist NRIs take up Indian franchise opportunities. The FAI booth at the expo too drew a lot of crowd and it managed to portray India as the most promising destination for Franchising business.

Franchising Association of India founded in 2000 is headed by leading industry professionals, Mr. C. Y. Pal and Mr. Pramod Khera.Notes to Editor

The Franchising Association of India is a Membership Organisation of Franchisors, Franchisees, Vendors, Consultants, Financial Institutions and Students and others. Our services are dedicated to provide a one-stop shopping experience for franchising business and with membership of the prestigious World Franchise Council we have ongoing access to knowledge of the World accepted best practice related to Franchising in different areas of business activity as also networking contacts with the WFC member Franchising Associations in different parts of the world for generating new business opportunities for Indian entrepreneurs.

In recognition of the increasing role of franchising in the market place and the very beneficial positive contributions of franchising to the Indian economy, the franchisor and franchisee members of the FAI believe that franchising must reflect the highest principles and standards of fair business practices.

Source: http://www.fai.co.in/index.php?option=com_content&view=article&id=79:gfais-franchise-trade-mission-to-the-united-states&catid=53:press-releases&Itemid=77

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27th January 2010, New Delhi: 44th India International Garment Fair organized by Apparel Export Promotion Council (AEPC) successfully concluded on 22nd Jan in New Delhi. The event witnessed around 721 buyers from 667 companies and 593 buying agents from 412 companies. The exhibitors showcased their Autumn/ Winter collections and attracted more than 1,314 visitors from approximately 60 countries.

The turnout of buyers was up 87% this year as compared to 42nd IIGF Autumn/Winter held last year. There was a 54% increase in the number of buying agents registered at the 44th IIGF. Business worth 9.67 million dollars was booked/negotiated, leading to a 62% hike as compared to the orders registered at last year’s IIGF for Autumn/ Winter collections. In purview of the buyers expected at the 44th IIGF, the display area was extended to 1440 square meters resulting in 26% more space available for the Indian exporters to display their creations.

On the occasion, Mr. Premal Udani, Chairman, AEPC said “We are very happy with the response received at the 44th IIGF. IIGF being a flagship event of Apparel Export Promotion Council (AEPC) has mostly succeeded in bridging the gap between the Indian exporters and global buyers by giving them numerous options and a platform to showcase their creations. This fair was all-the-more important for all the exhibitors and buyers as it was held just when the economy started picking up.”

Mr. Udani said garments are the final link in the textile chain that starts from fibers and consequently has the maximum value addition and job creation possibilities. “A slight push in apparel exports can see the entire textile chain moving up. But the government should refund all taxes to improve our cost-competitiveness.”

AEPC Secretary General Mr. Vimal Kirti Singh said the downfall in apparel exports during recent months may stop due to receding recession and the next two years may witness a turnaround. Mr. Praveen Nayyar, Council’s Senior Vice-Chairman and Mr. Ashok Rajani, Chairman, Export Promotion Sub-Committee were also present on the occasion.

The visitors were from various parts of the world i.e. US, Brazil, Chile, Mexico, Venezuela, Argentina, Panama, Russian Federation, Kazakhstan, Britain, Uzbekistan, Belarus, Kyrgyzstan, Ukraine, Azerbaijan, South Africa, Indonesia, Singapore, Malaysia, Myanmar, Thailand, Australia , New Zealand majority of which represented US, Britain, Spain, France, Turkey and UAE. The fair was inaugurated by Mrs. Panabaaka Lakshmi, Minister of State for Textiles & Mr. Jyotiraditya M. Scindia, Minister of State for Commerce & Industry.

Amid dazzling fashion shows, awards for the best display were announced. Shilpayan Decor got the gold prize, Village Crafts India bagged silver and Kack India got the bronze. Merits of certificates were given to Sarash Impex, Manvi Impex, Jain International, NCCR Exports, Dolphin Clothing and Cross Culture Fashions.

The 44th IIGF witnessed participants from locations such as Tamil Nadu, Mumbai, Bengal, Rajasthan, Uttar Pradesh, Gujarat, Madhya Pradesh, Punjab, Jaipur, Tripur and some cities in the NCR region. The product profile included women’s wear, men’s wear, kids’ wear, accessories, fashion jewellery and knitwear.

IIGF is jointly organized by the International Garment Fair Association (IGFA), the Apparel Export Promotion Council (AEPC), the Garment Exporters Association (GEA), the Clothing Manufacturers Association of India (CMAI), the Apparel Exporters and Manufacturers Association (AEMA) and the Apparel and Handloom Exporters Association (AHEA).

Sources: http://www.aepcindia.com/admin/press-pdf/wrap_up_release[1].pdf

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Federal Minister for Agriculture, Tony Burke toured the cotton industry last week, visiting “Keytah” in the Gwydir Valley to discuss grower issues, research and development.
“Keytah” Manager, Andrew Parkes, showcased the farm, and in particular the on-farm irrigation efficiency trials that have been set up to compare drip, overhead, bankless channels and furrow irrigation strategies.

Cotton Australia, through the Chair Joanne Grainger, took the opportunity to highlight a number of key issues to the Minister including:

• The slow APVMA response to issues surrounding phenoxy herbicide drift
• The huge benefit of GM technology to the industry as well as some of the exciting new technologies in the pipeline
• The new myBMP program
• The benefits of the industry R&D effort and how much we value the partnership with government

A key big picture issue during this election year for all farmers is the constant erosion of property rights, be it through encroachment of mining, native vegetation laws, water reform or urban encroachment. All these issues are impacting on grower certainty and were highlighted to the Minister.

Phil Alchin from Boyce and Co spent time with the Minister highlighting the financial impact of the ongoing drought on irrigators and the effects of water buyback on the Moree economy.

Special thanks must go to the owners of “Keytah”, David and Neil Statham and their staff for hosting the Minister’s visit.

Source: http://www.cottonaustralia.com.au/news/view.aspx?id=237

Mr A Sakthivel, President, Federation of Indian Export Organisation (FIEO) while commenting on the recently released data of RBI on the credit offtake stated that while the offtake is about 50% of what it was in the last fiscal (13.7% y-o-y as against 24% in 2008-2009), it is encouraging that it has moved on from the single digit levels.

FIEO Chief stated that keeping in view the fact that Index of Industrial Production (IIP) has shown a growth of 11.2% (as per data released on 10th January, 2010) and the consumer goods production, a whopping 36% growth, the timing and sequencing of exit from the expansionary fiscal and monetary policy is an issue which may be given due consideration while announcing the 3rd quarter review of the Monetary Policy on 29th January, 2010.He elaborated that much of the data announced is driven by domestic demand and the sustainability of the same can only be tested with time.

President FIEO concluded that it would only be right under the current scheme of things to not only continue with interest subvention but to include all sectors and factor in the element of transaction cost , at least partially, which is as high as 18% for some sectors. Foreign currency loans (PCFC and Post-shipment) at 6%; term loans at single digit rates of interest; investment linked tax deduction for plant & machinery, R&D besides marketing incentives for tapping new markets etc. might enable MSMEs to work on a level playing field with other MSMEs around the world.

http://fieo.org/view_Press_Releases_detail.php?lang=0&id=0,21&dcd=480&did=1264135718qtkn0t2f4ok1dt0ttlbibds7f0

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Indian Merchants’ Chamber (IMC) has signed a Memorandum of Understanding (MoU) with Chittagong Chamber of Commerce & Industry (CCCI) of Bangladesh for cooperation between the two Chambers aimed at promoting business tie-up between their member units.

IMC President Mr Gul Kripalani and Mr Mohammed Abdus Salam, CCCI’s Senior Vice President and Head of the Asia Group, signed the document on behalf of their respective Chambers at Hotel Taj Mahal Palace & Tower in Mumbai on January 21.

The agreement came about following a meeting held in honour of an eight-member Bangladesh delegation, headed by Mr Salam, at the IMC premises a day before. The delegation also included : Mr S M Memhmbubul Islam (Tuku), Director of CCCI, Mr Fahim Ahmed Faruk Chowdhury, Director of CCCI and also of International Business forum of bangladesh, Mr Syed Ahsanul Haque (Shameem), MD of FAC Eastern Enterprises Ltd, Mr Mohammed Emdadul Haque Chaudhury (Emdad), CMD of Lucky Group, and others.

“We had a very useful and constructive discussion and arrived at some concrete measures for implementation by both the Chambers to promote two-way trade and to strengthen economic relations between the India and Bangladesh,” Mr Gul Kripalani said.

Quoting a global study by Goldman Sachs, Mr Mohammed Abdus Salam said that Bangladesh was one of the 11 developing nations that, in the long run, would emulate the success of China, India, Brazil and Russia. Bangladesh had successfully come out of the impacts of the global crisis, improved its macro-economic stability factors, and developed potentials to attract more foreign investment.

He said that Bangladesh posted an average growth over 6% GDP growth in the past decade, resulting in raising the level of per-capita income to over $690 at present. “We are country of 150 million people, with middle income group accounting for about 15%, which is a big chunk. As the Bangladesh economy was on a firm growth trajectory, foreign investors venturing into our country at this juncture would reap the early bird’s advantages of sizable fiscal and non-fiscal benefits offered by the government,” he said.

According to Mr Salam, the following sectors offered great development potential for foreign investors: textiles, leather & leather gods, electrical & electrical goods, light engineering, ceramics, information technology, shipbuilding, steel industry, agrobased and processed foods, power & energy. “Bangladesh today offers lucrative business prospects, congenial trade and investment environment to overseas investors,” he asserted.

He said the CCCI’s MoU with IMC would help promote the development bilateral economic relations by providing a platform for businessmen to meet, discuss and explore business opportunities in trade, investments, transfer of technology, services and other industrial sectors.

Both the Chambers would endeavour to develop strong institutional, trade and business relations between them and their members in order to establish a sustainable mechanism of dialogue and platform for discussions, he said.

Source: https://www.imcnet.org/aboutIMC_news.asp?newsid=388

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NEW DELHI, January 21, 2010. Mr. S M Krishna, Union Minister for External Affairs, today underlined the need for a regional approach to bring about energy security In India and the ASEAN nations which can accommodate competing demands and constraints while shifting the focus from competition to cooperation based on mutual interests.

“We look forward to continued engagement with ASEAN countries and our partners in the East Asia Summit on this issue,” Mr. Krishna said while inaugurating the ‘Delhi Dialogue II-2010 – Regional Security and Cooperation Dialogue’, organized by FICCI in association with the Ministry of External and co-partnered by Institute of Southeast Asian Studies (ISEAS) and Economic Research Institute for ASEAN and East Asia (ERIA), Jakarta and supported by SAEA Research Group, Singapore.
Mr. Krishna said that India- ASEAN FTA in goods which came into force on January 1 this year has opened new possibilities for the expansion of India’s trade with the region and expressed the hope that agreements on trade-in-services and Investment would also be concluded soon.

The External Affairs Minister noted that people-to-people contacts and cultural and academic exchanges between India and the ASEAN region have continued to grow. The revival of the Nalanda University as an international institution of excellence, he added, has emerged as an important initiative that underlines the ancient linkages of the two regions.

“We strongly believe in sharing our developmental experiences with our fellow developing countries. We have been happy to participate in development cooperation programmes with ASEAN countries, and in the ‘Initiative for ASEAN Integration’ Programme. We have given particular emphasis to human resource development through training, scholarships, establishment of entrepreneurship development centres and language training centres,” Mr. Krishna declared.

He said that the ASEAN-India S&T Fund, which has been operationalised, would promote joint collaborative research projects in Science and technology. The proposed India-ASEAN Green Fund, with a corpus of US$ 5 million, would promote adaptation and mitigation technologies in the area of climate change.

The Minister said that at the 7th India–ASEAN Summit in October last year, Prime Minister, Dr. Manmohan Singh had announced several initiatives to further strengthen the links between India and ASEAN, including establishment of an India-ASEAN Round Table comprising think tanks, policy makers, scholars, media and business representatives that would provide policy inputs to the governments of India and the ASEAN countries on future areas of cooperation; intensification of negotiations on an open skies policy; further simplification of the visa regime to encourage business and tourist travel; more youth exchange programmes; enhanced cooperation in the agriculture sector to meet the challenges of food security; cooperation in the application of space technologies; holding an ASEAN trade and industrial exhibition in India; among others. “We are ready to allocate up to US $ 50 million to support these initiatives. We would continue to explore ways to further enhance our cooperation and benefit from our complementarities,” he said.

Mr. Krishna said that in the wake of the recent global financial and economic crisis, it was imperative to develop greater cooperation among developing countries, so that these countries have an effective voice in the international financial architecture and a new global economic order.

In his welcome address, Mr. Harsh Pati Singhania, President, FICCI, pointed out that while India and the ASEAN nations have to work closely with the western economies on addressing the global challenges, there are many things that could be done at the regional level to ensure that the long term growth path is sustainable. The global crisis has clearly shown the limitations Asia faces on account of vulnerabilities to external shocks.

He said that Asian economies are heavily dependent on the western markets for their exports. The bulk of foreign funds that flow into these economies also come from the western capital markets. This dependence on the west, needs to be reduced, he said.

Mr, Singhania said that India-ASEAN bilateral trade has crossed the US$ 45 billion mark and we will top the US$ 50 billion mark in 2010. “While our next immediate target for bilateral trade is US$ 70 billion, FICCI would like to propose that the two sides aim to achieve US$ 100 billion in trade by 2015″, he said, adding that with the first essential step towards this already taken – India – ASEAN FTA is now operational – this target is certainly achievable.

A FICCI analysis shows that ASEAN and India have much to offer to each other. While ASEAN countries can benefit from India’s strengths in IT, BPO, pharmaceuticals, space science and oceanography, India can learn valuable lessons from ASEAN countries in infrastructure development and maintenance, tourism management and urban area development.

“We need to cover a lot of ground and cooperate even more in the fields of maritime security and energy security. We also need to strengthen our connectivity and improve our logistical links. This is particularly relevant form the point of view of development of India’s North East which is in a way our superhighway to the ASEAN countries. More channels of communication and travel between India’s North East and ASEAN countries would prove to be a strong stimulus to regional growth,” the FICCI President declared. Countries, he said, can prosper and grow only in a secure environment, adding that terrorism is a regional and global problem and we will have to deal with this in a collective manner on a mission mode.

Mr. K Kesavapany, Director, ISEAS, noted that the target of achieving a US$ 100 billion trade turnover between India and the ASEAN countries by 2015 was a “signpost that we must all aspire for” and concurred with Mr. Singhania that the target was achievable if the borders were kept open and trade was free of barriers.

Source: http://www.ficci.com/PressRelease/548/REGIONALCOOPERATION.pdf

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