"If Rupee stabilizes, then we will touch
US$ 300 billion by 2012"
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Mr. Ganesh Kumar Gupta, President, FIEO (4th from left) addressing the gathering. On his left are, Mr. A Sathivel, Vice President, FIEO; Mrs. Tinoo Joshi, Secretary General, FIEO; and Mr. S K Jain, Chairman, FIEO(ER). On Mr. Gupta’s right are, Mr. Ajay Sahai, Director General, FIEO; Dr. R K Dhawan, Chairman, FIEO(NR) and Mr. S K Saraf, Chairman, FIEO(WR). |
Address by FIEO President Mr. Ganesh Kumar Gupta at 42nd Annual General Meeting
on December 20, 2007
It is a pleasure and privilege for me to welcome you all to this 42nd Annual General Meeting of our Federation on behalf of my colleagues and myself. I am happy to see the large presence of our members here. It is your keen interest and involvement in our programmes and activities that has made our Federation a premier and respected institution in the trade and industry community of the country. I am grateful to everyone of you for your valuable contribution towards its growth.
Friends, I feel proud in informing you that your Federation’s Head Office as well as its Northern Region Office is now functioning from its newly constructed building "Niryat Bhawan" which was inaugurated by our Hon’ble Commerce & Industry Minister on 26th December 2006. With this, FIEO’s dream of having its own building has been fulfilled. I am also happy to inform that the Federation’s Ahmedabad Chapter office has become functional from 1st August, 2007. I hope this will help the Federation serve the exporters of Ahmedabad and adjoining areas in a better way.
Friends, I am happy to inform you that on 14th September 2007, the Federation was awarded "ISO 9001-2000" Certificate by the Certification Body M/s TUV Rheinland (India) Pvt Ltd. It will not only help FIEO to standardize its processes but also help to monitor them closely so that efficient and timely service is provided to the members. This Certification will also help FIEO to convince the overseas buyers, during its ventures abroad, about the quality consciousness of the Indian exporters. I congratulate our Director General and all officers and staff of the Federation for receiving the Certificate.
We have circulated the Statement of Accounts and the Annual Report of our Federation for the period 2006-07 to members and I trust it has your approval. Friends, thanks for your keen interest and feedback which not only helped me but also to the Federation to focus sharply on the export issues that needed immediate attention. You may be aware that to help us in this direction, we have put in place some functional committees and have nominated Convenors and members to them. Needless to say, these Committees, with your valuable inputs, ideas and insights, helped me in addressing such issues before the concerned government authorities, and I am happy to inform that on many fronts, we have been able to resolve such issues with the help of Government’s proactive and favourable approach. I am sure in future also; you will continue to provide support and inputs to your Federation in the larger interest of exporting community.
Friends, I am happy to inform you that the growth of membership of exporters with the Federation has been increasing every year. In 2004-05, 8855 exporters were members of the Federation which rose to 9404 in 2005-06, and in 2006-07 it is 11651, registering a growth of 23.89% in 2006-07 over 2005-06 which not only shows confidence of exporters in the Federation but also reflects their satisfaction over the services being provided. I assure that your Federation will be in the forefront of providing services effectively and in raising issues/ suggestions before Government for the cause of exports
As you are aware, on export front India’s merchandise exports grew by 22% touching record level of US$ 124.55 billion during the financial year 2006-07, rising from US$ 103.04 billion in 2005-06. According to statistics released by the WTO, India’s share in total world trade, including trade in merchandise and services sectors went up from 1.1.% in 2004 (the initial year of the Foreign Trade Policy 2004-09), to 1.5% in 2006. As far as only merchandise trade is concerned, India’s share has increased from 0.9% in 2004 to 1.2% in 2006. Trade in the services sector has recorded an even higher growth, resulting in an increase of the share in world services trade from 2% in 2004 to 2.7% in 2006. In the Foreign Trade Policy in August 2004, a medium-term horizon for export growth was envisaged and the share of India’s merchandise trade in world trade was targeted to double in 2009. According to the World Trade Statistics of the WTO in 2006, India’s total merchandise trade (export & import) was valued at $294 billion in 2006 and trade in the services sector, inclusive of export and import, was $143 billion. Thus, India’s global economic engagement in 2006, covering both merchandise and services trade was worth $437 billion, up by a record 72% from a level of $253 billion in 2004.
The IMF in its update on the World Economic Outlook announced on July 27, 2007 has upgraded world growth projections from 4.6 to 5.2% for 2007 and India’s growth at 9%. While GDP growth has proceeded at a rapid pace for the last several years, the medium real incomes have not increased in equal proportions. Further, in many emerging economies, including many Asian economies, inequality has also increased. Over the last decade, inequality has increased in 13 out of the 18 Asian countries, as per the IMF data. Therefore, the merchandise and services exports, which now constitute 20% of the GDP, and the SME segment accounting for about 65% of the trade, may be provided the necessary support to counter the rupee appreciation (15 % since last Oct ) and the increasing transaction costs.
India’s exports during October, 2007 were valued at US$ 13302.71 million which was 35.65% higher than the level of US$ 9806.69 million during October, 2006. In rupee terms, exports touched Rs.52560.85 crore, which was 17.80% higher than the value of exports during October, 2006. Cumulative value of exports for the period April-October, 2007 was US$ 85583.30 million (Rs.347793.90 crore) as against US$ 70792.52 million (Rs.324863.93 crore) registering a growth of 20.89% in Dollar terms and 7.06% in Rupee terms during the same period last year.
You are aware about the current scenario on export front, particularly on account of appreciation of Indian Rupee. While exports have grown up by over 20% from 2003-04 to 2006-07, I am little apprehensive of achieving the same momentum this year. I am also little pessimistic in achieving the current export target of US$ 160 billion. We may, at best, end with US$ 140 billion approximately. I am equally worried about the declining share of exports in meeting import bill. Export as a percentage of imports of merchandise is declining constantly from 86% in 2002-03 to 82% in 2003-04 and further declining to 76% in 2004-05 and 69% in 2005-06 and finally to 68%. Similarly, on account of increase in import of services, we may be net importer of services as compared to the present trend of positive balance.
If Rupee stabilizes, then I am confident that we will touch an export of US$ 300 billion by 2012. However, this would require sector specific strategies. The sectors capable of generating such exports include textiles, pharmaceuticals, agriculture and food processing, automobiles and auto components and high technology products.
FIEO has already reacted to the relief packages highlighting their inadequacy and suggested to bring more comprehensive single package providing exemption of service tax on all services used during the course of exports rather than refund on few services. It also suggested extending the interest rate subvention till 31st Dec, 2008 besides other measures proposed by the Federation.
Friends, the activities undertaken by our Federation during 2006-07 have already been highlighted in the Report which has been circulated to all members. However, I would like to share with you some of the important activities undertaken by the Federation during 2006-07.
Friends, you would agree that in spite of exporter friendly trade policy and regime, it is quite a tough job to export and retain a reasonable margin of profits.
You are aware that the DEPB Scheme at present is valid upto 31st March 2008. However, since no alternative to DEPB has been announced, FIEO has suggested for continuation of DEPB Scheme till introduction of GST as exporters using DEPB are not aware how to do their costing for post March 2008 shipments. Moreover, if GST is introduced from 2010, it will dispense the need for duty refund schemes like DEPB.
Your Federation is also pleading with the Government that all un-refunded taxes and duties falling under the purview of Central or State governments or Municipal bodies (CST, Sales tax on Petrol and diesel, electricity duty, turnover tax, octroi etc whichever is leviable) may be reimbursed to exporters within a timeframe of 30 days failing which interest @15% may be paid to exporters for delay due to any reason. The refund of all indirect taxes and duties are permitted under "Agreement of Subsidies and Countervailing Measures" and thus Government should come with a comprehensive scheme to provide for its refund in a time bound manner
During the year, the Federation had successfully organized Open House Meets/Interactive Sessions on Foreign Trade Policy at various Centres; Meetings with CBEC; RBI officials and other Ministries and Agencies concerning trade; Buyer-Seller Meets with Business Delegations; and sponsoring of Multi-Sectoral Delegations. The details of these activities are mentioned in the Annual Report of the Federation.
I, along with Vice-President and DG FIEO, made a Presentation on issues concerning exports at a meeting of EPCs with Hon’ble Finance Minister and Commerce & Industry Minister on 21st December, 2006.
Earlier, on 27th July 2006, I raised and submitted points/issues relating to Foreign Trade Policy at a meeting of EPCs with Hon’ble Commerce & Industry Minister.
International Congress and Exposition "ServinXpo 2006", a mega International event covering large number of services, was organized with the support of Ministry of Commerce, Government of India. The three-day event was held from October 4-6, 2006 at Hotel Ashok, New Delhi and was supported by Ministry of Human Resource Development, Ministry of Health and Family Welfare, Department of Tourism, Department of Scientific and Industrial Research, National Research Development Corporation, Consultancy Development Centre and various multilateral agencies like UNCTAD, WHO, WIPO etc. The event was addressed by the Hon’ble Prime Minister, Dr Manmohan Singh, Hon’ble Commerce Minister, Mr. Kamal Nath, Commerce Secretary, Mr. G K Pillai. Besides, around 203 speakers provided an opportunity to develop and share understanding of the future direction and open issues, latest developments, current research and innovations in the diverse networking, information sharing and learning needs of the services sector. About 15 International speakers from Canada, Mauritius, Taiwan, Uganda, UK, USA, Zambia & Germany made presentations. Focus sectors included Education; Health & Life Science; Science, Technology & Engineering; Travel & Tourism; Consulting Services in the filed of legal, accounting, financial, Architectural, infrastructure & investment, logistics.
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Mr.Irshad Mirza, FIEO MC Member making a point to the President, FIEO. On his right is Mr. Subash Goyal, FIEO MC Member; and Mr. K. K. Kapila, FIEO MC Member(on his left) with other participants. |
Over 26 International buyers attended ServinXpo 2006 and came from Canada, Myanmar, Philippines, Sri Lanka, Trinidad & Tobago, Ethiopia, South Africa, Kenya, Uganda, Rwanda, Nigeria, Malaysia, Uzbekistan, Ivory Coast etc.
Earlier, in order to promote International Congress and invite overseas delegates, FIEO team comprising of Mr. Nalin Kohli, Convenor (International Congress) and Secretary General FIEO visited Los Angeles and Chicago for organizing Road Shows in these countries. During these Road Shows a large number of participants showed interest and ensured their participation.
With a view to strengthening and promoting Indian Services to Africa and also exploring the possibilities of joint ventures and long term business between India and Africa, a Workshop on Scope and Challenges of Services in Africa was organized on March 6, 2007 at Niryat Bhawan, New Delhi.
Regional Offices of the Federation had also organized various meetings and programmes in their regions for the benefit of exporters. Besides, they also represented the issues/problems of exporters before the Grievance Committee of Customs and Offices of DGFT. Apart from these, Refresher Programmes of International Trade in association with IIFT and Workshops in association with State organizations were organized by them.
FIEO was also invited by the Hon’ble Finance Minister, Government of West Bengal to discuss VAT and other Sales Tax matters.
Recently, I had the opportunity to address the leaders of the developing world at the 2nd IBSA Business Summit at Johannesburg. IBSA’s evolving trade and investment focus has induced some changes in the quality, quantity and direction of international trade. Each of the three countries has displayed strong comparative advantages and specialization in specific areas. While Brazil is regarded as an "agricultural powerhouse", South Africa has a combination of strengths in agriculture, manufacturing and services, and India has displayed good strength in Services Sector. These countries have become important suppliers for global sourcing of goods and services. There is some overlapping, but it is mostly complementary. The trends indicate that intra-IBSA trade is close to $10 billion target set for this year.
Friends, for the first time, FIEO organized an Ambassadors/ High Commissioners Meet of Foreign Missions based in New Delhi on November 15, 2007 at Niryat Bhawan. Ambassadors/ High Commissioners and senior diplomats of Foreign Missions of various countries attended the function. Besides, senior government officials from the Ministries of Commerce and External Affairs, FIEO Managing Committee members and prominent exporters were also present. The objective of the Meet was to acknowledge the continuous support extended by the Missions to Indian trade and industry. The event also provided an opportunity to renew the relations with the Foreign Missions. Besides, it also provided a networking platform to exporters. In order to give the foreign dignitaries a glimpse of Indian culture and tradition, a cultural theme "Colours of India" was organized on the occasion.
At the end, I would like to express our gratitude and respect to the Hon’ble Commerce & Industry Minister, Mr. Kamal Nath; Minister of State for Commerce and Industry Mr. Jairam Ramesh; the Commerce Secretary Mr. G K Pillai; the DGFT, Mr. R S Gujral; the Hon’ble Minister of Finance Mr. P Chidambaram; the Dy. Chairman, Planning Commission Mr. Montek Singh Ahluwalia; the Revenue Secretary Mr. P V Bhide; the Chairman (CBEC) Mr. S K Singhal; the Governor, RBI, Mr. Y V Reddy; the Joint Secretary (Drawback), Mr. P K Mohanty; and other senior officers in the State Governments and Centre for their co-operation, guidance and support for all programmes.
I would also like to express my sincere gratitude to our friends from the media who have always been proactive in the matter relating to exports.
No organization can progress, or even function efficiently, without the support of dedicated officers and staff. FIEO has been fortunate in having a committed workforce, which has enabled it to serve the exporting community to the optimum, and built it up as a national institution. I would like to record here my deep appreciation to all the officers and staff of the Federation in the Headquarters, and all the Regions for their co-operation in making FIEO’s activities and programmes so successful.
My special thanks to Vice-President Mr. A Sakthivel; the Regional Chairmen and Convenors of various Functional Committees, Secretary General Mrs. Tinoo Joshi, and Director General Mr. Ajay Sahai; for the excellent support they provided me in all my endeavors. It was a privilege to work with you, and I always cherish the close association I have had with this large fraternity of exporters, and decision-makers in the different States and the Centre.
