STRATEGY PAPER FOR CIS COUNTRIES: INDIA-CIS ROADMAP 2020

Transcription

1 STRATEGY PAPER FOR CIS COUNTRIES: INDIA-CIS ROADMAP 2020 Customized & Abridged Version: Extracts for Stakeholders In TEXTILES SECTOR FT (CIS) DIVISION July, 2012 (Including Updated Data upto March, 2011)

2 CONTENTS Sl No Description Page Nos 1. Note for Stakeholders 1 2. An Executive Summary of Strategy Paper for CIS 2-19 Countries: India-CIS Roadmap Extracts in r/o TEXTILE From Strategy Paper for CIS Countries: India-CIS Roadmap Chapter 1 - Enabling Environment - Existing Impediments & Measures required 3.2 Chapter 2- Trade - Existing & Potential Chapter 3- Investment- Existing & Potential Chapter 4- Engagement with CIS Countries-Promotion of trade & Investment 4. List of Stakeholders : TEXTILE Corrigendum to Chapter 2 (Of Customized & Abridged 53 Version of Strategy Paper for CIS Countries: Roadmap 2020 ) Trade - Existing & Potential (Extracts for Generic sector Textile ) 6. Annexure 1: Five-Year HS Code-wise Export data of Textiles in r/o 12 CIS Countries 54

3 Note for Stakeholders The present volume is a Customized & Abridged Version of the Strategy Paper for CIS Countries: Roadmap 2020 for Stakeholders in the Generic Sector Textiles. The DoC document Strategy Paper for CIS Countries: Roadmap 2020 comprises of seven chapters. A brief of each of the chapters is covered in the Executive Summary of the DoC document Strategy Paper for CIS Countries: Roadmap The Executive Summary forms a part of this volume which is a customised version for the stakeholders in the generic sector Textiles. This Customized & Abridged Version for Stakeholders comprises extracts relevant to the Generic Sector Textiles taken from the following chapters of the Strategy Paper for CIS Countries: Roadmap Enabling Environment & Existing Impediments and Measures Required Trade Existing and Potential Investment Existing and Potential Engagements with CIS Countries for Promotion of Trade and Investment 1

4 EXECUTIVE SUMMARY OF STRATEGY PAPER FOR CIS COUNTRIES: INDIA-CIS ROADMAP

5 INTRODUCTION The present document Strategy Paper for CIS Countries: India-CIS Roadmap 2020, compiled by DOC, is structured and chapterized to cover the following subjects: (a) The imperatives Why a Strategy Paper for CIS Countries?; (b) Existing impediments and measures required for creating an enabling environment; (c) Trade logistics and trade routes; (d) Existing and potential trade; (e) Existing and potential investment, and (f) Promotion of engagement with CIS countries. This document is the outcome of background research by five Study Teams formed for the purpose that provided inputs on the existing status and patterns on the above subjects. The Study Team comprised experts/ officials from the following organizations DOC, DIPP, FICCI, CII, India-CIS Chamber and FIEO. This DOC document charts out a Roadmap for engaging with CIS countries till 2020 with clearly defined short-term (3 to 4 years) and long-term (beyond 4 years) targets, so also sector-wise, country-wise (within sector) and value-wise targets (for merchandize trade) covering the above-stated subjects. ~~~~~~~~~~~~~~ 3

6 1. THE IMPERATIVES WHY A STRATEGY PAPER FOR CIS COUNTRIES INDIA? 1.1 The various imperatives for a Strategy Paper for CIS Countries are - economic and trade profile of India on the one hand and economic profile of the world and the CIS countries on the other, patterns in India-CIS trade, availability of natural resources in the CIS countries and the history of friendly relations with them. 1.2 The Indian economy is the ninth largest in the world by nominal GDP and it is the seventeenth largest exporter and eleventh largest importer in the world. The DoC s Strategy for Doubling Exports in Next Three Years ( to ) prescribes that in order to maintain an average growth rate of 9-10% in the medium-term, it is necessary to focus on higher export growth and devise a strategy for rapidly increasing merchandise exports. The old economic order of the world is gradually making space for the new order; today the countries with highest GDP average growth are entirely dominated by Africa, CIS and Asia with range of GDP being from 7.1% to 18.4%. The growth of CIS countries is on an average 5% and going upto 10%. 1.3 As far as India-CIS trade patterns are concerned, the trends observed are: negative balance of trade, 1.15% share in India's total exports and 1.58% share in India's total imports, the patterns of exports to CIS Countries is irregular as only two out of the 12 CIS countries - Russia and Ukraine receive 70% of total Indian exports to CIS region. Under commodity-wise patterns of exports also, there is no uniformity considering the total number of items being exported to the CIS countries - only very few commodities out of the total items of India s exports constitute a major chunk of Indian exports to a given CIS country. The story of imports from CIS countries is no different. 1.4 The CIS countries being rich in many natural resources such as petroleum, coal, natural gas, potash, metals and minerals, could be a useful source of raw materials which are of considerable importance to the manufacturing industry of India. 1.5 Last, but not the least, given the history of friendly relations and in the backdrop of erstwhile USSR being a strategic partner of India for over six decades, it is felt that the time is ripe for re-inventing the relationship. ~~~~~~~~~~~~~~ 4

7 2. ENABLING ENVIRONMENT EXISTING IMPEDIMENTS AND MEASURES REQUIRED 2.1 The background study of existing impediments in trade and investment with the CIS countries was conducted by FICCI; they were also to give recommendations/ solutions. The FICCI report, accordingly, gives a country-wise analysis for all 12 CIS countries (except Tajikistan). 2.2 The findings of the study are that there exist various non-tariff and tariff barriers impeding trade and investment in CIS countries. 2.3 The common non-tariff barriers identified (with varying shades of severity in different countries) are: Market challenges Lack of transparency/ consistency in the application of rules and regulations; the regulatory systems are being improved, but with not as many positive results Weak legal systems problems in dispute settlement Weak and unsound banking and financial institutions Certification/ registration of products Visa issues Border conflict between some of the CIS Countries. 2.4 The common tariff barriers identified i.e the customs/ import tariffs are: A slab system is followed in some of the CIS countries; Relatively low import tariffs are observed in Armenia and Moldova and higher tariffs in Uzbekistan (0 to 200% with an average of 30%). VAT is levied in all the CIS countries in the range of 12% - 20%. Other fees levied mainly include customs processing fees, road tax, environment tax, excise tax (20 570% in Russia). 5

8 Recommendations 2.5 In view of the stated impediments, this DOC Document has made the following recommendations in the short-term and long-term: a) Short-Term Recommendations a) FOR NON-TARIFF BARRIERS: To form temporary JWGs (Joint Working Groups) for each or combination of tacklable non-tariff barriers (such as, information access/ sharing; banking & finance; certification/ registration of products, etc.) and/ or for each or combination of CIS countries. b) FOR TARIFF BARRIERS: To move towards CECA or MFN Agreement with the Customs Union of Russia, Belarus & Kazakhstan b) Long-Term Recommendations a) For non-tariff barriers: To offer Indian skills/ experience for improving weak judicial and arbitration systems to the interested CIS countries. b) For tariff barriers: To initiate dialogue with each CIS country for assessing scope of moderation of tariff barriers; to pursue MFN/ preferential trade relationship with selected/ suitable CIS countries viz. Ukraine, Azerbaijan and Turkmenistan ~~~~~~~~~~~~~~~~~~ 6

9 3. TRADE LOGISTICS & TRADE ROUTES 3.1 The background study on Trade Logistics & Trade Routes with CIS countries was conducted by India-CIS Chamber, wherein they studied the existing trade routes CIS country-wise, identified problems in the sphere of trade logistics and made recommendations for improving the trade logistics infrastructure. 3.2 The existing trade routes between India and CIS countries are mainly two, both of which are very circuitous and require long transit time a) from India to Russia by sea via the Arabian Sea, Mediterranean and Red Sea to Kotka, Finland on the Atlantic Ocean and to St. Petersburg therefrom; b) From India by sea to the east to the Chinese ports and then through China on land route to the destinations in the CIS region. 3.3 Besides the above two circuitous routes, the other difficulties faced on the route are: border & customs issues and deficiencies in logistics procedures and services (like, automated cargo tracing system, adequate container services, packaging services, benchmarking etc.). 3.4 The existing trade route from India being circuitous with a high transit time, there has been a continuous endeavour to find shorter and economical trade routes. The International North South Transport Corridor (INSTC) is a project, with India, Iran and Russia as its founding members, which aims at establishing a shorter trade route between India and CIS countries. Recommendations 3.5 Given the above problems this DOC document makes the following recommendations for implementation in the short-term. To evolve Working Group mechanisms for initiating deliberations on the varied aspects of the problems being faced on the existing routes currently. To take specific steps for taking the INSTC project forward.~ ~~~~~~~~~~~~~~~~~~~~~~ 7

10 4. MERCHANDISE TRADE EXISTING & POTENTIAL 4.1 The background study of existing patterns in merchandise trade was conducted by CII and DOC w.r.t world-cis trade and India-CIS trade. 4.2 Patterns found in the existing world-cis trade: A study of share of India s imports into a CIS country in the overall global imports by that country revealed that it was less than 1% in all the CIS countries. A study of share of India s item-wise imports into a CIS country in the overall item-wise global imports by that country revealed erratic patterns % to 20.22% 4.3 Study of existing India-CIS exports was done on the following principles: a) Export data was collected for all the 12 countries for five years to (upto Dec. 2010) b) Export data was collected for ten generic sectors, which in turn covered all the commodities, where India s global exports exceeded US$ 5 million annually. The ten generic sectors studied and the commodities falling therein are tabulated below: Sl. Description of Commodities Covered including sub-sectors No. Generic Sector 1 Food Sector Tea, coffee, tobacco, cereals, meat, vegetables, juices, spices, fruits, nuts & cashew nuts etc. 2 Textile Sector Raw silk, other textile yarn and fabrics, raw wool, raw cotton, RMGs, apparels, carpets etc. 3 Leather and Skins, hides, leather products, raw rubber, rubber products Rubber Sector 4 Gems and Jewellery section Pearls, stones, precious, semi-precious stones, diamond sets, gold jewellery, etc. 5 Pharmaceutical Pharmaceutical products, drugs sector 6 Chemicals sector Chemicals, fine chemicals, inorganic chemicals 7 Metals sector Iron & steel, Metalfiers ores and metal scrap, Primary steel, pig iron-based items, Non-ferrous metals 8

11 Sl. Description of No. Generic Sector 8 Machinery and equipment sector 9 Construction sector 10 Miscellaneous sector Commodities Covered including sub-sectors Machinery and Mechanical Appliances: parts thereof, Electrical Machinery and Equipment and parts thereof; Sound Recorders and Reproducers, Television image and sound recorders and reproducers and parts, Vehicles other than Railway or Tramway rolling stock and parts and accessories thereof. Salt, Sulphur, Earths & stones; Plastering materials, Lime & Cement, Mineral Fuels, Mineral Oils & products of their distillation; Bituminous substances; Mineral waxes, Articles of stone, plaster, cement, asbestos, mica or similar materials and Ceramic products Newsprint, photographic or cinematographic goods, paper and paperboard; articles of paper pulp, of paper or of paperboard, optical, photographic cinematographic measuring, checking precision, medical or surgical inst. And apparatus parts and accessories thereof, glass and glassware, furniture; bedding, mattresses, mattress supports, cushions and similar stuffed furnishing; lamps and lighting fittings not elsewhere specified, toys, games and sports requisites; parts and accessories thereof and project goods; some special uses. c) The export data was collected for the ten generic sectors with reference to the identified two-digit HS codes and also for selected 4-digit HS codes thereof, where, as stated, India s global exports exceeded US$ 5 million annually. Data was thus collected for a total of 594 HS codes; the following tabulation depicts the numbers of HS codes for which export data was collected for five years for all 12 countries: Generic Sector Number of Sectors with 2-digit HS Code Number of sub-sectors with 4-digit HS codes Food Sector Textile Sector Leather and Rubber 5 36 Sector Gems and Jewellery 1 12 section Pharmaceutical sector 1 6 Chemicals sectors 5 88 Metals sector 9 59 Machinery and 3 95 equipment sector Construction sector 4 46 Miscellaneous sector 8 61 Total Remarks In identifying a sub-sector at the 4- digt HS code level, the criteria was: global exports by India in that subsector should be more than at least US$ 5 Million annually (in ) d) The data collated was analyzed and conclusions were drawn. 9

12 e) Based on the conclusions drawn, this DOC document has made recommendations for each of the 594 HS codes for focus on promotion of exports: Country-wise Short-term Long-term f) In addition, value-wise targets were set for the two-digit HS codes identified under each of the 10 generic sectors. Broadly, the value-wise targets have been set as 5% of India s global exports. Thus, an overall target set is US$ million to be achieved by The following tabulation depicts (in US$ million) the total targets set for each of the ten generic sectors. Generic Sector India s Global Exports India s Exports to CIS Target for next 5 years to CIS Food Metals Leather & Rubber Textiles Chemicals Machinery & Equipment Construction Pharmaceuticals Miscellaneous Gems & Jewellery Total 2,23, A study of existing India-CIS imports has revealed prevalence of negative balance of trade. This DoC Document has accordingly recommended that, in the long-term, specific steps may be taken for reducing the negative BoT one, by increasing the exports as per the above recommendations and two, by lowering/ reducing the items imported, where feasible. ~ ~~~~~~~~~~~~~~~~~~~~ 10

13 5. INVESTMENT EXISTING AND POTENTIAL 5.1 The background study on patterns of existing investment in CIS countries and the potential sectors of investment was conducted by DIPP. Material was collected for each of the CIS countries on the following parameters: Economic and investment climate in CIS Countries Natural resources in the country Investment relations between India and the CIS countries Recommended priority sectors for investment in the country. Information on the policy measures for priority sectors of investment was provided by CII. 5.2 A comparative study of patterns of global investments and Indian investments in the CIS countries was done which revealed the following picture: That India s share in the global investment in the CIS countries is very low. FDI outflows from India to CIS is more predominant than FDI inflows into India from CIS India is not a top investor country in the CIS region and the major countries investing in the CIS countries are: Russia, France, Argentina, USA, Cyprus, Turkey, Norway, Iran, United Kingdom, Italy, Germany, Switzerland, UAE, Netherlands, Virgin Islands, Kazakhstan, China, Ukraine, and Austria. Countries like Russia, Cyprus, Netherlands, USA, UK, China are top investing countries in more than one CIS country 5.3 As regards the potential sectors of investment in the CIS countries, it is observed that there is a commonality across the CIS region. The common sectors are: Food sector and agribusiness Pharmaceuticals & healthcare Telecom, technology parks, IT training Textiles Energy, power generation & transmission Oil-refining and petro-chemicals 11

14 5.4 In addition to the above, the following sectors require to be focused upon for strengthening the investment and trade relations between India and CIS Countries: Banking sector Technology Transfer Cooperation in Entertainment sector SME sector 5.5 Based on the material collected country-wise, the priority sectors identified for each of the CIS countries is tabulated hereunder: CIS Country Armenia Azerbaijan Belarus Georgia Kazakhstan Kyrgyzstan Moldova Russia Tajikistan Turkmenistan Ukraine Uzbekistan Priority sectors Mining & metallurgy, Agri-business & food processing, Textiles, Tourism & Entertainment, Infrastructure/ Construction & Machine building, Gems & Jewellery, Leather footwear Oil & gas, Energy & Power, IT &Telecom, Agri-business & food processing, Textiles, Chemicals, Tourism & Entertainment, Transportation Mining & metallurgy, Pharma &health care, Agri-business & food processing, Transportation, Infrastructure/ Construction & Machine building Energy & Power, IT &Telecom, Agri-business & food processing, Tourism & Entertainment, Transportation, Light manufacturing Oil & gas, Mining & metallurgy, Energy & Power, IT &Telecom, Pharma &health care, Agri-business & food processing, Chemicals, Transportation, Infrastructure/ Construction & Machine building Mining & metallurgy, Energy & Power, IT &Telecom, Agri-business & food processing, Textiles, Tourism & Entertainment Energy & Power, IT &Telecom, Agri-business & food processing, Tourism & Entertainment Oil & gas, Mining & metallurgy, IT &Telecom, Pharma &health care, Agri-business & food processing, Tourism & Entertainment, Automotive industry, Infrastructure/ Construction & Machine building Oil & gas, Mining & metallurgy, Energy & Power, IT &Telecom, Pharma &health care, Agri-business & food processing, Textiles, Chemicals, Tourism & Entertainment, Transportation, Light manufacturing, Infrastructure/ Construction & Machine building Oil & gas, Energy & Power, IT &Telecom, Pharma &health care, Chemicals, Tourism & Entertainment, Transportation Mining & metallurgy, Energy & Power, IT &Telecom, Pharma &health care, Agribusiness & food processing, Chemicals, Tourism & Entertainment, Automotive industry, Infrastructure/ Construction & Machine building Oil & gas, Mining & metallurgy, Energy & Power, IT &Telecom, Agri-business & food processing, Textiles, Chemicals, Tourism & Entertainment, Light manufacturing 12

15 Recommendations 5.6 This DOC document has accordingly recommended the following priority sectors: a) Oil & Gas Sector/ Hydrocarbons b) Mining and metallurgy c) Energy/ power generation & Distribution d) IT Sector/ Software/ Electronics/ Telecom e) Pharmaceuticals/ healthcare& Medical Industry/ Medicine f) Agribusiness/ Food processing & Packaging g) Textiles and Clothing h) Chemicals and Petrochemicals i) Tourism and Entertainment j) Transportation k) Automotive Industry l) Light Manufacturing m) Infrastructure, Machine-Building and Construction n) Gems and Jewellery o) Leather and Footwear p) Banking and Financial Services q) Education r) Consultancy and Transfer of Technology (such as: consultancy services for management of enterprises, transfer of technology in satellite imagery, consultancy services in legal systems and legislation including law making, court procedures, enactments, transfer of technology and consultancy in census and election commission activities, etc.) 13

16 5.7 For each of the above recommended priority sectors, this Document has prescribed short-term and long-term targets: In the short-term: Projects may be identified in the above sectors in selected CIS countries only (as per above tabulation). In the long-term: The identified projects may be discussed and finalized projects may be executed in consultation with the concerned agencies in the selected CIS countries. Further, projects may be identified in the sector in other CIS countries. ~~~~~~~~~~~~~~ 14

17 6. ENGAGEMENT WITH CIS COUNTRIES PROMOTION OF TRADE & INVESTMENT 6.1 This Chapter in the DOC document discusses existing and potential ways & means for a more intense engagement between India and CIS countries - through the permanent mechanisms, promotional schemes in the MEA and/ or MoC&I and through fairs & exhibitions - for promoting trade and investment between India and the CIS countries. 6.2 Permanent Mechanisms of Engagement a) The Inter-Governmental Commissions (IGCs), Joint Working Groups (JWGs) on Trade & Economic Cooperation constitute the permanent mechanisms of engagement. b) It is seen that IGCs have been conducted in the past in ten CIS countries except Georgia and Moldova, but majority of IGCs have only been held with Russia on a regular basis (each year), where 17 meetings have taken place. In contrast, in the case of other CIS countries the number of meetings is much lesser. What stands out particularly is the lack of engagement with Ukraine, considering that it is the 2 nd ranking trade partner of India in the CIS region. c) Regarding B2B Forum it has been observed that there is no means between India and CIS countries regarding these forums. Recommendations In the backdrop of prevailing status of meetings of permanent mechanisms the recommendations made in this DoC document are: a) SHORT-TERM TARGETS On country-wise basis, JWGs and IGCs must be formed in near future in countries like Georgia, Ukraine and Kyrgyzstan. On sector-wise basis, JWGs which are working presently need to be enlarged and JWGs for new sectors should be created. For this purpose feasibility report may be prepared. 15

18 b) LONG-TERM TARGETS On country-wise basis, IGC and JWG can be formed for Moldova and Uzbekistan respectively and in Ukraine B2B forum can be created at CEO level. On sector-wise basis, to implement feasibility report prepared during shortterm for expanding existing sector-wise JWGs (to include more countries) and for creating new JWGs. 6.3 Promotional Schemes a) In preparation of the present document, the different promotional schemes in existence in DOC, MEA and EXIM Bank and their utilization were examined. The schemes and funds available are as follows: In DOC there are several financial assistance schemes for export promotion, like MAI (Market Access Initiative Scheme), MDA (Market Development Assistance), Challenge Fund and IBEF. In addition, the DOC allocates budgets to commercial wings of the Indian Embassies in the CIS countries. In MEA funds amounting to US$ 100 million have been earmarked for the CIS Countries, in particular for CIS countries in Central Asia. EXIM Bank, on the basis of credit lines, has also earmarked US $190 million for CIS countries out of which only US$22 million have been utilised. The four lines of credit are for 4 countries 2 for Russia amounting to US$ 125 million (US $100mn is meant for development in MSME sector of Russia); US$ 55 million is for Belarus and US$ 10 million for Recommendations b) It was considered that a more focused utilization of funds available under these schemes in respect of CIS countries could be planned. Accordingly, following recommendations were made in the short-term on the subject: Utilization of MAI/ MDA funds for organizing and/ or participation in fairs/ exhibitions should be diversified to include more countries and more sectors. 16

19 Countries recommended for targeting Ukraine (2 nd ranking trading partner), Georgia (4 th export partner of India), Tajikistan, Turkmenistan and Azerbaijan. Sectors recommended for targeting Gems and jewellery, construction, infrastructure, consultancy, services like medical/ pathological, banking, knowledge/ legal/ business outsourcing. c) A structured methodology is recommended for ensuring utilization of budget allocated to Indian missions (commercial wings) by DOC. d) For utilizing the US$ One billion assistance of MEA for central Asian countries projects may be identified in consultation with stakeholders (both in the government and in business): Sectors recommended on the government side are setting up and modernization of power units, IT centres of excellence and e-networking. Sectors recommended on the business side are establishing chain of hospitals, textile units, pharma units (packaging and manufacturing), automobile & agricultural spare parts units and food processing units. 6.4 Fairs & Exhibitions a) The background study on Engagement with CIS Countries through Exhibitions, Fairs, BSMs, India Shows, etc. was done by FIEO. As part of the findings, country-wise thrust areas were identified based on India s strength of exports and imports by CIS Countries. FIEO also provided country-wise inputs on sector-wise events for calendar year 2012 in each CIS country alongwith locations/ venue/ cities. Recommendations b) Based on the findings, this DOC document recommends that fairs and exhibitions may be planned in thrust areas for identified countries in the short-term and for other than identified countries in the long-term. ~~~~~~~~~~~~~~ 17

20 7. CONCLUSION 7.1 Thus, to conclude, the present document Strategy Paper for CIS Countries: India- CIS Roadmap 2020, compiled by DOC, states specific goals and targets for all the stakeholders, so that the present engagement level between India and the CIS countries can be raised. The Document indicates, in specific terms, the targets to be achieved through coordinated and focussed effort by all the stakeholders - having in mind singular and common goals and targets and thus, provides a Roadmap. 7.2 It has been concluded that the Roadmap cannot be for a short-term of one to three years, as in this period it may not be possible to achieve a turnaround in the present level of engagement in terms of quality, quantity and content. Hence - a Roadmap going upto the year India-CIS Roadmap: 2020 thus recommends targets as under for all the above subjects covered in the chapters of the Document: Sector-wise targets Country-wise targets Short-term targets Long-term targets 7.4 The recommendations contained in this Document can be summated/ culled out for implementation as under: For sector-wise stakeholders: Summation of sector-wise targets comprising consolidated actionable points for a particular sector in the short-term, longterm and country-wise. For country-wise stakeholders: Summation of country-wise targets comprising actionable points for a particular country in the short-term and long-term covering all the sectors. 18

21 For short-term implementation: Summation of short-term targets comprising actionable points for the short-term for all countries and all sectors. For long-term implementation: Summation of long-term targets comprising actionable points for the long-term for all countries and all sectors. 7.5 This summation/ re-sorting will enable setting targets for stakeholders and implementation of India-CIS Roadmap: ~~~~~~~~~~~ 19

22 EXTRACTS FROM STRATEGY PAPER FOR CIS COUNTRIES: INDIA-CIS ROADMAP 2020 FOR STAKEHOLDERS IN TEXTILE SECTOR 20

23 Chapter 1 (Chapter 2 of DoC document Strategy Paper for CIS Countries: Roadmap 2020 ) ENABLING ENVIRONMENT EXISTING IMPEDIMENTS AND MEASURES REQUIRED (Extracts for Generic Sector Textiles ) 1. As can be seen from the Executive Summary of the DoC Strategy Paper for CIS Countries: Roadmap 2020, FICCI was tasked to study the existing impediments in trade and investments with the CIS countries. 2. The findings in the FICCI report relevant to the generic sector Textiles relate to essentially the non-tariff barriers particularly on certification and registration of products. 3. Further, the FICCI report has made a specific mention of in only one CIS country in this regard viz., Russia. The impediments for these in the Textile sector are discussed below. Even though other countries have not been specifically mentioned, it may be concluded that the non-tariff barriers discussed below are prevalent in the CIS region. 4. Russia Certification of products poses a major problem; the rules are complicated, cumbersome and are often changed. Under the textile sector, products like children s clothing require certifications. 5. Recommendations The recommendations in the DoC Strategy Paper for CIS Countries: Roadmap 2020 relevant to the generic sector Textiles are essentially for the short-term and in respect of non-tariff barriers discussed above. The recommendation is as under: 21

24 Short-Term Recommendations a) For non-tariff barriers: To form temporary JWGs (Joint Working Groups) for each or combination of tacklable non-tariff barriers such as certification/ registration of textile products and/ or for each or combination of CIS countries. ~~~~~~~~~ 22

25 Chapter 2 (Chapter 4 of DoC document Strategy Paper for CIS Countries: Roadmap 2020 ) TRADE EXISTING & POTENTIAL (Extracts for Generic Sector Textiles ) 1. As can be seen from the Executive Summary of the DoC Strategy Paper for CIS Countries: Roadmap 2020, CII and DoC were tasked to study the existing patterns in merchandise trade w.r.t world-cis trade and India-CIS trade respectively. World-CIS Trade (CII Findings) 2. The CII Report studied the share of India s item-wise imports into a CIS country in the overall item-wise global imports by that country. This revealed that under the Textile sector five countries share more than 2% share of imports from India. The major chunk has been imported by Moldova (10.41%), Belarus (5.86%) and Kazakhstan (5.21%). Apparels: under this sector only Turkmenistan has taken 10.61% share rest other countries have shares ranging from 0.09% to 3.63%. 3. The following tabulation shows the share of India s textile imports in the imports by the 12 CIS countries. CIS Country CIS Country-wise %age Share of Imports from India in Global Imports of Textile CIS Country-wise %age Share of Imports from India in Global Imports of Apparels Armenia Azerbaijan Belarus Georgia Kazakhstan Kyrgyzstan Moldova Russia Tajikistan Turkmenistan Ukraine Uzbekistan

26 4. The following figure shows in value terms the share of textiles imports in the total global imports of the 12 CIS countries: Textiles (Values in US$ million) Apparels (Values in US$ million) India-CIS Exports (DOC Study of India-CIS Trade 5. The DoC document Strategy Paper for CIS Countries: Roadmap 2020, with regard to merchandize trade in the generic sector Textiles, has identified sectors at the two-digit level and related sub-sectors at the four-digit level, where India s global exports exceeds US$ Five million annually. Accordingly, therefore, in its recommendations for merchandize trade, the Strategy Paper for CIS Countries: Roadmap 2020 covers the following related sectors/ sub-sectors HS Code-wise (at 4-digit level) as tabulated below: HS CODE DESCRIPTION 50 Silk 5007 Woven fabrics of silk or silk waste 51 Wool fine or coarse animal hair, horsehair yarn or woven fabric 5105 Yarn spun from silk waste not put up for retail sale 5107 Yarn of combed wool not put up for retail sale 5111 Woven fabrics of carded wool or carded fine animal hair 5112 Woven fabrics of combed wool or combed fine animal hair 52 Cotton 24

27 5201 Cotton not carded or combed 5202 Cotton waste including yarn waste and granted stock 5204 Cotton sewing thread w/n put for retail sale 5205 Cotton yarn (other than sewing thread) containing cotton 85 % or more by weight of cotton not put up for retail sale 5206 Cotton yarn (other than sewing thread) containing cotton < 85 % by weight of cotton not put up for retail sale 5207 Cotton yarn (other than sewing thread) put up for sale 5208 Woven fabrics of cotton containing >= 85% of cotton weighing not more than 200g/m Woven fabrics of cotton containing >= 85% of cotton weighing >= 200g/m Woven fabrics of cotton containing less than < 85% of cotton mixed mainly or solely with man-made fibres < = 200g/m Woven fabrics of cotton containing less than < 85% of cotton mixed mainly or solely with man-made fibres > 200g/m Other woven fabrics of cotton 53 Other vegetable textile fibres; paper yarn and woven fabrics of paper yarn 5305 Coconut, abaca ramie and other vegetable textile fibres NES or included, raw or processed, tow, noils and waste of these fibres 5307 Yarn of jute and other textile baste fibres 5308 Yarn of other textile vegetable fibres and paper yarn 5309 Woven fabrics of flax 5310 Woven fabrics of jute and other textile baste fibres 54 Man-made filaments 5402 Synthetic filament yarn (other than sewing thread) not put up for retail sale including synthetic monofilament of less than 67 decitex 5403 Artificial filament yarn (other than sewing thread) not put up for retail sale including artificial monofilament of less than 67 decitex Synthetic monofilament of less than or equal to 67 decitex and of cross 5404 sectional dimensions less than or equal to 1mm; strip etc (for e.g. artificial straw) of synthetic textile materials of width <= 5mm 5406 Man made filament yarn (other than sewing thread) put up for retail sale 5407 Woven fabrics of synthetic filaments yarn including woven fabrics obtained from materials of heading no Woven fabrics of articles filament yarn including fabrics obtained from materials of heading no Man-made staple fibres Synthetic staple fibres not carded, combed/ otherwise processed for spinning Artificial staple fibres not carded, combed/ otherwise processed for spinning 5505 Waste (including noils yarn waste & garneted stock of manmade fibres) 5509 Yarn other than sewing thread of synthetic fibres not put up for retail sale 25

28 5510 Yarn other than sewing thread of artificial fibres not put up for retail sale 5512 Woven fabrics of synthetic staple fibre cntngs 85% or more by weight of synthetic staple fibres 5513 Woven fabrics of synthetic staple fibre cntngs less than 85% by weight of such fibres mixed mainly or solely with cotton of weight <= 170 g/m2 Woven fabrics of synthetic staple fibre cntngs less than 85% by weight of 5514 such fibres mixed mainly or solely with cotton of weight exceeding 170 g/m Other woven fabrics of synthetic staple fibres 56 Wadding, felt and non-wovens; special yarns, twine, cordage, ropes and cables and articles thereof 5601 Wadding of textile materials and articles thereof; textile fibres not exceeding 5mm in length (flock); textile mill and dust NEPS 5603 Non-wovens, w/n impregnated, coated, covered, laminated 5607 Twine, cordge, rop and cables, w/n plated/ boarded and w/n impregnated, cord, covered/ sheathed with rubber/ plastic 5608 Knotted ntng of twine cordage/ rope, made up fishing net and other made up nets of textile materials 57 Carpets and other textile floor coverings 5701 Carpets and other floor coverings, knotted, whether not made ups 5702 Carpets and other floor coverings woven, tufted/ flocked, w/n madeup including 'kelem', 'karamanie', and similar hand woven rugs 5703 Carpets and other floor coverings w/n tufted madeup 5705 Other carpets and floor covering w/n madeups 58 Special woven fabrics, tufted textile fabrics; lace, tapestries, trimmings, embroidery 5801 Woven pile fabrics and chennile fabrics other than fabrics of heading no 5802 or Tulles and other net fabrics excluding woven, knitted or crocheted fabrics, lace in the pc in strips, motifs excluding articles under heading no Narrow woven fabric goods except under heading 5807; narrow fabrics consisting of warp without weft assembled by means of an adhesive Braids in the piece, ornamental trimmings in the piece, without 5808 embroidery other than knitted/ crocheted, tassle, pompone and similar articles 5810 Embroidery in the piece, in strips, in motifs 59 Impregnated, coated, covered or laminated textile fabrics; textile articles of a kind suited for industrial use 5901 Textile fabrics coated with gum/ any lacouse substances for outer book coverings, tracing cloth, prepared painting canvas, bukram etc Tyre cord fabric of high tenacity of yarn/ nylon / other polyads, polysters/ ciscose rayon 5903 Textile fabrics impregnated, coated, covered/ laminated with plastics excluding those under heading Runnerized textile fabrics except heading no Knitted or crocheted fabrics 26

29 6001 Pile fabrics including long pile fabrics and terry fabrics knitted, crocheted 6002 Knitted or crocheted fabrics of width less than 30cm, containing elastormetric yarn/ rubber >= 5% by weight except heading no Other knitted or crocheted fabrics 61 Articles of apparel and clothing accessories, knitted or crocheted Men's/boy's overcoats, car coats, capes (including ski jackets), wind 6101 cheaters, wind jackets etc, knitted/ crochetted excluding of heading no Men's/ boy's suits, ensembles, jackets, blazers, torusers, etc (except swimwear) knitted/ crocheted 6104 Womens's/ girl's suits, ensembles, jackets, dresses, skirts and divided skirts, trousers, bib, brace overalls etc, knitted/ crocheted 6105 Men's/ boy's shirts, knitted crocheted 6106 Women's/ girl's blouses, shirts, shirt-blouses, knitted crocheted 6107 Men's/ boy's underpants, briefs, nightshirts, pyjamas, bath robes, etc. knitted, crocheted 6108 Women s/ girl s slips, petticoats, briefs, panties, bight dress, pyjamas, negligees, bath robes, dressing gown etc, knitted/ crocheted 6109 T-shirts, singlets, and other vests, knitted/ crocheted 6111 Babies garments and clothing accessories, knitted/ crocheted 6112 Track suits, ski suits and swim wear, knitted/ crocheted 6113 Garments made up of knitted/ crocheted fabrics of heading 5903, 5906 or Other garments knitted/ crocheted Panty hose, tights, stockings, and other hosiery including stockings for 6115 varicose veins and footwear without applied soles, knitted, crocheted 6116 Gloves, mittens, mitts, knitted/ crocheted Other madeup clothing accessories, knitted/ crocheted, parts of garment/ 6117 clothing accessories 62 Articles of apparel and clothing accessories, not knitted or crocheted Men's/boy's overcoats, car coats, capes, anoraks (including ski jackets), 6201 wind cheaters, wind jackets and similar articles knitted/ crochetted excluding heading no 6203 Women's/girl's overcoats, car coats, capes, anoraks (including ski jackets), 6202 wind cheaters, wind jackets and similar articles knitted/ crochetted excluding heading no Women s/ girl's suits, ensembles, jackets, dresses, skirts, bib, brace overalls, brechs and shorts etc, except swimwear 6205 Men's or boys shirts 6206 Women's/ girl's blouses, shirts, shirt-blouses 6207 Men's/ boy's singlets and other vests, underpants, briefs, nightshirts, pyjamas, bath robes, dressing gown and similar articles 6208 Women s/ girl's singlets and other vests, slips, petticoats, briefs, panties, night dress, pyjamas, negligees, bath robes, and similar articles 6209 Babies garments and clothing accessories 6211 Track suits, ski suits and swim wear 27

30 6212 Brassieres, girdles, corsets, braces, suspenders, garters and similar articles and parts thereof w/n knitted crocheted 6215 Ties, bows, ties and cravats 6216 Gloves, mittens, mitts 6217 Other madeups clothing accessories, parts of garments or clothing accessories, excluding articles under heading Other madeup textile articles; sets; worn clothing and worn textile articles; rags 6301 Blankets and travelling rugs 6302 Bed linen, table linen, toilet linen, kitchen linen 6303 Curtains (including drapes) & interior blinds, curtains or bed valances 6304 Other furnishing articles excluding heading no Sacks and bags of a kind used for packing of goods 6306 Tarpaulines, sails for boats, sail boards or landcraft, awnings, sun blind, tents and camping goods 6307 Other made up articles including dress pattern 6309 Worn clothing and other worn articles 6. As stated in the Executive Summary, DoC in its study of existing trade in the textile sector collated export data for all the 12 countries for five years to (upto Dec. 2010). Export data was collected wherever India s global exports exceeded US$ 5 million annually. 7. Further under the generic sector Textiles fourteen sector (at the two-digit HS code level) and 92 sub-sectors thereof (at the four-digit HS code level) were studied, as tabulated above. 8. The succeeding paragraphs discuss the following aspects for generic sector Textiles : a) India s strength under the generic sector Textiles and comparison with the exports to the CIS countries. b) Regularity/ irregularity of Indian exports in the 5 years ( ) to the CIS countries based on data collected at the two-digit HS Code level c) Conclusions on patterns of exports in r/o the sub-sectors under generic sector Textiles based on the data collected at the four-digit HS Code level. d) Recommendations short-term and long-term - w.r.t the sub-sectors (at the four-digit HS Code level). The recommendations are with regard to enhancement of exports in the CIS countries in the identified sub-sectors. As it would not be practical for the stakeholders to make efforts for enhancement of exports in all 12 CIS countries simultaneously in the identified sub-sectors, separate targets are recommended - both 28

31 in the short-term and long-term - for different CIS countries based on the following criteria : CIS countries identified for short-term targets: Where under a particular 4-digit HS code, the exports to the particular CIS countries is regular i.e exports having taken place in three out of last five years. CIS countries identified for long-term targets: Where under a particular 4-digit HS code, the exports to the particular CIS countries is irregular i.e exports having taken place in two or lesser number of years in the last five years. Fixing of value-wise targets: In addition to the short-term and long-term targets, value-wise targets have been fixed at the two-digit level at 5% of the global exports of India in the textile sector. 9. India s Strength Under Generic Sector Textiles i) India holds a very strong position in the following three sectors of generic sector Textiles (at 2-digit HS code level) with global export being over US$ million 4000 (in ) in case of Cotton (HS 52), Articles of apparel and clothing accessories, not knitted or crocheted (HS 62) and Articles of apparel and clothing accessories, knitted or crocheted (HS 61). A comparison of India-CIS exports and India s global exports is shown in the figure below which clearly depicts the gaps HS 52 HS 62 HS 61 India's Global trade ( ) Total exports to CIS region ( ) 29

32 ii) Other Further, where India s global exports are between US$ Million 4000 to US$ 1000 (in ) in case of Man-made filaments (HS 54), Man-made staple fibres (HS 55), Other madeup textile articles etc. (HS 63) and Carpets (HS 57) are also considered strong exporting sectors for India. A comparison of India-CIS exports and India s global exports is shown in the figure below HS 54 HS 55 HS 63 HS 57 India's Global trade ( ) Total exports to CIS region ( ) 10. Regularity/ Irregularity of Indian Exports in Five Years ( ) i) The pattern of regularity/ irregularity of Indian exports under all the 14 two-digit HS codes in Textile sector are tabulated below and the conclusions and recommendations are self-explanatory. From the table, it is obvious that few 2-digit HS codes like 62 and 63 there is presence in a good number of CIS countries. Countries Having 2-Digit HS Codes Articles of leather saddler and harness, travel goods, etc. (HS 52) Regularity of exports in all 5 years Belarus, Kazakhstan, Russia, Ukraine Irregularity of exports (2-4 years) Georgia, Kyrgyzstan, Tajikistan, Nil or Near nil exports Moldova, Turkmenistan, Uzbekistan 30

33 Wool fine or coarse animal hair, etc. (HS 51) Silk (HS 50) Man-made filaments (HS 54) Man-made staple fibres (HS 55) Other vegetable textile fibres (HS 53) Wadding, felt and nonwoven, special yarns, etc. (HS 56) Special woven fabrics, etc. (HS 58) Knitted or crocheted fabrics (HS 60) Impregnated, coated, covered or laminated textile fabrics, etc. (HS 59) Articles of apparel and clothing accessories, not knitted or crocheted (HS 62) Articles of apparel and clothing accessories, knitted or crocheted (HS 61) Other madeup textile articles (HS 63) Carpets (HS 57) Russia, Ukraine Russia, Ukraine Belarus, Kazakhstan, Kyrgyzstan, Turkmen, Georgia, Moldova, Tajikistan, Uzbekistan N.A. Russia, Ukraine Moldova, Tajikistan, Turkmenistan, Uzbekistan, Kazakhstan, Russia, Ukraine Moldova (in four years) Russia, Ukraine Russia, Ukraine Russia, Tajikistan, Uzbekistan Kazakhstan, Kyrgyzstan, Uzbekistan, Armenia, Moldova, Uzbekistan Armenia, Kazakhstan Georgia, Kazakhstan, Moldova Armenia, Ukraine Armenia, Belarus, Georgia, Moldova, Turkmenistan Near Nil Azerbaijan, Tajikistan Azerbaijan, Kyrgyzstan, Tajikistan, Turkmenistan Georgia, Kyrgyzstan, Tajikistan, Turkmenistan, Uzbekistan, Near Nil Azerbaijan, Belarus, Belarus, Kyrgyzstan, Near nil Tajikistan, Turkmenistan, Uzbekistan Nil Azerbaijan, Belarus, Georgia, Moldova, Turkmenistan Russia Tajikistan Nil Armenia, Azerbaijan, Belarus, Georgia, Moldova, Turkmenistan, Uzbekistan Near nil Kazakhstan, Kyrgyzstan, Ukraine Russia, Georgia Kazakhstan Nil Armenia, Azerbaijan, Belarus, Moldova, Tajikistan, Turkmenistan, Ukraine, Uzbekistan Near Nil Kyrgyzstan Azerbaijan, Belarus, Georgia, Kazakhstan, Kyrgyzstan, Russia, Tajikistan, Turkmenistan and Ukraine. Azerbaijan, Georgia, Russia, Tajikistan, Turkmenistan and Ukraine. Azerbaijan, Belarus, Georgia, Kazakhstan, Kyrgyzstan, Russia, Ukraine, Uzbekistan Georgia, Kazakhstan, Kyrgyzstan, Russia, Ukraine Armenia (3 years), Moldova (4 years), Uzbekistan (3 years) Armenia (3 yrs), Belarus (4 yrs) Moldova (2 yrs), Uzbekistan (3 yrs) Armenia (2 yrs) Azerbaijan (4 yrs) Belarus (4 yrs) Moldova (2 yrs) N.A. N.A. Nil Tajikistan, Turkmenistan Near Nil Moldova Nil Armenia, Tajikistan, Turkmenistan, Near Nil Uzbekistan 31

34 11. Recommendations Flowing from the above discussions on the generic sector Textile covering India s strength, the regularity/ irregularity of trade to the CIS countries under the 20 sectors at the 2-digit level and the conclusions on exports to CIS countries within the sub-sectors (at the 4- digit level of the HS code), the following country-wise recommendations are made for the Textile sector both for the long-term and short-term. Further under the recommendations for Textile sector, targets for next 5 years for CIS region have been mentioned. The values have been calculated by taking 5% of the global exports by India in the year It is expected that once an improved momentum is achieved in first five years, it can be maintained till the year 2020 with same quantum of increase in the trade in each subsequent years. Table for recommendations Textile Sectors India s strength (in US$ Million, ) Countries recommended for improving trade Cotton (HS 52) India s global exports (in US$ Million, ) India s export to CIS (in US$ Million, ) Target for next 5 years for CIS region (in US$ Million, ) Cotton uncombed/ uncarded (HS 5201) Cotton yarn (HS 5205) Woven fabrics of cotton (weight not more than 200gm/m2) (HS 5208) Reason for recommendation Moldova, Russia, Tajikistan, Turkmenistan, Ukraine & Russia & Ukraine. Export in all most in Kazakhstan. Kyrgyzstan, Moldova, Tajikistan, Turkmenistan & Irregular exports can Russia Export in all most in Kazakhstan & Ukraine. Irregular exports can Shortterm Longterm 32

35 Woven fabrics of cotton (weight upto 200gm/m2) (HS 5209) Other woven cotton fabrics (HS 5212) Kyrgyzstan, Moldova, Tajikistan, Turkmenistan & Russia Export in all most in - - Moldova, Tajikistan, Turkmenistan, Ukraine & Russia Export in all most in - - Moldova, Tajikistan, Turkmenistan, Ukraine & Wool fine or Coarse Animal Hair woven or yarn (HS 51) India s global exports (in US$ Million, ) India s export to CIS (in US$ Million, ) 0.01 Target for next 5 years for CIS region (in US$ Million, ) 5.9 Yarn from silk waste not for retail (HS 5105) combed wool fabrics (HS 5112) Moldova, Russia, Tajikistan, Turkmenistan, Ukraine & Uzbekistan Moldova, Russia, Tajikistan, Turkmenistan, Ukraine & Uzbekistan wool yarn not for retail (HS 5107) Moldova, Russia, Tajikistan, Turkmenistan, Ukraine & Uzbekistan 33

36 Silk (HS 50) India s global exports (in US$ Million, ) India s export to CIS (in US$ Million, ) 0.49 Target for next 5 years for CIS region (in US$ Million, ) 13.9 Woven fabrics of silk or silk waste (HS 5007) Kyrgyzstan, Russia & Ukraine. Belarus, Kazakhstan & Turkmenistan. Georgia, Moldova, Tajikistan, & Man-made Filaments (HS 54) India s global exports (in US$ Million, ) India s export to CIS (in US$ Million, ) 1.67 Export in all most in Irregular exports can Target for next 5 years for CIS region (in US$ Million, ) Woven fabric of synthetic yarn (HS 5407) Russia & Ukraine. Export in all most in Synthetic filament yarn (not put up for retail sale) (HS 5402) Synthetic filament yarn (not put up for retail sale) (HS 5403) Woven fabrics of filament yarn (HS 5408) Kazakhstan Kyrgyzstan, Moldova, Tajikistan, Turkmenistan & Irregular exports can Russia Export in all most in Ukraine Moldova, Tajikistan, Turkmenistan & Irregular exports can Moldova, Russia, Tajikistan, Turkmenistan, Ukraine & Russia & Ukraine. Irregular exports can Moldova, Tajikistan, Turkmenistan & 34