Given the cross-cutting nature of the 21st century trade agenda, leadership should not rest with any line ministry. What is needed is an "apex entity" that has a clear mandate from the prime minister to consult with stakeholders and manage the process of developing the strategy. This entity cannot be solely responsible for implementation as that will by necessity involve many players in and outside government. Instead, its role in the implementation phase is to act as a coordinator and convener, and to have the mandate to monitor and assess implementation by the relevant agencies within the government.
The proposed apex entity can be called the National Trade Policy Council (NTPC). It will ensure that all agencies that are involved with trade activities - line ministries, regulatory bodies, state governments - know what the goals are. They are fully informed of the priorities that are defined by the strategy, and use it as a framework that guide their activities.
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The NTPC would provide executive sponsorship, vision and strategic direction. It would lead the process of trade strategy design and oversee the overall trade performance and update the strategy when required based on feedback and impact assessment.
The NTPC should be chaired by a minister who reports directly to the PM. The Council should include senior representatives of all relevant ministries and regulatory agencies. It should have the mandate to create technical committees that bring together sectoral or issue-specific experts to provide inputs on the design or implementation of specific dimensions of trade strategy.
The NTPC should be supported by a small secretariat, not by an existing line ministry. It can be tasked with organising meetings and managing consultative and deliberative bodies; interacting with the private sector; and monitoring and evaluating the impact of the implementation of the national trade strategy.
Its role could include strategic decisions on multilateral, bilateral, and regional trade policy; policy related to FDI, trade facilitation and reducing transaction costs of trade; policies related to domestic regulatory reform in various sectors to reduce the costs of doing business in India; strategic policymaking on improving India's competitiveness; policies to improve India's logistical capacity and connectivity with rest of the world, and policies to make India ready for the structural changes in global production focusing on skilling and technological acquisition.
The NTPC could have three offices - Office of the Chief Trade Negotiator, Office of the Trade and Competitiveness Economist, and the National Trade Facilitation Council (NTFC).
Chief Trade Negotiator
Its office could be responsible for all trade negotiations at the multilateral, regional, and bilateral levels. Trade negotiations are a strategic economic objective, and not an administrative one. It is critical to have a small dedicated secretariat that is not burdened with day-to-day administrative responsibilities to deal with it. The multilateral unit could be responsible for all negotiations at the WTO and to develop the agenda and policy position for India for the G20 discussions, as well as guide India's engagement with Unctad.
The bilateral/regional negotiations unit could be responsible for all bilateral and regional trade and economic engagement with three sub-units: South and East Asia (SEA), Africa, West and Central Asia (AWCA), and Europe and Americas (EA). The SEA should be high-priority, as India's role in SE Asia and its integration with Asian production, trade and investment networks are critical to its economic future. The SEA and EA would also together have to engage in the mega-regionals - TPP, through TPP to TTIP, and RCEP. The importance of TPP and TTIP should not be underscored since together they will have the largest GVC embracing about 60 per cent of global GDP.
The AWCA's mandate could be to rapidly deepen India's economic engagement and investment with Iran, GCC, and key Central Asian states like Afghanistan, Uzbekistan, and Kazakhstan. It could also have the mandate for exponentially increasing India's economic footprint in Africa through strategic trade and investment linkages, and concluding agreements with key African regional groupings.
Trade and Competitiveness Economist
Its office could provide a framework for policies related to domestic regulatory reform in various sectors to reduce the cost of doing business, and strategic policy making more generally to improve India's global competitiveness. The working model for the sectoral competitiveness council could be an upgrade of the existing National Manufacturing Competitiveness Council by making it truly an operational private-public platform, by allowing the private sector to be an equal partner.
National Trade Facilitation Council
We have no line ministry whose primary function is trade or logistics facilitation. Areas of concern are the administrative responsibility of several ministries and agencies - ministries of commerce and industry, finance, shipping and ports, surface transport, railways, and civil aviation. Allied agencies at the border that govern regulations related to technical standards include ministries of agriculture, food, health, environment among others. This means that genuine industry efforts to lobby for reforms get diluted, given the multiplicity of agencies with no accountability. This also results in poor coordination and lack of administrative urgency in implementing any reforms. No wonder our cargo dwell time is still in weeks, as against hours in all successful trading nations. Also, our exporters and importers still have to get signatures from numerous agencies that add immensely to the transaction costs.
To set things right we need to create a NTFC that should set the target for cargo dwell time in all ports and airports for exports and imports to be in hours within a defined timeframe. The NTFC should break down the cargo dwell time for each of the components - manifest filing, declaration, assessment, duty payment and examination - for all ports and airports. The time taken for each stage should be explained. A target should be set for the next semi-annual meeting which should be monitored by the PM himself. The agencies responsible for not meeting the target should be held accountable and punished. Only then will cargo dwell time be sharply reduced. Similar target should be set for administrative processing of trade documents by numerous agencies, leading ultimately to a couple of clearances.
There is an urgent need to create the 21st century institutional framework described here for India's global trade and investment engagement. In all developed and successful economies, strategic trade decisions are taken at the highest political level, and not left to the narrow focus of line ministries whose task should be the detailed implementation of these strategic decisions under the NTPC's close monitoring.
The writer was economic advisor in the Union commerce ministry