'India should partner more Asian countries'

By opening the economy to global trade, India has been gaining enormously and Indian companies are poised to gain further.

India, by opening its economy has witnessed a big rise in exports. Share of exports to GDP has trebled from 11 per cent during the boom of 1994-95 to 30 per cent witnessed now (2004-05), said Abheek Barua, chief economist, ABN Amro Bank. He was delivering a talk on 'Implications of WTO "" a Macro Scenario' as part of the Annual Session of CII Karnataka here on Saturday.

Many countries have gained substantially by integrating their economies to global trade. It makes sense for India to integrate or partner Asian countries through regional trade agreements (RTAs) and most favoured nation status for further growth.

The current World Bank study on openness and competitiveness shows that in the 1980s, 70 per cent of exports came from trade expansion "" in global demand. Whereas in the 1990s, 75 per cent came from rising competitiveness.

By integrating with global trade, Indian companies are poised to gain from openness, said Barua. So far with limited labour reforms by way of VRS and outsourcing, some companies have turned the corner and many are to gain when full-fledged labour reforms set in, he added.

Barua also brought to light industry concerns regarding access to global capital and technology, price competitiveness and improving product standard.

T K Bhaumik, senior advisor "" policy, CII speaking on the occasion said, witnessing 9 per cent growth for over a decade, the time has come for Karnataka to globalise and tap its potential and market opportunities.

"Karnataka's growth is coming from agriculture (25 per cent), services 55 per cent and industrial 20 per cent. It is here in the industrial sector that the state needs to discipline itself," he added.

Chief economist, CII, Rajiv Kumar said that the areas that needs to be closely monitored with respect to trade in the New World Economic Order were non-traditional agricultural reforms, especially cereal and non-cereal, anti-dumping rules and WTO for multilateral and regional trade and the services sector like retail, ITES, banking and finance.

Arun Goyal, director, Academy of Business Studies, shared his experiences on various aspects of regional trade agreements (RTAs) with respect to their relevance in WTO.

A few relevant issues he brought to light in terms of RTAs which will be significant to the Indian industry were MFN (most favoured nation) status, TRIPS, investments. He said that most countries, including India had started entering into RTAs owing to trade issues left unaddressed by the WTO.

Also speaking on the occasion were Shobana Kamineni, chairperson, CII (SR) and K K Swamy, chairman, CII Karnataka. The panelists felt that the RTAs' implications will be significant to the industry in Karnataka, to the extent that CII can focus on infrastructure and establishment of independent regulators.

Educational services could also be focussed upon, considering that Bangalore is emerging as India's knowledge capital. The present trends in the IT and ITeS sectors too indicate a growing need for specific focus-skill formation.