Government should review free trade agreements and come out with a fresh strategy to stem continuous fall in exports, industry body Assocham said today.
It said that going by the trend the country's exports in 2016-17, would be down to the level of 2010-11.
"With a 16-18 per cent contraction, exports will aggregate around USD 260 billion, a level quite close to USD 251 billion attained in 2010-11. This is the lowest since the exports broke the USD 300 billion-mark for the first time in 2011-12," Assocham said in a statement.
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It has given this detail as part of the feedback to the Rajya Sabha for Examination of Demand for Grants for the Ministry of Commerce and Industry for 2016-17.
Dropping for the 15th month in a row, exports dipped by 5 per cent in February.
"How severe is the situation can be gauged from a possibility that it would take another few years, maybe not before 2017-18, before we retrieve the export levels achieved 2011-12. That would be a seven-year reversal," Assocham said.
It said that while the external sector would remain challenging, new game plan including review of the Free Trade Agreements (FTAs) should be devised.
India has signed many trade pacts, more for geo-political reasons rather than commercial reasons, it added.
"The South Asian Free Trade Agreement, which has not resulted in any significant export gains. India's trade deficit has widened with the ASEAN. Further, most of India's preferential trade agreements are shallow in terms of product coverage," it said.
It also said that India's pharmaceutical exports have not benefited from tariff reductions under the India-Japan CEPA, mainly because it's too cumbersome to deal with Japan's drug regulator.
Further, it said that India's trade pacts have exacerbated inverted duty structure - high import duties on raw materials and intermediates, and lower duties on finished goods - that discourage the production and export of value-added items.
Sitharaman said investments too have increased in both the
countries from each other. India has received USD 1.7 billion FDI from Korea during April 2000 and March 2016 and India's FDI led by Mahindra & Mahindra, Aditya Birla Group and Tata has reached USD 3 billion in Korea.
Hyunghwan said 450 Korean firms have presence in India and they are providing 200,000 job opportunities here. There are over 100 Indian companies which have presence in Korea.
Although trade is growing, "we can increase the volume," he said, adding that Korea has expertise in areas like urban development, renewable energy and solar power generation and it can share that with India.
E-commerce is another key sector in India where huge opportunities exists for Korean companies, he said.
During the function five MoUs were signed in the presence of the ministers.
India's Automotive Component Manufacturers Association of India (ACMA) inked an MoU with Kotra (Korea Trade-Investment Promotion Agency) in auto sector; Kotra also signed a pact with Retailers Association of India for to support Korean companies tap domestic retail market.
Korean Engineering Consultants signed an MoU with JHS Svendgaard Laboratories for cooperation of marketability assessment of waste energy business; Ecoluz signs MoU with Aquara Group for power generation project in Rajasthan.
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Sitharaman also said that 'Korea plus' desk will be launched tomorrow. It would act as a platform to handhold Korean investors in India.
She said that the trade between India and Korea has increased from USD 1.58 billion in 1999-2000 to USD 16.59 billion in 2015-16.
Investments too have increased between the countries, she said.
