FTP Welcome, But Need To Tighten Regulatory Framework

New Delhi, April 16, 2008

CUTS International, a leading economic policy research and advocacy group has welcomed the forward looking supplement on the Foreign Trade Policy, 2008, in particular the thrust on gender empowerment, for the first time since the policy was adopted some time ago.

“It is a forward looking strategy which has provided several incentives for women’s engagement and empowerment in our export efforts, and will thus aid poverty reduction efforts of the government”, said Pradeep S Mehta, CUTS Secretary General in a press release issued here today.

The FTP recommends that the Government will provide incentives to exporters who recruit more women, provide better facilities to them and also pay equal wages. Further, the policy will also offer incentives to women entrepreneurs.

Sometime ago, in a study on SEZs done by CUTS International for the Department of Commerce, it was found that women were the greater beneficiaries. The study showed that some units had also undertaken special education programmes for women in the communities surrounding the SEZ.

However, Mehta lamented the fact that much of our exports are hamstrung by cartels of different nature and that there is no adequate regulatory framework or a competition agency to deal with them.

These cartels do not operate only in the goods sector, such as cement, steel and other intermediates, there are a large number of cartels in the transport business. These exist at the local level, where truck unions force companies to send out goods only through their members and collect hafta as well. The same exporting industry also suffer from shipping liner cartels which carry their goods overseas. In fact even the goods that they import for consumption are artificially priced high due to similar cartels operating outside.

Turning to the problem of black marketing and hoarding, Mehta said: “The government at the centre speaks about taking strong action, but they can not do much. It is the states who have to implement the laws, and their track record is rather poor”. He added, “unless the central government rewards better performing states, the will to crack down on black marketers will remain merely on paper”.

In conclusion, Mehta said that the Government has to nationalize the export movement and counter the cynicism of people as to why an export-led growth strategy can lead to more jobs. In this context, it will be useful to set in motion the Inter State Trade Council, which was announced when the FTP was launched four years ago, but has not happened.