The process of globalization of the world economy has thrown many policy challenges that require to be supported by analytical inputs. RIS work in this area deal with some of the important emerging challenges for the policy as summarized below.

 

 

A Strategic Approach to Strengthening the International Competitiveness in Knowledge-based Industries
Project Team: Dr Nagesh Kumar, Prof K.J. Joseph, Dr Neelam Singh, Dr V.K. Kaul, Dr Aradhna Agarwal and Dr Padma Suresh
This project seeks to analyze the relative roles of affiliation with MNEs and FDI, own technological effort and outward investments of national enterprises in promotion of knowledge intensive exports in India with a view to draw strategic policy lessons. This two- year project was launched with the financial support of the Department of Scientific and Industrial Research (DSIR), Government of India.

 

International Food Safety Regulation and Processed Food Exports from Developing Countries: A Comparative Study of India and Thailand
Research Team: Dr. Rajesh Mehta and Dr. J. George
This is an ongoing study being conducted in collaboration with Australian National University; La Trobe University, Melbourne; Thammasat University, Bangkok; and International Food Policy Research Institute (IFPRI), USA under the sponsorship of the Australian Centre for International Agricultural Research (ACIAR). Trade conflicts relating to food safety standards, and the effectiveness of the Sanitary and Phytosanitary (SPS) Agreement and the related WTO dispute settlement procedures in resolving these disputes have become a major focus of world trade negotiations. These issues are of particular importance for developing countries trying to exploit their potential for expanding processed food exports. This study aims to examine the policy, institutional and technical problems faced by processed food exporters in developing countries in meeting these requirements, and to identify appropriate policy measures to address them while recognizing the legitimate concerns in importing countries about safety and quality. During the last nine months the project teams have conducted field surveys of exporters for canvassing of questionnaire in Hyderabad and Bombay. A monograph based on papers presented at the international workshop organized within the framework of the project in March 2003 has been submitted for publication as a book to Macmillans. Presentations were made by the project team at ACIAR-TU Conference “International Food Safety Standards and Processed Foods Exports from Developing Countries”, March 19, 2004 at Bangkok, Thailand.

 

Foreign Direct Investment, Development and WTO: The Case of India
Research Team: Dr. Nagesh Kumar
The study, sponsored by the Asian Development Bank, discusses the experience of India in mobilizing and employing FDI inflows (and outflows) in its process of development. It also briefly summarizes the approach of India towards international investment agreements in general and towards the attempt of developed countries in establishing a GATT type framework for investment in WTO, in particular. The study begins with a discussion of the evolution of India’s policy towards FDI in the context of economic reforms of 1991. It then summarizes the approach of India towards the international investment agreements including bilateral investment treaties, TRIMs and the possible multilateral framework on investment. It outlines the broad trends and patterns in FDI inflows and outflows since especially in the 1990s after the policy reforms. It examines the impact of FDI in terms of various parameters of development. It also highlights the role of government policy in determining the impact of FDI inflows. Finally, it drives some policy lessons for the Asian Development Bank and its member governments for their FDI policy and some considerations for their approach to the discussion on the proposed multilateral framework on investment in WTO. RIS was invited to make a presentation of the paper at a Conference organized by the ADB in Manila on August 11-13, 2003. Subsequently the final version of the report was submitted to the Bank.

 

Industrial Restructuring and Export Competitiveness of the Textiles and Clothing Sector in South Asia in the Context of MFA Phase-out
Dr. Ram Upendra Das and Dr. Beena P.L.
This project forms part of the research agenda of the SAARC Network of Researchers on Global, Financial and Economic Issues assigned to the National Focal Point for India, that is RIS, for implementation. The phase-out of the MFA quotas by first January 2005 under the Agreement on Textiles and Clothing (ATC) of WTO presents both challenges and opportunities for the SAARC countries. The textile and clothing sector has emerged as the most important source of foreign exchange for almost all the SAARC countries. Hence, challenges for maintaining export competitiveness and industrial restructuring need to be analyzed on an urgent basis. This study explores the issues related to the sustainability of textile and apparel export growth of the SAARC member countries. The data on patterns of textiles and garments exports from South Asian countries have been analyzed to examine the trends in their international competitiveness. This has been followed up by a field survey to gather insights into the potential of restructuring at the regional level in strengthening international competitiveness and draw policy implications.

 

Implications of the WTO Tariff Proposals for Indian Industry
The process of non-agriculture market access negotiations is being conducted by Negotiating Group of Market Access (NGMA) under the premises of WTO. A number of modalities for tariff reduction have been proposed with the main emphasis on a non-linear formula. Further to its studies on Non-Agricultural Market Access, RIS has been looking at implications for specific industries.

WTO Tariff Proposals and Small-scale Industries
Research Team: Dr. Rajesh Mehta and Ms. Pooja Agarwal
A number of products have been reserved for exclusive manufacture by Indian small-scale industries. RIS has undertaken a study to assess the implications of present round of WTO negotiations on these products. Further the structure and levels of bindings, base rates from where negotiations would start and tariff incidence for the products reserved for the exclusive manufacture of Indian small-scale industries have been studied. Finally, the likely post negotiations scenario for Indian small-scale industries has been presented. The study finds that at present around 66 per cent items of Indian small-scale industry are bound, generally higher than all-India level. Preliminary results based on alternate scenarios suggest that the tariff reduction under WTO-NGMA can cause up to 53 per cent reduction in the current bindings of the reserved products. Some of this analysis was reported in the RIS Discussion Paper #74. Detailed results have been published in a monograph WTO Negotiations and Indian Small Scale Industry published by Federation of Indian Micro and Small & Medium Enterprises (FISME), jointly with the Office of the Development Commissioner (SSI), and RIS.

 

WTO Tariff Proposals and Indian Pulp and Paper Industry
Research Team: Rajesh Mehta and Ms. Pooja Agarwal
A position paper was prepared and discussed with the representatives of the paper and newsprint industry at the request of the Ministry of Commerce and Industry and Central Pulp and Paper Research Institute (CPPRI). CPPRI has now approached us for launching a detailed study for the benefit of the industry. It will be conducted in consultation with the industry bodies.

 

Short-term Forecasting of India’s Exports
Research Team: Dr. Rajesh Mehta, Ms. Sushma Bhat and Ms. Parul Mathur
This is an ongoing study supported by the Ministry of Commerce, Government of India to develop an econometric model of India’s export sector that is able to provide short-term forecasts and to provide forecasts in March and September updated taking note of the changing external/domestic factors for the Department of Commerce. RIS research team has been regularly submitting the forecasts of Indian exports to the Ministry. An attempt is also made to refine the forecasts.

 

Strategy for Export Oriented Manufacturing
Research Team: Dr. S.K. Mohanty
This research study sponsored by the Ministry of Commerce seeks to develop a comprehensive export strategy to improve India’s share in the global economy. For achieving this objective, the study is to identify the required restructuring of the domestic manufacturing sector to meet the specific requirements of importing countries. Keeping in view the Post-Cancun situation in the global economy, the study is to explore the possibilities of venturing in to new markets for exports apart from maintaining linkages with traditional trade partners. Export competitiveness of India is to be examined for selected number of products in the light of ‘Medium term export strategy’ of India. Taking into account the changing global standards of exports in important export destinations of India, and persistently evolving WTO rules, the study is also to examine the possibility of extending certain state-sponsored WTO-compatible incentives/schemes to domestic industries to enable them to manufacture export-oriented products for specific export markets.

 

State, FDI and Export of Software and BPO Services from India
Research Team: Prof. K. J. Joseph
While the developing countries are known for their comparative advantage in the production of services primarily on account of the low labour cost, the restrictions on the mobility of labour across national boundaries prevented them from reaping the benefits of this cost advantage. However, the emergence of information communication technology and the innovations therein have made possible the “splintering off” of the services from its provider and thus leading to the offshoring of various services which hitherto remained untraded. India with its large pool of skilled manpower at lower cost has recently emerged as a major provider of software and other services and also a major location for the offshoring of services. Against this background this study examine various policy measures and institutional interventions made by both the central government and different regional governments in facilitating India’s emergence as a major player in the world market for software and services. The study also examines the relative role played by foreign direct investment in making India a success story in IT and software. The study was commissioned by UNCTAD as a background paper for the World Investment Report 2004.

 

Quantifying the Contribution of Technological Change to Economic Development: Case of Biotechnology
Research Team: Dr. Sachin Chaturvedi
RIS with support from OECD launched a detailed study on identifying the various contours of dynamics of biotechnology research and industry in India with the perspective of its quantification. In this regard, one faces several constraints like definition of biotechnology with the perspectives of covering different economic activities, identifying the quantum of investments and status of various firms and their economic contributions. In India, there is a major challenge to develop a reliable source of data about status and development of biotechnology across different sectors. This project addresses some of these constraints and attempts to evolve a policy response.

 

Study on Trends, Structure and Competitiveness of Indian Seed Industry
Research Team: Dr. Sachin Chaturvedi
International Food Policy Research Institute (IFPRI), Washington D.C. has approached RIS to carry out a study on Indian Seed Industry to analyse the structure, progress and degree of competitiveness of the seed industry since the introduction of New Seed Policy in 1988. The study is also designed to look into the implications of the new IPR regime (after January 2005) for the seed sector and consequent changes following the Seeds Act 2001. Apart from this the study would also look into other issues like magnitude and nature of FDI in the Seed Industry.

 

Special Economic Zones and FDI in China: Lessons for India
Research Team: Dr. A.K. Kundra
This study has been launched to understand the reasons behind the success of China in attracting large magnitudes of export-oriented FDI which now account for nearly 55 per cent of its manufactured exports and 80 per cent of high technology exports. This study will involve field work in China to gather first-hand insights and draw policy lessons for India. This study is being conducted with the support of the ICSSR.