The high-powered Board of Trade (BoT) chaired by
Industrialist Kumaramangalam Birla recommended that
taxes and levies on goods must not be exported and
exporters must be rewarded with an abolition of these
levies on exported goods. The BoT also complained on
the 4% service tax introduced in the recent budget and
Commerce Minister Kamal Nath has promised ways to
nullify this tax. He also hinted at plans to announce
specific incentives for products to specific areas.
The Government has identified textiles, toys, leather,
gems and jewelry, sports goods, stationery, and
processed goods as priority areas for growth.
Meanwhile 70 countries will meet in Geneva next month to discuss
trade. World Trade Organization (WTO) talks collapsed
last week in London when 5 prominent membersâ€”the US,
European Union, Japan, India, and Brazil failed to
achieve a breakthrough in the discussion of modalities
to further the Doha Development Agenda (DDA).
Developed nations were pushing for major concessions
from developing nations on non-Agricultural market
access while the developing nations were seeking for
sharp reduction in agricultural subsidies from
developed nations. The link between the two issues was
established in December 2005 at the Hong Kong
Ministerial meeting. If this logjam is not cleared,
the July 31 deadline to get a draft to improve
services access will be missed and will have a
disastrous cascading effect on the Oct 31 deadline for
final draft on service access and Dec 31 deadline to
conclude DDA negotiations.
This is not good news for India, which is trying to gain
access to agricultural, industrial, and service access
to markets in developed nations.