Geography by Ajay Raj Singh

1. In modern era, it is transport and energy that determines the development in other sectors of
economy. They are the basic infrastructural requirement for rapid industrialization. Therefore
the developing countries have accorded them the most important Place in their economic
development programme.

2. Transport provides the link between production center, distribution centers and consumption
centers. It is the efficiency of transportation that helps in timely availability of essential
commodities across the country. More over cheap transportations also bring down the cost
and thus enhance the competiveness of goods and services. It also exercises a unifying and
integrating influence upon the economy.

3. Important means of transport are Railway, roads, water transport (both inland & overseas),
air transport and of recent pipeline transport has assumed huge importance. All these modes
of transport have recorded significant growth over the years both in spread of network and in
output of the system.

4. In India due to insufficient allocation of funds & Poor management of transport-system, the
growth in this sector has been slow, but since 10 th F.Y.P., transportation sector has been on
the priority list of the successive governments and the pace of growth has expedited.

Railway Transport
1. The development and growth of railways has revolutionsed the transport system, the world
over. In India, railways constitute the principle mode of transportation for freight and
passengers over “long distances”. They are most suitable for carrying “heavy and bulky
goods” i.e. iron-ore, coal, steel, machinery from mines or production center to the interior
industrial centers. They have the advantage over other modes because of carrying in bulk,
cheap, and reliability.

The Indian railway system is presently the largest in Asia and Second largest in the world
and it operate its services on three gauges – the broad gauge, the meter gauge and the narrow
gauge, out of this the broad gauge network is the largest operating system and accounts for
the bulk of traffic, both freight and passenger.
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2. Recent developments

The ministry of railway’s vision 2020 document envisages the railway sectors share in the
GDP to increase from the existing level of 1% to about 3% and its revenue’s to grow by 10%
annually over the next ten years. Some of the major goals set for 2020 in the document
include (A) Laying of 25000 km of new lines (B) quadrupling of the 6000 km network with
segregation of passenger and freight lines. (C) Electrification of 14000 km. (D) completion
of gauge conversion. (E)Up gradation of speed to 160-200 kmph for passenger trains (F)
construction of 2000 km of high speed rail lines.

Freight performance of Indian Railway

Freight loading by Indian railway during 2011-12 increased to 969 MMT. 2013-14–1051 million
tone.

Rail Safety: A high level safety review committee has been constituted under the chairmanship
of Dr. Anil Kakodar, former chairman, Atomic energy commission to look into all technical and
technology related aspects in connection with safe running of train services in the country.

Modernization of Indian railway

In a major move to give further impetus to Railway’s Modernization plans an expert-group has
been constituted under the chairmanship of Shri Sam Pitroda.

Dedicated freight corridor (DFC) Project

The eastern and western dedicated freight corridors (DFC) are a “mega rail transport Project”
being under taken to increase transportation capacity, reduce unit cost of transportation and
improve service quality. The eastern DFC (1839 route km) extends from Dankuni near Kolkata
to Ludhiana in Punjab. While the western DFC (1499 RKM) extends from the Jawaharlal Nehru
post (JNPT) in Mumbai to Dadri/Rewari near Delhi.

The corridors are targeted for completion in the terminal year of the 12 th plan. With the
commissioning of the eastern & western DFC capacity on existing eastern & western Indian
railway routes would be released for smoother flow of passenger traffic. Apart from this these
DFC’s will give big push to regional development i.e. DMIC.

Western DFC will have nine junction stations along which other railroad will connect allowing
the system to extend its reach across a wide swathe. The DMIC (Delhi-Mumbai Industrial
corridor) is being developed by GOI with a view to using the high capacity western DFC as a
backbone for creating a global manufacturing and investment destination. The project seeks to
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develop a series of futuristic smart industrial cities that can compete with the best international
manufacturing and industrial regions. The master plan has a vision for 24 manufacturing cities;
these are proposed as self-sustaining industrial townships with world class infrastructure
including domestic/international air connectivity, reliable power and competitive business
environment. Potential production sectors include general manufacturing IT/ITCS components,
electronics, agro and food processing heavy engineering, pharmaceuticals, biotechnology and
services. The total investment is pegged at $90 bn.

Socio-economic impact on the region

The DMIC project influence area of 436, 486 sqkm (4.36 lakh sqkm) is about 13.8% of India’s
geographical area. It extends over 7 states and 2 UT’s Viz Delhi, U.P, Har, Raj, M.P, Gujrat,
Maharashtra, Daman & Diu and Dadar and Nagar haveli. Around 17% of the country’s
population will be affected. The project goals are to double employment potential in 7 years,
triple industrial output in 9 years, Quadruple exports from the region in 8-9 years.

Bullet train

IndianRailway has planned to launch high speed passenger trains (Bullet trains). Seven corridors
have been identified for conducting prefeasibility studies for running high speed trains at speeds
above 350 kmph. These corridors will be set up through P.P.P route. Initially, the Mumbai-
Ahmadabad corridor has been taken up, for which prefeasibility study has been completed.

Jammu-Udhampur-Srinagar-Baramula rail line

Þ This project has been declared as a “project of National importance” in March 2002.
Þ Its objective is to provide an “alternative and a reliable transportation system to J & K “.
Þ It is a 345 km long railway line project which joins’s Kashmir valley with the Indian Railway
network.
Þ It is the biggest project in the construction of a mountain railway since independence. The
total length of the rail line form Jammu to Baramula is 345 km.

It following sections
1) Jammu-Udhampur section (53 km long). This section has been completed and opened to
public in 2005.

2) Udhampur-Katra section (25 km long). In this section all the tunneling & bridge work has
been completed and has become operational. This section consists of 7 tunnels having total
length of 11 km and 38 bridges.

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3) Katra-Qazigund section (129 km long). There is the toughest section, full of tunnels and
bridges, much tougher than konkan railway. This section passes through
Patni&Pirpanjalranges; here 62 bridges and 35 tunnels have to be constructed. The tunnel
length is 103 km that is 80% of the total length of this section.

The work on this section began in 2002 the first phase of this stretch between Qazigund and
Banihal involving 11 km long tunnel (T-80/pirpanjal tunnel) has been completed.

T-80/Pripanjal tunnel: -
It is India’s longest transportation (railway) tunnel at 10.96 km. This tunnel link is the only
broad gauge mountain railway is India. Stretches through the pirpanjal range from south to
North betweenBanihal and Quazigund.

It is constructed to provide J&K with reliable link to the rest of the country. The existing
Jawahar road tunnel link is inoperable in winter due to heavy snowfall this region. Recently,
the successful trial run of this tunnel was conducted smoothly.

This tunnel connects Bichleri valley (of Banihal) with Kashmir Valley (Qazigund).
It is India’s longest & Asia’s second longest tunnel. Previously the 6.5km long Karbude
tunnel of Konkan railway was India’s longest tunnel. While the longest tunnel in Asia is
Wushaoling tunnel (20 km) in Gansu province of china.

The tunnel reduces the distance between Banihal and Qazigund from 35 km (by road) to
17.5 km (by train).

It is 8.4 m wide & 7.3 m high tunnel. It runs 440 m below the existing Jawahar tunnel, so
the effect of snow is minimal. A 3m wide road runs along the railway track in the tunnel for
maintenance & emergency service.

The section between Katra and Banihal awaits completion, in view of difficulties being
faced due to adverse geology in the region and work is on progress, it is estimated that is
section will be completed by 2017-18.

It is in this section that a mega bridge over river Chenab (1.315 km long) is being built
near Salal village. The height of the bridge is 359 m, which will make it the tallest railway
bridge in the world and it will also be the longest single span railway arch bridge in the
world. (The main arch will have a span of 465 m across river Chenab)

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4) Qazigund-Baramula Section (119 km). This section is already operational since 2009 Oct. it
has 811 bridges but no tunnels as this lies in Kashmir valley.

Socio-eco impact of the project

i. The completion of this project will provide an all-weather and reliable connectivity to the
J&K State through rest of the country by the railway network also provides connectivity by
rail to far flung areas of J&K.

ii. Construction of Access Roads – Total about 262 kms of approach roads to work sites are to
be constructed. With completion of approach roads more than 73 villages will get connected,
which will provide road connectivity to about 1, 47,000 people.

iii. Employment generation – direct employment to the local people (about 7000) indirect
employment to thousands for day to day requirement of the project personnel. This will help
to mitigate militancy.

iv. Permanent job in Railways to one of the family members, whose more than 75% of land has
been acquired. Job given to 343 persons so far.

Benefits of Railway’s

1) Benefits to Agriculture: -
(A) Railways have done immensely creditable services in minimizing the suffering of famine
stricken areas by supplying food stuff from surplus areas of the country. Food grains being
heavy and bulky in nature and essential commodity of mass consumption cannot bear high
rate of transportation, particularly those carried to long distances. But railways by following
the principal of ‘what the traffic will bear’ of “discrimination principal of rates” and fares
keep the food grains in very low category of charges and by providing large carrying
capacity, enable the food grains to be distributed to distant areas.

(B) Railways has helped is commercialization of agriculture : While previously agriculture was
mostly subsistence based but now food crops are produced for the market and cash crops are
grown extensively.

2) Benefits to industry: - Railways have helped in territorial division of labour and

specialization within the national boundaries. That is it has helped in both specialization and
integration of economy. The cotton textile factories at Mumbai, Ahemdabad, Kanpur etc, the
Jute mills around Hugli, the glass and bangle works at Firozabad bear ample testimony to this

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fact. The cheap transportation of raw material to factory location and finished goods to wider
markets is the main factor behind the specialization and integration which has been brought
about by railway.

3) Benefits to trade: - Railways by providing a link between internal and external market have
greatly expanded both the internal and the external trade of the country. Exports and imports
have been encouraged by Quickmovement of raw material and finished goods to the Ports
and vise-verse.

4) Social benefits: - Railways have tended to break the social isolation of the country. They
have created a sense of national unity and prevented extreme regionalism, by allowing
cultural diffusion and have practically brought about a social revolution.

Problem’s and prospects

1. The present network of Indian railway is overburdened and in adequate to meet the new
challenges of the present times.

2. There are still numerous areas beyond the reach of railway due to unfavorable topography or
low return.

3. Stiff competition from road way, which is leading to its declining share in passenger’s and
goods traffic. In many parts of the country roads are running parallel to rail lines and the
concept of developing road transport complimentary to railway had yet to take concrete from
in India.

4. Railways have the largest number of employee’s on its payroll and are overburdened with
staff as result the operating ratio (Percent of total working expenses to gross traffic earning)
is very poor. In 2011-12 the overall traffic revenue stood at Rs 1, 04,153cr (Rs 69,548 crore
from freight earnings and Rs 30,963 cr from passenger earning).

The total working expenses including appropriation to the depreciation reserve fund and
pension fund was Rs 98,667cr.So the net revenue in 2011-12 was 6781cr. But after fully
discharging the dividend liability of Rs 5,656 cr for the fiscal, Railways during 2011-12
generated an excess of around Rs 1,125 cr. The operating ratio of Railways during 2011-12
was 94.9%.

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5. Since Railways is under central government where Railway minister always have upper
hand. The decision making is mostly influenced by populist approach. Therefore despite
increasing running cost of railways, the government has not increased the fare & tariff. So as
a result the operating ratio is very high, net revenue is very low, railway lack the modern
safety devices, there is lack of automation, lack of track renewal, most equipment’s used by
railway are obsolete and old which further compound the running cost and compromise the
safety and swiftness.

6. But despite these problems and short comings there is no substitute for railways because
these are six times more energy efficient, four times more economical in land use than roads,
have low social cost on environmental considerations.

Role of railways in regional development of India

1. Role in regional power development: Location of various thermal power plants in deferent
regions of India, which are devoid of coal resources like the northern regions (Pun, Har, Raj,
U.P, Bihar), western region (Guj, Raj, Maharashtra), southern region (T.W, Kerala, kar, A.P)
signifies that coal from chhotanagpur plateau region has been transported to various corners
of the country by means of railway.

2. Role in regional dispersal of industries

By providing “freight subsidy” and following “tapering rate” of freight movement, the GOI
between 1948-1982 encouraged long distance movement of bulk commodities through
railways which were raw material input in industrialization. This helped in the growth of
various large industrial complexes.

3. Regional development of agriculture: -

The Green revolution in Pun, Har and western U.P was aided by high intensity of fertilizer
use. It was through railways that the transportation of fertilizer from ports to their
consumption center i.e. regions of green revolution was made possible. The freight rate of
chemical fertilizer was kept low & has not been increased since 1985.

4. Regional distribution of food: - It is because of railways that the availability of food grains
has been ensured across the country. This has not only contained price fluctuation but has
also averted starvation and malnutrition.

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Road transport
Roads happen to be the most popular mode of transportation. Roads are generally classified into
following 4 categories.

(1) National highway (2) State highway (3) Major district roads (4) rural roads.

1) National highway: - These are the primary roads of the country, which connect large cities
and big industrial centers of the country.
2) State highways: - These roads link all the important centers of industry, trade and commerce
of state and national high way.
3) Major district roads: - These roads connect different parts of the district, important
industrial centers and market centers and usually lead to local railway station.
4) Rural roads: - There roads connect villages to MDR’s. They are either metaled or non-
metaled.

Road development in India

India has one of the largest road networks in the world, aggregating about 48.65 lakh kms.
However, this network is not adequate for speedy and efficient transportation. Half of this
consists of unsurfaced roads. The N.H although carry 40% of the goods and passenger traffic, but
it constitutes less than 2% of the total road network. Presently 70% of the freight movement and
85% of the passenger movement depend on roads.

Three important initiatives in the road sector taken in recent years are

1) NHDP (National highway development project). It deals with National highway

development.
2) PMBJP (PradhanMantri Bharat JodoPariyojana). It deals with linking major cities with
NHDP highway.
3) PMGSY (PradhanMantri Gram SadakYojana). It deals with all weather rural roads.

The NHDP is the largest highway project ever undertaken by the country and is being
implemented by NHAI. It consists of following components.

1) Golden Quadrilateral i.e. National highway connecting four metropolitan cities-Delhi,

Mumbai, Chennai and Kolkata, having an aggregate length of 5846 km.

2) North-South and East- West corridor (NSEW)- This comprise 4 lanning of 7300 km of NH,
connecting North- South corridor from Srinagar to Kanyakumari and E-W corridor from
Silchar to Porbandar.
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3) 380 kms length of NH is proposed to be upgraded to 4-lane standard for providing
connectivity to 10 major posts of the country to NHDP.

Recent initiating

As of now about 24% of the total length of NHs is single lane, about 51% is two lane standard
and the balance 25% is four lane standard or more.

1) Development of roads in left wing extremism (LWE) affected areas: - The government on 26
Feb 2009 approved the road requirement plan (RRP) for upgrading 1,126 km NHs and 4351
km state roads (total 5,477 km) to two lane at a cost of 7,300 crore in 34 districts affected
by LWE is Andra Pradesh, Bihar, Chhatisgarh, Jharkhand, M.P, Maharastra, Odisha and U.P
for inclusive growth of these areas. The development of roads under the programme is
scheduled to be completed by March 2015.

2) Prime Ministers Reconstruction Plan for J&K (PMRP)

The P.M announced a reconstruction plan (PMRP) for J&K during his vsit to the state in Nov
2004. The plan incorporates a total seven works amounting about 3300 cr. It includes.

1) Construction of Mughal road.

2) Widening of Domel -Katra road (NH-IC)
3) Double lanning of Batote- Kistwar-sinthan pass-Anantnay road (NH-IB).
4) Upgrading of Srinagar-Uri road (NH-IA)
5) Double lanning of Srinagar-Kargil-Ieh road(NH-1D)
6) Construction of Khanbal-Pahalgam road
7) Construction of Narbal-Aangmarg road.

Transport

1) NH-IA – It connects jalandhar-Uri-Length-663 km

– It passes through Jawahar tunnel (banihal pass)
– Srinagar-Jalandhar stretch of NH- IA is part of N-S corridor.(stretch of 554 km)
2) NH-IB – It connects Batote-Doda-Kishtwar-Sinthanpass-Khanbal-lenth-274 km
3) NH-IC – It connects Domel to Kartra – now it has been renamed as NH-144. Lenth-8 km

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4) NH-ID – It connects Srinagar-Kargil-Leh. Length-428 km. It passes through Zojila pass
(3528 m) and Fatula pass (4108 m).
Z-morh tunnel is lies on NH-ID it is 6.5 km long, two lane, bidirectional, cost-2700 crRs
(between Gagangir and Sonamarg).

5) Mughal road – It connects Punch to Shopian. It is 84 km long and passes through PirPanjal
pass. This road has reduced the distance b/t Srinagar and Punch from 588 km to 126 km. It is
an alternate route to valley from India. Since Akbar conquered Kashmir (1586) through this
route so it is known as Mughal road.

6) Leh-Manali highway – Part of NH-21, length-490 km.

– Average elevation of this highway is more than 4000 m. It passes through-Rohtangla pass,
Baralachala pass, Lunga la cha la pass, Tanglangla pass.
Highest pass in India is isKhardungla pass (5600 m) it connects leh to Khardung.

Construction of rural roads under the PradhanMantri Gram SadakYojna (PMGSY): - The
PMGSY was launched to provide single all weather road connectivity to unconnected habitations
having population of 500 persons and above in plain areas and 250 persons and above in hill
states, tribal areas(schedule 5), desert areas etc. Under this programme up to Jan 2012, about
4.41 lakh km roads to benefit 1,14,433 (1.14 lakh) habitations have been cleared with an
estimated cost of Rs 1,26,937 crore. (3.41 lakh km road lengths has been completed)

Comparative advantages of road transport vis-a-vis rail transport: -

1) No of places (i.e. farfetched villages, interior country side, and hilly areas) are not connected
by railway. So roadways are the only means of transport.

2) Road transport is complementary to railways. It provides feeder services, as goods arriving at

railway stations are dispatched to their destination through trucks or other means of road
transport.

3) Road transport has an edge over railways for carrying perishable and less bulky goods i.e.
vegetables and fruits reach mandis daily by means of road transport.

4) From the defense aspect, roads are very imp, since railway tracks cannot reach every nook &
corner of the country. So it is roads that enable the defense forces to move to areas
inaccessible by railway in times of need.

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Role of road ways in regional development is same as that of railways.

Problem of road transport

1. Apart from small number of commercial vehicles in India, motor transport also suffers from
the existence of a large number of operators. The “road transport reorganization committee”
(Masani committee) estimated that there were over 48000 operators of whom nearly 46000
were small operators owning five vehicles or less. Nearly 60% of the passenger traffic and
nearly 100% of goods traffic is in the hands of private operators. The result of such a large
number of operators makes for inefficiency and difficulty in enforcing necessary control and
regulatory measures.

2. Secondly, Motor transport has to work under “motor vehicles act code of principles and
practices” etc. each state has its own series of restrictive measures on motor transport.
Besides, road transport is subject to heavy and innumerable taxes.

3. Thirdly, road transport has been experiencing very high cost of operation, partly because of
heavy and numerous duties and taxes and partly because of bad roads which are responsible
for accidents, for heavy wear & tear of tyres and other parts, high fuel consumption.

4. Another major problem on Indian roads is that of mix traffic. Some road is used by high
speed cars, trucks, two wheelers, tractors, animal driven carts, cyclists and even by animals.

5. The multiple check posts, toll tax, octroi duties collection points on the roads bring down the
speed of traffic.

6. The participation of private sector in road development is not easily forth coming due to long
gestation period & low returns.

7. There is no consistency in policy regarding highway development in country. It has changed

with the change of govt. Despite the tremendous growth of road facilities in the past years,
the length of road per lakh population is abysmally small and that of surfaced road is still
smaller. The southern states have better road infrastructure in comparison to northern states.

Chenani-Nashri tunnel/(Patnitop tunnel)

– It is India’s longest highway tunnel, on the Jammu- Srinagar national highway.

– The length of tunnel is 9.28 km. The world’s longest highway tunnel is 24.51 km and is in
Norway.

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– It will reduce the travel distance between Jammu and Srinagar by 30.11 km.
– It is built on lower/Shivalikhimalayan range at a height of 1,200 m; it will cut travel time
between the two cities by at least two hours.
– The project cost is 3,720 crRs.
– It is part of a 286 km long four lane project on the Jammu-Srinagar highway.
– It is meant to avoid stretches of NH 44 prone to avalanches and landslides. Patnitop, kud and
Batote will be by passed now.
– The distance between Chennai and Nashri will now be 10.9 km (b/t two ends of the tunnel),
instead of the existing 41 km.
– Tunnel is an alternative all weather route, it is an alter native to the highway which often
closes at the time of snow and rains.
– This tunnel is India’s 1st and the worlds 6th tunnel to have transverse ventilation system
– It will preserve forests in the ecologically sensitive Patnitop area.
– It is Asian longest bidirectional road tunnel.

NH-1 – Delhi-Amritsar

via-Panipat-Karnal-Ambala-Ludhiana-Jalandhar

NH-2 – Delhi-Kolkata

Via-Faridabad-Mathura-Agra-Etawah-Kanpur-Allahabad-Varanasi-Sasaram-
Aruangabad-Dhanbad-Durgapur-Bardhaman

NH-3 – Agra-Mumbai

Via Gwalior-Indore-Dhule-Nasik

NH-4 – Chennai-Thane

Ranipet-Chitoor-kolar-Bangalore-Chitradurg-Belgaum-Satare-Pune.

NH-5 – Chennai-Cuttack

Vijay wade-Rajahmundry-Vizag-Srikakulam-Cuttack

NH-6 – Surat-Kolkata

Dhule-Jalgaon-Akola-Amravati-Nagpur-Bhandara-Durg-Raipur-Sambalpur-Keonjhar

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NH-7 – Varanasi-kanyakumari

via Jabalpur-Nagpur-Hyderabad-Bangalore-Salem-Madurai.

NH-8 – Delhi-Mumbai

Via Jaipur-Ajmer-Bhilwara-Udaipur-Gandhinager-Ahemdabad-Vadodara-Bharuch-
Surat-Valsad-Silvasa

NH-9 – Pune-Machlipatnam

Via-Solapur-Hyderabad-Vijaywada

NH-15 – Samakhali(kutch)-Pathankot

Barmer-Jaisalmer-Bikaner-Ganganagar-Faridkot-Taran-Taran Sahib-Amritsar-Gurdaspur.

Inland water way

1) India has an extensive network of inland water way in the form of river’s, canals, back waters
and creeks. The total navigable length is 14500 km, out of which about 5200 km of river and
4000 km of canals can be used by mechanized crafts.

2) Freight transportation by water way is highly underutilized in India compared to other large
countries like USA, china and European Union. The total cargo moved (in tone kilometer) by
the inland water way was just 0.1% of the total inland traffic in India, compared to 21% in
USA.

3) Cargo transportation in an organized manner is confined to a few waterways in Goa, W.B,

Assam and Kerala.

4) This mode of transportation has some unique inherent advantages not enjoyed by any other
mode i.e. fuel efficiency, environment friendliness and cost effectiveness. It is because of
these advantages, the GOI is trying to develop this mode to make it an effective
supplementary mode of transportation.

GOI created inland water way authority of India on 27 Oct 1986, as the statutory authority in
charge for development and regulation of inland water way for shipping and navigation. To give

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impetus to inland water way, the govt. of India has declared five waterways as national
waterways.

1) National water way 1: - Allahabad-Haldia stretch of Ganga-Bhagirathi-Hooghly river

system. Length÷ 1620 km.(U.P, Bihar and W.B.)

2) National water way 2: - Sadiya-Dhubri stretch of Brahamaputra river. Length ÷ 891Km.

(Assam)

3) National water way 3: - It consists of :-

A) Kollam-Kottapuram stretch of the west coast canal (168 km).

B) Udyogmandal canal (23 km).
C) Champakara canal (14 km)
Total length-205 km (Kerala)
 Kottapuram is in Thrissurdist (near kodungallur) is one of the biggest vegetable market of
Kerala.
1) NW3 is one of the most navigable and tourism potential area in India.
2) NW3 is the 1st national water way in the country having 24 hrs navigation facilities in the
entire stretch.

West coast canal: - It lies in Kerala, it has 3 stretches.

1) Kovalam-Kollam
2) Kollam-kottapuram (Thrissurdist)
3) Kottapuram-Kasargod (Hosdurg)

4) National water way 4: - It consists of following stretches :-

A) Bhadrachalam- Rajahmundry stretch of Godavari River. Legth-157 km.

B) Wazirabad-Vijayawada stretch of Krishna River. Legth-171 km.
C) Kakinada-Pondichery stretch of canals and kaluvellytank,it consists of:-
1. Kakinada canal-from Kakinada to Rajahmundry length-50 km.
2. Eluru canal-from Rajahmundry to Vijaywada length-139 km.
3. Commamur canal-from vijaywada to Pedaganjam length-113 km.
4. North Buckingham canal-from Pedagnjam to Chennai length-315 km.
5. South Buckingham canal-from Chennai to Merkanam length-110 km.

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6. Kaluvelly tank-from Markanam to Puduchery length-22 km.
7. This waterway lies in Andra Pradesh, Tamil Nadu and Pondicherry(Total length is 1077km)

5) National water way 5: - It comprises of following stretches. (States-Odisa-W.B. length-588

km).
A) Talcher-Dhamra Stretch of the Brahmani River. (length-265 km)
B) Paradip-Mangalgadi stretch of Mahanadi river delta. (length-67 km).
C) Dharma-Charbatia stretch of Matai River. (Length-39 km).
D) Charbatia-Geonkhali stretch of the east coast canal. (Length-217 km).

6) Proposed N.W 6: – Lakhipur to Bhanga stretch of Barak river in Assam. Length-121 km.

Limitations of inland waterways in India

1. In India, it rains heavily during monsoons, so water current is so torrential that it is difficult
to ply boats.
2. During dry winter & summer season, most rivers run dry, not even have sufficient water for
irrigation, so navigation is hindered.
3. River’s of south India flow is rocky areas. Hence they are not fit for plying boats because of
water falls.
4. As compared to boats, railways are quicker & reliable means of transport.
5. Since Indian rivers falls from shallow and sandy delta’s so ships cannot sail from sea shores
to inland parts.
6. But inland water transport has the inherent advantage of cheap means of transport, especially
for more load and long journey’s. One horse power can carry 4000 kg load in water where as
it can carry 150 kg & 500 kg load by road & rail respectively, more over water transport is
less polluting.

Role of inland water transport is Regional development

The river water transport can contribute significantly in the regional development of the country.
This is the cheapest mode of transport and except in the maintenance of ports, Jetties, canals, not
much money is involved in its maintenance. During pre-colonial period inland water transport
played a major part in the “Growth of trade” and “regional development in north India. Even
today it can play an imp role in reducing the production cost of industries. There are some
regions like the deltaic regions of Ganga where it is difficult and costly to construct roads and
bridges across numerous distributaries, river water way can be good mode of transport,
facilitating economic development of region. In fact rural water transport (RWT), a specific sub
sector of inland water transport (IWT) is particularly imp due to its potential to help reduce

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isolation and poverty. It mostly consists of small family owned boats that operate on river’s and
canal networks, such boats transport service, employment & promote fishing and additional
employment is generated in boat making.

IWT (Inland water transport)

– IWT sector has received huge funding in 9th, 10th, 11th FYP.
– IWT is an imp component of the national maritime development project (NMDP) as part of
the overall maritime policy of the country.
– The potential of this mode of transport has been unquestioned over the years. In Germany
IWT constitute 20%, Bangladesh 32%, India (0.15%) of the overall transport movement.
– Commercially, the m. imp sector is the small tidal riverine system in Goa, comprising the
Zuari and Mandovi rivers and the Cumbarjua canal.
– The potential navigable waterways are the riverine inlets along the coasts. More over if the
river interlinking project in the country is found viable; this can also give boost to IWT.
– Among operators, the govt. owned (CIWTC) central inland water Transport Corporation is
the largest owner of vessels and barges.

Pipeline network
1) Pipelines are the most convenient and suitable mode of transport for the movement of the
petroleum products and gasses in bulk over long distances. It has distinctive advantage of
1) Low energy consumption
2) Low transit losses
3) Low overall running cost/maintenance cost
4) Less wastage

2) More over in recent years other commodities like cool and iron ore, which can be converted
into slurry, are also being carried by pipelines. Now, with the steady increase in the demand
of petroleum products and natural gas and the feasibility of converting solids into slurry
forms, the pipelines have become a significant alternative mode of transport and can
supplement surface modes of transport, working under capacity constraints.
So far as solids are concerned iron ore is moved in slurry form, from Kudremukh to
Mangalore port and Bailadila mine to Vishakhapatnam port. Rock phosphate concentrate is
piped from Maltose mine to Debari smelter plant.

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Advantages

1. Pipelines can be laid through rough terrains as well as under water.

2. The operating and maintenance costs are lower than that for other modes.
3. Pipelines involve low energy consumption. Thus they save the environment from pollution
problems.
4. Pipelines integrate the entire industrial region. Transport bottlenecks due to poor road
conditions or strikes do not affect this made of transport.

Dis advantages

1. Construction of pipeline is very expensive for developing countries.

2. The capacity cannot be increased once the pipelines are laid.
3. Pipelines face security threats from terrorist organizations, which could jeopardize a
country’s economy, i.e. the oil pipelines in the northeast are often blasted by anti- nationalist
elements.
4. The repair of pipelines is also very difficult, particularly in case of leakages, detection of
leakages is quite difficult.

Spatial network of pipelines in India

1. Naharkatiya-Noonamati-Baruni pipeline (1152 km)

This is the first pipeline of the country, constructed by Oil India limited for transporting
crude oil from Naharkatia oil field in Assam to Barauni refinery via Noonamati oil refinery.
It also has number of subsidiary pipelines.
A) Noonamati-Siliguri pipeline to transport petroleum products from Noomati to Siliguri.
B) Lakwa-Rudrasagar-Barauni pipeline to transport crude oil from Lakwa and Rudrasagar
oil fields to Baruni oil refinery.
C) Barauni-Haldia pipeline to carry refined petroleum products to Haldia port and bring
back crude oil to Barauni refinery.
D) Barauni-Kanpur pipeline to transport refined petroleum products to Kanpur city.
E) Noonamati-Bongaigaon pipeline to transport raw material (refined products) for
Bongaigaon petro chemical complex.
F) Haldia-Maurigram-Raj bandh pipeline.

2. A. Bombay high-Mumbai pipeline: - Mumbai city has been connected with 210 km long
double pipeline to Bombay high to transport crude oil and natural gas.
B. Ankleshwar-Koyali pipeline: - To transport crude oil from Ankaleshwar oil field to
koyali refinery.

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3. Salaya-Koyali-Mathura pipeline: - This 1256 km long pipeline has been laid down from
Salaya to Koyali and Mathura, to supply crude oil to the extended Koyali refinery and
Mathura refinery. It has an offshore terminal for imported crude oil.

4. Mathura-Delhi-Panipat-Ambala-Jalandhar pipeline: - It transports refined products of

Mathura &Panipat refineries to market centers of N.W India.

5. Haldia-Kolkata pipeline: - It transports refined petroleum products to Kolkata.

6. Hazira-Bijaypur-Jagdishpur (HBJ) gas pipeline: - This is 1750 km long gas pipeline

which passes through Hazira, Kawas (both in Gujrat), Bijapur (M.P), Auriya (UP),
Jagdishpur (U.P), Saharanpur (U.P), Aonla (UP), Babrala (U.P), Anta (Rajasthan),
SawaiMadhopur (Rajasthan), Kota(Rajasthan).

Role of pipeline in regional development

Pipelines are the best means for industrial dispersal in backward and depressed regions. It acts as
growth pole giving rise to immense horizontal industrial clustering by attracting various petro-
chemical and fertilizer industries. The development of HBJ gas pipeline has given rise to
construction of three power plants at kawas (Guj), Anta (Raj) and Auraiya (U.P), and Six
fertilizer plants namely Bijapur (M.P), sawaiMadhopur (Raj), Jagadishpur ,Shahjahanpur, Aonla,
Babrala(UP).

The pipelines also link geography of production with geography of consumption, there by
leading to economic development and regional growth. The location of oil refineries and petro
chemical complex’s in economically backward regions like Barauni, Mathura etc. has also been
possible because of the pipeline transport.

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Air transport
Air. Transport: - Air transport because of its unchallengeable advantages of high speed,
accessibility and unbroken journeys, occupies a unique importance and place in the system of
transport today. It is the most modern means, capable of undertaking long journeys within a short
period. It has united the world by overcoming all insurmountable obstacles of nature. Although
recent in origin it has come to dominate other means of transport in certain spheres.

Characters of Air transport

1) Rapid speed is the most peculiar feature of A.T. The aircrafts can fly at a speed of 500 km/h
without any difficulty. Some planes can fly at a supersonic speed. No other means of
transport can move at such speed.
2) Aircrafts are capable of making their access everywhere. They know no barriers. No roads,
no rly’s, no Ships can cross the world’s great mountain ranges.
3) Air ways are free gift of nature and no capital is spent in their construction or maintenance.

Limitations

1. The rates and fare charged by airline are substantially higher than that of
Railways/Roadways.
2. Air transport is not fit for carrying heavy weight cargo.
3. Inclement/Bad weather caused by storms, rains, fog restricts the flight of an air craft.
4. Most accidents are fatal.
5. Except USA and a few other developed countries, the area of operation of air transport is
very limited. The flights are few, infrequent and for a few places only.

Role in regional development

1. Air services to remote and isolated area’s or other backward areas have very positive impact
on growth & development.
2. Air port’s function as growth pole, which propels the growth in the region by way of
spillover effect and trickledown effect.
3. Air services promote tourism and to cater to the needs of tourists, basic infrastructure i.e.
roads, transportation also gets the boost.
4. To cater to the demands of tourist’s market places, shops, restaurants, hotels, and other
amenities also get developed.
5. In addition to these, the local skills gets thrust, the diffusion of information by way of
exchange of views between tourists & locals, further create new avenues.

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6. Increased contact of outsider with locals also help’s in highlighting the local issues/problems
and these issues get proper notice of national govt. thus extreme regionalism can be
prevented.
7. Local handicraft is promoted so giving economic benefit along with preserving cultural
heritage.

Problems of Indian Air ways

– It is still class based not mass based.

– It is fuel prices that have prevented it for masses.
– Limited destinations.
– Lack of competition.

Resent development in civil aviation

A. Air passenger and cargo traffic

Air traffic in India continues to register significantly higher rates of growth averaging 18.5%
in the last seven years. Although the Domestic passenger traffic handled at Indian airports
reached 106 Million during Jan-Nov 2012, which is marginally lower than that of Jan-Nov
2011, when it was 108 Mn. International passenger traffic handled at Indian airport’s was
37.8 mn during Jan-Nov 2012 and the international cargo throughput at Indian airports
during the same period was 1.30 MMT compared to 1.37 MMT during previous year in same
period.

B. Airport infrastructure
1. For improving air navigation services, the airport authority of India (AAI) installed the new
ATS auto mation system at Chennai.
2. The govt. approved a one-time grant to the AAI for the final operation phase of GPS aided
GEO augmented navigation (GAGAN) project.
3. Govt. has also given in principle approval for setting up of a green field airport at karaikal in
Puducherry and Shirdi in Maharastra.
4. AAI is a major airport operator managing 125 airports across the country.
5. The 12th FYP (2012-17) envisages an investment of Rs 65000 cr at Indian airports.
6. The AAI has completed expansion and up gradation of two metro airports at Kolkata and
Chennai and Modernization of Delhi and Mumbai airports has also been under taken with
state of the art facilities.
7. Development of 35 selected non metro airports has been identified based on regional
connectivity, development of regional hubs, places of major tourist attraction and potential
for development as business hubs and projects at 28 airports have been completed.

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Ports and their importance in national & foreign trade
The ports act as the gateways to India’s import and export. These also facilitate the country’s
trade along coasts. Since independence development of port facilities have largely kept pace
with the growth of country’s trade. India has a coastline of over 7517 km, and has thirteen
major ports and more than 200 medium and small ports, which account for 95% of India’s trade.

Major Ports: - Kandla, Mumbai, JNPT, Marmagao, Mangalore, Cochin are the 6 major ports
on west coast. On the east coast Tuticorin, Chennai, Ennore, Vishakapatnam, Paradip, Haldia,
Kolkata are the 7 major ports. In total there are 13 major ports, which account for about 60% of
traffic (by weight) handled by all Indian ports (Major+Non major ports).

Among these ports1- JNPT is equipped with modern facilities having mechanized container
berths for handling dry bulk cargo. It alone handles about 50 to 60% of total containers handled
by all major ports in India. Apart from containers it handles liquid bulk and cement ships. It is
ranked 24th/31st among top 100 container ports in the world. It is located along the eastern shore
of Mumbai harbor off Elephanta Island.

2. Mumbai port: - This port has long been the principal gateway to India and has played a
pivotal role in the development of the national economy. For decades Mumbai port was India’s
premier port, even today it caters to 10% of the country’s sea borne trade handled by major
ports of the country in terms of volume. It caters about 19% of POL traffic handled by major
ports.

3. New Mangalore port (or Panambur port) (Daksin Kannada dist.) This port is equipped
with most modern LPG handling facilities, it is largest LPG handing port in India. It is one of
the eco-friendly port. Located b/t Netravati and Gurpur rivers.Historically, a ship building
center. It handled 31.5 Mntonnes of cargo in 2010-11. It has deepest inner harbor on the west
coast. Apart from other commodities it exports the kudremukh iron ore. Major commodities
exported from this port are Iron ore, POL, Granite Stones &Containerged cargo. Major imports
are crude & POL products, LPG, Coal etc.

4. Cochin Port: - This port lies on two islands i.e. Willingdon and Vallarpadam. The
international container transshipment terminal (ICTT), part of the Cochin port, is the largest
container transshipment facility in India. It has “Cochin Shipyard” the largest shipbuilding and
maintenance facility in India (it is building the 1st indigenous aircraft carries for Indian Navy).
Among the various ports though which cashew nuts are exported, Cochin port and ICTT at
Vallarpadam are at top, second comes Tuticorin port but Tuticorin port is largest importing port
of raw cashewnuts.

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5. Kandla Port: - It is located in kutch dist. of Gujrat, near the city of Gandhidham on Tekra
island, Constructed in 1950, as the chief seaport, after the partition of India, which led Karachi
port to Pakistan. It is a tidal port.

The port of Kandla Special economic zone (KASEZ) was the first SEZ to be established in
India & S. Asia, in 1965. Today, the port is India’s hub for exporting grains and importing oil
and one of the highest earning ports in the country. Kandla port has retained its number one
position for the 5th year in a row.

Kandla has emerged as the nerve center of economic activities & is playing vital role in the
growth & development of the regional economy. The port has established itself as India’s
biggest POL product handling port. Also largest offshore oil terminals have been built under the
port waters of kandla port (at Vadinar).

6.) Marmagao port: - It is located in south Goa district in Goa. It was accorded the states of a
major port in 1963. It is the leading iron-ore exporting port in India with an annual through put
of about 50 MT of iron ore traffic. It is one of the oldest ports (125 Yrs) on W. coast with a fine
natural harbour. Though iron ore is the predominant cargo, there has been a steady increase in
liquid bulk and general cargo traffic. It exports India’s 40% Iron ore and ranks among the top
10 leading iron ore exporting ports of the world. It is linked to konkan railway. The excellent
inland waterways provided by two rivers, the Zuari and the Mandovi, serve as the main conduits
for transporting of iron-ore to the port from hinterland . It has protected open type natural
harbour. (It is located at the mouth of Zuari River).

Indian Navy’s Goa Naval area base is located at Vasco-da-gama just south of marmagao port.

It is poised to take care of the energy needs of the region as a major coal handling port.

7.Tuticorin port: - It has been a center for maritime trade & pearl fisheries for last 2000 yrs.It
was declared as a major port in 1974. It is 2nd largest port in T.N and 4th largest container
terminal in India. It is also known as V.O. Chidambaram port (V.O.C). VOC port is artificial
port.

In the 2013 Budget the finance minister P Chidambaram announced the V.O. Chidambaram port
at Tuticorin will get a new outer harbour that will add 42 Mntonnes of capacity. The port
currently has a capacity of 27 Mn tones. The expansions is expected to benefit garment
manufactures from the western region who ship their products through this port known as Gate
way to south India.

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8. Visakhapatnam port:-

It is a natural port endowed with deep water basins formed by a high promontory into the sea,
known as Dolphin’s nose hill to the south and Ross hill to the north of the entrance channel. It is
the only port in India and first of its Kind in S. Asia to have a Cavern facility (a large
underground chamber) for LPG at a depth of 200 mts below sea level.

Viszag port is undergoing modernization & expansion program aimed at increasing its capacity
to 130 Mntonnes by 2016-17, entailing an investment of 13000 crRs. The opening of
Gangavaram port, located 15 km away from the Visakhapatnam port has led to a significant
diversion of traffic away from the Vishakhapatnam port. This loss of cargo traffic led to its fall
from its position as the largest port in India. The Vizag steel plant has shifted base to the new
port, taking with it a large chunk of the coal & iron ore traffic. Hindustan shipyard of
Vishakhapatnam port conducts major overhauls of Indian navy Submarines and is being
equipped to construct nuclear powered submarines.

The Visakhapatnam port trust plans to develop a satellite port at Bhimili (Bheemunipatnam) to
decongest traffic at Visakhapatnam port.

Gangavaram port is India’s deepest port inaugurated in 2009; it has a depth of 21 m.

Chennai port: - It is the 3rd oldest port among the 12 major ports. It has artificial harbor, the
Chennai port’s share of iron-ore export form India is 12%. In 1983, the port heralded the
country’s 1st dedicated container terminal facility having the capability of handling 4 th
generation vessels, the terminal is ranked in the top 100 container ports in the world. The long
term plan for Chennai port envisage that the port will mainly handle 4c’s i.e. container, Cars,
Cruise and Clean cargo.

Ennore port: - It is located on the coromandal coast, 24 km north of Chennai port, in Chennai
district. It is the 1st port in India which is a public company. The first corporatized major port in
the country IOCL has identified this port, as a location for LNG terminal; it plans to
commission the project by 2016-17. This port is connected to NH-4, NH-5, Kolkata-Chennai
rail line & to Chennai airport. It has been designed to be developed as Asia’s energy port. It is a
land lord port, which is characterized by its mixed Public-Private orientation. Under this model,
the Port authority acts as regulatory body and as land lord, while port operations (esp. Cargo
handling) are Carried out by private companies. (Port authority retains the port infra
&regulatory functions, whereas the port services are provided by private operation). Corporate
body owns the port & the services are leased out. The port has freedom to set tariffs & compete
with foreign & Indian private ports.

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Paradip port: - It is artificial, deep water port on the eastern coast of India in JagatSinghpur
dist. of odisha, at the confluence of Mahanadi River and the bay of Bengal.

It is 210 nautical miles south of Kolkata & 260 Nautical miles north of Visakhapatnam. Coal
and iron ore are major commodities that transit the port. It has artificial harbour, with ships
accessing the port via manmade lagoons. Indian oil is establishing major oil refining at paradip.
Paradip is having Paradeep Phosphate, limited, a fertilizer company, Essar steel pellet plant,
Indian oil refinery; paradip is emerging as a major industrial hub with several upcoming steel
plants, including US $ 12 bn plant by Pasco of S. Korea. In addition, alumina refinery, thermal
power plant, & a petro chemical complex are under development. Paradip has been identified
for development as one of the six major petroleum, chemical and petro chemical investment
regions (PCPIRs) in India, along the lines of Pudong in china, Rotterdam in Europe, and
Houston in USA. Paradip port has laid out a major plan to expand its cargo handling capacity
from the present 76 Mn tons to 237 Mn tons by 2020 on PPP mode.

Haldia port: - It is located in PurbaMedinipurdist of W.B. It is 50 km S.W of Kolkata near the

mouth of Hoogly River. The Haldia city has several major factories i.e. South Asian petro
chemical ltd, Indian oil Corporation ltd (IOCL), Tata Chemicals, Haldia. Petro chemicals,
Hindustan lever etc.

The port has attracted major international petro-chemical companies like Mitsubishi Chemical
Corporation. The Haldia Petro- chemicals is the second largest project of such kind in India.

Kolkata port: - It is a riverine port & the oldest operating port in India. The port caters to entire
eastern India and two landlocked countries i.e. Nepal & Bhutan.

Except Ennore port being Public sector undertaking all the major ports are administered by port
Trusts which are autonomous bodies.

Cargo Handling capacity and cargo handled

The capacity of Indian ports including major and non-major ports have crossed one billion
tonne per annum in 2011. The aggregate capacity of major ports on Dec 2010 was 616 million
tons. Major ports handled a total traffic of 570 Mntonnes in 2010-11 & Non major ports
handled 315 Mntonnes.

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Traffic handled at Major Ports 2010-11

1stKandla-----------------------------------------82

2ndVizag------------------------------------------68

3rd JNPT------------------------------------------64

4TH Chennai--------------------------------------61

5thParadip----------------------------------------56

6th Mumbai---------------------------------------55

7thMarmagao-------------------------------------50

8thHaldia------------------------------------------35

9TH New Manglore------------------------------32

10th V.O. Chidambarnar------------------------26

11th Cochin---------------------------------------18

12th Kolkata--------------------------------------12

13thEnnore---------------------------------------11

Total cargo handled by all Major & Non major ports in 2010-11 was 885 Mntonnes.

In 2010-11 -Major ports 570 Mnt T –64% and Non -major ports 315 Mn T – 36%

2011-12 – 911.7 Mntonnes. (Major pots – 61%), (Non major ports – 39%)

2013-14 – 975 Mntonnes. (Major Ports – 57%), (Non Major Ports– 43%)

Commodity wise traffic handled at major ports during 2010-11

1st POL

2nd Containerized Cargo

3rd Iron ore

4th coal

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Non Major Ports

There are 200 Non Major in the Country controlled by state govt. and UT’s. These are

U.T’s States

1st And &Nico – 23 1stMaharastra – 48 ports

2ndLakshwadeep –10 2ndGujraj – 40 ports

3rdPuduchery& Daman & Din – 2 each 3rd Kerala – 17 ports

4th T.N – 15 ports

5thOdisha – 13 ports

6thAndra Pradesh – 12 ports

7th Karnataka – 10 ports

8th Goa – 5 ports

9th W.B – 1 port

The govt. of Gujrat, Maharastra, Andra Pradesh have taken several initiatives for development
of their ports through private investments.

Gujrat: - Gujrat Maritime Board is a govt. of Gujrat undertaking. Along the 1600 km of
coastline of Gujrat there are 40 Non Major ports, 11 are intermediate ports and 29 are minor
ports, under the control of Gujrat maritime board. Out of there Porbandar, Okha a sikka are all
weather ports. Gujrat ports handle 70% of the total cargo handled by all non-major ports of
India.

Maharastra

The govt. of Maharashtra has encouraged development of port sector and adopted an investor
friendly port policy. Maharashtra Maritime board has entered into six concessional agreements
for development of minor ports namely Rewas-Awaare port, Dighi port, Jaigad port (Lavgan)
Vijay durg port, Redi port.

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Cargo traffic at Non-Major ports

During the first four year (2007-11) of the 11 F.Y.P, traffic at Non-Major ports increased at an
annual average rate of close to 14.5%. During 2011-12 Non major ports handled 39% of total
traffic. The growth in cargo handled at non major ports has been facilitated by sustained growth
in non-major ports located in Maharashtra &Gujrat. The growing importance of non -major
ports in handling cargo traffic has helped alleviate the congestion at major ports. Gujrat
accounted for more than 3/4th of the total traffic handled by Non-Major ports followed by Andra
Pradesh 13%, Maharashtra 5%, and Goa 3%. These states together accounted for 97% of the
total cargo traffic handled by the non-Major ports in 2011-12.

Private Ports

Major development Project

1. International Container transshipment terminal (ICTT) at Vallarpadam.

The ICTT, Vallarpadam is India’s first dedicated international container transshipment terminal.
It was developed by Cochin port trust through a public private partnership on BOT basis. This is
a major milestone achieved in maritime sector in the development of the country’s logistics
infrastructure. The ICTT has been developed in with facilities for handling mother container
ships of 8000 plus TEUs capacities and is state-of-the -art terminal with modern cargo handling
equipment to have an annual through put of 3 million TEUs.

2. Mundra port and special economic zone ltd (MPSEZL):- The largest private port and
special economic zone of India was in corporated as GujratAdani port limited in 1998 to
develop a private port at Mundra on the west coast. Later the company was renamed as
Mundra port and special economic zone limited. Mundra port provides cargo handling and
other value added port services. Mundra SEZ is India’s first port based multi- product SEZ.

Mundra port is strategically located for global trade on the northen coast of the Gulf of Kutch
in Gujrat. Mundra port provides a convenient international trade gate way to Europe, Africa,
America and Middle East. Mundra has deep draft (13m-17m) which enables large vessels like
Panamax and super post panamax carrier’s to dock alongside its berth. This port is also well
connected to the Indian railway network.

The cargo volumes have improved across all segments. It handled 52 Mn tone of cargo in
2010-11, which is a growth of 28% over previous year. Mundra port has crossed one million
TEU’s mark during 2010-11 and ended handling total 1.23 Mn TEU’s.Thus becoming third port
in country to reach one million TEU throughout.

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3. Essar Ports
Essar ports is India’s second largest private sector port and terminal company by capacity and
through put. It develops, own’s and operates ports and terminals.Essar ports provides port and
terminal services with an existing aggregate capacity of 88 Mntpy across two facilities located
at Vadinar and Hazira in the state of Gujrat. The company is expanding its ports capacity to 158
Mntpy, besides, a new port at salaya in Gujrat and two terminals at Paradip in the state of odisha
are also being developed.

Port efficiency
Efficiency at ports has an important bearing on the transaction cost of shipping lines. Major
ports have improved their efficiency of operations particularly in terms of turnaround time
(TRT). TRT is the total time spent by a ship at the port from its entry until its departure.
Average TRT for all major ports improved from 8.10 day in 1990-91 to 4.63 day in 2009-10.
During 2010-11, the TRT ranged between 2.20 day at Cochin port to 7.73 at Paradip.

Eleventh FYP target

The eleventh FYP envisaged an increase in capacity of major ports to 1,016 MT by the end of
2011-12, from the preplan base level of 505 MT. Average annual growth in capacity addition
was envisaged at 15%, actual capacity addition in first three years of the plan was moderate at
7.3% per annum. So the cargo handling capacity at major ports at the end of March 2011,
increased to 670 MT.

Report of working group for ports sector for the 12 th plan period (2012-17), planning
commission
As per its report, the estimated traffic by the end of 12 th plan (31.3.2017) is projected at 1758
Mntonnes against the projected annual capacity of 2687 Mntonnes. The capacity of major ports
is pegged at 1230 MnT and that of Non Major ports at 1458 Mn T while the traffic is projected
at 943MnT and 815 Mn T respectively.
The total proposed out lay for the 12th plan period, excluding the private sector investment is
22757 cr Rupees.

Maritime agenda 2010-2020

In the maritime agenda 2020, a target of 3130 MT port capacity has been set for the year 2020.
More than 50% of this capacity is to be created in the Non-Major ports as the traffic handled by
these ports is expected to increase to 1,280 MT. The objective of the maritime agenda is not

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only creating more capacity but setting up ports on par with the best international ports in terms
of performance.

The total investment proposed in major and non-major ports by 2020 is expected to be around 2,
96,000 cr. Most of this investment has to come from the private sector including FDI. FDI up to
100% under the automatic route is permitted for construction and maintenance of ports.

Shipping & Ports

– About 95% of India’s trade by volume and 68% in terms of value is transported by sea.
– As on 31 Jan 2013, India had a fleet strength of 1158 ships (with GT of 10.45 Mn).
– Despite one of the largest Merchant Shipping fleets among developing countries, India ranks
18th among world countries in terms of DWT.
– In 2011 as per UNCTAD, India was ranked 8th among developing countries in terms of
container ship operations with 9.95 Mn twenty foot equivalent units (TCU’s) of container,
with a world share of 1.74%.
– India is one of the major ship breaking destinations (Alang, Sachna, Bhavnagar dist.).
In 2011, with a world share for 28.7% (DWT terms) it topped the list of ship scrapping
nations in the world.
– There has been a sharp decline in the share of Indian ships in the carriage of India’s overseas
trade from about 40% in late 80’s to 10.4% in 2011-12.
– Indian ships have relatively low participations in India’s trade and India’s ship are ageing,
(avg. age about 17 Yrs.), there is urgent need to increase the shipping fleet, to meet India’s
trade volumes.
– A large & Modernized shipping fleet will not only lead to higher growth, employment and
higher earning/saving of foreign exchange, but also increase our bargaining power with
foreigner liners who carry Indian cargo as per their schedule and also discriminate in the
rates.

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Trade Balance / Balance of Trade
Balance of trade has been defined as a statement of a country’s trade in visible goods with other
countries of the world during a particular period of time. The trade balance suggests the
deference in value between export and import of goods. Trade in services or invisibles like
banking, insurance are excluded from balance of trade. If the value of imports exceeds that of
exports, the trade balance is negative and the country has a trade deficit. If the value of exports
exceeds that of imports, the trade balance is positive or favorable.

India’s balance of trade has mostly been negative, that is imports have exceeded the exports.
But this is not entirely bad because high imports reflect increasing demand and in some cases,
imports are for export that is import based exports i.e. Diamond after processing is exported as
high value product, oil after refining is exported as high value product.

In India’s case exports are low because of lack of cost competiveness, that is due to lack of
technology & lack of infrastructure.

The negative aspect of the trade deficit in India’s case is, that it has to be financed by capital
inflows or by drawing down of reserve’s, which is not sustainable means of financing the
imports as it leads to Current account deficit.

In fact if trade deficit is financed by invisibles, then it would lead to CAD surplus. That would
be sustainable. More over the accretion to reserves would be sustainable.

The story of India’s trade balance has been fairly consistent in terms of trade deficit. From
1.269 bn $ in 1950-51, exports rose to 8.486 bn $ in 1980-81 and further to 159 bn $ in 2007-
08. Imports during this period rose from 1.273 bn $ to 15.8 bn $ and further to 239.6 bn $
respectively.

In 2010-11 exports were 251 bn $ and imports stood at 370 bn $.

1950-51 1980-81 2007-08 2010-11

Export 1.26 bn $ 8.5 bn $ 160 bn $ 251 bn $

Import 1.27 bn $ 15.8 bn $ 240 bn $ 370 bn $

In fact the study of foreign trade data reveals that trade balance has been positive in only two
years since 1949 to 2016-17. These were the years of 1972-73 and 1976-77, when country
recorded small trade surplus of 0.134 bn $ and 0.077 bn $ respectively.

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The trade deficit has shown consistent increase over the years. The average trade deficit per
annum in

6th Plan (1980-81 – 1984-85)------------------5.9 bn $ / Per Annum

7th Plan (1985-86 – 1989-90)------------------5.67 bn $ / Annum

8th Plan (1992-97) ---------------------------3.45 bn $ / Annum

9th Plan (1992-2002) ---------------------------8.4 bn $ / Annum

During the period of 10th Plan (2002-2007), imports increased by three times from 61.4 bn $
(2002-03) to 186 bn $ in 2006-07. Because of substantial increase in imports, the trade deficit
rose considerably. Trade deficit in 2006-207 (in terminal year of 10th Plan) was 59.4 bn $.

The first year of the eleventh plan 2007-08 saw unprecedented trade deficit of 80.64 bn $.

India’s merchandise trade increased exponentially in the 2000’s decade from US $ 95 bn in

2000-01 to US $ 620.9 bn in 2010-11 and further to US $ 794 bn in 2011-12.

India’s hare in global exports and imports also increased from 0.7% & 0.8% respectively in
2000 to 1.7% and 2.5% in 2011 as per the WTO. Its ranking in the leading exporters and
importers improved from 31st and 26th in 2000 to 19th and 12th respectively in 2011. While
India’s total merchandise trade as a % of the GDP increased from 28% in 2004-05 to 43% in
2011-12, India’s merchandise exports as a % of GDP increased from 12% to 16.5% during the
same period.

The compound annual growth rate (CAGR) of India’s exports during 2004-05 to 2011-12 was
20.3%. India’s export growth has almost continuously been above world export growth in the
decade of 2000’s and in 2011. During 2011-12 exports crossed 300 bn $ mark reaching 310 bn
$ but growth rate declined to 21%.

India and Select Emerging and developing economies

The share of the select emerging and developing economies (EDEs) has increased by 15.6% in
world exports (18 trillion $) reaching 41% of the total world exports.

The performance of china is spectacular with its share in world exports increasing by 6.6%
[ ¿¿10.5 % ¿2000¿¿ 2011¿ ](1900 bn $) while India’s share has increased by 1%
[ ¿¿1.7 % ¿2000¿¿ 2011¿ ] (305 bn $)
India’s export growth has been one of the highest in world during 2010 and 2011 much more
than that of china. Still India’s exports are less than small advanced countries like Honk Kong,
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Singapore, Taiwan and S. Korea but more than that of Malaysia, Brazil, Thailand, Indonesia
and S. Africa.

Foreign trade policy 2015-2020

(EXIM Policy)

The foreign trade policy in general aims at developing export potential, improving export
performance, encouraging foreign trade and creating favorable balance of Payment Scenario.

Why such policy is so imp for India

In India’s case imports of Merchandise goods have always exceeded the export. So India’s
balance of trade has always been in deficit. Except for 1972-73 and 1976-77when country
recorded marginal trade Surplus, baring those exceptional year’s our trade balance has not only
been deficit but this trade deficit has been increasing over the Period. In fact Annual trade
deficit was not much large during 6th, 7th, 8th, 9th Plan period. During 9th Plan (1997-2002) the
annual trade deficit was 8.4bn $per annum. But the terminal year of 10th Plan 2006-07 recorded
the trade deficit of 59.4bn $which increased to 184bn $in the terminal Year (2011-12) of 11th
Plan. Such high trade deficit is unsustainable.

Here it needs to be noted that high imports are not bad rather it reflects increasing economic
activity and demand in domestic market what we need is to facilitate import of capital goods,
export based imports and rationalize non-essential imports (bullion’s).

On the other hand we need to accelerate our export by increasing their Cost Competitiveness by
way of adopting Modern technology and upgrading basic infrastructure.

We need to inculcate the same sense of efficiency in our Commodity export that use already
have in Service export. A large part of trade deficit is compensated by net Service Surplus, the
Service Surplus helps in limiting the current account deficit. In fact by enhancing export, by
way of inducing Cost Competiveness, also increases the value of our currency. This
automatically makes imports cheap, on the other hand lack of Competiveness in our export,
decreases the value of our currency and makes Imports costly. Moreover the country has huge
current account deficit which has to be met by borrowing which leads to fiscal deficit and Fiscal
deficit leads to inflation. Inflation further discourages export by appreciating the real exchange
rate although the nominal exchange rate remains same. This further increase CAD, so it is a
vicious cycle.

Current account = BOT +BOS+NFI (BOT=balance of trade, BOS=balance of service,

NFI=net factor income)
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NFI means → moneny received from investment abroad + remittances

Current a/c deficit = BOT (-ve) + invisible (+ve) (becoz trade deficit is more than service
surplus, so current account deficit)

Fiscal deficit = Rev receipts (tax∧nontax receipts) + Nondebt creating capital receipts (i.e.
recovery of loon + disinvestment) – Expenditure.

F.D = what govt. earns – total expenditure

F.D = borrowing in a year.

The economy has three domestic sectors: business, households and government, each had its
own saving rate: business saving is the difference between cash flow and investment. House
hold saving is the difference between consumption and family income. Govt. saving is the
difference between its expenditure and its earning.

Now any of these three Sectors Could either be running a surplus or a deficit, when you add up
the Surplus/deficit of all the three Sectors and the total nets out to a deficit, this is called current
account deficit and the country as a whole finance that deficit by borrowing from abroad.

A budget deficit /fiscal deficit produce a current account deficit if the business and household
Sector don’t save enough to finance that deficit. Like the situation in US. On the other hand
Japanese household and business save so much that the country runs a current account Surplus
despite a huge fiscal deficit.

The vision of F.T.P 2015-2020 is to make India a significant participant in world trade by 2020,
and to enable the counting to assume a position of leadership is the international trade discourse.
Govt. aim’s to increase India’s exports of Merchandise and Services from USD 465.9 bn in
2013-14 to approximately USD 900 bn by 2019-20 and to raise India’s share in world exports
from 2% to 3.5%

The FTP for 2015-2020 seeks to Provide a stable and sustainable Policy environment for trade
in Merchandise and Services. It seeks to link incentives for exports and imports with other
initiatives such as ‘Make in India’, ‘Digital India’, and ‘Skills India’ to create an “export
Promotion Mission’, to promote the diversification of India’s export basket by helping various
sectors of the Indian economy to gain global Competitiveness, with a view to expanding its
markets and better integrating with major regions, thereby increasing the demand for India’s
Products. It seeks to provide a mechanism for regular appraisal in order to rationalise imports
and reduce the trade imbalance.

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The policy statement further states that the state of the external environment undoubtedly will
be crucial and new features of the global trading landscape such as mega regional agreements
will Profoundly affect India’s trade. The biggest challenge, however, is to address Constraints
within the Country such as infrastructure bottlenecks, high transaction casts, complex
procedures, constraints in manufacturing and inadequate diversification in our services export.

Fifteen years ago India occupied a very small space on the global trade canvas (2000-01
Merchandise trade 95 bn $). As various sectors of the Indian economy became more
competitive globally, exports began to grow remarkably. India’s Merchandise exports recorded
a CAGR of 15.9% over the period 2004-05 to 2013-14. Similarly, as the economic growth rate
of the country picked up, so did imports, which grew at a CAGR of 16.8%over the same period.
As a result India’s Merchandise exports increased from USD 83 bn in 2004-05 to USD 314 bn
in 2013-14. But at the same time the value of imports in 2013-14 increased to USD 450 bn thus
trade deficit of USD 137 bn in 2013-14. So the high trade deficit, resulting in a persistently high
current account deficit has set alarm bells ringing.

This policy, therefore, aims at promoting export along with making import more rational.

The global economy

The update of the world economic outlook (WEO) released in Jan 2015 by the IMF puts global
growth projection for 2015 at 3.5% and at 3.7% for 2016.

Global growth will receive boost from lower oil prices-a result mainly of higher supply and the
recovery in the U.S was stronger than expected. But the economic performance in all other
major economies fell short of expectation. The euro area growth projections are weaker and
Japan is in recession.

In developing economics, growth is projected to remain broadly stable at 4.3% in 2015 and to
increase to 4.7% in 2016.

The slower growth in china will have important regional effects, which partly explains the down
ward revisions to growth in much of emerging Asia. The growth forecast for India is broadly
unchanged, with weaker external demand expected to be offset by the boost to the terms of trade
from lower oil process and a pickup in industrial and investment activity after Policy reforms.

India’s trade performance

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India’s two way merchandise trade crossed USD 760 bn in 2013-14 or 44% of GDP. If service
trade is added, India’s trade reached nearly USD 1 trillion. This has been achieved despite
global Contraction.

According to WTO in Merchandise trade, India was the 19th largest exporter in the world with a
share of 1.7% and the 12th largest importer with a share of 2.5% in 2013.

In commercial Services, India was the 6th largest exporter in the world with a Share of 3.2% and
9th largest importer with a Share of 2.8%.

Although there has been a gradual Shift in India’s exports away from the advanced economics
of the European Union and North America, the USA continues to be the topmost destination for
India’s exports with a Share of 12.4% in 2013-14 followed by the UAE (9.4%) and china
(4.7%) in 2013-14.

A key macroeconomic Variable critical to Competitiveness and prospects for export growths is
the exchange rate. There are two aspects that merit particular mention. First if the nominal
exchange rate Stays Steady and the rate of inflation in India is higher than that in the rest of the
world (as has been the case for the last decades) then the real exchange rate appreciates. The
Competitiveness of exports is eroded by the effective exchange rate appreciation of the rupee.

Secondly – The last 7 to 8 years have witnessed the Phenomenon of Quantitative easing in
USA. The resultant increase in money Supply has meant that dollars have weakened vis-a vis-
currency of other Countries, that is, it has resulted in real exchange rate appreciation in money
emerging Countries. (Q.E works by artificially depreciating the currency where the Q.E is
undertaken vis-a vis other currencies).

After USA, the European Central bank has recently announced Q.E for Europe. The euro has
already depreciated significantly. In such Scenario, the adverse implications on Indian exports
competitiveness are obvious.

Quantitative easing is an unconventional Monetary Policy in which central bank purchases

Govt. Securities or other Securities from the market in order to increases the Money Supply.
This measure increases the money supply by flooding financial institution with capital in an
effort to promote lending and liquidity.

Q.E is Considered when short term interest rate approach zero and does not involve Printing of
new bank notes.

Q.E → Govts and central banks, main tool to control growth is raising or lowering interest rates.
Lower interest rates encourage people or companies to spend money, rather save. But when

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interest rates are almost zero, central banks need to adopt different tactics – i.e. Pumping money
directly into the financial system. This process is called Q.E.

The central bank buys bonds (Govt.) from banks or pension funds. This increases the overall
amount of fund/money in the financial System. Making more money available is supposed to
encourage financial institutions to lend more to businesses individuals. This in turn allow
businesses to invest and Consumer to spend more, giving a knock on boost to the economy.
This can lead is inflation but in euro zone inflation is zero.

Quantitative easing while considered on unconventional monetary policy, is just an extension of

the usual business of open market operations. Open market operations are the Mechanism by
which a central bank either expands or contracts the Money Supply through the buying and
selling of Govt. Securities in the open market. The goal is to reach a Specified target for Short
term interest rates that will have an effect on all other interest rates within the economy.

While expansionary open market operation increase the Money Supply and decrease interest
rates in an attempt to stimulate economic activity, but this mechanism has limited effect when
Short term interest rates are near zero. In such Scenario more unconventional Methods of
Monetary Policy need to be used such as Quantitative easing, which targets Commercial banks
and Private Sector assets with much longer maturities. Q.E occurs on a much larger scale than
smaller scale, week to week open market operations.

Q.E is meant to stimulate a sluggish economy, but there stimulus measures have indirect effects
on the exchange rate, Putting down ward pressure on the dollar (decreases the value of its
currency). Such pressure makes exports relatively cheaper. However a weakened US dollar
hurts the exports of other Countries.

On the front of domestic challenges, some findings of a Study by the center for WTO Studies
need to be taken into account, these are:-

1) Telecom and IT infrastructure have increasingly become important in the Process of

trade. Internet use in India remains extremely low, compared to some of our Competitors.

2) In the absence or a uniform System of indirect taxation in India, exporters are often
unable to get a rebate on all indirect taxes paid on the exported product and the inputs that went
into its production, significantly inflating the final price of the exported Product and making it
less price Competitive.
The GST which is to be implemented is expected to help Indian exporters significantly. The
Simplification and harmonization of the indirect tax regime of the country will reduce the cost
of production, thereby making Indian trade and industry more competitive.

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3) Labour regulations play a critical role in determining the trade and investment climate of
a Country Recent initiative by the central Govt. and some of the state Govt. towards
liberalization, rationalization and simplification of labour laws must be taken to their logical
Conclusion in order to make Indian labour more productive and efficient which will contribute
to enhancing the global competitiveness of India’s products.

The trade policy Statement States that the policy of Market diversification which has
stood India in good stead during the global economic down turn will continue to be a key
determinant of the country’s trade policy, together with product diversification.

There is a clear recognition within Govt. that exports should not merely be a function of
marketable surplus but should reflect a genuine enhancement of economic capacity.
Through its foreign trade policy, Govt. envisages following.

1. Employment creation in both manufacturing and Services through the generation of foreign
trade opportunities.
2. A stable agriculture trade policy encouraging the import of raw material where required and
export of Processed Products.
3. A focus on higher value addition and technology infusion.
4. Investment in agriculture overseas to produce raw material for the Indian industry.
5. Lower tariffs on input and raw materials.
6. Development of trade infrastructure and provision of production and export incentives.

The multilateral trading System & India

India is a founding member of WTO, and believes that a rule based, nondiscriminatory,
multilateral trading System is necessary for bringing transparency, equity and fair Play into
global trade relations. The multilateral trading system offers the best institutional architecture
for a developing country. The consensus based decision making in the WTO ensures that even
the voice of the smallest member is heard.

India also recognizes the extraordinary contribution made by the WTO in dispute Settlement,
laying down jurisprudence in areas where the law was relatively ambiguous.

An imp Consideration while framing the FTP is (the need) to ensues that the FTP is aligned
with both India’s interests (in the negotiations) as well its obligations and commitments under
various WTO agreements.

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While the multilateral trading System needs to keep pace with new developments and update
the relevant rules, the fact is that there are glaring asymmetries in the capacities of WTO
members to participate in and benefit from international trade. Therefore India will continue to
work towards fulfilling its objections through negotiations under the Doha round, whose
fundamental objective is to improve the trading prospects of developing countries.

More over the various Uruguay round agreements which form the covered agreements under the
Marrakesh agreement contain several asymmetries. One such asymmetry is in the methodology
prescribed in the agreement on agriculture for estimating trade distorting support on account of
Procurement at administered Prices for public stocks of food.

India has taken up this issue with likeminded members through the G-33 Coalition of
developing Countries and the group has been able to persuade the WTO membership to agree to
negotiate a permanent solution to this problem.

More over the agreement on Subsidies and Countervailing measures of WTO envisages the
eventual phasing out of export Subsidies. This is a pointer to the direction that export promotion
efforts will have to take in future that is towards the more fundamental measures rather that
incentives and Subsidies alone.

The mega agreements: implications for India

The three Mega agreements that are currently being negotiated namely the Trans pacific
partnership (TPP), Trans-Atlantic trade and investment partnership (TTIP) and the regional
Comprehensive economic partnership (RCEP) add a completely new dimension to the global
trading System. India is a party to the RCEP negotiations. India recognizes the evolution of
Mega agreements as a significant development in the global trade architecture. These
agreements are perceived by some as consequences of the state mate in the WTO, while others
perceive it as a natural progression of ambitions on the part of major players in the WTO. While
India’s Commitment to WTO remains firm, it must also recognize the emerging challenges
from the Mega agreements under negotiation. They (agreements) are bound to challenge India’s
industry in many way Firstly these agreements will erode existing preferences for Indian
products in established traditional markets such as the US and EU, rather benefit those who are
the partners to these agreements Secondly – they are likely to develop a rules architecture which
will place a greater burden of compliance on India’s manufacturing and Services Standards for
access to the markets of the participating Countries. However, these challenges should be
treated as an opportunity to Persuade Indian industry to rise to the challenge of higher Standards
both in the area of products and Services. Indian industry needs to gear up to meet these
challenges for which Govt. will have to create an enabling environment.

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Section II : Market strategy

In order to put exports on a high trajectory India needs a market diversification Strategy based
on the changing dynamics of growth in the world economy. In future engagements, India will
engage with regions and countries that are not only promising markets but are also major
suppliers of critical inputs and have complementarities with Indian economy bilateral and
regional trading arrangements have gradually become Permanent features of the global trading
architecture. They have clearly become the rule rather than exception.

India has been actively engaging in regional and bilateral trade negotiations with a view to
diversifying and expanding the markets for its export as well as ensuring access to raw
materials, intermediates and Capital Goods for stimulating value added domestic
manufacturing.

It’s imp to note that these bilateral and regional trading arrangements are known by various
nomenclatures such as Preferential trade agreements (PTA’s), free trade agreements (FTA’s),
Regional trading agreements (RTA’s), Comprehensive economic cooperation agreements
(CECA’s), Comprehensive economic partnership agreements (CEPA’s), Broad based trade and
investment agreements (BTIA’s) etc.

The basic difference lies in the coverage with CECA, CEPA, BTIA Cover’s agreements on
goods (both tariff & non-tariff), Services, investment, intellectual property etc. while the more
traditional FTA’s are limited to trade in goods.

North America

1. USA→ USA is the most imp Market for India in this region. In fact USA is largest export
destination for India. In 2013-14, 12.5% of India’s total exports were destined for the USA.
Although the size of bilateral trade stood at about USD 62 bn for merchandise Goods and about
USD 100 bn for both Goods and Services.
The US in one of the most prominent traditional market for India’s products and Services and
has helped Indian producers in evolving their capacities both in Merchandise and Services
product Standards, technology etc.
The recent macro-economic data shows that the US economy is doing well with a growth rate of
3.1% Per annum. The US will therefore continue to be the sheet anchor of India’s exports. At
the same time there are challenges relating to area such as intellectual property rights,
immigration policies of the US Govt, labour and skill related policies of US Govt.
Important aspects of Indo-US economic relationship for India include resolution of the issue
relating to Social Security Contribution by Indian workers in the US through the early
Conclusion of a totalisation agreement (Social Security Pacts) between the two countries.

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Box Matter

Indian worker’s (IT Professionals) operating in US account for almost 50% of employment
based US green card and 50% of HI-B and L-I Professional Visas. These workers’s make
Yearly Contributions of about USD 2 bn to USD 4 bn towards US Social Security Systems.

However, according to the US norms, these worker’s need to complete 10 years for being
eligible to enjoy the benefits of this Contribution. As a result, worker’s going there for work for
a short period are not able to repatriate their Contributions.

India wants Social Security pact with the US that will exempt Indian worker’s on HI-B visa
from contributing to Social Security as they are not eligible for refunds because HIB visas are
given only for Six year’s whereas per US law’s, Social Security refund can be claimed by
foreign worker’s after ten years of Service. But US say’s it does not have the legislation
mandate to negotiate tantalization agreement with such countries that have less than half of its
population under Social Security Cover.

A team of officials from the ministry of overseas Indian’s had gone to Washington to negotiate
a Social Security pact, this team gave a presentations to the US Social Security officials on
Schemes such as the RastriyaSwasthyabimayojana, Atal Pension yojana, the Employee
provident fund and various old age and accident cover Schemes. The team argued that if we
count the population covered under such Social Security Schemes than it easily covers’s more
than 50% population under the Social Security net.

But this claim was rejected by Washington as these Indian officials were told that most of the
Schemes cited by the team could not be considered as social Security as these were voluntary
and not mandatory.

One of the factor with implications for India-US trade ties was GSP (Generalized System of
Preferences) Program, which expired in July 2013

Under GSP →The US GSP Program provides non-reciprocal, duty free tariff treatment to
certain products imported form designated beneficiary developing countries (BDCs).Infact
USA, European union and other developed countries have implemented Similar programs Since
1970’s.

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But US Govt. extended the GSP for Indian exporter’s on 4 th Aug 2015, thus India’s 3500
Products got duty free entry into USA. This move by US Govt. will benefit Indian exporters to
export range of products from engineering to chemicals to their biggest export destination that is
US. The US Govt. has extended GSP for India till 2017 which had expired in July 2013.

Canada – India’s bilateral trade with Canada is at Present USD 5.2 bn. There is significant
potential for this bilateral trade to grow. Bilateral negotiations are underway for an FTA.

Mexico – It is a major market for India, the bilateral trade is USD 5.9 bn and it has Potential to
grow significantly.

The European Union

The E.U as a regional block is India’s largest trading partner. India’s total merchandise trade
with the E.U. has increased fivefold from USD 21 bn in 2000 to USD 101 bn in 2014. The E.U.
is a highly discerning market .It presents several challenges in the area of Sanitary and Phyto
sanitary Standards, technical Standards, Complex System of quotas and tarrifs. Moreover the
EU’s practice of constantly evolving its sanitary and phyto sanitary Standards and Procedures is
a major challenge and raises the bar for exports from developing countries.

While India’s Merchandise exports in some sectors are very well integrated with the E.U.
market, there is significant Potential for growth in many other sectors. India has been the
beneficiary of the GSP is some sectors. However, some of these sectors have now been
excluded from the E.U GSP list thus adversely impacting India’s market access for these
Products.

An Indian – EU broad based trade and investment agreement (BTIA) has been under
negotiation for several years and the two sides have reached an understanding on many issues.

Non – EU Countries

1. EFTA → European free trade association, India is negotiating trade and economic
partnership agreement (TEPA) with EFTA (Comprising→ Iceland, Norway, Switzerland,
Liechtenstein)

Australia and New Zealand

Australia

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There is Considerable Scope to both widen and deepen India’s economic relations with
Australia. India and Australia have a strong and mutually beneficial partnership in the energy
and minerals sector. Australia is an imp source of 6 crucial inputs namely irons ore, coking coal,
copper, gold, Uranium and LNG. It is noteworthy that all of Australia’s Primary exports are
received in India at a zero tariff or very low tariff.

There is Significant potential for Australia to scale up investment in India, in areas including
cold chains, mega food parks, and biotech Projects, marine sector, infrastructure, clean and
renewable energy apart from mining and energy related projects.

India and Australia are negotiating a comprehensive economic cooperation agreement (CECA)
covering trade in goods, Services, investment and related issues.

N.Z

India and N.Z are also pursuing bilateral negotiations for a CEPA. N.Z is a globally recognized
source of dairy and dairy products. It is also an important source of some fruits, lamb meat and
wool.

South Asia

India’s trade relations with its immediate neighbor are a special focus area for the Govt.

India’s total trade with SAARC Countries increased from USD 5.63 bn in 2004-05 to nearly
USD 20 bn in 2013-14. In fact during the 5 year period of 2009-10 to 2013-14, export grew at a
CAGR of 20% while imports grew at a CAGR of 10.5%.

Bangladesh is India’s largest trading Partner in the SAARC followed by Srilanka, Nepal and
Pakistan.

India provides zero duty market access to all least developed countries (LDC’S) of SAARC, for
all tariff lines, except 25 lines of liquor and tobacco. This measure is helping them to reduce
their trade deficits with India.

India also provides significant trade access to Srilanka under a separate bilateral India –Srilanka
Free trade agreement.

Issues

→India-Srilanka trade is mostly conducted under bilateral FTA. The two countries completed
negotiation for a CEPA a few years ago, aimed at Promoting Services and investment on both
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sides, but this agreement could not be made effective due to certain reservation on the part of
Srilanka.

The operationalization of SAFTA with respect to trade with Pakistan has been constrained by
Pakistan’s unique approach to trade with India under the SAFTA agreement. Not only do they
maintain a legitimate sensitive list under SAFTA but they also have a negative list of more than
thousand products which cannot be exported from India to Pakistan.

Although the two countries had agreed to a road map for normalisation of relations in 2012 but
this road map has not been acted upon due to continued reservations expressed by Pakistan. As
a result the Consumer’s in Pakistan are not only deprived of affordable, good quality Indian
Products but they are also made to pay more for some of Indian Products which reach there
through circumvention of route.

Iran

Indias exports to Iran have increased two fold in the last couple of years. This has been
facilitated by the Rupee-Riyal Payment mechanism and Supported by the Complementarities
between the two economies. Still the Potential for bilateral trade, has not even been scratched on
the Surface. Given the significant complementarities between the two economies, Project
exports to Iran hold out lot of promise and need to be adequately supported. Keeping in view
the long term potential of project exports to Iran especially in the railways Sector, an umbrella
financing agreement for rupee credit has been signed between EXIM bank of India and Iranian
banks.

The Rupee-Riyal mechanism has stabilized and is now showing results. We will continue to
strengthen this mechanism for long term results.

South East Asia

In pursuance of the ‘Look east Policy’ which has been a major pillar of the country’s foreign
policy since the early 1990’s, India has developed multifaceted relationship with ASEAN
countries both bilaterally and multilaterally.

ASEAN - Association of S.E. Asian nations – It comprise 10 countries – Myanmar, Thailand,

Laos, Cambodia, Vietnam Malaysia, Indonesia, Brunei, Philippines, Singapore.

Taking this to the logical next phase, the ‘Act East’ Policy of the government of India
endeavor’s to cultivate wide ranging economic and strategic relations in south east Asia.

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Indias trade with ASEAN was USD 75 bn in 2013-14 and accounts for about 10% of India’s
total trade. ASEAN as a bloc has become one of India’s largest trading Partners in recent years.
In fact Singapore, Indonesia, Malaysia and Thailand form ASEAN are the four major trading
partners of India that account for more than 80% of India’s trade with ASEAN.

The ASEAN – India trade in goods agreement, entered into force in Jan 2010 and the ASEAN –
India agreement on trade in service and investment become of operational from July 2015. It
provides business certainty to service Providers form both India and ASEAN

Project exports – It involves activities like engineering, construction, design, equipment,

building material, consultancy, technical knowhow, technology transfer, with all other such
related services as are needed by the existing or new projects/Plants involving international
competitive bidding.

Project exports occupy an imp place in India’s export portfolio. The contracts secured in recent
years have been quiet diverse in nature, indicating the growing versatility and tech capability of
Indian Project exporters countries and is expected to strengthen business and commercial
relations between them. It will also open up opportunities of movement of both manpower and
investments between India and ASEAN.

Apart from this India – Singapore CECA become operational from 2005 and CECA was signed
with Malaysia in 2011. A comprehensive FTA is being negotiated with Thailand.

Future Focus

Enhancing bilateral and regional trade relations with this rapidly growing region will continue
to be a focus area. Trade integration with the CLMV (Cambodia, Laos, Myanmar, Vietnam)
countries is an imp part of India’s future regional trade Strategy. These are among the fastest
growing economies in the ASEAN region, with rising Consumption levels, a young work force,
and rich natural resources offering India Significant opportunities for trade in goods and
services, investment in project exports. Three of the CLMV countries benefit from India’s zero
tariff regime for LDCs. However, so far the scope of engagement by Indian firms with CLMV
countries remains limited.

The CLMV region also offers opportunities for Indian investment in manufacturing zones with
a view to benefitting from their institutional trade architecture and lower factor costs. It was
announced in budget 2015-2016 that in order to catalyze investment from Indian Private sector
in this region, a project development company will set up manufacturing hubs in CLMV
countries.

Connecting India’s North-East region with ASEAN :A Trilateral Highway

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Connecting with ASEAN is one of the strategic priorities of India. Four North Eastern states of
India share borders with Myanmar. We have recently started a shipping service to Myanmar for
boosting sea connectivity.

The single biggest effort under the ASEAN – India Connectivity is the India – Myanmar –
Thailand trilateral highway, which also constitutes part of the proposed Asian highway network
AH-1. It starts from Moreh (Manipur) in India and ends at Maesot in Thailand, passing through
Mandalay and Yangon in Myanmar.

On Completion, the Project will provide Complete land Connectivity between India and the
ASEAN region through Myanmar and Thailand. The relevant governments are also considering
extending the highway further to Cambodia, Laos and Vietnam. This connectivity will augment
trade by reducing travel distance and time thus enabling the economies of ASEAN and India to
integrate further and collectively emerge as a globally competitive economic region.

North East Asia

This region accounts for over 16% of India’s total trade. North East Asia includes China, Japan,

Hong Kong, Taiwan, the Republic of Korea (S. Korea), the democratic people’s republic of
Korea (N. Korea), Macao and Mongolia. India’s trade with this region stood at USD 125 bn in
2013-14. Trade with china was USD 66 bn, Hong Kong USD 20 bn, S. Korea USD 16.6 bn,
Japan USD 16.3 bn. These countries Constitute the major chunk of India’s trade volumes with
this region.

India has Comprehensive economic Partnership agreements with S. Korea and Japan. Three
countries of this region, namely china, S. Korea and Japan are participants in the RCEP
negotiations. A characteristic Common to India’s trade relations with these three countries is a
high trade deficit. China alone accounts for over a quarter of our trade deficit (USD 36 bn 2013-
14). Market access and non-tariff barriers block India’s exports of Pharmaceuticals, IT & ITES,
agro commodities to china. In fact India’s IT services are unable to make a breakthrough in
Chinas highly controlled and at times opaque state owned enterprises business. If the current
situation persists then by 2016-17, Merchandise imports from china will exceed USD 80bn
while India’s exports will be around USD 20bn on unsustainable trade deficit of USD 60 bn.

As far as India’s economic relations with S. Korea and Japan are Concerned, analysis indicates
that the projected gains for India from the CEPA’s with these two countries have not
materialized to the extent expected.

Future focus

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Engagement with china requires a comprehensive approach on trade, investment and economic
cooperation issues. With regard to china India will:-

1) Continue to pursue market access issues and removal of non-tariff barriers to augment
exports of Pharma and agro commodities.

2) India would seek to open china’s opaque state owned enterprises services sector for Indian IT
services.

3) India would seek Chinese investment in boosting India’s Manufacturing capacities –

industrial parks, SEZs and National Investment and Manufacturing zones (NIMZs) etc. An
MOU for industrial parks has already been signed with china.

4) India will seek to operationalize the five year development program for economic and trade
cooperation that lay out a roadmap for comprehensively deepening and balancing bilateral
economic engagement.

In case of Japan, the Japanese market has not seen growth in the product areas of India’s
interest, Indian business entities are facing problems in market access. These problems can be
briefly said to be arising out of language constraints faced by Indian companies in Japan, highly
demanding product and service standards and a relative lack of intensive effort on the part of
Indian business.

India’s trade and investment relationship with Japan is unique in nature. Japan is India’s
largest investment partner and several ongoing initiatives in this direction are likely to increase
Japanese investment in India.

So the access of India’s export into Japan will require language proficiency, negotiating a
simplified frame work for market access and continuous trade promotion efforts on the part of
businesses and the govt.

In case of S. Korea, it has taken significant advantage of the bilateral regional trade agreement
but India has not been able to utilize the bilateral agreement to the extent required.

Africa

There is enormous untapped potential for enhancing India’s economic relations with the African
Continent, involving not just trade and investment but also capacity development, technical
assistance and provision of services like health care and education.

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In fact Sector like Agro processing, manufacturing, mining, textiles, infrastructure development
and construction can offer huge potential to Indian companies.

More over despite uncertain global economic recovery, Africa’s macro-economic prospects
remain favorable. According to Africa economic outlook 2014, Africa registered growth rate of
4% in 2013, while global economy grew at 3%. The outlook projects that for 2015, the
continent would return to 5-6% growth.

India – Africa trade and investment relationship has been increasingly vibrant in recent years.
The share of Africa in India’s total exports was 9.7% in 2013-14. The govt. lays great emphasis
on institution building in Africa in order to promote the sustainability of the relationship. India
has already stepped up its assistance in Africa and intends to further increase aid-for-trade
assistance in the coming years. In fact the private sector both in Africa and in India see India’s
development assistance as having a comparative advantage in many service sectors, including
ICT, education, Vocational Skills development, health and financial services. Apart from this
facilitating investment by private Indian entrepreneurs, especially in agriculture, in Africa, is
another means to build productive capacity and generate employment there while bringing
about greater integration b/t the major African economies and India. Greater cooperation in
agriculture and agro-processing would also contribute to food security in both Africa and India.

In fact 21 LDC from Africa have signed (on to) India’s duty free tariff preference (DFTP)
scheme for LDCs. This can make a Significant Contribution in boosting exports from these
countries to India.

In the WTO, India has been working closely with the African Countries on development issues,
through platforms such as “friends of development group” and the G-33 coalition of developing
countries.

Future focus

India is engaging actively with countries and regional groupings in Africa, although presently,
India does not have any trade agreements with countries in the region.

1) Negotiations need to be pursued to finalize a PTA with the South African customs union
(SACU).
2) In this emerging market of the future with high infrastructure needs, there is a strong case for
promoting India’s Project exports,also there is considerable potential for India to provide
many skill based services in Africa including health care, education, R & D, consultancy
services etc. India can export these services in different modes i.e. India can provide distance
education for students abroad and establish off-shore campuses of Indian universities.

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The west Asia & North Africa region (WANA)

India’s total trade with the 18 countries of WANA region has increased at a rapid pace and
stood at USD 191 bn during 2013-14. (about 25% of India’s total trade with the world) India’s
exports to WANA countries in 2013-14 stood at USD 62bn (19.6% or India’s total exports) and
imports from WANA region stood at USD 129bn accounting for 29% of India’s total imports.

WANA region comprises of 6 west Asian countries, 6 North African countries and 6 gulf
cooperation council countries.

1. 6 GCC countries – Oman, UAE, Qatar, Bahrain, Kuwait, Saudi Arabia.

2. 6 west Asian countries – Israel, Jordan, Lebanon, Syria, lraq, Yemen.
3. 6 North African countries – Sudan, Egypt, Libya, Tunisia, Algeria, Morocco.

The UAE ranked first among the destinations for India’s exports in the WANA region (and
second overall after USA in 2013-14)

The other major destinations in the WANA region include Saudi Arabia, Israel, Oman and
Egypt.

The UAE is a major entry point for Indian products transiting to other markets in the region.
The growth has been impressive clearly indicating the demand for Indian products in this
region. This is a dynamically growing region with high absorptive capacity for exports. Our
ability to diversify exports to the region has been a significant factor in keeping India’s foreign
trade growing even during the most severe phase of the global economic downturn.

India is negotiating two FTAs in the region, with Israel and with six countries comprising GCC.

LATIN American and Caribbean region (LAC)

India’s relations with LAC region are under pinned by strong trade and investment links which
have strengthened and deepened in a short span of time. This region, comprising 33 sovereign
countries is rich in natural resources and has vast tracts of fertile land. India’s total Merchandise
trade with the region stood at USD 38 bn in 2013-14 accounting for 5% of India’s global trade.
The rising importance of the LAC region in India’s global trade is evidenced by the increase in
the region’s share in India’s global exports from 1.7% (2001-02) to 4.5% 2012-13 and in
imports from 1.8% (2001-02) to 5.6% in 2012-13

Brazil is India’s major trade partner in the region. Brazil and India are both members of BRICS,
IBSA and G-20. India’s other important trading partners in the region are Venezuela, Argentina,
Chile, Columbia and Peru.

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India has a PTA with MERCOSUR (a trading block of Argentine, Uruguay, Paraguay, Brazil
and Venezuela).

The fact that MERCOSUR has some of the most significant markets of Latin America, makes
this region important. So deepening and widening of India – MERCOSUR PTA in an important
part of the agenda for this region.

The India – Chile PTA is in the final stages of expansion. Chile is a promising market and
expansion of this agreement will help in broadening India’s export basket.

Peru – Colombia form part of a regional economic group known as the “Pacific Alliance” which
also includes Mexico and Chile. India has been officially accepted as an ‘observer member’ of
the Pacific alliance in 2014.

Form the energy security point of view the region is already ranked third in terms of Supply of
crude oil to India. With the discovery of new oil fields in Brazil, Venezuela, Columbia and
Shale gas in Argentina, India’s public and Private sector companies are looking for new
investment opportunities in this part of the world, from the food security point of view, the
region others excellent opportunities for large – scale farming and most of the produce could be
re-exported to India. Further, the LAC region can be an excellent source of minerals for India’s
growing industry.

The CIS Region

Trade between India and the CIS region has increased by about 45% in the last five years.

CIS comprises of Tajikistan, Kyrgyzstan, Turkmenistan, Uzbekistan, Kazakhstan, Georgia,

Armenia, Azerbaijan, Ukraine, Moldova, and Belarus.

Russia and Ukraine are India’s major trading partners in this region, accounting for
approximately 81% of India’s total bilateral trade with the CIS region.

The CIS region offers enormous market Potential given its strong GDP, high per capita incomes
and economic growth rates, the size of the region’s populations. And the abundance of natural
resources such as petroleum, coal, natural gas, Uranium, potash, fertilizers, metals and minerals.
The CIS region has a strong complementarity with India’s Manufacturing sector.

Invigorating trade and investment ties with Russia is a focus area of the government. India’s
trade with Russia was USD 6bn in 2013-14, which was surprisingly small.

There is huge scope to increase cooperation in areas such as hydrocarbon’s, nuclear energy,
pharmaceuticals, fertilizer’s, diamonds, textiles, IT services etc.
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Some of the impediments faced by exporters in trading with Russia include underdeveloped
trade infrastructure, complex and time-consuming custom procedures, the requirement for the
exporter to bear the cost of obtaining import licenses, product specific approvals and even for
pre shipment inspections, frequent changes in laws and regulations. In addition, Indian
exporters face various non-tariff barriers in their trade with Russia such as stringent Sanitary
and Phyto sanitary standards.

The joint statement issued on the occasion of the visit of the president of the Russian federation
to India in Dec 2014 recognizes the enormous untapped potential for bilateral trade between the
two countries and commits the two govts. to identifying measures to facilitate the full
realization of this potential. It also sets a target or USD 30bn for bilateral trade in goods and
services to be achieved by 2025.

Diamond trading in an important constituent of trade relations with Russia. During the Summit
in Dec 2014, ALROSA, the targets diamond Supplying Company of Russia signed agreements
of direct sale of rough diamonds with twelve Indian companies. Under these agreements, over
the next three years, USD 2.1 bn worth of rough diamonds will be supplied to India at the rate
of USD 700 Mn per years.

Future Initiatives

India’s exports to the CIS countries have traditionally been routed through NhavaSheva port in
Mumbai to Dubai and then to St Petersburg. On an average, a shipment from Mumbai to
Moscow on this route takes about 35 days.

Major exports from India to the CIS are perishables such or onion, potatoes, garlic etc. which
can even be transported in dry containers if the transit time is reduced and packing technology is
improved. The international north south transport Corridor (INSTC) was envisaged with this in
view. This corridor runs from NhavaSheva in Mumbai to Bander Abbas (Iran) and then to
Amirabad (Iran) or on to Astra khan in Russia for onward shipment to Moscow. It was
calculated that on the INSTC a shipment would take an average of 23 days. This route once
popularized, will unlock the true potential of international trade between India and the CIS,
particularly India, and Russia.

In order to enhance trade relations with the CIS region, it has been decided to set up a Joint
study group for an agreement between India and the custom union of Belarus, Kazakhstan, and
the Russian federation for trade is goods and Services.

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The CIS region is a major supplier of raw materials. India’s engagement with most of the
countries except Russia has been much below its potential. It is expected that once INSTC
becomes popular, integration would be initiated.

Impact and utilisation of FTA’s

FTAs and similar trading agreements are rapidly becoming the predominant way in which
global trade is conducted. An impact analysis of FTAs has therefore been instituted in order to
assess whether the concessions under these agreements are being gainfully utilized.

The broad inferences from the impact analysis are:-

1. India’s FTA partner countries have not significantly displaced other markets as Indias largest
trading partner indicating that trade diversion has been limited.

2. Under each or these FTAs, there has been significant increase in overall trade in both exports
and imports, although imports have increased at a faster pace. This was expected given the
tariff asymmetry between India and its FTA partner’s,that is India having much higher
applied tariff compared to all its FTA concession given by India being much deeper.

3. An increase in the share of intermediate goods and capital goods in India’s export basket in
some of these FTA’s could be indicative of a rise in value addition of India’s exports.

4. More over imports of intermediate goods into India through these FTA’s may have facilitated
increase in manufacturing activity in India by making these available at competitive prices
and facilitated value addition. The statistics clearly show that we have not been able to derive
full advantage out of our later trade agreements such as with Korea, Japan and ASEAN.

Some issues being addressed

1. Rules of origin (ROO’s)

Rules of origin are used to determine the country of origin of products and accordingly their
eligibility for preferential treatment. They set out specific and detailed conditions on the level of
processing that an imported item from a non-FTA partner country must undergo in the FTA
partner country before being eligible to be called an originating product of a FTA partner
country. ROO’s are an effective means of both preventing trade diversion and addressing the
sensitivities of the domestic industry.

Now in this regard India has been negotiating for the most conservative rules of origin in its
FTA’s. However at the same time, conservative rules of origin of India’s trading partners have

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affected our ability to take advantage of export opportunities under India’s FTA’s. Now this
approach is being reviewed. It is necessary to simplify and ease rules of origin criteria to locate
India effectively in global value chains.

2. Inversion in duty Structure

Another criticism of FTA’s is that they have led to some cases of inversion in duty structures
i.e. finished products can be imported into the country at zero or reduced import duties whereas
duties on raw materials or intermediate goods are higher, thereby making raw materials and
intermediates costlier than finished products. So the inverted duty structure is making Indian
manufactured goods uncompetitive against finished goods imports in the country. Since finished
goods are taxed at lower rates than raw material or intermediate products, this discourages
domestic value addition. So domestic manufactures have to pay a higher price for raw material
in terms of duty, while the finished products lands at lower duty and costs less.
So some instances of inversion due to FTA’s were rectified in Budget 2014-15 and others have
been proposed for correction in Budget 2015-16.

3. FTA out reach

The impact analysis revealed a relative lack of awareness on the part of industry and business
about the benefits which can be drawn from an FTA. To fill this gap, an intensive FTA outreach
programme has been launched covering all tier1 and tier 2 cities.
A web portal on FTAs has been developed which can be accessed at Indian trade portal. In this
portal provides both MFN and preferential tariff rates, rules of origin, sanitary and phyto
sanitary (SPS) Standards and technical barriers to trade (TBT) under various FTA’s signed by
India.

India’s initiatives for LDCs

In keeping with its commitments in the WTO, India became the first developing country to
extend duty free quota free access to least developed countries (LDCs). India announced the
duty free tariff preference (DFTP) scheme for LDCs in 2008, became effective from 2014. At
present 31 LDCs have become beneficiaries of the scheme.

Section III: Product Strategy

In order to raise India’s share in world exports from 2% to 3.5%, it is essential to focus efforts
on those sectors where India already has strength as well as those which have untapped
potential. A strategy paper prepared by the department of commerce in 2010 identified such
sectors, (based on various considerations) which continue to be relevant today.

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Promoting the growth of exports from high value creating and employment generating sectors
with a strong domestic manufacturing base would be the lynchpin of India’s overall export
growth strategy.

1. Engineering exports
In order to increase the share of manufacturing in the country’s G.D.P and absorb the increased
numbers being added to the labor force, the engineering industry is critical. Within engineering,
we need to move up the value chain.

Engineering exports from India stood at 62 USD bn in 2013-14. The share of engineering
exports in India’s total exports has remained at around 20% over the last decade. But India’s
share in global engineering trade is around 1.2% whereas Chinas share is around 12%. In fact
India does not hold a dominant position in any of the 34 product categories in the engineering
sector.

India primarily exports low and medium technology engineering goods. The share of high tech
goods is less than 6% of the overall engineering export basket. This is because almost all
exporters from India rely on the labour cost arbitrage and this has resulted in limited exports in
the high end segment.

A study on ‘Make in India’ has identified India’s automobile ancillary industry as one in which
India has a significant opportunity to move up the value chain. India is fast emerging as a
manufacturing and exporting hub for small sized cars. The auto component sector is also
substantially integrated with global supply chains. Both these product areas offer significant
opportunity for growth in exports.

Issues to be addressed
1. The engineering export promotion council of India (EEPC) report identifies certain
impediments such as high energy costs, high interest rates, un refunded tax benefit, lack of
adequate physical infrastructure and lack of best practices. These increase the cost of
manufacturing, rendering Indian manufacturing uncompetitive in international markets.
2. The report suggests that rather than subsidies and incentives, the govt. need to focus more on
measures to remove Structural deficiencies through institutional reforms that would result in
more durable benefits. Moreover emphasis should be laid on increased R&D, innovation,
attracting FDI, skilled workforce to boost engineering manufacturing and exports.

Electronics’

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There in huge domestic demand for electronics goods, which is largely met by imports,
supplemented by some locally manufactured products. Companies are not actively looking for
export opportunities because of large and rising domestic demand fuelled by the growing
middle class.

– Indian electronic hardware manufactures also experiences a higher level of taxation, higher
cost of power, finance and poorer infrastructure compared to their competitors from china,
Taiwan, Korea and Japan. The cost of production of most electronic goods in India is at least
8% to 10% percent higher than in other countries of south East Asia.

– Now after information technology agreement (ITAI) came into effect, with zero or very low
duty rates already prevalent in this sector, reforms such as simplification of procedures can have
a significant impact in raising exports. Besides some of the disabilities related to infrastructure,
labor productivity etc. would also need to be addressed in the medium to long term.

Pharmaceuticals
India’s pharmaceutical industry has established a global reputation for quality and affordability.
Pharma exports from India account for 10% of the global market by volume (ranked 3 rd) and
1.4% by value (ranked 10th globally). At present India’s pharma exports are about USD 10 bn.
The industry is expected to expand at a compound annual growth rate (CAGK) of 14.5% over
2009-2020 to USD 55 bn. Our pharma exports have been dominated by generics. With many
drugs having gone off-patent in recent years and a shift in developed market drug spends
towards generics, the prospects for this segment are very good. Developed economies are facing
fiscal problems and where ever public health is a major charge on the national exchequer,
solutions will have to be found, an integral part of which will be increasing reliance on high
quality generics instead of patented or branded drugs.

Issues to be addressed
Access to the Japanese market remains constrained by NTB’s (Non tariff barriers) even after
implementing a comprehensive free trade deal with Japan, Indian pharma Sector faces
procedural issues like tedious registration process in Japan. Japan being the 2 nd largest pharma
market in the world and India has less than 1% share of total Japanese pharma market.
NTB’s are any measures other than high import duty that makes import of any product difficult.
NTB’s refers to restrictions, conditions or specific market requirements that make import of
product difficult. NTB’s also include unjustified or improper application of non-tariff measures
i.e. SPS measures or other technical Barriers to trade (TBT)

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NTB’s arise from different measures taken by govt. in the form of laws, regulations, policies,
Conditions, restrictions or specific requirement that protects the domestic industries from
foreign competition. NTB may include.
– Product Specific Quotas
– Complex / discriminatory rules of origin
– Quality Condition imposed by importing country
– Complex regulatory environments
– Unjustified SPS measures.

In china Indian pharma companies face regulatory hurdles in the form of prolonged and
unpredictable time lines for registering Indian drugs, which has adversely impacted expansion
plans of Indian pharma companies. On an average registration in china takes about 3 to 4 years,
compared to less than 10 months in India. The Chinese drug regulator requires that a company
planning to register its products in china to not only reveal the detailed process of manufacture
but also conduct clinical trials within china, which has deterred a number of Indian pharma
players.
Apart from these the pharma sector is beset with several challenges. Most of these challenges
arise out of the enviable reputation of India as a reliable supplier of generic medicines.

These challenges are:

1) Campaigns to malign generic products as being in violation of India are IPR Commitments
and second are India’s propensity for compulsory license.

(Section 3(d) of the patents (amend) act 2005 established stringent norms w.r.t obtaining
pharma patents in India)

Section 3(d) sets the invention threshold higher than TRIPS, which mandates that patentable
inventions must be (1) New (2) involve an inventive step (3) must be capable of industrial
application. But section 3(d) of patent (Amend) out 2005 adds a fourth condition of (4)
enhanced efficacy in addition to three conditions prescribed in TRIPS, for patentability and
Indian S.C has upheld this. So India has been exhorted to bring its patentability ‘on par with
international norms’. Now international norms refer to patentability standards styled after the
US model. In fact section 3(d) is compatible with TRIPS that creates a broad frame work of
minimum standards. In fact Article 27 of TRIPS delineate the broad conditions under which
nations may exclude inventions from patentability that is nations ability to exclude the grant of
patents to inventions, if it is necessary to protect human, animal or plant life or health”

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So it is clear that TRIPS agreement afford its member nations a substantial degree of flexibility
to formulate their patentability standards to best suit national conditions, provided they are
enforced without discrimination as to the place of inventions”

2) Alleged lack of compliance of generic medicines coming out of India, with quality standards.

3) India not being party to the pharmaceutical inspection convention and pharmaceutical
inspection cooperation scheme and Indian pharmacopeia (drug making) being not recognized
yet in major markets.

4) India’s pricing policies that force Indian exporters to price their products with extremely low
margins.

All these challenges have been met frontally by the government. In the area of IPR’s the
challenges have been addressed in international forums by filing disputes and challenging any
wrongful treatment meted out to Indian medicines.

Quality related compliance issues have been addressed by promoting self-discipline and dealing
with ill-intentioned campaigns against Indian medicines.

In fact India is the first country to adopt a “trace and track” policy for all medicinal products
exported by it globally form 1 April 2015. Now this trace and track surveillance system would
offer the consumer an opportunity to track the movement of products up to their manufactures
& there by establishing their originality. This will be a deterrent against mischief likely to be
done by exporters from other countries as well as un scrupulous (un principled) exporters within
the country. This trace and track system, is in order to reassert India’s claim as a credible
generic pharma supplier and at the same time to mandate an internal discipline upon the
exporting community.

As regards pricing, while the challenge is daunting, it is also recognized that this is the factor
that makes Indian medicines affordable. It is important for India to work towards membership
of pharma inspection convention.

Light manufacturing: Leather products and textiles

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Another imp category that needs to grow is that of exports based on light manufacturing sectors
i.e. leather products and textiles. These are imp become they generate employment, have high
value addition and have historically been areas of strength in our export market.

Leather – The leather sector is a major employment creating sector. India already has a
significant name in the footwear sector (Vellore). Additional focus is required for leather
garment manufacturing and export.

Textile: - In textile, we need to realize more effectively the scope for growth made possible
since the dismantling of the quota regime. (MFA – imposed quotas on the amount that
developing countries could export to developed countries)

With over 45mn people employed directly, the apparel industry is one of the largest sources of
employment in India. So the labour intensity of the apparel industry is one of the highest. As a
net exporter of cotton yarn, India has advantage over competitors like china and Bangladesh and
can benefit from moving up the value chain.

The textiles and garment sector has traditionally been a leader of India’s exports in global
markets particularly to the traditional markets of US and E.U.

While it continues to be an imp sector, it has come up against several challenges. So it needs to
reorient itself in view of increasing challenges and emerging opportunities. Several developing
countries are becoming major competitors of India in the garment sector.

The FTP recognizes the employment creation potential as well as its importance as a value
creator. (Textile valley of India lies along Coimbatore, Tirupur, Erode).

Gems and Jewellery Sector

Gems and Jewelry is another imp labour intensive export sector that must continue to be
encouraged. This sector has relatively low value addition, but contributes a high volume of
exports and employment and is, therefore important.

The Gems and jewelry manufacturing sector largely consists of small and medium enterprises
(SME) units, employing skilled and semi-skilled labour, almost entirely in the unorganized
sector. This sector is not only a major source of revenue generation but also a source of
employment, employing a skilled workforce of 3.5mn.

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Gems and jewelry exports have increased from USD 29bn in 2009-10 to USD 41.7bn in 2013-
14. Its share in India’s total merchandise exports was 13.3% in 2013-14. The sector has been
included under the ‘make in India’ initiative.
The Gems and jewelry sector is an important intensive sector with export orientation. It also
requires high working capital. Recent budget announcements are expected to help in this
direction. The decision to create a Special Notified area will help bring diamond trading into
India.

Natural resource based Exports

Another area of focus is that of natural resource based exports. This category includes
agriculture, Plantation crops & marine products. There is tremendous potential for exports from
this sector. The govt. is focusing on this sector with mega food processing parks and cold chain
projects to address infrastructure issues.

Agricultural Products
Exports of agriculture and allied products (including plantation and marine products) have more
than doubled over a period of 5yrs. Exports have grown from USD 17.8 bn in 2008-09 to USD
42.5 bn in 2013-14 with a CAGR 19%. During 2013-14, agri-products exports constituted
13.6% of total export.

Important considerations while framing a trade policy for agricultural products are: the stocks
available in the country, food security concerns, the domestic price situation, ensuring
remunerative prices for growers and price competitiveness in the international market.

The salient teaturese of a plan of action to promote exports of agricultural products are:
1. A stable policy regime: maintaining a long term, stable, consistent and by default ‘open’
export policy.

2. SPS/TBT Issues: effective handling of such issues, this includes

(A) Upgrading quality to avoid disruption in trade on account of SPS issues
(B) Effectively challenging unfair practices of trading partners if they resort to unreasonable
SPS measures.

While India is now a significant supplier of agro products to the world, these remain largely
confined to commodities like cereals, ground nut, castor oil, oil meals, guar gum etc of which
surpluses are limited, so supply side issues need to be addressed.

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More over there should be a shift in focus towards processed and value added exports.

Potato 2rs /kg after value addition Uncle chipps – 100rs/kg

– In addition value addition will facilitate the growth of Agro based industs
– It will lead to new avenues of employment

We need a range of facilities and infrastructure on the post-harvest front (30% grains wasted
due to lack of adequate storage capacity) i.e.
1) Cold chain facilities and transport logistics from the farm to the ports.
2) Silos with temperature control mechanisms to preserve the quality of produce.

Organic export

Presently, India’s export of organic products is miniscule. But recognizing the value of organic
agriculture for exports particularly in markets like EU, US and Japan, it is necessary to promote
organic agricultural exports. To derive greater market realization this sector requires special
attention which include major investment in technical capacities and outreach to the states
particularly the north eastern states where the potential for organic agriculture is very
encouraging. Sikkim has chosen to be an “organic state”. In order for Sikkim to draw advantage
from this foreign trade policy, a package will be made in consultation with the govt. of Sikkim
to facilitate organic export from Sikkim. Similar such initiatives from amongst other north
eastern states will be encouraged.

So export of processed agricultural products and organic products will be key drivers.

Plantation products

The plantation sector directly supports livelihood of about 18 lakh small growers and more than
33 lakh workers. Most of them are resource poor, low income groups, inhabiting tribal and
geographically challenging terrain, in a sustainable and eco-friendly manner.

Plantation today face a number of challenges including stagnation in productivity due to the
ageing plant material, impact of climate change including pests, Scarcity of labour, volatile
international prices and stringent food safety regulations in importing markets.

To ensure that plantation remain commercially viable and attractive investment, following
issues assume importance

1. Productivity enhancement is a major goal for all plantation products, particularly tea and
coffee. Alongside productivity, expansion of the production area is another important challenge.

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This is particularly relevant for rubber and spices. Through intensive efforts rubber plantations
have expanded phenomenally in Tripura but there is still vast potential to expand rubber
plantations in Assam and other states of the north east. Programmes for expansion of rubber will
be initiated in Chhattisgarh, Jharkhand and parts of Orissa & Maharashtra.

– Coffee plantations are adversely affected by pests particularly the stem borer. Effective
means of neutralizing the impact of this pest will be found through scientific and technological
methods and collaborative research.

– India occupies an important position in exports of all the plantation crops. It is the leader in
Spices and plays an important role in coffee and tea exports. While tea exports have remained
stagnant, coffee exports have grown steadily but need to grow even further.

Exports by medium, small and micro enterprises

Micro, small and medium enterprises (MSMEs) contribute about 45% of the manufacturing
output, over 40% of the total exports of the country and around 8% of the country’s GDP. They
contribute significantly to employment generation and development of rural areas.

The MSME sector is one of the key drivers of India’s transition from an agrarian economy to an
industrialized one, through its contribution to improving entrepreneurial skills and economic
empowerment. MSMEs feed local consumer market and international value chains. This sector
currently produces more than 6000 quality products, ranging from handloom sarees to auto and
machine pacts. The potential of the sector, the problems it faces and its requirements have been
kept in view in framing the FTP.

Section IV: The service sector

The service sector has emerged as a prominent sector, and it contributes around 58% to the GDP
of the country and 28% to employment. Its contribution to total trade is 25%, around 35% to
exports and 20% to imports.

Sector accounts for more than 50% of FDI into the country. The service sector in India has in
general grown at a rate higher than the overall GDP growth rate.

– The increasing surplus from service trade has helped to offset a major part of the
merchandise trade deficit there by, keeping a check on the current account deficit.

– The share of India’s services exports in the world export of services has increased from 0.6%
in 1990 to 1% in 2000 and further to 3.3% in 2013.

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– The share of India’s services exports in world’s service exports has been increasing at a
faster rate than the share of India’s merchandise exports in world exports.

– The service exports witnessed a double digit growth during 2002-03 to 2008-09 with a peak
growth of 61% in 2004-05. But the growth in service exports has declined in the aftermath of
the global financial crises. In 2013-14, the service exports stood at USD 151.5 bn and service
imports stood at USD 78.5 bn resulting in net services exports of USD 73 bn. The declining rate
of growth primarily reflects the impact of the global financial crisis and the consequent
slowdown in the US and the E.U.

– The single most imp contributor to India’s services exports is the IT/ITES sector. While the
share of the IT/ITES sector in India’s service export has been a little less than 50%, but the
share of IT/ITES in India’s net services export is around 90%. About 80% of IT/ITES exports
are targeted towards west (the share of US is above 60% and that of EU is 20%). Hence any
slowdown in the US/EU and the protectionist measures that follow are bound to impact India’s
IT/ITES exports. This suggests the imperative of diversification of markets and products in the
area of information technology enabled services. Japan, china and S. Korea can be potentially
promising market but Indian businesses are hampered by language constraints and the unique
features of these markets. So measures need to be taken for facilitating market access for Indian
businesses in these markets.

We have advantage in various services which are incidental to manufacturing and can bring
transformational efficiency to manufacturing. Now the structure of manufacturing in many
countries including India is becoming more and more sophisticated so there is an increasing
“servicification” of manufacturing. Better services will improve the competitiveness of the
manufacturing sector. For example, efficient and reliable infrastructure services such as
transport, distribution, finance, telecommunication, and professional services are essential for
cost effective production. The service sectors have a critical role to play in the ‘Make in India’
initiative.

Considering the impact of technology on services delivery, the govt. of India has recognized the
over whelming importance of the mobile device in India’s growth and development agenda. The
“digital India” initiative pledges to deliver universal mobile access to all citizens of India by
2018.

– A global exhibition on services will be held annually. This would be an opportunity to show
case India’s strengths in the service sector.

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– Financial assistance for export of services is also being expanded through a new, ambitions,
user friendly ‘served from India scheme’ being launched as part of the FTP.

Section V: Trade Promotion and Infrastructure

– Government is committed to transforming India into a manufacturing and exporting hub.

This is possible only if India’s products are world class and of a standard acceptable in the most
discerning markets.

There is a synergistic relationship between standard and trade. Adherence to standards enhances
the potential of trade because standard signal quality to consumers. At the same time the
concerns about standards acting as non-tariff barriers (NTBs) in global trade are also addressed.

– At the same time a long term branding strategy is required for India to hold its own in this
highly competitive environment, not merely to attract consumers but more importantly to
encourage industry to position its products in highly discerning markets and to ensure that
Brand India becomes synonymous with high quality.

Institutional Mechanism for trade Promotion

It includes various instruments and schemes that are used for trade promotion such as schemes
providing financial assistance for market access and development through buyer-seller meets,
trade fairs, conventions and seminar’s. In addition there are a number of export promotion
councils responsible for the promotion of exports.

MAI Scheme

The market access initiative (MAI) scheme is an umbrella instrument for supporting trade
promotion initiatives. The activities supported under the scheme broadly include the
organisation of exhibitions, buyer seller meets, seminars, conferences, conventions etc.

MDA Scheme

Under market development assistance (MDA) scheme, financial assistance is provided for a
range of export promotion activities implemented by export promotion councils.

Export Promotion Councils (EPCs)

Another important instrument for the promotion and development of the country’s exports are
Export Promotion Councils (EPC’s).

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Each council is responsible for the promotion of a particular group of products, projects and
services. The main role of the EPC’s is to project India’s image abroad as a reliable supplier of
high quality goods and services. The EPSs are tasked with encouraging and monitoring the
observance of international standards by our exporters. They are also required to keep abreast of
the trends and opportunities in international markets for goods and services and assist their
members in taking advantage of such opportunities to expand & diversify exports.

EPCs have acquired a central position in India’s trade promotion efforts.

Project Exports

Project exports are broadly defined as exports of such goods and services where the export
receipts are allowed to be staggered over a period of more than twelve months. This is largely to
reflect that the export transaction is not a one off single transaction but represents certain goods,
construction and service activities, where the payment receipts are staggered in line with the
project execution.

– As per data maintained by the project export promotion council, its member’s project exports
orders have increased form USD 1.7bn in 2012-13 to USD 4.4bn in 2013-14. This increase of
162% is indicative of the strong potential which exists for India to increase its world trade
market share in project exports.

– Since project export contract earning range over one to five years, such export orders also
impart stability to the export earnings of the country. India’s current project export contracts are
estimated at around USD 5bn. It is estimated that project exports from India can be boosted to at
least USD 25 bn per annum within five to seven years. The main markets for India’s project
exports are in Africa, Middle East, SAARC & ASEAN Countries, central Asian republics in
CIS.

Benefits of Project exports

Project exports have numerous benefits. While it helps the recipient countries to bridge their
infrastructure gaps, on the other hand India gets benefitted by export of goods and services. In
fact project exports help in building long term relationship of the country with India. Long term
business relationship develop in supplies of replaceable components and spare parts, annual
maintenance and servicing contracts, up gradation of project technology etc. more over repeat
orders become easier, as the countries gain experience and confidence in Indian project export
entities.

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India’s entry into high value project exports will also impart high brand visibility in the target
countries. Besides the specific brand visibility India’s general branding will also be promoted as
a country which can export hi-tech and high value projects. Such branding facilitates easier
acceptance of other products exported by India to such markets.

– Many Indian companies have developed considerable expertise in executing project export
contracts in diverse areas such as railway sector, Power Sector, roads and bridges, drinking
water supply schemes, irrigation projects, construction of oil and gas pipe lines, construction of
electricity grids, hydro power projects, airport construction etc.
– For boosting project exports, the Department of Commerce has set up the National export
Insurance account.

Main Streaming trade

There is compelling need to ensure that trade is fully assimilated in the Country’s governance
architecture, hence the phrase “Main streaming”.

In fact trade or can say business orientation is practically nonexistent in local bodies, in some
state government and even in many departments of the central government. Even in the
economic ministries / departments of the central govt., there is relatively little emphasis on
exposing various sectors to international competition for improving policies, efficiency and
competitiveness.

Efforts have already been initiated for mainstreaming foreign trade in the central govt.
departments. Many state govt’s. have nominated export commissioners. States are also being
helped in preparing export strategies aligning them with overall national objectives.

Export infrastructure

In fact infrastructural bottlenecks are the most critical constraints to achieving accelerated
export growth. There are two categories of infrastructure requirements:

A. Better multi modal transportation for improved road connectivity to ports, rail heads and
airports, faster throughput at Ports.
B. Supportive infrastructure required for exports include more lab’s for testing, larger trade
facilitation centers, enhanced cold storage facilities for perishable goods.

ASIDE (Assistance to states for developing export infrastructure and allied activities)

While a number of ministries are responsible for creation of infrastructure, the dept. of
commerce has the role of filling in key infrastructure gaps to facilitate exports. This was being

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done through coordinated efforts with states under the ASIDE Scheme. Small infrastructure
projects are selected on the basis of local needs of export sectors, with focus on projects such as
common facility centers for handicrafts, textiles, leather, agro processing facilities like cold
storages, labs for testing and export certification, marketing and packaging support.

These initiatives are designed to help exporter’s especially form the small industry, handicrafts,
agribusiness and commodity sectors to produce high quality finished products with high value
addition primarily for the export market.

The ASIDE scheme has played an important role in bridging some infrastructural gaps.

Special economic zones (SEZ)

– India’s export processing zone scheme, launched in 1965, is the precursor to the present day
SEZ scheme. The SEZ Act was enacted in 2005 and made operational in 2006.
– The objectives of the SEZ scheme, as laid out in section 5 of the SEZ Act are as under.
A. Promotion of exports of goods and services.
B. Promotion of investment from domestic and foreign sources.
C. Creation of employment opportunities.
D. Development of infrastructure facilities.

- Evaluating the performance of SEZs on these parameters, we find that SEZs have performed
well.
- Exports form SEZs have gone up from Rs 22000 cr in 2005-06 to Rs 4.94 lakh crore in 2013-
14.
- Investments in SEZs have gone up from Rs 4035 cr 2006 to Rs 3.80 lakh cr in 2014.
- Direct employment in the SEZs has gone up from 1.34 lakh persons in 2006 to 13.5 lakh in
2014.
- Most importantly, SEZs have enabled the development of world class infrastructure in some
of the SEZ’s.
- However, in 2011, Minimum alternate tax (MAT) and Dividend distribution tax (DDT) were
imposed on the SEZs, which has severely hampered the progress of the SEZ scheme.
- The need for strengthening of the SEZ scheme is felt for the following reason’s–

1. The SEZ scheme provides an ecosystem conducive to exports, where in all clearances,
starting from setting up of the unit, allocation of space, monitoring of exports etc. are
provided at one place.

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2. It provides a mechanism enabling manufacturing units to repeatedly import raw materials and
capital goods for export production and export, without having to separately seek advance
authorization, EPCG authorization etc. each time.

3. The scheme is especially helpful for SME investors as they lack the resources available to
bigger players for obtaining various kinds of approvals, finding space etc.

4. The service sector is an extremely important component of our foreign trade. There are large
inflows of investment into SEZs (Especially for software exports) and this trend is likely to
continue over the next decade.

Section VI Trade ecosystem digitization and e-governance

– For export-Import operation, the costs involved, as well as the complexity of the documents
and the procedures, are a major burden for business. For small and medium sized companies
especially these costs act as a major disincentive to engage in international trade. Since goods
cannot travel faster than the information that controls them, speeding up the information
exchange makes trading more competitive and efficient. All operations related to exports and
imports should be automated and paperless. A firm should be able to submit all information
required by govt. and related agencies through a single window. S.Korea, Singapore and many
other countries have implemented such systems.

– GOI has already launched a very ambitious programme for digitization under its ‘Digital
India’ initiative. Under the national e-governance programme, Subsumed within the Digital
India initiative, the e-trade programme will continue to be a strong focus area with the objective
of ensuring transparency, simplification and faster action.
Now the use of electronic data interchange (EDI) at DGFT has enabled faster processing,
speedy communication and on line availability of application processing status. It provides
online connectivity to the export import community in a 24x7 environment.
The programme has empowered the trade and industry to have a transparent system for
international trade, where in they are in command to have anywhere, anytime access to all the
trade regulatory agencies.
Electronic data interchange is a core driver for facilitating international trade and one of its key
initiative is e-BRC (electronic bank realization certificate) e-BRC system allows electronic
transmission of export related foreign exchange realization information from the respective
banks to the DGFT server so now exporters will not be required to make any request to banks
for issuance of Bank export and realization certificate for settlement and release of export

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benefits. And this scheme will ensure seamless connectivity amongst DGFT, Custom’s, banks
and exporters.

Developments in information & Communication Technology (ICT)

and their impact on economy and society
Information & Communication technologies have made significant progress since 1980’s, when
they first appeared in India. In fact it was the Y2K phenomenon (1999) that propelled Indian IT
companies into a position of global leadership.

The India’s IT sector is growing steadily. The sector has maintained a CAGR of over 30% in
the 10th plan (2002-2007), and has continued to sustain growth rate in the 11 th plan (2007-12)
despite the global economic downturn, which brought the growth trajectory of the industry to
single digits in 2009-10. As a result the aggregate revenue of the industry has crossed US $
100bn mark in the year 2012. The export revenue of IT industry has grown from US$4bn in
1999-2000 to US$69bn in 2011-12. The domestic revenue has increased from US $ 1.9bn in
1999-2000 to US $ 19bn 2011-12.

The US $ 100bn revenue of IT industry contributes 7.5% of India’s GDP. Indian IT industry
accounts for 58% of the “global IT services” out sourcing revenue. Most of the fortune 500
companies are outsourcing some of their work to Indian IT companies & many operate either
directly or indirectly in India.

Some of India’s IT Company’s i.e. TCS & Infosys have reached annual revenue of $ 10bn & $
7bn respectively in the year 2012. There is no doubt that IT industry has emerged as one of the
most dynamic sectors in India’s economic boon and is responsible for the global recognition of
India as a soft power. The growths of IT sector has not only created wealth, Promoted exports,
Generated employment but it has also brought more transparency in govt. working, brought all
the govt. programme & Policies amenable to public (on line) and has reduced red tapism.

Employment

This sector has created jobs for 28 Mn IT professionals and has indirectly employed an
additional 8.9Mn people in diverse fields i.e. real estate, retail, hospitality, transport etc. 30% of
the work force in this sector consists of women and it is the largest employment provider for
women.

Society

Over the post 5 Yrs, India has spent billions of dollars on its e-governance project one of the
largest e-governance projects in the world. The several e-governance initiatives launched by the
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govt. under the national e-governance plan (NeGP) are also expected to provide sustained
growth in domestic demand for IT services apart from improving delivery of services to the
citizens.

Growth of e-governance can be traced to the massive efforts made during the 1980’s by the
national information center (NIC) to connect all the district headquarters in the country through
a VSAT network. But all these efforts were mainly government centric with the primary
objective of exploiting informatics and communication technologies (ICTs) for automating
internal govt. functions. Citizen centricity with focus on improving delivery of services to the
citizens was not the primary goal during this period. It was in late 1980’s that a few initiatives
by the government started making an impact on citizen’s services. The most prominent among
these was the computerization of the passenger reservation system by the Indian Railway.

NICNET– NIC has set a satellite based nationwide computer-communication network called
NICNET connecting national capital, state capitals & dist. H.Q to one another.It is largest
VAST networks of its kind in the world so all types of information can be exchanged.

DISNIC – District information programme of NIC to build digital opportunities for grass root
development. Providing continuous support to development agencies in district, facilitate easy
collection, compilation, dissemination and on line accessibility of information on several sector
of economy at state level, district, taluk, Block, Panchayt, village level.

E-governance during this period (late 80’s) received a major thrust with the launch of NICNET
in 1987 followed by the launch of DISNIC in 1989.

During 1990’s several govt. depts. at both central and state levels launched projects aimed at
deploying ICT’s for improving services to citizens. Attempts were made by some govt. depts.
during late 90’s to use World Wide Web mainly for providing information to the citizens.
Several states particularly the southern states, achieved significant success in using e-
governance to improve delivery of services to the citizens during this period.

This trend continued during the early years of the last decade with several states across the
country implementing citizen centric e-governance projects.

However these initiative were isolated and fragmented due to lack of adequate & integrated ICT
infrastructure reaching down to the block & village levels, lack of connectivity and lack of
computerization. The national e-governance plan (NeGP) conceptualized in the early part of the
decade, aimed at addressing all these deficiencies. The NeGP is the most significant initiative
taken in India during the last decade to main stream ICT in governance. It aims to make all
government services accessible to the common man in his locality and ensure efficiency,

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transparency and reliability of such services at affordable costs to realize the basic needs of the
common man.

These efforts have yielded results i.e. on line banking, ATM’s, insurance, filling of IT returns,
payment of custom duties, passport, Visas, Pension, Postal Services, land records, Vehicle
registration & driving license.

Apart from these certain other key projects includes

1. India Portal: - It aims at providing a single window access to all govt. services under
various dept.’s at both central and state levels.

2. E-courts: - This provides for e-filing of cases, online availability of Judgments etc. under
four service categories.

3. Project Aadhar: - It started in 2009 and is one of the most ambitions IT projects in the
world; aim’s to provide a unique ID to every citizen. By 2014, using a combo of bio metric
measures, Aadhar aims to identify every Indian.

Apart from these govt. led efforts certain individual efforts at leveraging IT for societies benefit
i.e. Flip kart, Red bus Tutor Vista etc.

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Indian Space Programme
India’s space Journey began with the launching of a sounding rocket from the Thumba
equatorial Rocket launching station (TERLS) on the outskirts of Trivandrum, way back in Nov
1963.

Now the country is poised for a quantum leap in space exploration with its plans for planetary
probes and human space flight Missions.

This long journey become still more important for, this feet has been achieved defying the
technology denial regime, starting from scratch and building on with scarce funding available to
LSRO.

The thrust of India’s space programme continues to be on diffusing the fruits of space
technology for national development & exploiting the developments in space technology for
societal benefits. And in keeping with its mandate of the peaceful applications of space
technology ISRO has championed the cause of keeping outer space free from the arms race.

1. The two widely acclaimed socially beneficial projects launched by ISRO – the village
resources Centre (VRC) and the telemedicine network are based on the capabilities of
INSAT communication system and IRS earth observation satellite constellation operated by
ISRO. Both INSAT and IRS systems are considered one of the largest satellite constellations
in operation anywhere in the world.

2. Geopolitical compulsions have nudged ISRO to take up the development of India’s full-
fledged navigation satellite constellation named IRNSS (Indian regional navigation satellite
system). IRNSS would help in ending country’s dependence on GPS Navistar. IRNSS is
made up of 7 satellites and is expected to become fully operational by the middle of this
decade.

3. Another major challenge taken up by ISRO in the frontier area of technology and research is
the development of space suit for the Indian astronauts, who will be part of the human space
flight mission stated for a takeoff in near future. Towards this end ISRO has signed an
agreement with Bangalore based Defense Bio-engineering and electro medical laboratory
(DEBEL). (The design &dev of the space suit continues to be a closely guarded secret of a
handful of advanced space faring nations).

4. As part of this human space mission, ISRO will also build a third launch pad at
SatishDhawan space centre (SDSC), on Sri harikota Island.

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 Geography by Ajay Raj Singh
5. The successful accomplishment of the manned mission will make India the fourth country
after the USA, Russia and China to send astronauts into space.

6. The successful launch of India’s first microwave earth observation satellite RISAT-1 in April
2012 by PSLV marked a major technological breakthrough for ISRO, for only a few
countries have the technology to make such advanced satellite (space craft system) that can
provide data on a continuous basis irrespective of darkness, haze, dust or cloud cover. The
remote sensing satellites launched by ISRO so far were passive systems in that they can
operate only under the conditions of brightness.

The significance of RISAT-1, the heaviest ever satellite to be launched into space from
Indian soil till 2012, lies in the fact that it has freed the country from dependence on the
foreign microwave imaging satellite.

Now with RISAT-I, the data on standing crop’s during Kharif Season, when cloud cover is
dense, would prove beneficial for the planners to forecast the food yield with reliability.

7. Another land mark achievement of ISRO was the launch of 800 kg spot-6 French satellite,
this order bagged by Antrix has been described as the highest ever revenue earning contract
for the PSLV launch service (till 2012).

8. Before the end of 2012, ISRO also conducted a flight of its three stages Geo synchronous
Satellite launch vehicle (GSLV) having homemade upper cryogenic engine. The success of
GSLV will make India self-reliant in launching its 2.5 tonne class INSAT communication
satellites, most of the INSAT class satellites now operated by ISRO were launched by means
of Arian space vehicle.

ISRO is also developing a high performance version of GSLV named GSLV-MAK III,
which, when ready would be capable of placing 4 tonne class satellite into geostationary
transfer orbit (GTO).

9. ISRO, as part of its long term vision of not only reducing the cost of access to space but also
making space missions a routine affair, is working on a reusable space transportation system
based on complex and challenging technology of air breathing propulsion. An air breathing
space vehicle makes use of atmospheric oxygen from the surrounding and burn’s it with the
stored on-board fuel for producing thrust.
1) GSLV – Project started in 1990, India depended on US & European for the launch of INSAT
class of satellites.
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 Geography by Ajay Raj Singh
2) Two launches in 2010 failed.
3) GSLV-D5 launched in Jan 5, 2014, was 1st successful flight of GSLV MK II using
indigenously developed cryogenic engine, CE-7.5.
4) GSLV MK III was successful launched on Dec 2014.

10. So far, using PSLV, Antrix has launched as many as 40 satellites of different countries.
Antrix estimates its revenue to increase 20% annually over the next 5 years, by way of
launch services.
The strong point is the PSLV, having multi mission &multipayload capability in a single
launch. In spectacular display of its prowess, the PSLV mission of April 2008 successfully
launched 10 satellites into orbit in one go.
In the field of satellite technology, in alliance with Astrium (European company) Antrix has
built high performance W2M and Hylas satellites. Also Antrix has submitted several
proposals to the satellite operators for the delivery of custom made satellite on turnkey basis.
(ready for use).

11. At present Antrix, with the active support of the Indian industry is gearing to meet the
challenges of competing in the multibillion dollar global space market. Currently around 500
Indian industrial units are actively contributing to the Indian space programme by way of the
supply of hardware, systems and services for various projects of ISRO.

Now ISRO is looking at the possibility of involving the Indian industry in the production and
delivery of communication satellites and PSLV on a turnkey basis, the idea behind roping in the
Indian industries for the production and delivery of satellite and launch vehicle systems is to
enable ISRO researchers and engineers focus more on research & development aimed at
evolving the concept of next generation satellites & freeing them from repetitive exercise of
building satellites & launch vehicle.

As part of ISRO’s “Vission 2025” strategy, it plans to explore mass, Venus & asteroid
belt. According to ISRO’s plan, India’s mar’s orbiter, the first ever Indian mission to the red
planet, launched on 24sep 2014 by PSLV, which was also used for launching chandrayana-1.
ISRO is also working on Aditya, a mini research satellite meant to study sun’s outer most region
called corona. Aditya will be India’s first space based solar research probe & it will also be
launched by PSLV. Also lined up for launch in the near future is Astrosat the first dedicated
Indian space borne astronomy mission.

However, the high point of the Indian space programme would be the launch of chandrayaan II,
by means of GSLV. It will be an orbiter cum lander mission.

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Ph: 9211703771, 01143801172

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