UAE- Ministry of Economy publishes report on trade policy review of India

ABU DHABI 14th September 2015 (WAM) -- A new report published by the Ministry of Economy MoE entitled 'Trade Policy Review of The Republic of India' has revealed that India's real GDP achieved a 6.9% growth in 2013-14 and is expected to surge further to 7.4% in 2014-15 while the GDP per capita registered US$1500 in 2013-2014. The report also indicates that the country witnessed an inflation rate of 5.9% between July and September 2014 and has become more moderate in recent years as a result of declining oil prices and the sustained efforts of the Reserve Bank of India to curb inflation.

Hind Al Youha Director of Foreign Trade Policies at the MoE pointed out that the report clearly shows that if India is to continue to achieve its goal of economic consolidation within the present regulatory environment the Indian government must reduce its fiscal deficit to 3% by 2017-2018 and increase taxation through introducing the goods and services tax (GST). Al Youha also noted that the services sector is the main driver of economic growth in India and accounts for more than 50% of the country's GDP.

The report further suggests that the volume of trade (exports and imports) in services and goods accounts for about 53% of the total GDP. Trade surplus for the services sector meanwhile registered 3.9% in 2013-2014. The report adds that the current account deficit for the period has been compensated by large capital inflows from foreign direct investments.

Pointing out that the manufacturing sector's contribution is low and accounts for only 13% of the total GDP the report reiterates that the Indian government issued a new manufacturing policy in 2011 with a view to increasing the sector's contribution to 25%. The government also launched the 'Make in India' campaign in 2014 to promote the country's manufacturing sector and attract investments.

It also shows an improvement in the agricultural sector that has contributed about 18% to the GDP since 2011. This was one of the key objectives of the government's public policy and its aim to accomplish food security and price stability.

In addition the report notes that as an active member of the World Trade Organization (WTO) India is a strong advocate of the multilateral trading system and an important party in a number of regional trade agreements. It adds that one of the key objectives of current trade policies is to make India a major player in international trade and increase the country's share of world exports to 3.5% by 2020.

On the subject of bilateral trade relations with the United Arab Emirates the report notes that non-oil trade between India and the UAE reached about US$37 billion in 2014 with the Republic of India among the UAE's top trading partners.

On foreign direct investment the report added that in an effort to attract greater inflows of Foreign Direct Investment (FDI) the Indian government lifted restrictions on foreign ownership in some sectors such as insurance and transportation. To further complement FDI growth the government implemented organisational changes in the financial services telecommunications and transportation sectors. These included establishing fully-owned subsidiary banks and raising the foreign equity in the insurance sector to 49% in addition to amending the Securities Act and adopting a National Telecom Policy.