Prime Minister of India - Dr. Manmohan Singh

Major decisions of Trade and Economic Relations Committee

Constituted on 3rd May 2005, the Trade & Economic Relations Committee is an institutional mechanism for evolving the extent, scope and operational parameters of our economic relations with other countries in a coordinated and synchronized manner. The Committee was created to engage in the following tasks:

(a) Suggest mechanisms for promoting economic cooperation through various arrangements such as Joint Study Groups, Task Forces, Negotiating Teams, etc.

(b) Suggest the extent and scope of economic engagement with the identified countries.

(c) Commission studies which would be valuable inputs in arriving at suitable decisions.

(d) Examine proposals for economic coordination between India and the identified countries.

The Committee has held seven meetings till date, in which the following issues have been discussed:

1. India's engagement in regional trading arrangements

2. Investments, both into the country and by India abroad

3. Economic relations with the United States, with special emphasis on the Small and Medium Enterprises sector, energy and services sectors.

4. Economic relations with the European Union

5. Free Trade Agreement between India and the Gulf Cooperation Council

6. India's economic engagement with Bangladesh and Pakistan, esp in the context of textile trade

7. India's economic engagement with Korea

8. Status of negotiations in the WTO

9. Progress on South Asian Free Trade Area

10. Economic Engagement with BIMSTEC

11. Unilateral tariff Preference Scheme for African LDCs

12. Proposed CECPA with Mauritius

13. Recommendations of the India-Israel Joint Study Group

Major Decisions Taken by TERC

At its very first meeting the Prime Minister elaborated his vision of India's economic engagement with the world and called for greater trade and investment links with India's neighbourhood.

In pursuit of this vision the TERC has approved a series of economic cooperation and free trade agreements. India has already entered into an FTA with Sri Lanka and a Comprehensive Economic Cooperation Agreement with Singapore. The TERC has also approved early completion of an India-ASEAN FTA, the South Asian FTA and an India-GCC FTA. The TERC has also discussed proposals for an India-Korea FTA, an India-Israel FTA, and an India-Mauritius CECPA. The Prime Minister has called for increased economic engagement between India and all her Asian neighbours.

The Prime Minister has underlined the need for India to be pro-active in increasing economic interaction with all neighbours. In pursuit of this objective TERC has approved steps to enable increased imports from Pakistan, Bangaldesh and Myanmar to rectify existing imbalances and distortions in trade. The TERC has also called for investment in trade-related infrastructure to facilitate imports from neighbours. The Prime Minister has said, "Our neighbours must acquire a greater stake in our economic growth by benefiting from it. India must be willing to import more from our neighbours, especially the less developed economies."

The TERC has approved measures that will encourage higher levels of two-way trade between India and SAARC and BIMSTEC member countries.

Background

The TERC is serviced by the Prime Minister's Office, which may obtain assistance as required from any Ministry/Department/Agency of Government. The composition of TERC is as follows:-

Prime Minister - Chairman. Members: Finance Minister; Commerce & Industry Minister ; External Affairs Minister ; Deputy Chairman, Planning Commission; Chairman, Economic Advisory Council; Chairman, National Manufacturing Competitiveness Council; National Security Adviser; Principal Secretary to PM - Convenor. The Secretaries of the Departments of Economic Affairs, Revenue, Commerce, Industrial Policy & Promotion as well as Secretary, Planning Commission and Foreign Secretary, are permanent invitees to the meetings of the Committee.