It says, "recent protectionist measures by some countries against BPO, miss out not only the efficiency gains from such outsourcing, but also the employment gains from the resources saved in the process and deployed in other employment generating sectors."
It, therefore, makes out an urgent need to revive trade negotiations under the World Trade Negotiations.
Economic Survey 2003-2004: Complete Coverage
A successful conclusion to the Doha Development Agenda could contribute to a stronger and more even expansion of world trade and sustained global economic growth, it adds. This includes cross-border trade in services, including movement of natural persons.
But in a reflection of the new strident position of the country on agricultural issues, it also says that such liberalisation cannot be at the expense of food security for developing countries.
It says, India has emphasised that flexibility in domestic policies for agriculture aimed at enhancing food and livelihood security, should be incorporated in the rules and disciplines on trade in agricultural products This can be done by extending the ambit of special and differential treatment for developing countries to include these concerns.
The other significant issue in foreign trade for India is the enlargement of the European Union from 15 to 25. But the Survey notes that this would not create any significant trade diversion for India.
This is because the volume of the country's trade with the new members is only $550 million annually. But the relative comparative advantage of many of India's exports to the EU may be impacted as new members like Poland and the Czech Republic compete in similar areas.
A survey says India and Poland compete in the EU market for 46 of the top 100 exports from the former to Europe.
On attracting FDI too, India faces new competition, as Poland, Hungary and the Czech Republic compete with India in the list of top ten most attractive investment destinations.
Reviewing the trends in global trade in 2004 and beyond, the annual Survey prepared by the finance ministry says growth prospects for emerging market economies, particularly in developing Asia, are bright.
The region is expected to log an over 7 per cent growth rate in the calendar year, which is the highest since the East Asian crisis. China would continue to be the main driver, while India is also expected to contribute substantially to the robust outlook.
But instead of cribbing over the rising rupee, exporters must focus on non-price factors such as product quality, brand image and after sales service.