In a dynamic and disruption era today there is a considerable shift happening in inter-country interfaces towards trade and commerce. Resultantly, there are also new developments taking place in and around our own State. The State Government was taking up projects on trade routes with neighbouring countries considering its strategic geographical position. The Chamber was also working on such projects with the Government. It was therefore, thought appropriate to throw some light on what was happening in trade routes, tariff rates and proxy wars across the world. Having said so, the Director General introduced the guest speakers from IIFT who were present to speak and interact with the Managing Committee.

- Dr Deepankar Sinha, Associate Professor, Ph.D from IIT Kharagpur, Department of Industrial and Systems Engineering with vast experience in Port Industry and in academics, whose expertise included strategic planning, global logistics, supply chain management in ports and shipping. He is on advisory boards of a number of Government and Non-Government bodies..

- Dr Bibek Roy Chaudhuri, currently Associate Professor of Economics at Indian Institute of Foreign Trade. Ph.D in Economics from Jawaharlal Nehru University, New Delhi. Dr Ray Chaudhuri’s research publications have been in areas of International Trade, FDI, Political Marketing and Branding.

- Dr Debasis Chakraborty, Associate Professor of Economics of IIFT, had conducted several research projects on regional trade agreements, India’s trade and investment flows, WTO related commitments etc. He is presently Co-Editor of Foreign Trade Review (SAGE), a comprehensive forum for disseminating theoretical and empirical research on international trade and investment related issues.

Dr Deepankar Sinha stated that in his presentation, he would speak about implications of trade wars that we have been hearing so far, and also on implications of trade routes which have also courted various controversies.

Trade wars recently surfaced when US imposed stiff tariffs on China’s metal goods. They did so for other countries as well but China was affected more and it had been a shock to firms who were exporting to the US. Chinese firms have borne the shock andthis may also serve as an opportunity for Indian firms,since US tariffsfor China are higher than that of India, thus allowing India to benefit from the situation. Therefore, it was necessary for exporting firms to have indicators to monitor the economic environment in order to understand their extent of exporting in the world market. Impacts would have to be sharply anticipated. With this, the firms can take corrective actions in the countries they were already active in. The facts that were discussed centered around the balance of payment issue in the US. It was the difference between what is earned in terms of dollars and what is spent in terms of dollars. When imports exceed exports, a country becomes weak in terms of balance of payment. As an indirect impact, there is an increase in job cuts (that is, unemployment). There have been almost around 65 thousand job cuts every year in the US during the last few years posing serious unemployment problems. During such a situation in a democracy, the Government has to play a protective role and a way of doing so is by imposition of import duties and other tariff and non-tariff barriers. Moreover in case of USA, their stance of global domination in world trade had also played an important factor. Germany was becoming more powerful in the European Union and this was the reason for the US wanting to pull out of the NAFTA. Further, with China increasingly gaining prominence, the US took a stand of stringency.

At one stage the US had professed that the world should be a global village with no boundaries and US had become a leading proponent of open trade. Multilateral trade between countries soon started developing and trade blocks started coming up. However, as this went on and as their balance of payments reduced and job cuts happenedleading to increased unemployment, US started backing out. This could have happened with any country and there could be trade swings between closed or open economies. However, currently other than the US, this was not particularly true for others. The European Union had already signed a pact with Japan and were talking with China.They also support China’s ‘One Belt One Road’ (OBOR) initiative to a very great extent.

However, exporters are exposed to shocks and it was important to understand what the export market is all about in the current context. For exporters, KYC (Know your Customers) was an important aspect but in global trade, KYCC (Knowing your Customer’s Country) was equally important. Hence through developing a framework, the shocks that are imposed by the different countries across the world could be somewhat avoided. A closure of a market or a product can be anticipated and this closure may not continue for long and there could be a recovery period as well. So during this period, how one could improve business in that country needs to be identified. Therefore there was a need to integrate the political, economic, social and ecological changes that are happening around the world with our business. This integration was left to the country policy makers and this was how their import and export policies were framed. The firms also need to understand the foreign market scenario and accordingly implement their action plans. The action plan would constitute monitoring the international market and the market share. A cause-analyzing study for any fall in market share was important as far as understanding the reason for fall was concerned. Competitiveness, world economic trends or our own country’s policy changes could cause the fall. There should be a mechanism to monitor the markets across the globe and organizations like BCC&I could endeavour to develop such a mechanism for market-share monitoring in manner similar to that in which trends in the stock markets are monitored and predictions are performed, through data analysis.

There was a need to understand the tariff and non-tariff barriers that are increasing in order to gauge the extent to which it would be possible to sustain a business with an increasing trend. This kind of simulation exercise was also important for us. It could be so that when China was getting affected on account of high tariffs, India could emerge as a gainer in those regions. It would also be interesting to find out whether China’s loss could turn out to be India’s gain. Business houses could be advised on market diversification plans.

In case of Bengal as a State, which has neighbours in the likes of land-lockednations like Bangladesh, Bhutan, Nepal and others, it was important for us to implement the TIR Convention. Whereas India was a signatory to the Convention whichis yet to be implemented. The implementation would ensure smooth hassle-free transit of transportation through the borders, ensuring door to door delivery. This was necessary to increase the country’s border trades.

Speaking about strategic trade routes, the Professors made the following points:

• Even before the announcement of the OBOR’s project, some cargo railways have been built connecting Europe and China and passing through Kazakhstan, Russia, Belarus and Poland.
• In 2011, the Yixin’ou railway had been inaugurated linking Chongqing (China) and Duisburg (Germany) and in 2012 the line had been extended to Antwerp (Belgium).
• In April 2013, the fastest line between China and Europe was launched connecting Chengdu (China) and Lodz (Poland) in 12 days and the Zhengou railway that links Zhengzhou (China) and Hamburg (Germany).
• In 2014 the Hanxinou railway was inaugurated linking Wuhan (China) with Lodz (Poland) and the Yixin’ou railway that links Yiwu (China) and Madrid.
• China had been building strong relationship with Germany. According to some scholars the economic crisis that occurred in Europe commencing in 2008 pushed Germany to strengthen its relations with the most dynamic markets, especially those in Asia.
• China identifies Germany as its main European collaborator.
• Like Germany, other countries like France and UK, are strengthening their relations with China and seeking a privileged relationship with her. For example, in 2015, France signed an agreement with China for cooperation in third-party markets.
• Another important issue that the EU needs to consider is the recent strengthening of China’s relations with the CEE (Central and Eastern Europe) region that has led to the institution of the 16+1 group, fundamental for the realization of the OBOR, as mentioned by the former Prime Minister Wen Jiabao in 2011.
• China is working on a land-sea route project, financed with 2.5 billion dollars by the China Export-Import Bank, that will link the port of Piraeus, one of the key container ports in Europe, with six or eight Eastern European countries in order to make it a Chinese hub for trade with Europe.
• The Chinese shipping company COSCO has already won 35 years concession in the Greek port.
• Establishment of the Asian Infrastructure Investment Bank (AIIB) with the objective of financing the project, especially with respect to infrastructure, and spreading connectivity in the developing countries mainly situated in the Asiatic region.
• The decision to establish the AIIB, together with other two important financial institutions, the New Development Bank (NDB) and the Contingent Reserve Arrangement (CRA), both created as a BRICS’s initiative but in which China plays a central role.
• On the one hand China’s disapproval of the existing international financial institutions where it feels that itself and the other emerging powers (especially the BRICS members) are under-represented, and on the other hand its ability to contribute towards shaping the new global order that appears as an important objective of its foreign policy strategy.
• The other dynamic is the future of the India-China relationship that will be strongly influenced by the manner in which India will participate in the various Chinese cross-border initiatives.
• The next aspect is its image in the global scenario; a strong regional strategy will of course contribute towards ameliorating its image as a global actor;
• Conversely, a fragmentary strategy based mainly on the national interest of the member states, will reinforce the idea of the Chinese leadership in terms of foreign policy.
• The TEIN (The Trans-Eurasia Information Network) project, another important instrument - a high-speed international research network provided for the use of researchers and research institutes, rather than for commercial use, could be engaged in the OBOR in order to improve the soft connectivity between the two continents.

Having made the above points on the connectivity front, the IIFT Professors opined that as far as India was concerned, it could be an observer nation for some time and do a SWOT Analysis with or without
– Asian Highway
– The Bangladesh, Bhutan, India, Nepal (BBIN) Initiative
– India-Myanmar-Thailand (IMT) Trilateral Highway
– Kaladan - Sittwe Project

However, it was important to sign FTA with EAEU- CHINA – ASEAN and implement TIR, as the country would stand to gain through these. They also mentioned that:
• First trial run was conducted by India by sending a cargo truck from Kolkata to Agartala via Dhaka, travelling 640 km, instead of a distance of 1550 km through Indian territory
• As part of a trial run of the agreement, Bangladesh sent trucks carrying garments from Dhaka to New Delhi in August 2016.
• After the BBIN network is completed (expected by end-2018), intra-regional trade could potentially increase by 60%, and trade with the rest of the world by 30%.

The professors observed that while India was already going ahead with development of routes and connectivity features, it perhaps is not required to worry about the debate on being a part of the OBOR. It should,however, closely look into the short and long term dynamics of the trade route connectivity issues.

The President thanked the team from IIFT for a very insightful deliberation on the topic of discussion and invited members for an interactive session with the team. An extremely interesting round of Q&A session followed thereafter.