1. CUTS/2009/Rana Trade & Investment Promotion: A Field Perspective Kishan S Rana

2. Introduction WTO Director General Pascal Lamy at CUTS-FICCI Conference on 13 Aug 2008: Making trade possible, and making trade happen are two different things. Proposition 1: Too many trade ministries focus on the regulatory frame, and not enough on promotion. CUTS/2009/Rana

3. 1. Eco Dip Stages ED typically progresses in 3 stages, which remain concurrent: 1.Export & investment promotion 2.Sustained networking, abroad & at home 3.Managing regulatory & eco environment, FTAs, RTAs, dumping

4. CUTS/2009/Rana 1. Contd No unanimity over definition of economic & commercial diplomacy The two largely cover concurrent areas, but economic dip is the wider term Following graphic presents one perspective

5. CUTS/2009/Rana ECONOMIC DIPLOMACY Trade promotion, networking with business FTAs. RTAs + other trade agreements WTO, multilateral trade issues Joint Commissions, business councils. EP Groups FDI Promotion + investment & other accords World Bank, IMF, UNCTAD, etc Aid, Technology transfer, S&T Agreements Brand Image, Tourism promotion COMMERCIAL DIPLOMACY ECONOMIC & COMMERCIAL DIPLOMACY

6. CUTS/2009/Rana 2. Role of Embassies Field units contribute to all 3 tasks, but expertise in: promotion & networking Regulation mainly headquarters task, but embassies provide inputs Close Hq-Emb interactions produces ideal result, embassies must be tasked Embassies can contribute to policy, but unlike Hq, have a pure marketing task, for them home conditions are a given

7. CUTS/2009/Rana 2. Contd Are embassies given sufficient tasks? Should they not contribute to fixing country targets? Why not stipulate an economic action plan for 20 key countries, developed jointly? Can we identify 6 countries for intensive promotion, in a 2-year plan? Proposition 2: Most embassies have unused reserve capacity; need better TASKING

8. CUTS/2009/Rana 3. Export Promotion A.MARKET SHARE ANALYSIS: what is countrys share in the import basket of target country? What are key products; what is missing; who are the competitors? B.FIX HARD TARGETS: these can only be indicative, but help focus

9. CUTS/2009/Rana 3. Contd C.INFORM + MOTIVATE HOME ENTERPRISES: done through EPCs, apex chambers, direct outreach D.NEW PRODUCTS + MARKETS: key priority, hinges on information + overcoming local hurdles ; once market opened, one can rely on lemming effect to produce volumes E.Write own market reports, learn on job

10. CUTS/2009/Rana 3. Contd F.DELEGATION VISITS: hinge on match- making, advance preparation G.FACILITATE BUSINESS VISITORS: proactive mindset to help in local contacts, use embassy facilities, gratis when possible H.BUYER-SELLER MEETS AT EMB: possible even with modest infrastructure + market center Proposition 3: Teaching craft skills is sadly inadequate in most developing countries

11. CUTS/2009/Rana 4. Trade Fairs Own trade show Getting visitors is the biggest hurdle Works well with established local buyers Also helps in making a splash in new market not accustomed to trade fairs Useful to gain attention Join established show Best option in sophisticated markets Provides rich market intelligence, product trends Requires discipline, conforming to norms for max impact Master methodology Proposition 4: Trade Fairs are underused

12. CUTS/2009/Rana 5. Investment Promotion Entails 2 parallel tasks: Addressing BROAD CATCHMENT in potential investor country: PURSUIT OF IDENTIFIED TARGETS, possible only by careful study of own needs. We are yet to find our optimal investment agency (after demise of India Investment Centers): a PPP model is one possibility Foreign Investment Promotion Board makes little impact on ground Embassies operate on self-motivation, are underused

13. CUTS/2009/Rana 5. Contd Embassies pursue targets on basis of local assessment, Fortune 500 type lists Experience confirms that sustained efforts aimed at identified potential investors yield result, as does establishment of missions target-10 kind of lists Export promotion, local networking and outreach integrate into one another Technology targeting tasked from home fits this Outbound FDI from India is new phenomenon, offers limited role for embassies

14. CUTS/2009/Rana 5. Contd Success stories are more effective than any amount of ones own publicity Networking with local business chamber, industry associations, business press helps Organizing ones own investment promotion seminars is good, but joining such events held by others may work even better State-level marketing works well if pursued seriously Proposition 5:UKs Trade & Invest Britain is an good promotional mode, needs study

15. CUTS/2009/Rana 6 Challenge Funds A British innovation, it sets up a competition among field units, for promotional funds Typically, modest amounts are disbursed to 10 or 12 best project proposals Project must cover a real target 10% of allocation used to measuring impact, 6 months after event Encourages competition + innovation Builds up a library of workable ideas Encourages emulation and spread of best practices

16. CUTS/2009/Rana 7. Other Methods Identify 5 or 6 target countries for export + invest promotional for a maximum of 2 years Follow up through embassies to convert approved FDI, to implementation Use public-private partnerships (PPP) in promotional activities, in innovative fashion Treat dispute settlement as a priority, with a promotional value

17. CUTS/2009/Rana 8. Country Brand Integrate brand marketing into FDI and export promotion, esp. IBEF Treat country branding as a core activity, relevant to all promotional, integrate tourism marketing Accelerate the modernization of Indias own exhibition & convention facilities, which integrate directly into branding. Further professionalize trade fair hosting Proposition 6: Branding needs policy direction, e.g. French & UK public diplomacy boards

18. CUTS/2009/Rana 9. Harnessing ICT Canada offers a virtual trade exhibition on the website of its combined Department of Foreign Affairs and International Trade We can do the same through ITPO, FICCI and others, as a means of trade promotion The bulk of market reports and product surveys should be on the websites of the EPCs which are linked to one another Similarly, embassies should post the bulk of their promotional information + reports on website

19. CUTS/2009/Rana 10. Local Outreach Bilateral chambers (AmCham, Indo-German) are often neglected in our promotional efforts India-based purchase offices of foreign buyers are potential multipliers in export promotion, should be harnessed Our apex bodies (Assocham, CII, Ficci) not used to joint action, but can be mobilized for targeted marketing Proposition 7: Eco Dip demands a Whole of Govt approach + promotional direction