Introduction
In a significant move aimed at bolstering economic ties and fostering deeper collaboration, the Union Cabinet of India has given its approval for the signing of a protocol establishing a Joint Economic and Trade Committee (JETCO) between India's Department of Commerce and the Ministry of Foreign Affairs of the Dominican Republic.
The decision to establish the JETCO comes against the backdrop of friendly bilateral relations between India and the Dominican Republic. Despite this amicable relationship, the absence of a dedicated mechanism for trade and commerce prompted this strategic move. Currently, India primarily imports gold from the Dominican Republic while exporting a diverse range of goods, including pharmaceuticals, marine products and motor vehicles.
The creation of the Joint Economic and Trade Committee is poised to significantly strengthen economic ties between the two nations. It will serve as a vital platform for discussions, knowledge exchange, and idea-sharing, thereby facilitating smoother trade and industry operations. Moreover, the collaborative effort is expected to open avenues to tap into the larger Latin American and Caribbean markets, presenting promising opportunities for both countries.
The Joint Committee is set to act as a central hub for the exchange of information between relevant authorities, promoting seamless trade in goods and services. This partnership is viewed as a positive stride toward creating employment opportunities for professionals in both India and the Dominican Republic.
One of the primary objectives of the establishment of JETCO is to address challenges in the export of Indian products through mutual dialogue. There will be a specific focus on boosting exports of pharmaceuticals, automobiles, and engineering goods. This aligns with India's broader vision of building a self-reliant economy and contributing to increased foreign exchange earnings for the country.
Significance of the Agreement
The protocol establishing the Joint Economic and Trade Committee holds significant implications for both India and the Dominican Republic. It not only strengthens bilateral ties but also serves as a gateway to tap into the vast Latin American and Caribbean markets.
As of now, there is no bilateral institutional mechanism for trade and commerce between India and the Dominican Republic. However, with the establishment of JETCO, both countries are poised to enhance their economic cooperation significantly.
India's Existing JETCO Agreements
India has previously entered into Joint Economic and Trade Committee agreements with various countries worldwide, including the United Kingdom, Singapore, Thailand, Indonesia, Malaysia, Vietnam, South Korea, Canada, Mauritius, and Oman. These agreements have played a pivotal role in strengthening economic ties and fostering collaboration in trade and industry.
India-Dominican Republic Relations
Diplomatic relations between India and the Dominican Republic were established in May 1999, marking the beginning of a mutually beneficial partnership. The Dominican Republic opened its embassy in New Delhi in May 2006, while India reciprocated by opening its embassy in Santo Domingo in January 2022.
Despite the existing friendly relations, bilateral trade between the two countries witnessed a slight dip, amounting to $690 million in 2022-23, compared to $959 million in 2021-22. However, the establishment of the Joint Economic and Trade Committee is poised to reverse this trend by facilitating increased trade and investment opportunities.
Union Minister’s Comments
The total outlay for coal gasification projects is set at Rs 8,500 crore, providing financial assistance across three distinct categories, as outlined by Union Minister of Mines, Prahlad Joshi.
Under Category I, a provision of Rs 4,050 crore is allocated for government Public Sector Undertakings (PSUs), supporting up to three projects. These projects will receive a lump-sum grant equivalent to Rs 1,350 crore or 15 percent of the capital expenditure (capex), whichever is lower.
Moving to Category II, Rs 3,850 crore is earmarked for both the private sector and government PSUs. Each project in this category will receive a lump-sum grant of Rs 1,000 crore or 15 percent of the capex, whichever is lower. Notably, at least one project will undergo a bidding process based on tariffs. The criteria for this bidding process will be formulated in consultation with NITI Aayog, as emphasized by Union Minister Joshi.
In the third category, Rs 600 crore is allocated for demonstration projects involving indigenous technology and small-scale product-based gasification plants. Selected entities in this category, fulfilling the minimum capex of Rs 100 crore and a minimum production of 1500 Nm3/hr Syngas, will receive a lump-sum grant of Rs 100 crore or 15 percent of the capex, whichever is lower.
Union Minister Joshi underscored that the selection of entities in Categories II and III will undergo a competitive and transparent bidding process. The grant disbursement will occur in two equal installments, with the Empowered Group of Secretaries (EGoS) chaired by the Secretary of Coal having full authority to make necessary changes in the scheme's modalities. It is mandated, however, that the overall financial outlay remains within the Rs 8,500 crore threshold.
Conclusion
The establishment of the Joint Economic and Trade Committee between India and the Dominican Republic marks a significant milestone in the bilateral relationship between the two countries. It reflects a shared commitment to fostering deeper economic ties, promoting trade and industry, and addressing mutual challenges.
Through the collaborative efforts facilitated by the JETCO, both India and the Dominican Republic are poised to unlock new avenues for economic growth and prosperity. As they embark on this journey of enhanced cooperation, the protocol stands as a testament to their shared vision of a prosperous and interconnected future.
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