Business Today

"We need industrial revolution 4.0"

In May, representatives from over 30 countries met in Beijing to discuss an ambitious multilateral trade and investment arrangement that China is spearheading.
Joe C. Mathew and twitter-logoRajeev Dubey    New Delhi     Print Edition: June 18, 2017
We need industrial revolution 4.0
Photo: Shekhar Ghosh

In May, representatives from over 30 countries met in Beijing to discuss an ambitious multilateral trade and investment arrangement that China is spearheading. Given its scope, the One Belt One Road, or OBOR, project is widely expected to impact almost every country in Asia, Europe and Africa. India chose to ignore the event. In an interview with BT's Joe C. Mathew and Rajeev Dubey, Commerce Minister Nirmala Sitharaman preferred to maintain silence over ramifications for India's trade. What India needs to do is to continue with its trade talks, OBOR or no OBOR, she says. Edited excerpts:

What are the trade implications of staying away from OBOR talks?

We have taken a strategic call to not participate. I will see it only in that context.

Is there any reason other than the fact that the proposed project passes through PoK?

Isn't it a good enough reason? It is an occupied territory, an Indian territory under occupation. The use of that land by a different country is a serious matter.

We are not questioning the decision. We are just trying to understand if there has been an attempt to assess the economic implications of staying away. Are we planning measures to minimise any possible negative impact?

This is an issue on which India is stating its legitimate position. Our sovereignty issues should be seen and given priority over everything else.

Are we engaging in any multilateral or bilateral talks that may reduce the impact of OBOR?

I think you are going back to the same question and I have answered it. Territorial rights are important for India, and will stay so.

We have plans to increase our share of global trade. Will that become difficult in the backdrop of developments like OBOR?

Are you suggesting that trade is more important that sovereign rights?

No, not at all. We are trying to understand the possible impact.

I will not even look at it in that manner.

So, you mean to say we will continue to engage with all our partners irrespective of what is happening around us?

We are engaging with all our partners. RCEP (Regional Comprehensive Economic Partnership) is a group of countries, and RCEP negotiations are going on.

But China is a dominant partner in RCEP. Will it effectively be an FTA (Free Trade Agreement) with China, especially given the huge trade deficit we have with it.

Where is the FTA with China? RCEP is a negotiation with a group of countries, of which China is a member. The agreement will be with that group of countries. So, why is it different today, when it was not different yesterday? China was an RCEP member some weeks ago, it is a member even today. In the last two years, whatever progress we have made in RCEP negotiations, and I wish we had progressed further, was OBOR there? My view is that the negotiations could have been much faster even when OBOR was not there. Now, even after OBOR, my trade negotiations will continue.

After a lengthy, gloomy spell, exports have begun to pick up. How do you see this resurgence despite rupee appreciating against the dollar?

There are several reasons why exports have revived. We have been entering a lot of new markets. This includes some Latin American countries. Also, in some cases, raw material imports have become cheaper. As it appears, it looks sustainable. But we need to be cautious before saying everything will be okay and happen automatically. The global situation has not changed much.

Indian companies seem to be positive about the governments performance. But global corporations are yet to be convinced. They see the government's approach on several issues, including IPR and tariffs, as ambivalent.

I am not sure if I agree with that. If that was the case, India's FDI inflows would not be growing so consistently. The growth was 38 per cent in 2015/16 and over 40 per cent in the previous year. So, if FDI is coming in, it means overseas investors have confidence in India. Further, if Indian companies are confident of India's growth story, there are still avenues for further investments.

There are certain sectors that are showing clear growth. Automobile is one. E-commerce is doing well. Are we on a revival path?

There are clear signs of a revival. It may not be across the board but you can't deny the fact that there is a revival, both in the domestic market and exports.

Textiles is one sector where the government has provided a major policy support to boost employment. Are there other focus areas?

Earlier, there was a discussion on leather, on leather-based industries. Not much has happened on that. Other than that, I am not looking at any sectors at the moment.

What has been the government's response to companies such as Apple or Ikea that are looking at specific relaxations in policies? Are you looking at tweaking policies to suit individual companies requirements?

See, policies are never made for one company. When companies come to give their inputs, we will be happy to hear them.

@rajeevdubey & @joecmathew

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