New Delhi, Feb 22
Minister of Commerce & Industry and Civil Aviation, Suresh Prabhu, inaugurated the 4th India-ASEAN Expo and Summit 2019 in New Delhi today. Addressing the inaugural session Suresh Prabhu reaffirmed India’s commitment to the path of mutual progress and prosperity and said that terrorism knows no boundaries, it needs to be addressed through collective reaffirment towards promoting regional peace, stability and development.
In this fight against terrorism and mindless violence, events like India ASEAN Expo and Summit acquire a unique significance, as it epitomises our faith and commitment towards a path of shared prosperity, progress and peace.
The Commerce Minister recalled the participation of ASEAN ministers during the ASEAN-India Business and Investment Meet and Expo 2018, organised on the side-lines of the ASEAN-India Commemorative Summit in New Delhi in January, 2018 and said that it provided us the much needed opportunity to engage on promotion of trade and investment collaborations. He also recalled the informal Mini Ministerial of WTO hosted by India in 2018 which was attended by 52 countries,including many ASEAN partners. Suresh Prabhu said that the core idea behind organising this 4th India -ASEAN Expo and Summit is to build upon the success of the previous events and carry forward the momentum of the relationship built up over the years. He said that this Summit is a testimony of India’s dedicated efforts towards Act East policy.
India and ASEAN represent fast moving economies. The global headwinds have caused a softening of the global growth from 3.1% in 2018 to 3.0 % in 2019. According to the recently published United Nations’ World Economic Situation and Prospects Report 2019, India and ASEAN are set to outpace the global growth. India continues to be the fastest growing major economy and is expected to grow at 7.2% in 2019 and ASEAN at 5.2%, with many economies within ASEAN with a growth of more than 6%. Cambodia, Laos, Myanmar and Vietnam (CLMV) countries in ASEAN are also on a higher growth trajectory. This is indeed a manifestation of the new emerging world economic order, wherein India and ASEAN have a significant place.
The Commerce Minister said trade is a buckle that binds India and ASEAN together and India’s vision of trade is not limited to exchange of goods and services. He asserted that India believes in trade that brings about mutual collaboration, promotes livelihood opportunities, brings in shared prosperity and binds us to a common future and a common destiny.
ASEAN has emerged as one of the second largest trade partner of India in 2017-18,with a share of 10.58% in India’s overall trade. Our bilateral trade has grown more than threefold from USD 21 billion in 2005-06 to USD 81.33 billion in 2017-18. Despite escalating trade tensions and tightened credit market conditions, India and ASEAN present an alternative story. In the recent years India’s trade with ASEAN has rebounded from US$ 65.06 billion in 2015-2016 to USD 81.33 billion in 2017-18, posting an annual growth of 13.64%. India’s trade with ASEAN from April 2018 to December 2018 has already touched USD 72.3 billion compared to previous year, which is a growth of over 20.5%, which is an indicator of our strong economic and business connect and holds the key to our future engagements.
India currently is working with ASEAN on multiple connectivity projects, through land, water, and air. Our projects like India-Myanmar-Thailand Highway, Kaladan Multinational Transit Transport Project, Project Development Fund for CLMV countries is crucial for our development. Exploring opportunities through connectivity projects will help India to remove physical impediments to trade with ASEAN countries and further integrate the two regions for better economic and trade relations. Increasing the rate of technology adoption and providing financing mechanisms is another challenge to expand growth.
The Minister said that India is constructively engaged in RCEP negotiations and believes that ASEAN will remain central to the economic integration of the Indo-Pacific region through RCEP. Substantial progress has been achieved in the negotiations so far with the successful conclusion of 7 out of 16 chapters. As negotiations have intensified, member countries are now engaged in bilateral pairing process to achieve mutually satisfactory and balanced outcomes, keeping in view each other’s sensitivities and aspirations. As directed by our Leaders at the 2nd RCEP Summit in November last year in Singapore, we should all work concertedly towards early conclusion of RCEP and create a win-win situation for the greater prosperity of the people of the region. A successful RCEP will lift the spirits of the global trade, which is facing challenges in terms of trade tensions amidst protectionism and unilateral measures. Reiterating India’s commitment to make endeavours for successful conclusion of RCEP, Suresh Prabhu urged ASEAN colleagues to also engage in the review of ASEAN-India Trade in Goods Agreement to resolve the implementation issues being faced by our businesses on both sides. He also referred to successful accomplishment of 2nd Review of India Singapore CECA and signing of MRA in Nursing with Singapore. This is a proof that we can continue to strengthen our bilateral relations, notwithstanding challenges faced by multilateral trading system.
During the last four years, Government of India has introduced several reform measures and initiatives, both through the legislative and executive routes in a wide range of areas including Goods and Services Tax, subsidies, labour, infrastructure, finance, investments as well as governance. Suresh Prabhu said that most of the policy reforms that have been undertaken will bring transparency and enhance efficiency and open up immense opportunities for collaboration and investment. He also mentioned key flagship programmes like Make-in-India, Skill India, Invest India, and Digital India, which have improved the general economic and investment sentiments. Our mission is to bring in infrastructure, policies and practices that compete with best global standards to convert India into a global manufacturing hub. India has recorded a jump of 23 positions in the Ease of Doing Business rankings to be at 77th position. We are now working towards improving Ease of Doing Business at States and districts within States of India.The government has identified ten ‘Champion Sectors’ under Make in India 2.0 that have the potential to grow at double digits and generate sufficient employment opportunities. These include, auto and auto components, biotechnology, defense & airspace, food processing and pharmaceuticals among others. The government has also announced 12 Champion Services for focused attention to promote their development. India has consistently improved its position in Global Innovation rankings and it now ranks at 57th position.
In last three years, the Government has embarked on a comprehensive programme to liberalize Foreign Direct Investments. Most of the sectors are now under automatic approval route. Foreign direct investment is now open for manufacturing in large number of sectors ranging from defence to pharmaceuticals, and several services including airlines, insurance, and single brand retailing. The government has also allowed 100% FDI in railways infrastructure like high-speed train systems, suburban corridors and dedicated freight line projects.
FDI policy now also includes start-ups. Start-ups can issue equity, equity linked instruments and debt instruments to foreign venture capital investors in accordance with FEMA rules. We have recently widened the definition of startups and have raised investment limit from Rs.10 crore to Rs.25 crore for availing tax exemptions to improve ease of doing business for startups.In the last four years, we have received FDI worth US$ 263 billion. This is 45 percent of the FDI received in last 18 years.
FDI in India is at a record high and India is among the top two emerging markets in the FDI Confidence Index.In the UNCTAD report 2018, India has been placed in the top three of the strongest economies of the future.
Several reform measures have been taken in the power sector over the last few years whereby Indian power sector has improved significantly in terms of improved access to electricity, better financial health of DISCOMS and promotion of renewable energy generation. India has turned from a net importer of electricity to net exporter of electricity exporting around 5,798 million units to Nepal, Bangladesh and Myanmar in 2017. From ranking 99th at the global level in 2014 in terms of electricity accessibility ranking (under Ease of Doing Business), India currently ranks 24th on this parameter.
One of the Government’s significant initiative for the people is the Medical Assurance Scheme called Ayushman Bharat. This shall benefit about 500 million people and will provide immense investment opportunities in the areas of health infrastructure, medical equipment manufacturing, and healthcare services.
India is experiencing rapid urbanization and to cater to this, Government has launched three mega urban schemes – Smart Cities Mission, Atal Mission for Rejuvenation and Urban Transformation (AMRUT) and Housing for All. Government’s plan to develop 100 smart cities and 500 AMRUT cities over the next five years offer a USD 111 billion opportunity.
Leveraging Regional Value Chains (RVCs) is essential to take the India-ASEAN economic partnership to the next level. RVCs in the IT/ITES and apparel sector that already exist are evidence of the indirect benefit to skilling and development. With the introduction of GST in India, GVCs and RVCs will have a conducive environment to grow. The North East region, which is a development priority of the Government of India has great potential for this, in terms of natural resources and skilled labour. Also, India is a global hub for design and engineering R&D, that is critical to any value chain.As the global economy becomes increasingly digitalized, and technology as the great disruptor has the potential to be truly transformative, we have to be cognizant of the challenges and work together in the domain of cyber security and create regulation that is conducive to partnerships.
The Commerce Minister invited companies from ASEAN countries to take advantage of these opportunities for boosting trade with India and said there is immense scope for mutual collaboration in Services especially, healthcare, education, tourism, financial services, digital and artificial intelligence based services. India can play a vital role in lowering healthcare costs in ASEAN countries, as India can provide international standard drugs and formulations at very reasonable cost.