Q.1. How do you look at Indias new foreign trade policy? How does it help India-Russia economic relations?
Ans: The major initiatives as has been mentioned in Indias new Foreign Trade Policy to help the India-Russia economic relations are Connecting India with CIS i.e. International North-South Transport Corridor (INSTC) Project and to set up a JSG (Joint Study Group) for studying the feasibility of FTA with member-countries of the Customs Union viz Russian Federation, Kazakhstan and Belarus. We hope that the two initiatives among other endeavors would increase the level of India-Russia economic engagement.
India and Russia share a special and privileged strategic partnership. Economic and trade relations constitute an important element in this time-tested relationship. The emphasis is on harnessing the untapped potential in both the countries in order to create mutually beneficial partnership. We are also looking at joint collaborations through technology transfer where the competencies in various fields could be put to best use for creating joint projects for trade and economic cooperation.
Q.2. This is your first visit to the St Petersburg International Economic Forum. What kind of outcome are you looking forward to?
Ans.: I am very happy to participate in the prestigious St. Petersburg International Economic Forum. I am especially happy since this is my first visit to this beautiful city and to this forum which provides an excellent platform for deliberations on various contemporary issues which are relevant to the evolving global financial architecture. I look forward to the exchange of views and ideas; and interaction with the experts from around the world who would be participating in various sessions during the Forum.
Q.3. The Indian government has formulated the Make in India policy to boost manufacturing and set the economy on a fast growth track. You have been an active proponent of PM Modis Make in India mission.
Ans.: The Make in India initiative is one of the major policy initiatives announced the new government in India that took office in May 2014. Make in India initiative intends to invite both domestic and foreign investors to invest in India. The Government has undertaken a set of reforms aimed at legislative, administrative and executive actions specifically on Ease of Doing Business, amendments inlabour reforms, liberalising FDI, and some sector specific initiatives to help in realisation of the Make in India campaign that will unlock the potential of Indias natural advantages. We have made some progress on taxation, particularly Goods and Services Tax that can add as much as 1.5% to national GDP growth rate. An efficient GST would be inclusive in covering all sectors and would avoid taxation anomalies that currently detract from manufacturing growth.
Apart from this, we are working towards rationalizing and modernizing various legislations pertaining to land acquisition, mining, and other areas. These would greatly influence the development of the manufacturing industry.
Another key focus area of the Government is skill development. As the economy races ahead, the need for skilled and qualified labour will only escalate. To bridge this gap and to impart industry specific learning, Government of India will be setting up training centres across all manufacturing cities. Skill India, a national multi-skill programme is proposed to be launched. It would skill the youth with an emphasis on employability and entrepreneurial skills. The modules will be designed as per industry standards and will broadly cover automobile and auto-components, general manufacturing, chemicals, garments, petrochemical and pharmaceutical sector.
The initiative is aimed at providing a platform for our friendly partner countries all over the world to invest in India and to benefit from the available resources in India to manufacture quality products at globally competitive prices for consumption all over the world. Thus, the Make in India is based on a win-win approach, which would allow our partner countries to cooperate more closely with India and to be a part of Indias growth story.
Q.4 How successful has been these initiatives taken by the Government so far?
Ans.: I mentioned some of the measures which have been taken by the government in the first year of its term. These measures are historic and will have highly positive impact on the economy. Though gestation period of any reform ranges from 12 to 18 months, the preliminary results of these reforms are visible even in a short period of time. Foreign direct investment has shown substantial increase across the sectors. During the financial year 2014-15, FDI inflow recorded a growth of 24% from US$ 36 billion in US$45 billion. During the period October, 2014 to March, 2015, FDI inflow recorded a growth of 38% from US $ 18.13 billion in US $ 24.95 billion. More than 50 percent of the FDI was received from October, 2014 to March 2015.
Q.5. How do you see the role of Russia in Make in India project? What particular Russian industries can partner with India in this initiative, other than the defence industry, where both countries are already close partners?
Ans.: As I mentioned earlier, India and Russia share a time tested partnership and now is the time to bring the existing potential in Economic and trade relations to the level it should be. Though Cooperation in Defence sector is no doubt a very important component of our cooperation, I sincerely believe that under the umbrella of Make in India the two countries have historical opportunities to engage particularly in high technology sectors, Space, Railways, Mining, Energy apart from other sectors like hydro-carbons, pharmaceuticals, minerals, fertilizers, diamond, automobile industry, infrastructure. I hope that our friends from the business community in Russia be a part of this initiative.
Q.6 There have been reports that India is interested in joining the Eurasian Economic Union? What is the progress on this proposal for India to be part of the CISFTA and EEU?
Ans: India and the EAEU are in the process of having the 1st meeting of the JSG (Joint Study Group) for studying the feasibility of FTA with member-countries of the Customs Union viz Russian Federation, Kazakhstan and Belarus in July, 2015. We will sign the Joint Statement on the launching of JSG during SPIEF, 2015.
Q.7 What is your Governments policy on FDI in e-Commerce ? What potential do you see for Russian companies in this sector?
Ans : Government of Indias FDI policy permits 100% foreign investment in a Company engaged in B2B e-commerce which means such companies would engage only in Business to Business (B2B) e-commerce and not in retail trading, inter-alia implying that existing restrictions on FDI in domestic trading would be applicable to e-commerce as well. This is a growing sector and with the advancement in information technology, the potential is enormous. Russian companies can also avail the opportunity to join the growth story in this sector.
Q.8. What are the areas you envision as the growth areas for Russian-Indian commerce in the next few years? There is a figure to achieve $30 billion bilateral trade in the next decade. What will be the growth areas?
Ans: There are several complementarities between the two sides and scope to increase cooperation in areas such as hydrocarbons, nuclear energy, pharmaceuticals, fertilizers, diamonds, coking coal, agro products, textiles and leather, engineering, information technology services and infrastructure development.
Q:9. Which are the new sectors that the government has opened to attract foreign investment?
Ans. During first year of its tenure, the Government has liberalized the Foreign Direct Investment (FDI) Policy considerably with the objective to attract investment as well as technology in different sectors. Today, there is practically no requirement of Government approval for foreign investments in manufacturing sector except for defense sector. Some of the measures as regards to FDI policy, announced by the new Government, inter-alia, include:
The composite cap in defense manufacturing has been increased to 49% from the current level of 26% through Government (FIPB) route. FDI beyond 49% may also be allowed on case to case basis wherever it is likely to result in access to modern and state-of-art technology in the country;
100% FDI under automatic route in construction, operation and maintenance in specified Rail Infrastructure projects
100% FDI under automatic route (no prior approval) permitted in Medical devices sector
49% FDI permitted in Insurance sector;
49% FDI permitted in Pension sector;
The requirement of the built up area and capital conditions for FDI in Construction Development sector has been reduced from 50,000 square meters to 20,000 square meters and from US$ 10 million to USD 5 million respectively in case of smart cities.
Q. 10. : Do you think India can become an manufacturing and export power house?
Ans.: India has great advantage in several sectors, be it in automobile, auto components, pharmaceuticals or chemicals. Our manufacturers have proved themselves to be at par with the best in the world in terms of quality of their products.
We need to explore new markets and grab the opportunities created due to globalization and the growth of global value chains. My ministry is engaging with the industry. These are areas in which we will like to address the issues faced by our industry to ensure that they access newer markets and expand onthe existing markets too.
