By Chandran Iyer
The Union Minister for Commerce and Industry, Textiles and Consumer Affairs, Food and Public Distribution Piyush Goyal shared his conviction that India would be the third largest economy in four years or so, at best five years. “My own conviction about the way India is growing is that we will drive our economy probably closer to 35 – 40 trillion-dollar economy by 2047. The desire of every Indian is to be second to none,” the minister said at the valedictory session of the three-day Asia Economic Dialogue 2023 held in Pune.
Asia Economic Dialogue (AED) 2023, the flagship geo-economics conference organised jointly by the Pune International Centre policy research think tank and the Ministry of External Affairs (MEA), Government of India, was held in Pune from February 23 to February 25, 2023.
The theme for AED 2023 was ‘Asia and the Emerging World Order’ in the backdrop of the post-pandemic geopolitical developments in Asia and Europe, which continue to have a global impact.
This conference was a major international event, featuring high-level participation from ministers, policymakers, industry leaders, domain experts, academia and global trade and finance experts. A total of 44 speakers from 12 nations including Brazil, the USA, Taiwan, the UK, South Africa, Bhutan, Maldives, Switzerland, Singapore and Mexico participated in this conference.
The inaugural session on February 23 began with a warm welcome by the eminent scientist Dr Raghnuath Mashelkar, FRS, President, PIC. This session featured a discussion between External Affairs Minister Dr S. Jaishankar, Mr Lyonpo Namgay Tshering, Minister of Finance, Royal Government of Bhutan and Mr Ibrahim Ameer, Minister of Finance, Maldives.
The Union Minister Piyush Goyal exhorted the industry to be proud of their achievements, of our strong macroeconomic fundamentals, about the reforms done in the past few years. “We believe India not only is the fastest growing large economy, but we will also continue to be so for many decades to come.”
Mr Goyal observed that Asia has its own particular dynamics, where we have economies which are both democracies and those which are non-transparent and non-rule-based. “In the last decade or so, India has been wanting to internationalize and engage with technology and modern way of working. Today, India is clearly recognized as the country of the decade, if not the country of the 21st century. We have already moved from the tenth largest to the fifth-largest economy. We today have a young demographic dividend, which is being recognized as our biggest asset.”
The Minister said that the Russia-Ukraine conflict has had a severe effect on the developed world more than the developing countries. For food security and energy security and consequential impact on inflation, interest rates and growth, it has had a devastating effect on both developed and developing countries, he added.
The Minister recalled that in 2019 when India was engaged in discussions on joining the RCEP group of nations, having studied what was being offered to India as part of the RCEP Agreement, we realized we were in some way an outlier. “To my mind, the then government’s decision to offer to become a part of RCEP was ill-conceived, since we were entering into an FTA with a non-transparent economy with no rule of law or court of appeal or democracy. The agreement could have been the death knell of all manufacturing in India.”
The Commerce Minister said that over the years, we have hurt India’s interests by making our people get used to low-cost substandard goods from China. “The trade deficit with China which was under 2 billion dollars around 15 – 16 years ago, increased to around 48 billion dollars by 2014. We allowed products to come from China while they stopped our products from India to go to China for legitimate or illegitimate reasons. Hence, it was music to my ear when Prime Minister Narendra Modi decided to not join RCEP on 4th November 2019, which was celebrated across the country by every section of industry and business, every farmer and every person associated with the dairy sector.”
The Minister spoke of the need to sensitize our people to take more pride in Indian products. “India believes in the rule of law, their right to liberty, and freedom of expression. Very different economic philosophies coexist in Asia. It will take some time for us to create adequate systems and manufacturing systems, and also sensitize our people and businesses to wean ourselves away from the opium of low-cost low-quality goods coming in from China.”
The Minister said that India is now a partner the world can trust. “By converting the COVID-19 crisis into an opportunity, we were able to open the world’s eyes towards India. Our ability to innovate and come out with vaccines and distribute and vaccinate the population at low cost has been a world record. During COVID-19, we did not let down a single international commitment. We are a trading partner the world can trust. We have had the highest ever exports in 2021-22.”
Speaking of Free Trade Agreements, the Minister told industry representatives that we did the fastest-ever FTA in the history of the world, the India-UAE Agreement having been completed in 88 days. “We also completed a fast FTA with Australia. That is the enthusiasm the world is demonstrating towards working with India. We have negotiations going on with Israel, Canada, the EU, the UK and GCC. Russia and its partner countries of EAU too want to fast-track negotiations with India.”
The Minister spoke of the need to be 100% indigenized in the auto industry. “We must strengthen our domestic manufacturing capabilities; we should be competitive and able to stand on our legs and our consumers must be more caring on the potential we are losing by indiscriminate imports.”
Speaking on payment timelines to MSMEs, the Minister said that big companies that benefit from low borrowing costs should consider paying MSMEs promptly so that the small businesses to become more profitable.
On a question on promoting green businesses, the Minister said that while the developed world is the largest contributor to climate change, they are preaching to us today about what we should be doing despite us being only 2.5% of contributors to carbon emissions. “The government has focused on addressing climate change as a responsible global citizen. We are promoting circular economies so that we recycle our waste. We are among the top five performing nations in addressing climate change goals. We are also promoting products like sustainable textiles. We are also laying a big focus on promoting organic farming, for instance, we are going to make exports of agricultural organic produce from Sikkim grow from Rs. 8 crores currently to Rs. 8000 crores by 2030.”
On a question on FTA with the USA, the Minister said that FTA approval in the US requires the approval of the US Congress and that there is no bipartisan support for this in the US. “Hence the Indo-Pacific Economic Framework has been conceptualized as an alternate framework. We are looking at getting closer to the US in terms of resilient supply chains, technology partnerships and opening our economy through indirect measures. We have constant dialogues with the US. A huge business delegation comprising top US corporations is coming down to India along with US Commerce Secretary during Holi. We are investing huge time and capital in strengthening the India-US partnership.”
On a question of supporting MSMEs, the Minister pointed out that any effort to increase exports will have an impact on MSMEs, given the whole ecosystem around large businesses. “While the government has schemes to kickstart businesses, ultimately, we have to have a balance between the interest of consumers and businesses. We can artificially support a sector only up to a point. MSMEs will always be very critical to the global economy. Hence, various concessions are being given to MSMEs as well as startups and women entrepreneurs.”
The Minister told the industry that the government has undertaken game-changing reforms for the empowerment of people. The aspiration of the young population in India for the good things in life will drive the Indian economy and help us become a 47 trillion dollar economy by 2047, he added.
OPENING DAY
Earlier on the opening day, External Affairs Minister S Jaishankar advised Pakistan to “fix their plans and decisions in the favour of people.”
During the panel discussion at the inaugural session of the Asia Economic Dialogue 2023, Dr Jaishankar was asked by India’s ambassador to China and Bhutan Mr Gautam Bambawale as to what should be India’s stand regarding Pakistan which was facing an economic crisis. Dr Jaishankar said, “The country must fix its social and political issues. If I plan any scheme or decision for a country, I must think about the people’s perspective too. What they want, they (Pakistan) must think about this. Jaishankar said “The reality of this particular relationship (India-Pakistan) is that it has a fundamental issue which we cannot and we must not avoid. And that issue is that of terrorism because the moment you start doing this walk around that…”
“And we mustn’t be in denial of what are very fundamental problems in that relationship. And just as a country has to fix its economic issues, a country has to fix its political issues, too. A country has to fix its social issues too. No country will ever come out of a difficult situation and become prosperous power if its basic industry is terrorism,” he added.
He also stated that it is in nobody’s interest that any country least of all a neighbouring country get into severe economic difficulties. But, if any country gets into severe economic problems that country has to make policy choices and governance decisions to get itself out of it.
Meanwhile, Jaishankar also highlighted the ‘Neighbourhood First’ policy, the state of the world and India’s G20 Presidency at the event.
“If I were to pick three big issues in the forefront of my thoughts, one I would actually reflect on our neighbourhood, partly because we are in the neighbourhood, 3 of us,” said Jaishankar.
The Asia Economic Dialogue (AED) is the Ministry’s annual flagship event on Geoeconomics, co-hosted in collaboration with Pune International Centre.
