Remarks by Foreign Secretary at the Bharat Chamber of Commerce on ‘Post-Covid Economic Recovery’

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Namaskar and Good afternoon!

I am delighted to be at this interaction with the office bearers and members of the Bharat Chamber of Commerce. I would like to thank the President, Shri N. G. Khaitan and members of the Bharat Chamber of Commerce for inviting me to speak today. A special word of thanks to Dr. Rajib Chakraborty for arranging this valuable interaction. My thanks also to my colleague Joint Secretary (Economic Diplomacy) in the Ministry of External Affairs, Md. Noor Rehman Sheikh who is present with me here. Warm greetings to all those who are joining the session today.

2. It is a privilege to address one of India’s oldest, largest and leading Chambers of Commerce in Eastern India. I congratulate the Chamber for its dedicated service to promoting trade and industry for over twelve decades in this part of the country.

Friends,

3. Over the past two years, the pandemic has had a devastating impact world over. It has resulted in loss of both lives and livelihoods.

4. In India, we were impacted by the pandemic over three waves. While the pandemic had an unprecedented impact, it also resulted in a whole of government and whole of society response not witnessed earlier in the country. The massive vaccination drive, one of the largest in the world, against COVID-19 is a prime example of this. Successful implementation of our vaccination campaign has allowed opening up and recovery of our economy. Another example was the Vande Bharat Mission undertaken to repatriate Indian nationals stranded abroad. This was the largest such evacuation operation ever carried out by the Government.

5. India also played a proactive and responsible role in the global fight against the pandemic. Even in the most difficult days of the pandemic, we were conscious of the fact that we were part of a greater global community. In the early days of the pandemic, India supplied critical medicines such as Hydroxychloroquine, Paracetamol and other medical items to over 150 countries. We also shared our healthcare experience and expertise with partner countries, particularly in our neighbourhood and Africa. A number of medical supply missions were undertaken in the face of daunting logistical challenges. This was followed by Vaccine Maitri under which we have supplied over 178 million doses of made-in-India vaccines to 96 countries as well as to the United Nations. We have put the teaching of Vasudhaiva Kutumbkum or the ‘World is One Family’ into practice during the pandemic.

6. On the economic front, during the pandemic, the Government accelerated the ambitious reforms process that was already underway since 2014. This was done under the ambitious Atmanirbhar Bharat Abhiyaan launched by Prime Minister Shri Narendra Modi. Under the Abhiyaan, India rolled out a stimulus package for the economy of about USD 270 billion, which was close to 10% of our GDP. As you would recall, it consisted of critical fiscal and monetary support for the economy, steps for improving the ease of doing business and implementation of key structural reforms. During the pandemic, the Government provided free food grains to 80 crore people under the Pradhan Mantri Garib Kalyan Yojana. Launched in the early days of the pandemic, this scheme has recently been extended for another six months.

7. As the Prime Minister said in his ‘State of the World’ address at the World Economic Forum earlier this year, “during the Corona period, when the world was focusing on interventions like Quantitative Easing program, India paved the way for reforms.” The Prime Minister had further mentioned, “the biggest projects to modernise digital and physical infrastructure got unprecedented momentum during the pandemic.”

8. The FDI regime has been further liberalised. Previously restricted sectors such as space, defense and atomic energy have been opened up to greater private participation. The Government has implemented Production Linked Incentive schemes worth USD 26 billion across 14 important sectors, including mobile and electronics, medical devices and pharma. Government is supporting greater R&D in critical sectors such as Artificial Intelligence, Geospatial Systems and Drones, Semiconductors, Space Economy, Genomics and Pharmaceuticals, Green Energy, and Clean Mobility Systems.

9. A key priority for the Government has been augmenting the physical infrastructure as it will lay the foundation for economic growth through public investment as the economy emerges from a pandemic-induced slump. Prime Minister’s GatiShakti – National Master Plan for Multi-modal Connectivity is bringing together all stakeholders for integrated planning, development and implementation of infrastructure projects. GatiShakti will have a transformative impact on promoting seamless connectivity and movement of goods, people and services across the country.

10. India has made significant investments in creating a robust digital infrastructure. This emerged as a strength for us during the pandemic. We quickly created landmark digital platforms such as Arogya Setu for tracking infections and Co-Win portal for facilitating vaccination. These platforms have played an instrumental role in our fight against the pandemic.

11. The success of the reforms launched by the Government is evident in the fact that despite the unprecedented challenges posed by the pandemic, the FDI inflows into India during this period were the highest ever. India received over 81 billion in Foreign Direct Investment in the year 2020-21. India has today become home to one of the world’s largest start-up ecosystems and hosts close to 100 unicorns 40 of which have reached this status in 2021 alone.

12. Supported by widespread vaccine coverage, gains from reforms and easing of regulations, robust export growth and ramped up capital spending, Indian economy is expected to witness a GDP growth of over 8 per cent in 2022-23. This would be amongst the highest in large economies.

13. India has also achieved the ambitious target set by our Prime Minister of USD 400 billion of goods exports in the year 2021-22. This represents an increase of around 37% over the previous year. This figure for exports has been reached for the first time ever. This is a key milestone in our journey towards an Atmanirbhar Bharat.

14. Let me now come to the role played by the Ministry of External Affairs in promoting trade and investment opportunities abroad for our industry in the post-COVID period. Indian Missions and Posts work closely with other Government Ministries and our Chambers in promoting our economic interests abroad.

15. The pandemic has further underlined the need for a renewed push on trade and investment promotion work. The imperative of contributing to our national goal of becoming Atmanirbhar has led to a sharper focus on the Ministry’s efforts in the area of economic diplomacy. The Prime Minister has given directions that the performance of Indian Missions should be assessed on the basis of their ability to boost trade and tourist inflows and facilitate technology transfer to Indian companies. The Ministry of External Affairs has therefore made the promotion of the 3Ts- Trade, Tourism and Technology a high priority of its diplomatic outreach. Indian Missions abroad have been asked to mainstream the 3Ts in their work.

16. The Ministry has been emphasizing on the importance of the work of Missions for the promotion of trade and investment. Our Missions worked closely with the Department of Commerce to achieve the export target of USD 400 billion that I referred to earlier. We have already commenced work on next year’s target which has been set at USD 470 billion. Missions have been asked to give due attention to achieving the targets set for them and enhancing India’s trade and investment engagement with countries they are working in.

17. During the pandemic, the tourism sector was significantly affected. Lately, tourism flows, globally and within the country, have started to pick up quite fast. The Government has announced various measures to boost the tourism industry, including granting tourist visas free of charge to the first 500,000 travelers to India. Missions have been asked to work in close coordination with all stakeholders in the Government, including Ministries of Tourism, Civil Aviation, AYUSH and Culture as well as Indian airlines operating to their countries.

18. The COVID-19 pandemic saw the need for sourcing various medical equipment and technologies from around the world. Our Missions are our ears and eyes abroad for getting inputs on the new and emerging technologies around the world. They have been tasked with providing inputs for obtaining the best possible technology for use in the country.

19. Friends, India has placed a renewed emphasis on strengthening ties with its neighbouring countries under its Neighbourhood First Policy. This applies not just to working in the political or strategic domains but also to deepening economic ties with our neighbours. With sustained focus on reducing barriers to trade and facilitating seamless movement of goods and people, we have been able to see significant enhancement in bilateral trade with some of our key partners in the neighbourhood. The reason I mention this is because, with economic growth in our neighbouring countries and our emphasis on improving trade infrastructure and cross-border connectivity, neighbourhood will provide some of the greatest economic opportunities for the Indian industry. The Bharat Chamber of Commerce is very placed to enhance our trade and investment ties with our neighbours, particularly Bangladesh and Nepal.

20. Let me elaborate on the two success stories – Bangladesh and Nepal. Bangladesh and Nepal are now among the top ten export destinations for India with our total exports to these two countries amounting to over 16 billion dollars.

21. Bangladesh has emerged as our largest trading partner in the neighbourhood and the fifth largest export destination globally. However, for a country that has been growing at an average annual growth rate of over six per cent for the last one decade, potential for trade with Bangladesh is much higher. Bangladesh is also undertaking rapid infrastructure development in the form of airports, seaports and highways. As Bangladesh’s closest neighbour, the Indian business community has much to offer to Bangladesh in its transformation. I believe more and more of our businesses should open representative offices and subsidiaries in Bangladesh to understand the market better.

22. Bangladesh is also on track to graduate out of the Least Developed Country status in 2026. As many of the trading arrangements of Bangladesh would change when that happens, India is in discussions with Bangladesh for a Comprehensive Economic Partnership Agreement.

23. Nepal is a close neighbor and economic partner of India. It is India’s ninth largest export market and an important destination for Indian investments. Indian firms account for over 30% of the total FDI stock in Nepal, worth nearly USD 600 million. There are about 150 Indian ventures operating in Nepal in manufacturing, services, power sector and tourism industry. A number of reforms have been undertaken in recent years in Nepal which are expected to improve ease of doing business in that country. Some upcoming areas that may be attractive for Indian industry include vehicle assembly, hydropower, medicinal and aromatic plants and pharmaceuticals.

24. India has also been funding connectivity and trade infrastructure projects to remove the bottlenecks in the trade flow with its neighbours. Connectivity can be a force multiplier for improving the flow of trade and people as well as promoting economic integration. As a recent World Bank study pointed out, India’s exports to Bangladesh could grow by 172% through improved connectivity. Steps like revival of historic rail links – Haldibari-Chilahati being the most recent, establishment of a new rail link between Agartala-Akhaura, commencement of rail based container freight movement and expansion of inland waterway routes have been facilitated in the last couple of years. Now, a container cargo can be transported from Mumbai port all the way to Dhaka using railways, and from Patna to various business centres in Bangladesh using waterways. These developments also reduce our current overdependence on land ports like Petrapole. A series of cross-border connectivity project like Integrated Checks Posts and cross-border rail links and roads have also been implemented with Nepal.

25. Another important region, which I understand is also a focus area for the Chamber, is Africa. I am happy to note that the Bharat Chamber of Commerce, in partnership with the Ministry of External Affairs, has established an ‘Africa Help Desk’ for supporting prospective exporters and investors interested in doing business with Africa. Present mega-trends in Africa are supportive of India’s trade and investments in the region. Africa’s large working-age population, its growing middle class, and the significant share of services are crucial for value-adding trade and investment relationships. Consumer-driven goods related to agribusiness, apparel and clothing, pharmaceuticals, and automotive components are some of the opportunities that Indian industry can take advantage of. India’s total trade with Africa has grown from just USD 6.8 billion in 2003 to over USD 75 billion in 2021. Indian investments in Africa have also grown rapidly in the last decade.

26. The Government has announced setting up of 18 new Indian Missions in Africa with an aim to expand India’s diplomatic footprint in that continent. This will also enhance India’s economic outreach in Africa and be of immense value to Indian industry interested in working in Africa.

27. A very important area, one that would be highly relevant for the members of the Chamber, is of project exports. India has a large development partnership programme. Two regions that receive the highest development assistance from India are the neighbourhood and Africa. This is an important component of our engagement with our partners in these regions. Projects executed under India’s development partnership cover varied sectors such as roads, railways, power, ports and shipping, telecom, health, education, aviation, energy, agriculture etc. We would like to encourage greater participation of Indian companies in these projects. Their participation in these projects provides an opportunity to showcase Indian expertise in project planning and implementation.

28. Friends, we have seen that unprecedented uncertainty hit global markets during the pandemic. The emerging markets were hit particularly hard by the pandemic with large capital outflows occurring that go well beyond what we have seen in past crises. However, the Indian economy has proven to be adaptable and resilient, and vaccine distribution and coverage has helped in this regard. As the world returns to normalcy, new opportunities will be generated. It is time for India to take advantage of these opportunities and expand its economic engagement and drive inflows of foreign investment.

29. I would like to conclude by assuring you that we stand ready to provide any assistance in supporting the relentless efforts of the Chamber in furthering trade and investments. I once again thank the President, office bearers and members of the Bharat Chamber of Commerce for inviting me to this exclusive session. My best wishes to the Chamber for its future endeavors.

Thank you.

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