Huge potential for services exports to Latin and Central America, says Commerce Minister
We will ensure that the outcome of the World Trade Organisation (WTO) Ministerial Meet in Buenos Aires next month does not go against the interests of India, said Suresh Prabhu, Commerce and Industry Minister.
Adopting a consultative approach with the trade and industry as well as the Finance Ministry, Prabhu believes that it is better to have a focussed strategy in place for Foreign Trade Policy rather than give numbers.
In conservation with BusinessLine, the Minister talked about a range of issues including India’s stand on the on-going trade negotiations, the export and industrial growth strategy under works and the need to balance the interest of producers and user industry. Excerpts:
With the WTO Ministerial meet just two weeks away, how is the Ministry tackling the increasing pressure on India to soften its position in important areas such as public stock holding and e-commerce?
We are not worried about that. India will not concede its position. We are sure about what our interests are. Whether it is public stockholding, fisheries subsidies, e-commerce or any other important issue, our interests will be properly safeguarded. Whatever the outcome of the WTO, it will not be against India’s interests, that we will make sure.
The domestic industry is concerned about the on-going negotiation on Regional Comprehensive Economic Partnership and the possible tariff cuts on a large number of goods from 15 countries plus China. How will you address these concerns?
We will definitely make sure that all concerns of domestic industry will be taken on board while articulating or negotiating positions at RCEP. China is a part of the 16-member RCEP, so obviously whatever is being negotiated will apply to it as well. We have assured the industry that our domestic concerns will be taken care of.
How far has work progressed on the review of the existing Foreign Trade Policy?
What we are trying to do is to focus on the strategy that we will put in place. Giving numbers in isolation has no meaning. Numbers is the outcome of a strategy. If you focus on strategy properly, it will result in numbers. I am convinced that the strategy we are building will give us results.
I had recently sent the Commerce Secretary to Africa. She met a number of neighbouring countries around Uganda. The result is phenomenal. We had gone with a team from the Exim Bank, the ECGC, a Japanese bank and DFID. That is the new approach we are adopting. We are not just engaging bilaterally.
But, if you ask me when the results will be seen, I can’t say what will be the response to the approach and whether results will be noticed from next month. What I do know is that until you don’t put strategy in place, outcome will not come.
How seriously are you pursuing the market diversification drive?
Central America and Latin America are two markets with great potential. I had recently gone to Cuba and Panama. I talked to the industry there. While goods don’t speak a language, services do. So if we want to send services to that part of the world, you have to have a regional centre. We are thinking of making Panama the regional centre. As soon as I came back I asked Nasscom to send a delegation to Panama. It is up to them to do so. At best what I can do is promote. But, to actually export is the job of the industry.
So you think there is a lot of opportunity to increase services export in Latin and Central America?
Oh, yes. There is hardly any services export to Latin America and Central America at the moment. But, exports to North America are good. However, there is stiff competition in that market. There are also entry restrictions such as high visa fee. While we are pursuing that issue and in a recent meeting I asked the US Commerce Secretary and the US Trade Representative to relax it, but the point to ponder is whether we should focus only on one market. Should we not explore other markets? Should we promote only goods or also services?
Did the USTR and the Commerce Secretary give any assurances on redressing the issue of high visa fees for professionals from India?
Issues related to US visa are dealt by the homeland ministry and other ministries. The USTR and the Commerce Secretary said that they have to take it up with them. PM Modi also took up the issue subsequent to that when he met US President Trump on the sidelines of ASEAN.
When can we expect the new industrial policy?
We are virtually ready with the draft. But, we are not going to announce it casually. We will have wider consultation. One component of the policy is reducing the regulations. So I have asked the DIPP Secretary (who is chairing the committee on reducing regulations) to do it quickly.
Industrial policy should reduce regulations. India’s growth story is private sector driven. If I put too many restrictions and ask industrialists to come and meet me every now and then for various clearances, where is the time for them to do business?
Is the government going to go ahead with the imposition of anti-dumping duties on import of solar panels and modules?
When you make trade related decisions, there is always a trade-off. You may be trying to protect the domestic industry, but there are other users of that industry. Another example of this could be the issue of imposition of anti-dumping duties on steel (being pushed by steel producers).
However, steel users say don’t impose that duty as it does not help us. That is a big challenge. I want to see domestic production going up but at the same time there are down stream users who are against it. We have to balance it. We will have a quasi judicial process to settle it.