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Keynote Address by Secretary (East) on launch of report ‘APEC and India: An Appraisal’ in New Delhi (May 21, 2015)

May 22, 2015

Ambassador Shyam Saran,
Mr. Sidharth Birla,
Ambassador V.S. Seshadri,
Members of the Business Community and the Academia,
Distinguished Former colleagues,

Ladies and Gentleman,

  • It gives me great pleasure to address the august gathering assembled here today to witness the launch of the Report on ‘APEC and India: An Appraisal’. Meticulously crafted by Ambassador V.S. Seshadri, the report is timely, coming as the Indian Lion, the brand image of our flagship economic diplomacy initiative, ‘Make in India’, is taking purposeful strides across global economic hotspots, where it has been a roaring success!
  • As India looks to transform itself as a global player, it seeks partners across the world, to facilitate and share in India’s growth and prosperity. It is in this light that India looks towards its eastern neighbours with a renewed determination to reinvigorate existing partnerships as well as develop new ones, both at the bilateral and multilateral levels.
  • India’s commitments in South-East and East Asia have been substantial, seeds for which were sown with the ‘Look East Policy’ in the early 1990s. The Look East Policy has today transformed into a more action driven, pragmatic and result oriented ‘Act East Policy,’ with the wider Asia-Pacific as its canvas. It is rooted in India’s proactive engagement with virtually all major regional fora in the Asia-Pacific, notably the annual ASEAN-India Summit, the annual East Asia Summit, the Regional Comprehensive Economic Partnership (RCEP) negotiations, the ASEAN Regional Forum (ARF), the ASEAN Defence Ministers Meeting Plus (ADDM+) and the Expanded ASEAN Maritime Forum (EAMF). In fact, the Asia Pacific Economic Cooperation (APEC) appears to be the only significant forum of which India is not a member.
  • India is today a global growth engine, with the third largest economy in purchasing power parity terms. In nominal terms, India’s GDP stands at over US$ 2 trillion, accounting for 12 percent of global GDP. The Indian economy is one of the fastest growing large economies in the world. It registered an estimated growth rate of 7.4 percent in 2014-15 and is projected to continue growing at a similar and even higher rate, perhaps even outpacing China. With its 1.25 billion population, India is home to 17 percent of the world’s total population, which offers both a large market and a gigantic workforce. According to a FICCI report, the work force will balloon to 869 million by 2020 with an astounding 64 percent of the population being in the age bracket of 15-59 years by 2026, bringing large dividends to the Indian economy if skilled appropriately. India is, therefore, a very attractive partner for any economic grouping to have on board.
  • APEC economies account for over 43 percent of the world population, 57 percent of world GDP and 47 percent of world trade. India has extensive and expanding trade and investment relations with APEC economies, which account for 35 percent of India’s merchandise trade, 27 percent of FDI inflows, and 40 percent of FDI outflows. These figures are not insignificant, even if they may not be commensurate with APEC’s overall trade and investment profile. India’s size and role as a key regional and global player, as well as its maritime location at the western gateway to the Asia-Pacific region, points to the enormous untapped potential that can be realized between India and APEC in terms of trade and investment. India also maintains close political and strategic ties with many APEC members.
  • Whilst some may have the view that India’s entry into APEC would be redundant, given its involvement in regional forums such as RCEP and EAS as well as the weightier G20 forum, our view is that each forum has its own unique value, and engagement with multiple fora is not mutually exclusive.
  • As India undertakes further economic reforms and sets the next generation of the liberalization process into motion, there is a golden opportunity for India and economic forums such as APEC to benefit from deeper engagement. There is today a significant and identifiable convergence of interests and aspirations between India and APEC member economies. India’s ‘Act East Policy’ envisions increased cooperation in trade, investment, infrastructure development, connectivity, capacity building and strengthening people-to-people contacts in the region, goals which are shared by APEC too.
  • India finds common ground with APEC’s initiatives such as the ongoing objective of making it 25 percent easier to do business, with a particular focus on four key areas, which are, starting a business, receiving credit, trading across borders and enforcing contracts. The Indian Government’s goal is to improve India’s ranking on the ‘Ease of Doing Business’ global index, raising India’s position within the top 50 category over the next three years. Similarly, the ‘Make in India’ and ‘Digital India’ initiatives require a business friendly environment. India is preparing for these, as is evident in the recent labour reforms which aim to create a more attractive and efficient business environment. As India strives to transform itself into a global manufacturing hub, India recognises the value that it will gain from greater involvement in regional production and supply chain networks, which APEC can offer.
  • There are specific sectors in which India has already launched several liberalization initiatives, for example, in the services sector, particularly in insurance, air and rail transport, and construction services. Another potential area of cooperation between India and APEC is government procurement and competition, where India’s progress is quite comparable to those of APEC developing countries. India has also undertaken reforms in customs procedures whereby customs procedures have been simplified and their transparency standards are again, more or less comparable to several APEC economies.
  • These are just a few of the umpteen areas in which India and APEC can find mutual benefit. Other benefits of a formal engagement between India and APEC would include reduction in transaction costs of doing business as well as greater haromisation and mutual recognition of standards, professional qualifications and other soft infrastructure. Indian entrepreneurs would undoubtedly benefit from the APEC travel card which permits virtually visa free travel among member economies. India could in turn inject dynamism and bolster economic growth in APEC.
  • APEC’s priorities for 2015, as announced by The Philippines, Chair of APEC this year, are to establish a more inclusive economic environment across the Asia-Pacific and advancing of APEC’s work under four major themes, notably, regional economic integration, fostering SME participation in the regional and global economy, strengthening human capital development, and building sustainable and inclusive communities, including enhancing disaster preparedness. India views these as important measures towards building a stronger and more integrated region, and also supports APEC’s objectives for increased connectivity, lower transaction costs and an overall improvement in economic integration of the region.
  • APEC’s membership has remained constant at 21 since 1998. Its last expansion happened in the last century and indeed the last millennium! For APEC to fully realise its potential in the Asia-Pacific and the world at large, it needs to reflect 21st century realities. This would entail inclusion of economies such as India which cannot be ignored given their economic size, might and potential. India’s track record speaks for itself.
  • India applied for APEC Membership in 1991. In recent times, India’s case for membership has received positive articulations of support during the visit of President Obama to India in January 2015 and during the Foreign Ministers Meeting of Russia, India and China (RIC) in Beijing in February 2015, in acknowledgment of India’s important role in driving global economic growth.
  • As one of the most dynamic big economies in Asia, India is singularly well placed to contribute to major regional economic groupings such as APEC. India represents a politico-economic opportunity for APEC as a G20 country and founding member of the East Asia Summit and RCEP, whose economic and political weight is bound to increase in the coming years.
  • We believe that India could play an important role within APEC for growth, development and stability of the region. In turn, membership of APEC would help India in integrating further with economies of the region, resulting in a win-win situation for all.
  • To conclude, I would like to thank RIS and FICCI for organising this event to give us an opportunity to explore how India can engage more constructively in the Asia-Pacific and play an important role in regional growth and success for mutual benefit.



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