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Transcript of Media Briefing on forthcoming G20 Summit (November 6, 2014)

November 06, 2014


Official Spokesperson: Good afternoon friends and thank you very much for being here again this afternoon despite it being a holiday. As you are aware that the diplomatic calendar this month is very heavy. Prime Minister will be travelling to several countries. He begins his travels on 11th of November with visits to Myanmar for India-ASEAN summit, followed by the East Asia Summit. Subsequently, he will be in Australia for the G20 Summit and after the G20 Summit, he will also have a bilateral visit to Australia and finally there will be a visit to Fiji. Given that there are several Summit meetings coming up, what we thought is that we will focus our briefings on different days on different issues. So, today we will focus on the G20 Summit. I have here with me Mr. Suresh Prabhu who is designated as the Sherpa of the Prime Minister for the G20 Summit.

This is Prime Minister’s first participation at the G20 Summit and Mr. Prabhu is alsoparticipatingas the Sherpa for the first time. We have a continuity in terms of oursous-sherpas. On the extreme right is Ms. Usha Titis, Joint Secretary in the Ministry of Finance and she is thesous-sherpa forthe financial track. On my left is Mr. Charanjeet Singh who is Joint Secretary (MER) in the Ministry of External Affairs and who assists on other issues. I will now request Mr. Suresh Prabhu to speak to you about G20, following which the floor will be open for questions on the G20 Summit. After that if you have questions on anything else, I will try and respond to that. May I now request Mr. Suresh Prabhu to make his opening remarks.

Shri Suresh Prabhu: Thank you very much and thank you my friends for coming on a day which is not a working day and now I know why you call them working journalists because they keep working all the time. So, thank you once again for being here. As my friend Mr. Akbar pointed out, it is a very interesting and important international event. It is going to take place on the 15thand 16th of this month in Brisbane, Australia.

The Brisbane G20 is continuation of many things that have happened since 2008. But also in a way it is an important milestone. Firstly, as you all know 2008 was a very critical year for the global economy. We had a contraction, we had a virtual questioning of the entire economic model that we have been working for a long time. We were believing that the world economy is going to go in only one direction, it is going to continuously expand and that was particularly questioned in this 2008 crisis. It started with financial institutions and then snowballed in to a virtual economic crisis which affected not just countries who were responsible for it but also some other countries. Then there was a realization that dawned that there are not just 7-8 countries of the world which till then were like a club and who could deal with such a massive crisis that is engulfing the world; and therefore large emerging economies who have substantially large stakes because they suffered because of the economic crisis, but they could also rescue the rest of the world in terms of bringing back the growth and that is how in 2008 there was the first one (G20).

So, one issue which continues to be there in all the summits and which will be there in this summit also is the economic issue. One principle of economic issue is how do you get more than 2% growth rate for the global economy, more than what is already happening. I am very glad to say that you can't get 2% global growth if all the 20 countries don't contribute. And it is a reality that there are some economies which are contracting, like Europe; there are some economies which are struggling and there are some economies which are expanding. I think India's contribution to this 2% economic growth will be quite substantial and I think India continues to be rising rapidly and continues to progress economically and therefore, India would contribute significantly not only now but far more in the years to come. Because as you could see the Chinese economy is slowing down, our economic growth will be definitely be higher than theirs after a year and a half. Therefore, for India this economic issue is very important.

So, in that, is this one very important macro-level issue of 2% economic growth. The second part is development of infrastructure and as you know India is at the forefront of demanding that the global surpluses which are parked in various firms should really be utilized for a proper economic use. If you could develop them, deploy them in to development of infrastructure, which will benefit global economy to begin with but also the economies of those who are making the investment besides obviously the country which hosts that investment. Therefore, this is a very interesting issue which India pushes. We are looking at various options, either through G20 or others which could finance infrastructure in a very significant way. So economic issues are one of the dominant issues.

The second one is a issue relating to energy and G20 is obviously one of the largest, being 85% of the global economy, the largest guzzler of energy as well. But in India we have big issues at stake, we are demanding that there should be a global change in energy mix. We are seeing that a large portion of the energy markets are dominated not necessarily by free competition. So, there should be more transparency in these operations and the global energy mix, when it changes, should also result into bringing more renewables and more clean energy in the field. Also, India is at the forefront of saying that we should have a dialogue on gas markets, because you know that gas is going to be a very imporant fuel which will be relatively cleaner one as compared to coal and oil. Also, India has a big stake in that because we do not produce enough gas to fulfill the requirement of the country. Therefore, we have energy as one the principle issues. In energy, we are talking about energy efficiency which is very important part of the whole process and India has a new law called Energy Efficiency Law which was passed some years ago. We are demanding that improper use of energy, wasteful use of energy should also be discouraged. It is not energy efficiency alone but discouraging energy consumption. Because as we have seen that if you look at it , India's per capita consumption of energy would be 1/20thof the energy consumption of so many other countries. Therefore, G20 should focus not only on energy efficiency alone but but also to discourage the wasteful expenditure of energy.

Other important issue is environmental issue. India is demanding that we want a strong action on climate change in the form that the United Nations Framework Convention on Climate Change (UNFCCC) which talks about a very important principle that is common but differentiated responsibility and the negotiations should conclude much faster under the aegis of this principle which is a very important issue and we really want to work on that.

The other important issue is the social issue. We have been seeing a very interesting aspect of the global economy. The economy expanded but did not result into creation of jobs. So, what we call a jobless growth was a global phenomenon. So we want not only growth in economic output (measure by GDP) but also creation of more employment. Therefore, this is one of the major social issues that we have talking about. Also, the outbreak of Ebola which happened in the West Africa but the rest of the world is also affected. Fortunately, we do not have any serious incidents of Ebola patients here yet. What India has been saying that we want global action in terms of ensuring such mass communicable diseases do not occur. The World Health Organizations (WHO) must have a system and also, we must develop a vaccine or something like that which would not only cure it but also to take action which could help in prevention of this.

Then there is another very important item in the agenda, before I stop because I am sure you have some questions to ask. It is reforming the globalfinancial institutions and this is something which we strongly believe; this is not a new stand of the country. We are also raising the same issue in G20- reforming IMF. There has been an agreement on how that recapitalization should take place, how the Special Drawing Rights should be redrawn and how they should be chalked out. But unfortunately, action is lacking, like we see in forums like this which speak little more than what they act. So, there has to be, as our Prime Minister says -" Kehni aur kathni mein zyada antar nahin hona chahiye".So, l think that is something in which we should try to work on and make sure that our partners in G20 agree to what they have committed, act on it, act in a timely manner and really try to make the institution more democratic, more participatory and in a way which reflects today's reality. Because the global output is far more in the countries other than the countries which are controlling the IMF to begin with and therefore, this again is a very important issue.

I don't know where to put it whether social or economic, but we have been demanding that we should try to reduce the cost of remittances. As you know and we are very proud of the fact that the Indians send maximum money back home. So, India is the single largest recipient of the global remittances and this is a record which India has kept for sometime. So, we remit more money than theFilipinos, the Chinese. In fact, we remit more money back home than any other country in the world which has a working population abroad. India should be proud of this fact. Many of our friends from Kerala, many of our friends who work in more than 50 degree centigrade. They work hard, send the money back to India which supports the Indian economy significantly because that reduces the gap of Current Account Deficit. I don't know what would have been the Current Account Deficit, what would have been the value of rupee if these US $ 70 billion would not have come in to India's external account. So, we have been saying that the cost of remittances should be reduced. Sometimes, it could be as high as 10%. Just imagine a poor worker who has to send back US $ 10,000, looses US $ 1000 only because the country that is to facilitate that transfer is going to charge US $ 1000. It is ridiculous. Fortunately, there is some understanding that the cost of remittances should be limited to not more than 5%. I am very happy to say that because of the constant pressure and interaction by India, we have able to reduce it for example, Saudi Arabia is saying that it is willing to reduce it to 3.5%. This will benefit our poor workers immensely. Obviously, it will also mean that more money will come into India's external account. But in fact, it is very ethical, logical, and very important that why should a worker who is working there should pay a bulk part of his money in order to remit money back home, just because the banking system does not operate in a proper manner. He is working hard that's why he gets money, but in this process he looses that money. So, this is one area that we are going to work on.

Another very important issue is the issue related to taxation. As you know, there is a very important concept which has happened is that large companies in different locations and because they operate in different locations, it is very difficult to decide where they should be taxed. We had a concept, always accepted, that the residence of a company/individual should be the place where it should be taxed. But now where it operates from is not necessarily where its activities are there. Its headquarter may be located in USA but it operates from multiple locations. So, therefore, base erosion and profit shifting results in to profit not being taxed in the place where substantial activities were carried out and therefore, in that area India is putting forward its viewpoint. We have circulated a paper.

The other related issue that there is going to be a new regime which is hopefully going to come in to place in a few years' time. It would mean automatic sharing of information. Today, you know tax evasion/dodging happens because people hide certain assets, certain incomes outside of the tax charging authorities ambit. But by doing so they are not allowing a proper taxation to take place. When the tax authorities want that, it becomes difficult because of lack of information. So, it is going to be automatic exchange of information to be available to everybody and anybody. It would be available with in the country, so it would be a very interesting idea. These are broadly the issues on which our Prime Minister is going to be in Australia on 15thand 16th. He would be meeting a large numbers of leaders besides his interactions with them collectively. There are many requests for him to have a bilateral. I think he is probably the only world leader to have maximum requests for bilateral. Therefore, this visit will be hopefully as successful or more successful than several of his other visits where he has set a landmark for himself in terms of making them as good as they have been in the last few years. So I would stop here and I would happy to answer your questions related to G20.

Question: Mr. Prabhu, you spoke about collective action on environmental front, climate change negotiations. Is it true, are we planning to break away from China in international climate change negotiations? Will the basic framework continue or are we going to have our own pitch? What will be our pitch at the G20 Summit on climate change?

Shri Suresh Prabhu: Climate change negotiations happen under the framework of United Nations Framework Convention on Climate Change. The next round is going to take place in Lima. India has not decided about the stand. When India decides the stand the Ministry of Environment and Forests Mr. Prakash Javadekar will let you know about it.

Question:Sir, on the issue of proper taxation which you have talked about, which in general sense we call black money in circulation on international front, should we be bringing some framework before world leaders to agree on?

Shri Suresh Prabhu: This is exactly the framework. What you are mentioning is absolutely right. Basically if you have a proper database, a proper information platform on which you maintain systemic information creation – and that is what will happen through what is called as automatic information sharing, that is exactly the issue – that will prevent future generation; and in fact we will be able to look at several of the transactions which are cross-country, transnational transactions could be looked into in a proper manner.

Question:I was interested by your comments regarding remittances. And I wanted to ask as part of the trade more broadly and the Prime Minister’s outreach to the diaspora community in Australia, how important is it to him to tie in the diaspora community not just in terms of remittances but in finding ways to, if you like, come home, help the Indian economy through boosting trade and business ties.

Shri Suresh Prabhu: As you know, India is a strong believer that we really need a proper trade facilitation agreement globally. Therefore, as I have always been saying, India has been a founder member of the General Agreement on Trade and Tariff (GATT) which is the body which then finally got converted into WTO. If India was not a believer in that, India would not have been a member of that from the very beginning. And consistently India has been participating in the trade negotiations agreement and has been a facilitator, not just trade facilitator but even facilitator of concluding the agreement. Therefore, in the Doha Round in Bali it was decided that food security, public stockholding issues will also be dealt with along with trade facilitation agreement. So, I am sure the world community will work on those issues so that we could conclude this agreement faster.

Official Spokesperson: On your question about the involvement of the diaspora, let me tell you that we will have a separate briefing for the Australian part of it, and that is when that will be an element. Today we are focusing only on the G20. We will come to those elements in a separate briefing. We do not want to overload you with information. So, please bear with us for a few days.

Question:Mr. Prabhu, I would like to come back to Manish’s question on the cooperation between India and China on climate change. You referred it to the Minister of Environment and Forests because basically that is what the India-China climate change partnership is under. Yet you have been quoted today as having said that India has actually suffered because of being bracketed…(Inaudible)… when it comes to climate change negotiations, which was a considered decision of the Indian Government to go along with in those international negotiations. Do you stand by those words? And is there going to be a rethink of the India-China climate change partnership that has already been signed?

Shri Suresh Prabhu: G20 is not a negotiating platform. G20 is a group which talks and discusses the issues. What we are saying in G20 about climate change is two issues. One, all future negotiations must be concluded as fast as possible under the aegis of the United Nations Framework Convention on Climate Change, which has a very important component which is Common but Differentiated Responsibilities. That is one part.

The second part we are saying in G20 is that adaptation to climate change should be a priority. As I said earlier, which I repeat again, climate change negotiations will not happen in G20 platform at all. They will happen under the specialised institution,which is the United Nations Framework Convention on Climate Change, which is going to meet in February in Lima. They will discuss that.

Question:…(Inaudible)… Will there be a meeting between Mr. Modi and Spanish President Mr. Rajoy?

Official Spokesperson: As has just been told, we have several requests for bilateral meetings. But finalising the schedule of bilateral meetings is a factor of availability of schedules and matching of schedules of the leaders. It is the Prime Minister’s intention to meet as many leaders as possible. So the focus is on those leaders who he has not been able to meet previously during his Prime Ministership so far. Amongst those leaders is also the Spanish Prime Minister. As of yet we have not finalised the schedule of the bilateral meetings because as you are aware bilateral meetings can only be scheduled when both the leaders are free. So, we are working on this.

But let me assure you that the Prime Minister intends to meet all leaders in some capacity or the other because there are elements in the programme where only the leaders will be present, there are elements in the programme where the leaders will be assisted just by one person, etc. It is our intention that the Prime Minister meets as many leaders as possible, and it is the intention that he meets virtually all those leaders who are present in some capacity or the other because they would be together for a day and a half. But if you would like structured bilateral discussions, that schedule is being worked on as yet.

Question:Mr. Prabhu, coming back to the automatic sharing of information on taxes, India has already signed DTAA with many countries but there is a problem now being talked about the confidentiality clause. In this forum, will India be raising this issue of confidentiality, whether it can be removed bilaterally or multilaterally?

Shri Suresh Prabhu: This is what exactly the new platform, new regime in which common automatic information sharing will happen in a way that does not necessarily ... This is common reporting standards. This is something in which if you maintain ... You remember, we used to have different accounting years for example many many years ago and then we have brought it to 31st March so that there is uniformity in this. Then there is uniformity of accounting standards which are accepted globally. In the same way there is going to be an automatic reporting of information based on certain reporting standards which are common to all. So, you will report information in the same platform as everybody else will do. This is one part.

The other part that you have talked about, confidentiality is something which has happened because of the past treaties, past agreements. But this is something which will happen because you maintain your accounts in a way. All the banking system in India, all the banking systems in other countries who subscribe to this, they will maintain accounts in a way that there will be a common reporting platform which will be available to everybody.

Question:Sureshji, my question is about the energy sector. The Government announced the gas price recently and it is the fourth time. Will the G20 meeting discuss about the possible infrastructure investment and all these things, who will buy and who will invest in this?

Shri Suresh Prabhu: This is exactly what is meant by a dialogue on gas markets. If you have noticed, normally the natural gas can be transported through pipeline. We are talking about only transnational transactions. If you do not have a pipeline, then the only way you can transport gas from one country to another is in the form of Liquefied Natural Gas (LNG) in which you need to liquefy it, then you have to regassify it, and then you have to use it. So there is a lot of investment that will go into infrastructure.

If you look at it, the gas prices globally are really varying from end to another. That is why what India has been saying, and the other countries are supporting it, is that we should have a dialogue on the functioning of the gas market, how this happens so that there will be more information available and there should be some sort of principles which should go into deciding the dialogue. But a dialogue will decide the principle.

Question:Sir, you spoke about confidentiality at the time of automatic transfer of information. If transfer of information is there, how can you disclose it then? Will it be possible to disclose the information?

Shri Suresh Prabhu: These are the type of issues which will be operational in 2017. India has been at the forefront of saying this, there has to be a proper protocol which will be put in place, and this protocol of course has to be decided between the countries as well. But this is a great improvement over a system wherein now there will be automatic sharing of information based on common reporting platform. That is very important.

Question:My issue is a little different, it is slightly political.

Mr. Prabhu, when you go to G20, would you go as a Minister of this Government, because there is a lot of talk that you are being inducted in the Cabinet that is going to happen very soon? And would it be from the same party that you previously represented?

Shri Suresh Prabhu: If you feel like and if you all agree, we can put this as a point of agenda for the G20’s consideration.

Question:Sir, you have said that India has circulated a paper on how large companies operating from different locations should be taxed based on economic activity or based on their residence. What has India broadly said in the paper?

Shri Suresh Prabhu: Actually it is a very interesting idea. In fact it is not that anybody has firmed up their views. Basically what we call Base Erosion and Profit Shifting (BEPS) is something which is laying down the principles about how, just to give you an example, a company located in the US which has its headquarters in the US may be carrying out sourcing activities in Europe, their manufacturing facilities could be in China, and they could be selling substantial part in some other country. This could be an issue. Therefore, the principles for BEPS are laid down and more or less agreed to between the countries. This is how we will really set the stage for deciding the taxation.

Going beyond that, there is also a possibility of looking at the transactions which take place through e-commerce. E-commerce essentially happens in one country, the dispatcher, the person who is going to manage the logistics could be in another country, the manufacturer of a product which is sold through this process could be in another country, and the consumer or the final customer, not necessarily a consumer, could be in the fourth country. So, where do you tax such a transaction?

Therefore, there are certain issues like this which really need global consideration. In fact that is why we talk about global governance. Global governance is governing global institutions, like IMF is one part, but also deciding about the governance issues broadly in terms of certain cross-country transactions, transnational transactions, where they should be taxed, the principle. So these are very important issues. In fact that also brings in the issue of transport pricing, basically where you really bring in the concept of taxation. So, I think this is a very important issue. In a way some progress has been made but I would say even lot more needs to be done also, and that will happen through the process of consultation like this.

Question:My question concerns, it is a little bit different from the G20 summit, the surrogacy issue. Sir, India is refusing visas to Australian couples concerning some of the surrogacy issues in India. What is the Indian policy now coming up like? Is India concerned that the Australian couples would not be present when the child is born in India? Also, MEA is also in talks with the Commission concerning the same issue. On what level the talks are going on and how much time will it take?

Official Spokesperson:Thank you very much. This is like a Matryoshka doll, one question in another. That said, let me try and respond. You are aware that surrogacy is a very sensitive issue. It is an issue on which we are discussing legislation. There is current legislation in place also.

Our view is that anybody who applies for visas under the present system requires to fulfil all the criteria for being granted a visa. If in a certain country the laws do not permit them to fulfil that criteria, obviously visas cannot be issued for people who are not willing or not yet ready to fulfil the criteria that exist today. Therefore, coming back to your question, if there are any applicants in Australia who are unable to fulfil the requirements of our visa regime for surrogacy purposes, obviously they will not be able to be granted a visa. Our requirements are clearly stipulated on the websites of all our Consulates and all our Embassies and High Commissions.

I understand that in Australia this is one such issue. The ball, therefore, lies in the court of the country from which those nationals hail and would require to come and have surrogate children in India. This is still an interim and a transitory phase, as you are aware, because there is legislation which is being considered and it is best to wait for the outcome of that. Until that, the law of the land will prevail.

Question:A Sri Lankan Minister made allegation against our defence force IPKF. What is the Government of India’s reaction?

Official Spokesperson:You time and again come up with voices from the wilderness and ask me to react, and I always tell you we react to governments. If I start reacting to every view of every person in all parts of the world, there is no way I can ...

Question:…(Inaudible)…

Official Spokesperson:Let me finish, Sir. Please give me the opportunity to finish. I will answer your question. Let me finish. I am just prefacing the question.

The Sri Lankan Government has not raised these issues with us. We deal with the Sri Lankan Government. As a government government, we deal with the Sri Lankan Government. Our High Commissioner is in touch virtually on a day-to-day basis or more than once a day with the Sri Lankan Government. If they have not raised this issue with us, we will not respond to issues from voices in the wilderness.

I have said this before in other instances, let me repeat it in this instance that voices from the wilderness will try and occupy your mind space and your space. As far as us, we are government, we will respond and respond clearly and lucidly to governments. The moment the Sri Lankan Government raises issues, we will respond to them and we will make it clear to you.

So, my answer to that question is, the Sri Lankan Government has not raised these issues, these are issues we consider to be from voices from the wilderness, we will not respond to voices from the wilderness.

Question:Sir, the relationship between India and Israel was on a standstill for some time earlier but now it seems there is some warmth. So, what is the new change between India and Israel as Home Minister Rajnath Singh is there in Tel Aviv just now?

Official Spokesperson:Our relationship with Israel has always been warm. Our relationship with Israel is a relationship which is not hidden or anything; it is not based on our relationship with others. We have candidly and openly said we have a very vibrant and robust relationship with Israel. That relationship does not in any way impinge on our traditional position on Palestine, on our approach to other aspects of this issue. So let me make it very clear, we have had very good relations with Israel while also having robust relations with others.

Yes, the Home Minister is travelling to Israel and you are aware that both the Prime Minister as well as the External Affairs Minister had met their counterparts in New York. That is reflective of our good relations.

Question:Sir, there were some reports saying that India does not have any objections to the maritime silk route which China has proposed. When the Chinese President came in September, was there any discussion on India joining the maritime silk route, and what is India’s position if there was a discussion?

Official Spokesperson:Elizabeth, I have mentioned previously and let me clarify that re-emergence of traditional routes is a process that is reflective of ongoing trade, commerce and sharing of ideas. Whether it is the silk route, or it is the spice route, or it is the mausam route, this is an ongoing process.

That said, as regards the new silk route that you are talking of, this matter was neither raised, nor discussed, nor is it reflected in any of the outcomes of the visit of President Xi Jinping to India. I hope that clarifies that this was neither raised, nor discussed, nor is it reflected in any of the outcome documents available publicly on the visit of President Xi Jinping to India.

Question:This is about Sri Lankan refugees. The 157 refugees who escaped from India were caught in Australia. Actually on a humanitarian ground, what is our position to rescue them and to bring them back? So far a position has not been taken.

Official Spokesperson:Let me clarify the position for you again. We made it clear, but we will clarify it once again.

India does not support illegal migration from India or illegal migration to India. That is number one. Number two, when this matter was brought to our attention we requested the Australian authorities to please grant us consular access because we would like to know who these people are. Are they Indian citizens? We have no problem in accepting Indian citizens back. However, if they are not Indian citizens, then they can only be dealt in accordance with relevant international legal obligations. Finally, if there are any children etc., we should adopt a humanitarian approach. We have not had access to them. Our understanding is that they are currently in a Pacific island under a process that Australia has worked out.

We remain ready to repatriate any Indian national if they are Indian nationals. As regards nationals of other countries, this has to be dealt with through normal international obligations that the country receiving them and the country from where they have travelled or from where they hail are responsible. These are internationally standardised obligations. We will not budge from our obligations, let me make it certain to you.

So, please, if there are any Indian citizens we will have consular access to them and we will bring them back to India. However, primary to this is that we should be certain that they are Indian citizens.

Thank you very much. With that we end this conversation.

(Concluded)

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