Media Center

External Affairs Minister's address at Economic Times Global Business Summit

March 07, 2020

  • Today my remarks will be focused on three issues: i) what can Foreign Policy do for business; ii) what can business do for Foreign Policy; and iii) How, where and on what do we work together?
  • The first step in this direction has been to bring about a mindset in terms of the Government’s approach. I can say with considerable confidence that Indian Embassies today exude receptivity and extend support to Indian business in a manner that they did not earlier. In fact, I have often come across instances where policy, regulatory or operational challenges faced by our corporates abroad are addressed by them even without reference to Delhi. And when we have actually referred issues, the responses have been equally effective. This is not just in regard to high value transactions but even the requirements of SMEs. Overall, I would confidently assert that we are far more business-friendly than before. And that is not a small change. But are we there? The honest answer is no, not yet. Do other governments do more for their business abroad? Absolutely, I see this everyday with every visiting President, PM or even FM. Our system has to fully appreciate that standing up for business abroad is rooting for jobs at home. Others get it; its time we did.
  • A positive attitude must be backed up by supportive policies. And that’s what we have been doing. Noteworthy among them has been the extension of Lines of Credit (LoC) by the Government to our partner countries with soft rates of interest. Numbering in the hundreds, they have grown in scale, complexity and coverage over the last few years. Their intent ranges from executing projects abroad to extending services and supplying products. What is common among them is that65% to 75% of any Line of Credit has an India content.Each, in their own way, provides market access abroad for our companies.Since Lines of Credit have sovereign guarantee, it helps our companies to operate in markets which they would normally not venture into since they are risk prone. And they can showcase their capabilities and demonstrate their expertise with greater confidence. It is noteworthy that some of our leading companies in India made their first foray into our neighbourhood and into countries in Africa through our Lines of Credit. They then went on to establish themselves commercially in these countries.
  • As of date, India has offered 300 Lines of Credit to 64 countries involving 539projects. These initiatives have been qualitatively expanded in recent years, especially in terms of the size of the LoCs and the profile of the projects. Their planning and execution has also become more efficient by a more integrated whole–of-the-Government approach and stronger oversight, one that goes all the way up to the Prime Minister. As a result, in the last few years, we are completing projects at the rate of more than 2 large ones a month. When it comes to High-Impact Development Projects, which make an impact at the grass-root level in our neighbourhood, we are completing 4 projects a week. This, if I say so myself, is no mean achievement.
  • The bulk of the LoCs and projects are with Africa,given the huge focus the Government has given to our development partnership with that continent. This includes 321 projects involving 205 LoCs. But we also have 181 projects in Asia, 32in Latin America and Caribbean and 3 each in Central Asia and Oceania. The dispersal of grant assistance is even broader than the Lines of Credit, ranging from the Caribbean to the Pacific Islands. So, if you think about it, it is today these development partnerships which are helping to make India’s diplomatic footprint more global.
  • Development partnerships are most salient in our relationship with Bhutan, where it has a long and successful history in the power sector. Other iconic projects in our neighbourhood under the LoCs include key rail bridges in Bangladesh, reconstruction of railway tracks in Sri Lanka, road projects andpower transmission lines in Nepal, and the Metro Express in Mauritius.
  • In Africa, the prominent LoC projects cover the power sector in Sudan, Rwanda, Zimbabwe and Malawi; water in Mozambique, Tanzania and Guinea, health in Cote d’Ivoire, Guinea and Zambia, sugar plants in Ethiopia and Ghana, cement in Djibouti and Republic of Congo and Government buildings in the Gambia and Burundi. In fact, in several African countries, some of the manufacturing plants we have set up are truly the first of its kind and pioneering in nature.Cumulatively, they are a testimony to our economic capabilities and national branding. And in that sense, they become a foundation for Indian companies broadly to engage in more aggressive business development in those particular geographies. It is significant that as a result, even in the last 5 years, we have extended USD 1 billion in Buyers Credit to African countries.
  • The same logic also applies to the supply of goods and services using Lines of Credit. We have, for example, supplied buses to Bangladesh and Senegal,and dredging ships as well as road construction equipment to Bangladesh,railway locomotives, wagons and coaches to Bangladesh, Sri Lanka, Maldives, Angola and Mozambique, jeeps to Sri Lanka, ambulances to Tanzania and medical equipment and CT scan machine to Liberia. Each of these examples has made a visible reputational difference in the recipient countries.
  • Defence supplies like patrol vessels, aircrafts and helicopters have also been done under defence LoCs. Given the focus of our Government on defence exports, they will be enhanced in the coming days.Other facets that we expect to expand in coming days are support to conceptualize and plan projects as well as capacity building and public services delivery.
  • In addition to the Lines of Credit, we have also provided grants on occasion to countries abroad in relationship to projects undertaken by us. The reason we do so are complex: it could reflect the repayment capacity, compulsions of market penetration, its strategic importance for India, the symbolism of the issue or simply the quality of the relationship. Not surprisingly, the bulk of the grant projects tend to be in our immediate neighbourhood - 272, if Mauritius and Seychelles are also included, as they should be. The iconic grant projects include the Afghan Parliament and the Salma Dam, the housing projects for Tamils in Sri Lanka, the Kaladan transport project in Myanmar, the Supreme Court in Mauritius, and the Biratnagar integrated checkpost with Nepal.
  • Nice as it may sound, my purpose in sharing all this is not to blow our trumpet. There are some serious messages that we would like the Indian business community to hear, appreciate and support. Economic diplomacy is at the heart of our Neighbourhood First, Act East and Africa policies. While I stress the brand recognition, market access and business development aspects of our endeavour, its overall strategicpurpose should also be adequately recognized.
  • And that brings me to what business can do for Foreign Policy. Here’s the answer:

    a) Your investments, supply chains and trade make my Neighbourhood Foreign Policy credible. It creates a large sense of regionalism that is key to our rise. And connectivity is central to this endeavour.

    b) If there is a sense today of extended neighbourhood, that is because of the economic connect. Whether it is ASEAN or the Gulf, its all about trade, investments and services. Ask them in Singapore or in Dubai and you’ll get that answer.

    c) Our major power relationships are heavily business driven too. Indo-US relations transform because of the Dotcom Revolution. To differing degrees, we are markets, consumers, trade partners, supply sources or service providers in the eyes of the world.

    d) Have seen increasing how big investments change the very perception of India in many societies. Sometimes, it takes just one to make a difference.

    e) End of the day, Foreign Policy is built on economic muscles. And that is why, the key Foreign Policy challenges – connectivity, technology, global architecture etc. – is best addressed as a partnership between us.

  • We are today rapidly bridging the connectivity deficit that has constrained our prospects till now. Let us look at South Asia itself. With Bangladesh, four of the pre-1965 cross-border rail links have been restored and the other two will be done this year. Three new rail links will come on stream by 2021 including the critical one between Agartala and Akhaura. The two countries are now rediscovering their shared waterways for trade and transport, including a new river terminal at Daikhowa. With Myanmar, the Kaladan project and Trilateral Highway have both been progressing substantially. With Nepal, the operationalization of two integrated checkpoints (another 2 are under implementation) and building of road links are changing the landscape. With Bhutan, a mutually beneficial power generation programme is supported by a host of other socio-economic initiatives. With Afghanistan, the unfolding of the Chabahar port and the operations of the air freight corridor have provided us new avenues of commerce. In Sri Lanka, our efforts are ongoing to promote greater cooperation in the ports sector and in energy. Already, most of our land neighbours source electricity and fuel from India. Their goods transit more comfortably, as indeed do ours. Joint ventures are on the rise and the vision of Indian growth as a larger lifting tide for the region is beginning to be a reality.
  • India has long been present in Africa but not as active as it should be. That has now changed discernibly. In the last four years, we have extended Lines of Credit worth more than US$ 6.5 billion, backed by substantial grant assistance. Our training programmes for the same period has coveredmore than 40,000 Africans as well. We are present in51 out of 54 countries today. And to ensure that our projects work out properly, 18 new Embassies are being opened in that continent.India is today a major development partner in a broad spectrum of domains, and the International Solar Alliance has further inspired these endeavours. Two digitalinitiativesarealso on a pilot mode in Africa today – the e-VidyaBharati distance education and the e-AarogyaBharati distance health. We will be launching initiatives and greater engagement with Africa, including in e-Governance, agriculture, health etc. which will directly benefit the common man in these countries as well as give an opportunity to our companies to take our successes abroad.The main point to appreciate is this: India is investing in the emergence of Africa. This is very much a reflection of a solidarity borne out of past struggles, an affirmation of India’s strong commitment to the Global South. But it is also an aspect of grand strategy – supporting the rise of Africa as part of a multipolar vision of the world. And the economic partnerships provide the foundation for long-lasting relationships.
  • India’s outlook towards development partnerships reflects our larger world view. It envisages a demand-driven and consultative agenda that respects the interests of partner nations. This applies as much to the building of connectivity in the neighbourhood, one that is gradually expanding outwards. It is already visible in logistical initiatives in the Indian Ocean. And it is only a question of time before it reaches Africa and beyond. Connectivity today is the new Great Game. It shapes choices and builds linkages that could well determine the architecture of the order in making. India’s views on connectivity were made clear in 2017 and have been reiterated in greater detail since. In that sense, we have been the pioneering voice of this emerging conversation. In essence, the world in our view is best served by connectivity that is transparently debated, collaboratively envisaged, is commercially viable, financially sustainable, environmentally friendly and has local participation. This is a domain that is already seeing diverse interests in action. Our goal is to set clear priorities that are then realized using our capabilities in collaboration with partner countries. We are, of course, open to working with others who think similarly.
  • Technology has always been the driver of global politics and never more so than now. Its promise, especially for a society for India with a natural interest in leapfrogging, is enormous. We are seeing that unfold most of all in the digital domain. As we all know, this has created its own issues of data protection and data security. But from the vantage point of foreign policy, there are some aspects that need greater deliberation as a national approach. The first is to appreciate that by its very nature, technologies are strategic, whether in its capability or in its consequences. Indeed, for that very reason, we have now created a Technology Division in the MEA. But like connectivity, technology too will create its own debates, constraints and compulsions. Their management will inevitably acquire greater salience with the passage of time. In a world with a growing knowledge economy, the flow of talent will surely become a key variable as global competition is innovation-led. How we fare in the domains of education, digitization, skills and start-ups will determine our relevance and standing. But the bottom line is that both businesses and foreign policy will have from these developments a more powerful hand to play in the global arena.
  • In a world that is more narrowly economic, trade negotiations have acquired a higher profile in international affairs. Much of that arises from the behaviour of America, the strategy of China, the approach of Japan and the focus of Europe. As a nation that is still to integrate itself into global supply chains, develop its infrastructure and scale up its capabilities, these are not easy times. The debate between opportunities and risks is consequently both active and open. At stake is the livelihood of many, a concern underlined by the experience of large deficits and hollowed-out sectors. Obviously in a globalized world, no economy can be an island unto itself. But the exercise of engagement – and its terms – must be very objectively assessed. Trade outcomes must be primarily justified by trade calculations, not by political correctness. Their gains must be visible, probable and practical; not just hypothetical scenarios.And above all, they must promote manufacturing as the mainstay of the economy, not undermine it. Having stressed that, I would readily accept that there are strong strategic aspects to such negotiations. And that is why we are today following a whole-of-the-Government approach on this vital issue.
  • The rise of India is underway. And it is based, amongst others, on the rise of Indian businesses. Many of them operate abroad and as per global norms, expect the support of their Government. They are entitled to it and our obligation is to provide it. Their quest to expand market share and penetrate new markets is entirely understandable. Here too, they deserve full backing and I can assure you, will get it. Our businesses will be more effective and efficient if they enjoy more friendly connectivity. Creating that is a shared endeavour. Our collaboration is equally important in the appreciation and deployment of technologies. And we are all equally well served by a smoother flow of talent across the world. Recent events have only underlined that the importance of supply multipolarity and its emergence requires a more robust Government-business partnership. Today, business is appreciated not just as creators of wealth or even of jobs. Brand India has many facets for the world. And Business India is one of its most important. Your success is part of our success and as you go out in the world, count on us; we are there for you.
Write a Comment Write a Comment

Post A Comment

  • Name *
    E-mail *
  • Write Your Comment *
  • Verification Code * Verification Code