Union Finance Minister Nirmala Sitharaman on Tuesday urged industries to “identify a partner for making a joint venture” in Australia and United Arab Emirates, following the signing of agreements signed by India with the two countries.
Sitharaman at the Stakeholder’s Outreach Programme organised by the Directorate General of Foreign Trade here, said by selecting the “joint venture partner” in the respective countries, domestic companies would be able to scale up their business.
With the signing of the Comprehensive Economic Partnership Agreement (CEPA) with the United Arab Emirates and the Economic Cooperation of Trade Agreement with Australia, now it is up to the industries to identify “their joint venture partner” in the two countries.
“Earlier when I used to make a visit to Tamil Nadu six or seven years back, I have been asked whether India does not sign trade agreements with other countries and all. Today, we have signed two agreements with the UAE and Australia,” she said.
The agreement with Australia for which negotiations were going on for more than 10 years was signed in just 88 days, she said.
Australia plays a “very important role in the Indo-Pacific Strategic Framework,” she pointed out.
“The company or an enterprise should be transparent in its operations and ensure that all the details like the investors in the company be made available in “public domain” and these are the things that should be told to industry,” she said.
“The Centre is ready to extend all its support. For example, a self-declaration form in which a pre-filled application is sent to industries stating this will be your tax for the income and expenditure you made (for the year). We do not conduct inspection also. You just need to pay only the tax,” she said.
Sitharaman said it was critical for the industry as the global economy was growing and there was an opportunity that was available for India.
“Lots of industrialists have come here and have taken time to attend this meeting with keen interest. When we bring transparency in our operations, we will be able to scale up business faster by adopting technology. so we have to utilise the signing of agreements with UAE and Australia,” she said.
Noting that the companies were earlier “hesitant” to speak to their counterparts in other countries, she said, “Industries should take risks with the government signing the pact. “Government is ready to extend its assistance,” she said.
Quoting Prime Minister Narendra Modi’s comments made to her, Sitharaman said, “Trust business, talk to them. Make processes transparent.” The Finance Minister also said that the industries should encash the opportunity with Indian signing the agreement with the UAE as businessmen from that country have committed to make investments of USD 75 billion in India.
“When they say they are ready to invest in India, you (industrialists) should take the opportunity and speak with partners of your industry who are doing business there so that you may be able to receive at least USD 1 or 2 billion (of the total USD 75 billion) as investments in the sector which you operate in,” she said.
The Minister appealed to the industry to do “backward and forward linkages” to ensure availability of raw materials whenever businesses set up shop in a State.
“They may be interested to set up business for chip production. But a company has to check whether there was backward and forward linkages — which refers to the availability of all the necessary raw materials to that business,” she said.
Citing an example, she said due to lack of availability of a chip, automobile-makers were unable to supply despite huge demand. “Industry has to study about the backward and forward linkages since a company should not get affected due to lack of one raw material,” she said.
Sitharaman said the country was once producing maximum ‘active pharmaceuticals ingredient (API)’ but that business got dwindled and now the country was depending on API from another country.
The India-UAE Comprehensive Economic Partnership Agreement was signed in February and came into effect on May 1 while The India-Australia Economic Cooperation and Trade Agreement (“IndAus ECTA”) was signed in May to boost ties between the two countries.