Months before the next WTO ministerial in Argentina, commerce and industry minister Nirmala Sitharaman discusses India’s strategy.
Months before the next WTO ministerial in Argentina, commerce and industry minister Nirmala Sitharaman discusses India’s strategy. She says the WTO needs to fulfil earlier commitments, including a permanent solution to the public stock-holding issue, first. In an interview with FE’s Banikinkar Pattanayak, she says sectors like defence remains a focus area of attracting FDI, and exporters feel the government should tweak the duty refund mechanism under the GST regime. Edited excerpts:
What will be India’s strategy for the WTO ministerial in Argentina in December? Which are the areas you where you want the WTO to deliver?
During the last Parliament session, I went to Geneva as several meetings were arranged — with the DG, member countries and others — essentially because I wanted make sure the progress on those items which were reiterated in the last two ministerials in Bali and Nairobi is happening at the technical groups. So before the ministerial in Argentina, we expect the preparatory meetings to be conducted on agenda issues well before the ministerial, and not leave it for the last minute. Importantly, issues where there is already a mandate — especially the permanent solution to the public stock holding issue which was agreed upon at the Bali ministerial and reiterated in Nairobi —should be on agenda. Keeping these things in mind, before the ministerial, a mini-ministerial will take place in Morocco in October — a rare practice of holding a mini-ministerial before a ministerial. The agenda for the next WTO ministerial will be discussed there.
Are you going to commit more on TRIPS or Information Technology Agreement at the WTO, as is being demanded by some?
No we don’t have any plan to review our stance on these two issues.
Some countries, especially the developed ones, want to have e-commerce on the WTO agenda. What is going to be India’s stance?
We have no hesitation in talking about e-commerce but it might be too early to have e-commerce on the ministerial agenda, as domestic policies on this issue are still evolving in many countries. Therefore, we are ready to discuss all such issues but compelling a country where e-commerce is still evolving to make binding commitments will restrict their domestic policy-making space.
Are we going to give China the same kind of access in goods at RCEP that we want to give to Asean? What is the level of our commitments?
The process of negotiations is going on and nothing is concluded yet. The pace of negotiation in goods, however, is moving at a faster pace than in services.
Last week, the commerce ministry has restricted duty-free imports of gold from South Korea with which India has an FTA? Are you going to put similar curbs on others with which India has an FTA to ensure that nobody can misuse such pacts?
We saw an unusual level of gold imports, using the free trade agreement with Korea. So we have taken this action duly informing the Korean authorities. I can’t undo the FTAs signed earlier and we will make sure how best we can protect India’s interest.
Which are the sectors where you will further liberalise the FDI rules to sustain the high growth in such inflows in recent years?
The government is committed to the make India an attractive FDI destination. More FDI can also come in sectors where the scope for more inflows is greater and current inflows are still below potential. We also have to make sure that such sectors are projected even better to foreign investors and ease of doing business in these sectors improved further.
Which are the sectors where you think the scope for attracting FDI is greater?
Defence, for instance. Because we are a large captive market and there is a great scope for defence exports from this country as well. If defence production takes place here, the cost will come down and products will be competitive in countries that have not yet found such weapons affordable. Even in food processing, we may attract good FDIs. Exports have been growing in recent months, but the pace of growth isn’t up to the mark. We are planning to come out with the foreign trade policy in September that should address the question of supporting exports.
What has been the feedback on GST from exporters?
Before and after the introduction of the GST, exporters voiced mainly one concern — about their capital getting locked up in the process of duty payment and a subsequent refund. It’s because these SMEs are now borrowing to pay the duty. On this, we are talking to the finance ministry. If indeed it’s the only way (to pay first and ask for refunds later), we are saying if we can have another way of doing it so that actual money isn’t paid in. For instance, if there are ways through which a kind of nominal payments is done and a nominal refund is given later.