March 11, 2015
H. E. Mr. A. K. P. Mochtan, DSG for ASEAN Corporate and Community Affairs,
Dr. Jyotsana Suri, President, FICCI,
Dr. A. Didar Singh, Secretary General, FICCI
Ladies and Gentlemen,
- On behalf of the Government of India and our partners of Delhi Dialogue VII, I extend a warm welcome to all. It is a great privilege to participate in the first-ever full-fledged Business Session of the Delhi Dialogue, bringing together CEOs from both ASEAN Member States and India.
- Over the last six years, Delhi Dialogue has emerged as the premier Track 1.5 dialogue process for strengthening India's engagement with ASEAN Member States. It has helped broad base the interface for the ASEAN-India strategic relationship to include policymakers, the strategic community, academia and media, as well as representatives of business and industry to share their thoughts.
- With the strengthening of this Dialogue process, the ASEAN-India relationship has expanded in significance over the years and is at the core of India's Act East Policy. With 26 dialogue mechanisms, including a Summit and 7 Ministerial level meetings, a structured interface for engagement between the think tanks in our region and creation of an ASEAN-India Centre, exchange programmes for media, students, farmers, diplomats and the opening of our new Mission to the ASEAN, we have built a strong foundation for our future ambitions.
- At the 12th ASEAN-India Summit in Nya Pyi Taw in November last year, Prime Minister Modi had observed that India has moved with a great sense of priority and speed to transform our ‘Look East Policy’ into ‘Act East Policy’. The increased focus on India's eastern neighborhood and beyond is clearly discernible from visits by our Prime Minister to Japan, Myanmar, Australia and Fiji, and high level visits from Australia, Vietnam and Singapore in the recent past.
- India's 'Act East Policy' has very strong economic underpinnings. The Vision Statement adopted at the ASEAN-India Commemorative Summit in 2012 looked at the unprecedented prospects for economic engagement in our region as one of the anchors to our Strategic Partnership. As ASEAN and India have experienced economic growth and achieved success in progressing towards socio-economic goals, the importance of economic cooperation has become even more salient. One of the key components of our Act East Policy is expanding our economic engagement and integration with the Asia-Pacific region.
- This is very relevant at this time when the economic fundamentals of the global economy are being driven by the growth engine of Asia and the Asia-Pacific region is showing unparalleled dynamism in political, security, economic and demographic terms. By the end of this year, ASEAN will move towards the ASEAN Economic Community which is envisioned as the culmination of decades-old economic integration efforts to create a free market for goods, services, investment, capital, and skilled labour. The AEC will provide additional dynamism and growth to the region’s 600 million consumers and producers, who will collectively constitute the world’s seventh largest economy. The establishment of AEC opens up many possibilities for India Inc, especially as we embark on our new goal of double digit growth.
- The region comprising ASEAN and India together represents a combined population of 1.8 billion, which is a quarter of the global population, with a GDP of over US$ 3.8 trillion, creating one of the largest economic spaces in the world, and offering immense opportunities for the region. The implementation of the ASEAN-India Free Trade Agreement in Goods, which was signed in 2009, has elicited a positive response from the business community and translated into a significant increase in bilateral trade, which has risen from under US$ 44 billion in 2009-10 to over US$ 74 billion in 2013-14. With ASEAN-India trade at US$ 74.41 billion in 2013-14, the ASEAN is currently India’s fourth largest trading partner. Yet the trade level is well below our true potential and we hope that the FTA in Goods, when reviewed, will lead to better efficacy and results.
- In the recent past, investment flows have also expanded with US$ 25 billion FDI equity flowing into India from ASEAN countries and US$ 31 billion in outflows from India to AMS over the last seven years (i.e. between April 2007-March 2014). The signing of the Agreements on Trade in Services and Investment last September and their expected entry into force later this year will give a much needed ballast to our economic engagement. It will hopefully also rectify the trade and investment balance, which is currently somewhat in favour of ASEAN! Our aspiration is to take ASEAN-India trade to US$ 200 billion by 2022, and the RCEP negotiations, which are currently underway, will also contribute to this.
- The ‘Act East’ policy of the Government of India endeavours to cultivate extensive economic and strategic relations in South-East Asia. In order to catalyze investments from the Indian private sector in this region, a Project Development Company has been announced by our Finance Minister on 28 February 2015. It will, through separate Special Purpose Vehicles (SPVs), set up manufacturing hubs in CMLV countries (Cambodia, Myanmar, Laos and Vietnam).
- In keeping with trends of economic globalization and regional integration, there is a need to see greater engagement between the private sectors of ASEAN and India. Active participation by these stakeholders will facilitate the early realization of the true potential of our economic partnership. In India, this has been facilitated by the fresh mind-set of the new Government which has instilled confidence among the business community. Underlining the importance to the connectivity agenda, Prime Minister had during the 12th ASEAN-India Summit announced establishment of a special facility to facilitate project financing and quick implementation of ASEAN-India connectivity projects with provision of US$ 1 billion over a 10 year period to catalyse investment from the Indian private sector to the tune of US$ 10 billion over the same period. This will also include identification of economic nodes & development of backend linkages to achieve a symbiotic model of development and integrate our North East with regional value chains in the ASEAN region.
- A political mandate for reform and a benign external environment have created a historic moment of opportunity to propel India into a double digit growth trajectory. We have embarked on the new growth trajectory with emphasis on infrastructure, manufacturing, trade, agriculture, skill development, urban renewal, affordable housing, industrial corridors and smart cities.
- Manufacturing and trade have been the engines of growth in the post war period for most economies, especially in Asia. The validity of the experience acquires salience in the context of our 'Make in India' initiative. Our stated policy objective is job creation through revival of growth and investment and promotion of domestic manufacturing and ‘Make in India’. Reforms have been initiated in a number of areas and major ones are on the horizon. The emphasis has been on rapidly improving ease of doing business and launching fresh initiatives like Make in India and Digital India, creating National Industrial Corridors Authority, streamlining environment, forest clearances and labour reforms.
- While Make in India has occupied prominence, the Prime Minister's other goal of 'Skilling India' is no less important and perhaps deserves as much attention. India is one of the youngest nations in the world with more than 54% of the total population below 25 years of age. Our young people have to be both educated and employable for the jobs of the 21st Century. The Prime Minister has articulated that Skilling India needs to be closely coordinated with Make in India. Enhancing the employability of youth is the key to unlocking India’s demographic dividend.
- Besides these, there is vast potential for economic cooperation and forging partnerships in various sectors between ASEAN countries and India. We are making good progress towards ushering in Digital India and Clean Ganga Mission and would welcome ASEAN countries to support our initiatives. DMIC corridors of the Ahmedabad-Dhaulera Investment Region in Gujarat and the Shendra–Bidkin Industrial Park near Aurangabad, in Maharashtra, are now in a position to start work on basic infrastructure. Moving ahead with the Government’s focus on building infrastructure, we are setting up Mega Power Projects in plug and play mode and considering setting up similar projects in roads, ports, rail lines, airports etc. Swachh Bharat Mission, Heritage City Development and Augmentation Yojana and Smart City Schemes have been launched to develop urban infrastructure. In futherance of our vision of inclusive growth, we aim to provide Housing for all by 2022. This would require building 2 crore houses in urban areas and 4 crore houses in rural areas.
- Growth, development and economic prosperity are at the core of the ASEAN-India Strategic Partnership. Our growing relations with ASEAN and larger Asia-Pacific neighbourhood has the potential to bring about a significant positive developmental impact on our North-Eastern region as well. Our Prime Minister has emphasised that the North East requires a boost. By involving the Chief Ministers of North Eastern States in the Delhi Dialogue process, we have included State Governments as key stakeholders. Being our land bridge to ASEAN, the North East is a natural partner in India’s ‘Act East Policy’, especially with respect to the connectivity agenda.
- Our civilizational heritage, collective human resource potential and the diversity of our natural resources work together to strengthen the dimensions of India-ASEAN Strategic Partnership. In order to utilize these optimally, we need to reinforce physical, institutional and people to people connectivity between ASEAN and India. After the success of Visa on arrival extended to travellers of 43 countries, including 8 ASEAN countries, the Government is planning to extend this facility to 150 countries in a phased manner. We hope to see increased contacts between students, youth, teachers, parliamentarians, diplomats, media, farmers, artists and experts between ASEAN countries and India.
- The afternoon session of today will deliberate on "Trade in services as driver for future economic cooperation”. India’s dynamic services sector has grown rapidly in the last decade with almost 72.4 per cent of the growth in India’s GDP in 2014-15 coming from this sector. Indian growth story has been led by services-sector growth which is now in double digits. Several ASEAN countries have strength in key services sectors like ports and logistics, warehousing, tourism and hospitality, food processing, preservation and packaging etc. We hope that they would look at leveraging the market potential and the liberal investment regime in India in these sectors.
- Keeping in mind the strength of India and some ASEAN countries in the services sector, we see the Services agreement as a game changer in this regard. It is based on the GATS, follows a positive list of modalities for scheduling, contains comprehensive review clauses and a protocol on Movement of Natural Persons. I look forward to an objective analysis of the Agreement in the afternoon session and hearing views of both sides on the immense possibilities services sector offers.
- I would like to conclude by saying that we require an approach that seeks to realize the ASEAN-India vision for partnership and prosperity in an integrated, inclusive and multimodal manner so that it is in our mutual interest and sustainability in the long-term.
- I congratulate FICCI and thank all the participants from ASEAN countries and India who will undoubtedly made the Business Session of DD VII a grand success. In the season of Cricket World Cup, we can say that we are off to a flying start, as far as DD VII is concerned. I look forward to your conclusions today and to your practical suggestions for translating the Vision Statement in its economic and developmental dimensions.