New policy in the works
In August 2017, the Department of Industrial Policy and Promotion (DIPP) released a discussion paper on the proposed industrial policy. The paper reviewed the developments in the last twenty-five years and noted the challenges faced. Public comments were invited on the paper to facilitate the formulation of the new policy. Subsequently, a draft has been prepared and is currently being presented for seeking “consultations from industry”. Since the beginning of this month, the Commerce and Industry Minister Suresh Prabhu, has participated in deliberations on the proposed policy with stakeholders at an event in Guwahati and subsequently with the Confederation of Indian Industry members. Though the latest draft has yet to be made available to the public, it is expected that the new industrial policy will be finalised in the coming month. Consequently, even after completing inputs, the report will be tabled for approval before the cabinet by April.
Changes brought by the new proposal
The new policy is ambitious and aspires to be futuristic. It aims to link industrial growth with the growth of India’s economy, creating a globally competitive industry that leverages skill, scale and technology. Similar to the 1991 policy, the focus on foreign direct investment (FDI) and liberalising regulations remain because they have proven to be beneficial in the past. The policy now seeks to enable the creation of global brands linking Small and Medium Enterprises (SMEs), both Indian and global, along with encouraging FDIs that create local value addition. Aspirations to change, even at the district level, can strengthen the ease of doing business and reduce compliance costs. The policy also seeks to ensure employment to new entrants along with re-employment to those who might lose jobs as a result of increased automation. It will subsume the old National Manufacturing Policy of 2011 which sought to create 100 million jobs by 2022.
Special Focus on AI
To become globally competitive, India has to keep up with the technological advancement taking place internationally. The ‘Industrial Revolution 4.0’ uses the new policy to promote modern, smart technology. It has been theorised that the fourth edition of the industrial revolution will include artificial intelligence, robotics, deep learning, all of which could bring a sea of changes to everyday life.
The promotion of technology is imperative to the ease of doing business, an essential component for promoting India as an international destination for advanced manufacturing. While releasing a discussion paper on the industrial policy last year, the government also constituted an eighteen-member task force to explore the possibilities of using artificial intelligence (AI) for India’s economic transformation. The task force is chaired by Dr Kamakoti Veezhinathan, a professor at the Indian Institute of Technology, Madras. The objectives of the task force include creating a policy and legal framework to accelerate the deployment of AI technologies with a five-year horizon. This is projected to give recommendations for specific government, industry, and research programs.
Using AI in the Indian context
The new policy aims at projecting India as an advanced manufacturing hub, which is impossible to achieve without embracing and promoting smart technologies such as AI. Further, in order to emerge as a forerunner in technological advancement, there is a need to invest in research and development. The policy aims to support this by incentivising the implementation of emerging technologies for creating ease of innovation.
Speaking at the sidelines of a session at the World Economic Forum-IES last year, minister Suresh Prabhu had said that the new industrial policy will help Indian companies integrate into the global value chain, as well as ensure that they take a “quantum jump” in terms of technological advancement. Therefore, the promotion of AI will result in India gaining a global importance. AI is predicted to replace 45 percent of employee time and lessen human intervention in performing tasks. In a country like India, which boasts of its demographic dividend, lesser jobs will only result in detrimental unemployment. As such, it is crucial that the government reforms have a sound backup plan, or else AI may prove too harmful.
Threading a path forward
In October 2016, Sundar Pillai, the CEO of Google had said, “The last 10 years have been about building a world that is mobile-first. In the next 10 years, we will shift to a world that is AI-first.” As India aspires to become globally competitive, adoption of smart technology across sectors will undoubtedly contribute to economic development. The new industrial policy supports and focuses not only on what is currently important but aims to be futuristic as well.
The complexity is that India needs to provide a supportive educational framework that will enable the country to easily adapt to the technological advancements. The new industrial policy promotes sustainable and responsible development, along with drawing attention on issues of creating employment. However, the impact will only be felt when implementation will be felt.
Prime Minister Narendra Modi on Sunday laid out the many reforms in the economic sphere which he said are significantly improving the ease of doing business in India.
He was addressing business leaders from the Gulf Cooperation Council (GCC) in order to boost India's trade and investment relations with the Gulf nations.At a meeting here with GCC corporate leaders, Modi outlined the changes that had resulted in India climbing 30 places last year in the World Bank Ease of Doing Business rankings to break into the top 100 countries. Modi is on his second visit to the UAE, on route from an Indian Prime Minister's first visit to Palestine. The trip comes at a time of tensions within the GCC caused by a standoff between Qatar and some members led by Saudi Arabia.
"Taking India story to the business leaders! (Modi) painted the vision of a new India and shared the ease of doing business in India with the business leaders from GCC countries," External Affairs Ministry spokesman Raveesh Kumar tweeted following the meeting here.
Earlier, Modi met the United Arab Emirates (UAE) Vice President and Prime Minister Sheikh Mohammed bin Rashid Al Maktoum.
"Strengthening our comprehensive strategic partnership! ... The two leaders had an engaging discussion on expanding cooperation in trade and investment, defence and security and people-to-people contacts," Kumar added.
On Saturday, India and the UAE signed five MoUs, including in the areas of energy and railways, following delegation-level talks headed by Modi and Crown Prince of Abu Dhabi and Deputy Commander of the UAE Armed Forces Sheikh Mohammed Bin Zayed Al Nahyan here.
While the UAE is one of the largest suppliers of crude oil to India, it is also the 10th largest investor in India in terms of foreign direct investment, having invested an estimated $8 billion.
As of 2016-17, India-UAE trade stood at around $52 billion, making India the largest trading partner of the UAE. The UAE the fourth largest trading partner of India.
Source:- Greater Kashmir
Since Prime Minister Narendra Modi came to power, he has focused on making India a more attractive investment destination, easing foreign direct investment rules, and ensuring India climbs up the World Bank’s Ease Of Doing Business index. This focus has yielded impressive dividends. India is one of the world’s fastest-growing large economies, and is attracting record levels of foreign investment.
Yet, there are increasingly loud voices calling for protections against foreign internet firms. It is important for India to repudiate these protectionist sentiments. As India knows well from its long period of self-imposed economic isolation, Indian businesses thrive in competitive environments.
Investors and businesses have responded enthusiastically to the Modi government’s focus on openness and deregulation. According to the ministry of commerce and industry, in fiscal year 2016-17, India attracted a record $60.1 billion of foreign direct investment. In 2017, India attracted a net foreign portfolio investment of $31 billion, up from $3.2 billion in 2016 and $10.6 billion in 2015.
The Modi government has also launched new projects to strengthen India’s ecosystem for innovation, such as the Atal Innovation Mission and Startup India. While such projects take a while to yield results, they are headed in a very positive direction. Companies such as Uber, Microsoft, Amazon, and Google are investing in India and sharing their skills and expertise—and more importantly, adding choice and variety for Indian consumers and businesses. Uber, for example, has partnered with Invest India to create UberEXCHANGE, in which Uber executives visited India and shared their expertise with Indian start-ups.
Despite these positive examples, there are reports that some are asking the Indian government to shield India’s internet start-ups from foreign competition, arguing that they are not able to match the resources of multinational companies and therefore need protection. Their argument lies in the notion that not only do multinational companies have more capital, they can run negative margins in India by leveraging successful businesses in other countries.
However, this idea that Indian companies are hurt by multinational presence and cannot compete with foreign companies due to a lack of resources does not hold much merit. It not only ignores the fruitful tech ecosystem to which multinationals have contributed in India, but also the accomplishments of Indian technology companies.
Companies such as MakeMyTrip, Oyo, and Naukri.com have built their businesses on innovating for users rather than relying on protectionist policies, allowing them to successfully compete with multinational companies. Indian tech giants like TCS, HCL, Infosys, and Wipro thrive and have successfully built international businesses to make India the world’s leading software and IT services provider. These companies have since flourished due to their ability to innovate and provide a variety of effective solutions to consumers. Rather than restricting consumer choice through protectionist measures, government should be encouraging a broadening and deepening of the tech ecosystem in India.
By promoting competition, the government can ensure that Indian consumers have access to the best products and services available. India’s businesses and growing middle class want more choices, and cutting-edge tech companies of all nationalities are at the forefront of meeting these demands in a tailored way.
In 2016, Samsung launched a strategy entitled “Make for India”, creating products specifically based on insights from the Indian experience. In the absence of arbitrary barriers to market entry, companies are able to innovate in a unique fashion to cater to the Indian market, ultimately benefitting Indian consumers and companies, providing them a wider array of products and services to meet their demands and to make India more competitive.
In the same vein, discouraging access to the best technology, no matter the country of origin, impedes India’s ability to achieve some of the prime minister’s key stated priorities. The economic multiplier effect of a robust tech sector simply cannot be underestimated. A tilt towards protectionism will likely result in a slide down the World Bank’s Ease Of Doing Business rankings, where India has recently made impressive gains (its rank improved by 30 spots in 2017, reaching the top 100 for the first time).
Additionally, by limiting competition, the Modi government would disadvantage its acclaimed Digital India campaign—and the Startup India campaign as well, as Indian start-ups would lose access to international platforms and information.
Ultimately, India stands at a crossroads. Doubling down and creating barriers might help some businesses in the short term, but in the long term, start-ups, entrepreneurs, and consumers would lose and India’s competitiveness would suffer. Worse, the negative signal would leave both foreign and domestic companies wary of investing in India, and those that remain would have lost any incentive to innovate.
Instead of allowing protectionist urges to isolate India from the thriving global technology sector, the government should invest in the future by encouraging start-ups to be more competitive and to become global leaders (as so many Indian companies have), as well as by ensuring Indian consumers have the choices they want and deserve.
Indian Prime Minister Narendra Modi on Monday invited Omani businesses to invest in the country as he showcased the government’s initiatives to further ease doing of business in the “New India”.
Addressing around 50 Omani chief executives at the Oman-India Business Meet here, Modi said that the reforms were aimed at preparing India for the 21st century and make it a global manufacturing hub.
He said India was ushering in a knowledge-based technologically driven society which presents many opportunities for Omani businesses.
“Four countries in four-days strengthening our footprint in Gulf and West Asia! PM @narendramodi begins Day 4 with business – Oman-India Business Meet in Muscat. Pitching India as an attractive destination,” Indian External Affairs Ministry spokesperson Raveesh Kumar tweeted.
Listing some of the major reforms by the government in the last over three years, Modi noted that India had climbed to the third position in the global Start-up Index.
On Sunday during his meeting with Sultan of Oman Qaboos Bin Said Al Said, Modi voiced his appreciation of the Indian expatriates for their contributions to Oman’s development.
Oman is home to over 800,000 expatriate Indians and Modi, in a community gathering earlier on Monday, praised their role in the Gulf country’s development.
Following the meeting between Modi and Sultan Qaboos, eight agreements were signed between India and Oman.
These include three memorandums of understanding on cooperation in the fields of health, outer space, diplomacy and defence studies and analyses.
The India-Oman defence cooperation has emerged as a key pillar of the strategic partnership between the two countries.
Oman is a strategic partner of India in the Gulf and an important interlocutor at the Gulf Cooperation Council (GCC), Arab League and Indian Ocean Rim Association (IORA).
Modi arrived here on Sunday evening on the third and final leg of his visit to West Asia and the Gulf that also took him to Palestine and the United Arab Emirates.(IANS)
Source:-The Shillong Times
New Delhi, 12th February, 2018 (WAM) – The UAE and India have reached a historic agreement which will enable businesses on both sides to bypass the US Dollar or any other foreign currency and trade directly in UAE Dirhams and the Indian Rupee.
The agreement will mean large savings for business communities on both sides as trade between the UAE and India soars to new highs.
India’s Ambassador to the UAE, Navdeep Suri, said that this is in addition to the agreements and memoranda of understanding which were signed during Prime Minister Narendra Modi’s just-concluded two-day visit to Abu Dhabi and Dubai.
"There were two other agreements that have been finalised. One is a currency swap agreement where India and UAE – it is an agreement between the two Central Banks – and the agreement has been completed and it is going to be exchanged through letters. Under this, businesses from the two sides will be able to trade directly in Rupees and in Dirhams and not have to go through US Dollars which means that there is a saving for business community. It makes trade between the two countries more competitive," Suri said while reviewing Modi’s visits to the UAE, Jordan and Palestine along with India’s new Foreign Secretary, Vijay Gokhale, for Indian reporters.
Although the Dirham has a fixed peg to the US Dollar, the currency swap agreement between the UAE and India could favourably impact trade between the two countries as the Trump Administration in the US cements further an expansionary fiscal policy and the US Federal Reserve considers rate hikes.
The impact of US policies on the Indian Rupee would be greater and favourable to trade with the UAE since the Indian currency’s value is not pegged to the US Dollar but is determined by a basket of currencies.
The rationale for the currency swap agreement is evident from UAE-India trade figures. From a mere $182 million in 1982, the current level of bilateral trade amounted to about USD 53 billion, according to a joint statement released at the end Modi’s visit.
Another agreement which has been finalised and will be signed this week is "between the Financial Intelligence Units which commits both countries to work more closely together in money laundering, in preventing money laundering that takes place," Suri said.
About this agreement, the joint statement said "the two sides welcomed the finalisation of an MOU on cooperation in the exchange of financial intelligence related to money laundering, associated predicate offences and terrorist financing."
Source:- Emirates New Agency