I am happy to have this opportunity to address the inaugural session of the annual UK conference organized by the Confederation of Indian Industry (CII). Let me, on this occasion, also congratulate the CII on its 125th anniversary.
- The theme of the conference – “A New India-UK Economic Partnership in a New World: Lives, Livelihood & Growth” – appropriately mirrors the optimism with which we see the India-UK relationship today. I also commend the organizers for preparing a topical agenda for the conference, including sessions on economic recovery, healthcare and supply chains.
- India and the UK have a strategic partnership rooted in the shared values of democracy, rule of law, equality and free trade. We see the UK as a key partner in Europe for a wide range of sectors including, trade, investments, defence, science and technology. Prime Ministers Narendra Modi and Boris Johnson are committed to further strengthen our strategic partnership in the next decade, and a comprehensive roadmap for this is being formulated. While we undertake this exercise, we are fully conscious of the fact that both our countries are in a unique position to forge a truly global partnership and should not miss this opportunity.
- Let me very briefly recap the state of the India-UK economic partnership. Our bilateral trade has been on an upward trajectory and touched £24 billion in 2019. The UK is the sixth largest investor in India with investments totalling USD 28.21 billion till date. Indian companies have also made substantial investments in the UK. India was the second largest source of Foreign Direct Investment (FDI) in the UK in 2019. Going through the ‘India meets Britain Tracker’ published by the CII and Grant Thornton, I was happy to note that there are around 850 Indian companies in the UK employing over 100,000 people. Companies from both countries are also working together to form joint ventures and partnerships across sectors. Most of you are likely aware of these facts and figures. But I mention these to highlight the important point that while we have made significant headway in our trade and economic partnership, there remains significant room for further scaling up of our economic ties.
- In this context, I would like to underline that India has now emerged as one of the top destinations for foreign investments. The Government of Prime Minister Narendra Modi has launched several historic reforms to improve the ease of doing business in India in the last six years. Today, India is one of the most open economies in the world. We have put in place a transparent and predictable tax regime. We have implemented the Goods and Services Tax – our biggest tax reform since independence. We are rapidly improving and creating infrastructure for railways, roads, ports and airports. We have created a National Infrastructure Pipeline to provide world-class infrastructure.The JAM trinity – Jan Dhan – the world’s biggest financial inclusion initiative; Adhaar – again world’s biggest biometric project; and Mobile connectivity – pioneered by this government – has set the stage for a fintech revolution in India. We have greatly liberalized our FDI regime and opened up previously restricted sectors such as space, defense and atomic energy to greater private participation. We have implemented groundbreaking reforms in the agriculture sector. The Government has also recently launched Production Linked Incentive schemes for several sectors including mobile & electronics, medical devices and pharma. More such schemes in other sectors will follow in the coming days. This presents several investment opportunities for British companies.
- The COVID-19 pandemic has created severe economic challenges for both our countries. We can overcome these challenges by working together to create new opportunities for our business and industry. Our Government has been prompt in providing the right conditions for this to happen. The process of reforms I referred to earlier, has been accelerated with the launch of the Aatmanirbhar Bharat Abhiyaan or Self Reliant India campaign of the Prime Minister. Under this initiative, India has rolled out a stimulus package for the economy of about USD 270 billion, which is close to 10% of our GDP. The stimulus package is a mix of fiscal and monetary support, injection of liquidity in the market, financial support for the industry, measures to improve ease of doing business, and key structural reforms.
- Like all other crises preceding it, the COVID-19 crisis will also generate new opportunities. India would like to be in a position to benefit from them. One of our priorities is to transform India, as the Prime Minister said, “from being just a passive market to an active manufacturing hub at the heart of global value chains”. It is in this context that the vision of Aatmanirbharta or Self-Reliance needs to be seen. Self-Reliance is not about seeking self-centered arrangements or economic isolationism. It aims to ensure India’s position as a key participant in global supply chains.
- The issue of secure and reliable supply chains has also gained increased salience in the current global context. It is important to design supply chains which have greater resilience to major disruptions like the current pandemic. By increasing domestic capacities India can contribute better to making global supply chains more resilient by mitigating any disruptions. For instance, our strength in the pharmaceutical sector allowed us to ensure uninterrupted supplies of essential medicines during the pandemic, while also meeting our own domestic requirement.
- The success of the reforms launched by the Government is evident in the numbers. Even during the pandemic, we have received over USD 20 billion of FDI this year. While the global FDI declined by one per cent in 2019, FDI into India rose by 20% in the same period. Several global technology majors have announced major investments in India. Google is investing USD 10 billion, Facebook USD 5 billion and Mubadala – the UAE Sovereign Wealth Fund – USD 1.2 billion.
- Our bilateral cooperation with the UK has continued during the pandemic. This involved facilitation of exports to the UK of essential medicines. We also facilitated the repatriation of thousands of UK nationals from India during the lockdown. Despite the challenges, trade and investment ties have also advanced during this period. While trade in goods has been slightly affected, services sector has picked up very strongly. This period also saw TVS Motors of India investing and acquiring the iconic British brand Norton Motorcycles.
- Research & Development for vaccines for COVID-19 is a crucial area where there is potential for collaboration between our countries. Serum Institute of India is already working with the Oxford University-Astrazeneca on their vaccine project. I talked about the role played by India’s pharmaceutical sector in meeting the global demand for essential medicines during the pandemic. We are certain that our companies will play a similar role in the development of an affordable vaccine for COVID-19.
- Since one of the sessions of the conference is on India-UK Healthcare Bridge, let me also share with you some of the initiatives we have taken in India in this area. The pandemic has focussed our attention on improving and augmenting our healthcare systems. In India, the Government had earlier launched Ayushman Bharat – one of the world’s largest health insurance initiatives. The Prime Minister also recently launched the National Digital Health Mission with the aim of providing efficient and affordable healthcare to our people through digital tools. When the pandemic began, our capacity to produce critical COVID-19 equipment and items such as the N-95 masks, PPE kits, ventilators etc. was limited. Rising to the occasion, our companies ramped up production of these essential items, and I am happy to say that we are now able to export these items which were in short supply at the beginning of the crisis. With annual growth of over 22 per cent, the healthcare sector in India has become very promising for investments and joint ventures.
13. The economies of India and the UK are complementary in nature. For instance, while the UK is strong in research and innovation, India offers scale and affordability. Our complementary strengths in different areas can lead to winning partnerships between our industries at a much greater scale. I would invite British companies to take advantage of the economic opportunities opened up by the reforms currently underway in India. As the Prime Minister said in his address at the India Ideas Summit 2020: “India is contributing towards a prosperous and resilient world through the clarion call of an ‘Aatmanirbhar Bharat’. And, for that, we await your partnership!”
Excerpts of Virtual Address by the Foreign Secretary at CII’s Annual Conference in the UK on 15th.September 2020
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