Goyal says the India-US trade deal will show that farmers' interests are protected

New Delhi: Commerce and Industry Minister Piyush Goyal on Thursday expressed confidence that the details of the India-US trade deal, when released, will show that India has protected the sensitive interests of farmers and other stakeholders while securing a strong comparative advantage.

India’s trade deals went beyond tariff reductions, rules of origin and market access to include services, investment, education, skills development, technology partnerships and cooperation on climate goals, Goyal said at India’s fourth national conference on industrial transformation, organized by the Institute for Studies in Industrial Development (ISID) and the Industrial Development Research Association (IDRA).

He said the nine FTAs and bilateral trade agreements concluded by the government have opened up preferential market opportunities in economies with a combined gross domestic product (GDP) of $60 trillion, compared to $10 trillion covered by agreements concluded before 2014.

Read also | India to gain comparative advantage in trade deal with US: Piyush Goyal

Goyal also defended the government’s decision to withdraw from the China-backed Regional Comprehensive Economic Partnership (RCEP), saying joining the free trade bloc would sound the death knell for India’s manufacturing ambitions.

“Otherwise we would be a nation of salesmen and saleswomen selling Chinese goods in India,” Goyal said, referring to India’s withdrawal from the RCEP talks on November 4, 2019 in Bangkok.

The minister argued that the deal, which brought together China, Japan, South Korea, Australia, New Zealand and 10 ASEAN countries, would effectively open India’s domestic market to Chinese products without adequate tariff protection.

He said earlier agreements were largely with countries that compete with India, while the current approach seeks to foster complementary economic relations. India’s trade deals were intended to create opportunities for both sides, with India exporting products needed by its partners and importing goods needed for its own development, he said, describing such arrangements as mutually beneficial partnerships.

Read also | India to gain comparative advantage in trade deal with US: Piyush Goyal

Goyal said the deal was fundamentally about comparative advantage and competitiveness rather than absolute numbers. He noted that several developed countries structured their tariff plans to impose high tariffs on labor-intensive goods and use them as bargaining chips.

India’s trade talks have also sought to protect sensitive industries and facilitate access to high-tech products, including graphics processing units (GPUs), memory technologies and medical technologies essential to the country’s development. The agreements were negotiated after extensive consultations with stakeholders to protect India’s sensitivities and interests, he said.

Goyal identified quality, global market access, economies of scale and inclusiveness as the four key factors that will drive India’s industrial transformation. Reiterating Prime Minister Narendra Modi’s emphasis on “zero defect, zero effect”, he said Indian manufacturers must focus on quality and use the opportunities created by trade deals to expand their global presence.

India’s domestic market of 1.4 billion people, combined with access to international markets, could help manufacturers achieve economies of scale, affordable production and competitive costs, he said.

Read also | India and the US are fine-tuning a trade deal after most discussions are concluded, says Goyal

The minister highlighted the growing international recognition of Indian talent and skills. Recalling a conversation with the German foreign minister regarding the immigration deal between the two countries, Goyal said he was told that Germany needed significantly more Indian talent than the 90,000 Indians per year required under the deal.

He cited Indian professionals in senior positions at Fortune 500 companies and their contributions to cutting-edge technology as a testament to the capabilities of the country’s workforce. Goyal expressed confidence that India will remain the world’s fastest growing major economy for the next 20-25 years, attributing this prospect to the talent, skills and energy of its people.

On climate action, Goyal said global efforts should be guided by “polluter pays” principles and common but differentiated responsibilities, with adequate financial and technological support for developing countries. He said 60% of India’s installed electricity capacity comes from green and renewable sources, while coal remains essential for energy security and affordable energy.

The minister said the Make in India initiative and phased manufacturing programs across sectors have helped bring factories to India and increase domestic production. According to him, India has moved from being a major buyer of products made elsewhere to becoming a country that is increasingly recognized for manufacturing.

Goyal emphasized that innovation will be essential for industrial transformation, requiring collaboration between the government, private enterprises, academia and research institutions. The government should primarily act as a facilitator and catalyst for private sector-led innovation, he said, highlighting the research capabilities of IITs, technical colleges and other institutions.

Referring to the Startup Fund of Funds, Goyal said that the first fund has been fully utilized and the second fund has been introduced. He also highlighted the Research, Development and Innovation Fund as part of efforts to strengthen India’s innovation ecosystem, which he said has made the country home to the third largest startup ecosystem in the world.

Goyal said India’s $8.4 billion space economy has the potential to reach $44 billion by 2033. He added that international partners are increasingly interested in working with India in space, artificial intelligence, computing and startups.

Referring to his recent visit to Germany, the minister said that research institutions there have shown interest in collaborating with India. He attributed the growing interest to confidence in the partnership between the two countries and in India’s talent, skills and commitment to fair play and equal opportunities.

Goyal said international partnerships could create opportunities for joint research, technology development and industrial collaboration by combining domestic capabilities with international expertise and investment. He called for coordinated efforts between the government, industry, academia and research institutions to achieve the Viksit Bharat 2047 vision.