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Business News/ Politics / Policy/  We are not under pressure from the US on IPR: Nirmala Sitharaman

We are not under pressure from the US on IPR: Nirmala Sitharaman

The trade balance with China is definitely adverse and it is growing, and this cannot be sustained, says commerce minister Sitharaman

Union commerce and industry minister Nirmala Sitharaman. Photo: Pradeep Gaur/MintPremium
Union commerce and industry minister Nirmala Sitharaman. Photo: Pradeep Gaur/Mint

Commerce and industry minister Nirmala Sitharaman has won accolades for her apt handling of the food security issue at the World Trade Organization (WTO) soon after she took charge. She has a crucial role to play in Prime Minister Narendra Modi’s effort to make India a manufacturing hub through the Make in India initiative. Ahead of her visit to Paris, where she will engage with other trade ministers to talk on WTO’s post-Bali work programme, Sitharaman says the developmental spirit of the Doha negotiations need to be upheld and differential treatment for developing countries cannot be ignored. Edited excerpts:

You have completed one year in the commerce ministry. What are your two major achievements?

Most certainly, the World Trade Organization course correction to the Bali agreement. With the prime minister taking the lead and, at various levels, handling it and trying to convince people that we are not asking for any favour but it is our sovereign right to protect our farmers through the minimum support price and the poorest of the poor who need the public distribution system. Second, the Make in India initiative, in which both the centre and the states are involved, along with entrepreneurs and manufacturers, so that the country facilitates entrepreneurship and makes sure it is a good place to invest and work. We cannot be seen as regressive.

Are you worried that exports have been contracting for five months in a row?

I would like exports to improve, but I would add a caveat. Exports have not contracted across the board, but overall, it gives such an impression. Monetary value of exports have come down because the crude oil prices have fallen. There are sectors where both in quantum and in value terms, exports have gone up, such as engineering and ready-made garments.

In such a scenario, how confident are you of the target of doubling exports to $900 billion by 2020?

It is absolutely achievable, because we need to understand that it is not because of fall in quantum of exports that the value has fallen. The quantum remains the same, or in some sectors, it has gone up. So, if international crude oil prices are determining the total value of exports, then we must be seized of the reality.

India has already crossed the threshold of 3.25% of world trade in textiles, after which it should stop providing export subsidies to the sector. It will soon cross the threshold of $1,000 per capita income, after which it has to stop all kinds of export subsidies. Do you think that will further erode our competitiveness in international markets?

I don’t think it will erode our competitiveness, particularly if you are referring to textiles, because, like in bulk drugs, Indian textile manufacturers have set high standards for themselves. And they have become globally competitive both in terms of pricing, variety and the quality they offer. It will certainly help if they are able to get some assistance because these are sectors where there are many small and medium-sized companies. But if WTO rules have told us that and we have to follow it, it might make many of them feel the pinch, but I am sure they will overcome these difficulties with the strength of the industry.

So, are we going to withdraw these subsidies anytime soon?

Well, at this stage, we are doing very many things for different sectors. We are definitely going to comply with the WTO, but many of them also need handholding. The ministry is working on how and in what way we do that in compliance with WTO rules.

Many countries keep a tab on the number of jobs created by the export sector because they also provide subsidies. Do you plan to collect such data in India?

India’s approach to mining and keeping data and constantly monitoring to get real-time data is a very big and right investment to make. With digitization, we are now in a position to ensure that such data are collected and maintained. But it will take a while for us to get the complete picture.

We are also making sure that the ministry itself has a better real-time data collection process, linking with customs and ensuring that the registration forms and the forms that are filed have such data which we don’t need to ask exporters to refile. So, there is also a question of simplification, alignment of all the forms and collection of data. We are working on that.

You talked about Make in India as an achievement of your ministry. But by only focusing on manufacturing through the Make in India campaign, are you not neglecting services sector where we have the advantage at present?

We are not confining ourselves only to merchandise manufacturers. In fact, we held a special conclave to show we are focusing on services, and there also, we are not confining ourselves to IT (information technology) and IT-enabled services (ITeS) only. With the prime minister placing emphasis on trade, tourism and culture, we are talking about yoga, wellness industry, hospitality industry, and activities under that also count as Make in India. Because they would want equipment, machinery, their demand will also influence manufacturing.

But the Make in India logo was nowhere to be seen in the Global Services Conclave you referred to.

Thanks for the observation. But there is a lot of give and take.

Does this government have a different approach to signing new free trade agreements (FTAs) than the previous one?

I will not describe it as a different approach. We are ensuring to leverage our advantages in services; for instance, ensuring that certain sectors are treated differently. For example, in agriculture, you cannot open dairy to countries which for centuries have given advantages to their own people. In India, the sector is very diversified. One person with one cow would still be contributing to Amul. His livelihood depends on milk from that one cow. So, while negotiating, we are sensitive to some sectors that the large bulk of the poorest of the poor depend for their livelihood.

Now there are a few mega regional trade agreements being negotiated such as Trans-Pacific Partnership (TPP) and Transatlantic Trade and Investment Partnership (TTIP), which are expected to set up higher standards in goods, services, investment and intellectual property rights (IPR). Do you think India not being part of such agreements will limit our export markets and erode our competitiveness? What we should do?

We may not be part of TTIP or TPP because, geographically, we are not placed in such a position. But we are there in the Regional Comprehensive Economic Partnership (RCEP), negotiating and finding our own space. At the same time, when we are talking with the EU (European Union) for the FTA, we are asking them if they are so keen to go ahead with the plurilateral trade agreement with the US, will they see any benefit in going for an FTA with us, and they have said overwhelmingly yes. So, India has not lost out on large markets. I think it is an ideal mix. We are neither overexposed nor isolated.

Cracking the Chinese market has been another big challenge for Indian exporters. Where do you see the real problem?

Trade balance with China is definitely adverse and it is growing. It is not as if we are not conscious of it. The bilateral negotiations that we had with China, we have underlined that this imbalance cannot be sustained. It is not as if we have nothing to export to China. Because they deny access to us, we are unable to get into their market.

China needs many of the things we produce—for example, bulk drugs. Chinese society is ageing. Their regions are far flung, distant and remote. Chinese healthcare is completely governmental healthcare. For them to have bulk drugs at affordable prices is a very important thing. World over, we have established that we produce bulk drugs at affordable prices and of highest quality.

Similarly, on IT and ITeS sector, our companies are approaching, registering. It is very cumbersome. For Indian IT companies, it takes three years to even get registered. So, there are clearly sectors where India has lead advantage which can serve the Chinese market and it will be a win-win situation for both countries. But the Chinese will have to be a lot more open-minded. We are talking to them.

What do they tell you when you raise these concerns?

That they will definitely look into it and come back. (smiles) I hope they move faster.

Recent reports suggest the US has rejected a demand for a special safeguard mechanism (SSM) that aims to protect resource-poor farmers in developing countries from unforeseen surges of agricultural imports to be made a part of the post-Bali work programme which needs to be finalized by July-end. Will India support an agreement without SSM? Where do you think the Doha round is moving?

India hopes that WTO, completing its 20th year this year, will understand the importance India gives to multilateralism. The facilities that have extended to the least developed countries should prove that we are keeping the Doha Development Agenda alive in letter and spirit. I would expect that WTO preparing for its ministerial conference will ensure that justice is done and that Doha does not get forgotten as a developmental round. Trade alone does not bring development. Special and differential treatment is still necessary because countries may grow faster, but within them, there are regions whose per capita income is worrisome. I think the spirit of WTO in the context of the Doha Development Agenda is kept up. I will insist on that.

So, are you saying a deal without SSM will not be acceptable to India?

Yes, absolutely.

Your government came to power with the promise of providing a rule-based system. Don’t you think allowing FDI (foreign direct investment) in retail on paper but insisting that we won’t welcome it is against the very concept of a rule-based system?

But has there been any application which is either entertained or not? No. So, the compendium recording 51% is stating what is existing on paper. And because I am asked about it, I am stating the party’s position.

On IPR, the prime minister made a statement at the Global Services Conclave which now the US has also quoted in its reports, that India needs to bring its patent laws on par with global parameters.

The prime minister is absolutely right in saying that. It is a statement as a matter of fact that we have to be consistent with the international standards on it. And we are.

So if we are, then what is the need to make such a statement?

The prime minister did not say we are not, and we should be. He very clearly said we should be. That’s a reminder of what we are.

But is there pressure from the US to make changes in our IPR policy and give concessions on data exclusivity and compulsory licensing?

On the contrary, in each one of my meetings with the US authorities, I have upfront said that we have formed a think tank which is forming the IPR policy, every one of the decisions that are being taken is put in the public domain. I myself told the US team, if you are keen to know about our position, please meet up with the think tank, and they have sent their representative also and have given their views. That’s where it ends. So, where do you find any pressure on me? And if at all, where do you find me yielding to it? If anything, I am putting pressure on them, asking them to please go and study our scheme of things. So let’s be clear.

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Published: 02 Jun 2015, 01:00 AM IST
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