Mumbai: India’s ranking in the World Bank’s Doing Business survey will improve substantially next year, thanks to the measures taken by the government, said Amitabh Kant, secretary in the Department of Industrial Policy and Promotion (DIPP). In an interview on the sidelines of the Mint Luxury Summit, Kant touched upon a number of issues, including India’s stand on a unilateral patent investigation by the US and the booming e-commerce market in India.
The “Make In India" campaign was launched with much fanfare. Have things moved from there?
A series of measures have been taken for business process re-engineering and bringing all clearances online, on the use of digital technology, on doing away with processes, paper work, licences. For example, the industrial licence and industrial memorandum have been put 24X7 online, you can make the payment online and there is no human intervention. I think this is what we are pushing for across departments and you will see the results coming in the next four to five months.
The second aspect of “Make In India" is how do you open up the Indian economy. There, the government went very aggressively forward and liberalized the rail sector to 100% FDI (foreign direct investment), delicensed 60% of items of defence and FDI in defence went up from 26% to 49%, and we have said that in state-of-the-art and defence manufacturing sector, it can go up to 100%. In the case of construction, we have recently liberalized very aggressively. The government has also moved forward on insurance and the cabinet has approved the enhancement of FDI in the sector from 26% to 49%.
The third thing is the government is focusing on infrastructure—new industrial corridors, smart cities—many of them are moving forward to the stage of implementation.
You talked about the ease of doing business. Recently, the World Bank released the “Doing Business" ranking and India has slipped by two places to 142. How do you see it, and do you think the target of bringing India within the top 50 countries is achievable?
The study where India is ranked 142 was till 31 May 2014. After the new government came to power around June, a series of radical measures have been taken, which are not captured in the study. All of them will get reflected during the next study. To my mind, we need to be very radical, we will keep pushing for change aggressively and we will meet the challenge which the Prime Minister has set.
With the measures that have been taken, where do you see India’s place in next year’s “Doing Business" ranking?
Our position should improve radically. I think India should target to come in top 50 in next two to three years’ time. Several more changes are required, which all of us are pushing very hard in the government.
There is a lot of discussion on moving towards a composite cap of foreign investment. What is the status now?
That is still under examination and consideration and interaction with other ministries.
Why is it taking so long?
There is no time. The process of inter-ministerial considerations takes time. There are different viewpoints. We consult each other. All decision-making is through a process of consensus through inter-ministerial consultation and that process is still on.
Recently, the US announced that it will do an out-of-cycle review of India’s intellectual property rights (IPR) policy. Are you going to cooperate with the US, and how do you see the move?
Our position is very clear that we are totally TRIPS (Trade Related Intellectual Property Rights)-compliant. We firmly believe in patents... We have enacted the Indian Patents Act and we believe if there is any reservation regarding this, the US should go to the World Trade Organization (WTO) and we can then contest that. This is a unilateral examination by the US and we don’t have any comments as far as this study is concerned. It is their internal study. It is not as per the multilateral act of the WTO.
But we have, at the same time, set up a working group with the US on IPR issue. What will that group do?
There is a trade policy group under my colleague, the commerce secretary, which has been in existence for some time. We will continue to discuss bilaterally. These solutions have to be found through bilateral discussions, not through unilateral action. We believe, through bilateral discussions, we will be able to convince the US about our position and about our stand.
On e-commerce, one discussion paper was launched. What is the status now?
In India, we permit 100% FDI in business-to-business and that is why today e-commerce is flourishing in India. That is why a lot of FDI has come in and you just had a very exciting investment by SoftBank into Snapdeal. (It) demonstrates that...a policy framework has clarity and the model on which many countries have grown and we will continue to grow. But if there are some minor issues which require clarification, we will be very happy to interact with the industry and see what best we can do.
But on the front-end e-commerce, the government is not thinking of allowing FDI?
At this moment, we are still examining whether (FDI in) business-to-consumer is required at all, because business-to-business e-commerce is thriving in India already. Young Indian entrepreneurs, very dynamic young Indians, have done extremely well. I think that is the model on which young Indians have taken on the rest of the world. I think we need to see if at all we need any modification in it.
But many critics say the current policy allows FDI in retail e-commerce through the backdoor.
But this is the model on which China grew. Alibaba’s entire model is exactly the same. If Alibaba could grow in China, why shouldn’t we allow Flipkart, Snapdeal and others to grow as big as Alibaba in India?
But what about Amazon? They have announced $2 billion investments in India.
Absolutely, let them compete in the Indian market in the existing model.
But you don’t have any problem with the existing models followed by the e-commerce companies?
If there is any specific issue relating to that—there is none to our mind—let the concerned authority, the Department of Consumer Affairs, look into that.
There were a lot of complaints against Flipkart for not living up to the promise made...
See, it is a marketplace where people buy and sell. It is like going to a brick-and-mortar store. Sometimes you don’t get a product. Sometimes a product is sold out. This is exactly what happens in an e-commerce market as well.
So, no investigation is being carried out by DIPP?
There is no investigation going on. DIPP is not an investigating agency. We are a developmental ministry. If there is any need for investigation, let the concerned authorities look into it.