India’s new-age Regional Trade Agreements (RTAs) will need to be upgraded to reflect the changing eco-system of regional and global value chains. This is crucial to India’s emergence as a manufacturing hub, said Commerce Secretary Rajeev Kher at a CII-JETRO conference on RTAs.
Mr. Kher said that Indian industry needs to engage with the government to identify specific sectors where such value chains will be beneficial for the country for deepening the presence in global markets while keeping sensitivities in mind. He highlighted the importance of India’s strength in service sector in this regard. The conference comes at a crucial time when the 6th round of Regional Comprehensive Economic Partnership (RCEP) negotiations are slated to be held in Delhi in December.
DIPP Secretary Amitabh Kant said that a slew of reform measures are being undertaken as part of the ‘Make in India’ initiative to improve India’s ease of doing business and connecting to value chains. He pointed out that for India to grow at 9-10 percent, manufacturing sector has to grow at 14-15 percent and exports-led manufacturing growth should clock 25-30 percent. Mr. Kant informed the high level Japanese participation that the future of Japanese companies is in India and they should not be risk averse in investing in the country.
The Chairman & CEO of JETRO, Mr. Ishige further emphasised the need for regional integration in Asia under the RCEP umbrella. He reiterated the Thatcherian slogan that ‘there is no alternative’ to regional economic integration in an increasingly connected world. India’s potential as a manufacturing hub can be realised through broad-based supply chain linkages, unification of business rules and the integration of services into the value chain. Mr. Ishige also echoed the views that reforms are key as the old trade and industrial policies will not see India emerge as a hub for competitive manufacturing.
Successful Japanese companies operating in India, such as Daikin and Nissan highlighted the need for reforms in areas such as taxation and the need for infrastructure investment. They said that closer regional economic integration will help in the creation of local supply chains as well as making India a hub for exports to other regions including West Asia, Africa and Southeast Asia. India is strategically located to become the hub for manufacturing and in this context regional integration is not only desirable but a necessity and a must.
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