Union Minister Piyush Goyal.
| Photo Credit: ANI

Commerce and Industry Minister Piyush Goyal on Wednesday (October 16, 2024) asked the industry to focus on making high-quality products to tap global markets as export competitiveness will not come from government subsidies or support.

He also said that the government is putting its effort to nudge industry to get into the manufacturing of high quality products as it is a “tough” task to get industry to accept that they should be making quality goods.

Initially, the government faced a huge amount of opposition from the industry on quality control orders.

“Our export competitiveness is not going to come from subsidies or government support. It is not going to come from our closing the doors to the rest of the world. If we are looking at self-reliant India, it can only happen when India will be self-confident and that confidence will only come when we all decide that quality is not our job, it is our duty,” the Minister said.

He added that if the Indian industry is not competitive in any product, that can be imported the industry has to work towards competitiveness where it has a comparative advantage with other nations.

The government is taking a series of steps such as rolling out Quality Control Orders (QCOs) to boost manufacturing in the country.

Till 2014, he said, only 14 QCOs covering 106 products were issued, but in the last 10 years, the government has issued as many as 174 such orders covering 732 products to ensure that more and more people will become aligned with better quality standards.

These orders help curb the import of sub-standard products, prevent unfair trade practices and ensure the safety and well-being of consumers as well as the environment.

Under the order, an item cannot be produced, sold, traded, imported or stocked unless it bears the Bureau of Indian Standards (BIS) mark.

Violation of the provision of the BIS Act can attract imprisonment of up to two years or a fine of at least Rs 2 lakh for the first offence. In case of second and subsequent offences, the fine will increase to a minimum of Rs 5 lakh and extend up to 10 times of the value of goods or articles.

QCOs are issued in accordance with the WTO Agreement on Technical Barriers to Trade.

He also said that manufacturing high quality goods helps boost economic activities, generating jobs and increasing exports.

“India will have to aspire to become a manufacturer of high-quality goods and services and it should be recognised globally,” Mr. Goyal said.

Citing an example of the pharma industry, the Minister also urged the big industry players to handhold and support MSME units in this area.

“We still have a lot of work to do in terms of getting industry aligned with these QCOs,” he said adding India was not able to become a partner of a protocol in the pharma sector as “every single time when we try to join that protocol, which has certain strict conditionalities attached to it, there will be an opposition from those (industries) who would be looking at short cuts”.

The Minister urged the industry to participate in the BIS (Bureau of Indian Standards) committees through their skilled technical manpower.

Union Minister Piyush Goyal during a meeting with Minister of Trade, Industry and Energy, Republic of Korea Inkyo Cheong, in Vientiane, Laos.
| Photo Credit: PTI

India and South Korea on Saturday (September 21, 2024) held discussions on upgrading the existing free trade agreement, balancing two-way commerce and promoting investments between the two countries.

The issues were discussed during a meeting between Commerce and Industry Minister Piyush Goyal and his South Korean counterpart Inkyo Cheong at Vientiane, Laos.

“Deliberations were held on achieving more balanced trade, upgrading the India-Korea Comprehensive Economic Partnership Agreement (CEPA), promoting investments linked to job creation and addressing non-tariff barriers to further strengthen our economic ties,” Mr. Goyal said in a post on social media platform X.

The two countries are holding review meetings to upgrade the CEPA, which was operationalised in January 2010. So far, more than 10 rounds of review talks have been held.

The two countries have sought greater market access for certain products that are under the negative list of the agreement. No customs duty concessions are granted for the goods under this list.

Department of Commerce had earlier engaged with different Ministries, including Heavy Industries, Steel and Chemicals, to prepare the offer list.

India has sought greater market access for certain products such as steel, rice, and shrimp from South Korea to boost exports of these goods. India has flagged issues over Korean firms not buying Indian steel.

The review exercise assumes significance as both sides have shared the hope that the CEPA upgradation negotiations would play an important role in strengthening and deepening the economic cooperation between both countries.

In general, such review or upgrade exercise includes implementation issues, rules of origin, verification process and release of consignments, customs procedures, further liberalisation of trade in goods, and sharing and exchange of trade data.

India has also raised concerns about the growing trade deficit between the two countries. India’s exports to Korea dipped to $6.41 billion in 2023-24 from $6.65 billion in 2022-23 and $8 billion in 2021-22.

The imports stood at $21.13 billion in the last fiscal as against $21.22 billion in 2022-23 and $17.5 billion in 2021-22.

According to economic think tank Global Trade Research Initiative (GTRI), India’s trade deficit with South Korea increased at a much higher rate compared to its trade deficit with the world.

It has also stated that Indian exporters are facing various non-tariff barriers in South Korea, including stringent standards, regulations, and certification requirements, and these barriers make it difficult for Indian goods to penetrate the South Korean market.

Mr. Goyal also held a meeting with Kan Zaw, Myanmar’s Minister of Investment and Foreign Economic Relations, on the sidelines of the 12th East Asia Summit Economic Ministers’ Meeting.

“Discussed potential cooperation in areas such as lentils, diesel, gasoline, electric vehicles, etc and ways to promote bilateral trade including through Rupee-Kyat currency mechanism, between our nations,” he said.

Union Minister of Commerce & Industry Piyush Goyal. File
| Photo Credit: PTI

Commerce and Industry Minister Piyush Goyal has exuded confidence that during this fiscal, the country’s goods and services export numbers will be at the same level; as it was last year despite slowdown and uncertainties in the global trade.

He also said that the government measures such production-linked incentives schemes and focus on high-quality goods and services would help in containing the country’s trade deficit. So our trade deficit will be significantly lower than last year.

“I am happy to share with you that we close the current year in March at the same level as last year. We have a little bit of an adjustment between goods and services, but collectively we will be at the same level as last year, which will be a very, very significant achievement given that most developing countries and less developed countries are seeing a fall in their international trade,” Mr. Goyal told PTI in an interview.

Cumulatively, the country’s merchandise exports in April-January 2023-24 contracted by 4.89% to $353.92 billion. The estimated value of services exports during the ten-month period stood at $84.45 billion. In 2022-23, India’s goods and services exports stood at $776 billion.

The war between Russia and Ukraine; Israel-Hamas is impacting global supply chains and the Red Sea crisis has led to significant increase in transportation costs and delay as Indian exporters have to send their consignments through the Cape of Good Hope, encircling Africa.

The Minister said that India saw a scorching pace of growth in its international trade in the years between 2021 and 2023.

“We grew by 55% over a period of two years, both in goods and in services’. It went up to $776 billion in only two years. And with growth on both goods and services, we could clearly see that this year is going to be one where we will have to consolidate the gains,” he said.

When asked if the government is thinking of extending some kind of support measures to exports to deal with the crisis, he said the approach of being dependent on the government to resolve all the problems is something that now Indian industry also does not really desire.

“We have been able to change the thinking to bring the confidence in the Indian exporters that we should stand on our own feet. We should not be dependent on the crutches of the government. And I’m glad to share with you that they do not want the crutches of support anymore.”

“What we are doing is of course working through the military and the Navy to see that we can give protection to the ships traversing the Red Sea. We are also continuously in dialogue working with the countries in that region and with our own exporters, and very, very mindful and watchful of the situation,” he said.

When asked about the World Trade Organisation (WTO), the Minister said it is “very” relevant and will continue to increase in its relevance as the world needs a rules-based trading system, which is transparent.

“The understanding that is gradually creeping in that we will not allow ourselves to make the same mistakes that countries made in the rural ground, for example, in agriculture,” he said.

Certain quarters of experts are of the view that the WTO is losing its relevance as the member countries are not able to reach consensus on key issues.

On March 1, the talks at the WTO’s Ministerial conference ended with no decision on key issues such as finding a permanent solution to public food stockpile and on curbing fisheries subsidies, but the members agreed to further extend the moratorium on imposing import duties on e-commerce trade for two more years.