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.

“There is work ongoing with a number of economies, including the U.K., on intellectual property (IP) rights and modernisation in an effort to improve Indian protocols,” Union Minister of Commerce and Industry Piyush Goyal has said.

Responding to questions from a gathering of Indian-origin chartered accountants (CAs) from the U.K. Chapter of the Institute of Chartered Accountants of India (ICAI) at the conclusion of his London visit on Wednesday evening, the Minister – a qualified CA – covered a range of topics including IP rights and corporation tax to environmental, social and corporate governance (ESG).

He said the process to harmonise with international standards is high on the government’s agenda because integrating with world thinking on standards and IP is important for the fast-paced growth of the Indian economy.

“With the UK we are working on IP rights or IP modernisation. Our effort is to improve the Indian protocols around intellectual property rights and areas associated with it, but I feel it will have to be a little more gradual process,” said Goyal.

“Similarly, we are working very actively on quality standards in India. The BIS (Bureau of Indian Standards) for non-food products and FSSAI (Food Safety and Standards Authority of India) on food products are trying to develop standards. Wherever it’s possible, we are trying to harmonise also with international standards. But it’s not possible in everything…we are roughly at about 90 per cent of our standards harmonised with what is generally accepted standards,” he said.

“But I can assure you we are conscious that if we have to develop our economy at a fast pace, we’ll also have to integrate ourselves with the world thinking on standards, on intellectual property. Though it may be a process, we are moving very rapidly and hoping to become a preferred destination for other countries. So, it’s very high on our agenda,” he added.

The minister forecast that over the next three or four years, Indian standards will be seen as world class and accepted across the world.

While he veered away from any direct reference to the ongoing India-UK free trade agreement (FTA) while “negotiations are on”, the minister mentioned that the issue of transfer pricing was among the matters that had emerged as part of efforts to find wider solutions in the trade talks.

“There is no written rule or unwritten rule that any one geography or one set of people are honest and the other set is dishonest… so transfer pricing will remain an issue by issue, case by case subject and there can’t be a one size fits all,” he said.

Asked about the corporate tax levels in India, the minister was clear that India’s rates were at a comparable level having been reduced significantly in the last nine years.

“We have been successful through G20 in getting the world to bring in a minimum corporate tax of 15 per cent,” he noted.

Goyal, who was in the UK on a three-day visit which coincided with the 11th round of FTA negotiations with the UK, met his British counterpart Kemi Badenoch to build momentum behind the process. The Commerce Ministry issued a statement following the meeting to say that “considerable progress was achieved during their frank and open discussions on various difficult issues”.