COMMERCE MINISTER’S ADDRESS AT INDO-ROMANIAN JOINT COMMISSION AND JOINT BUSINESS COUNCIL AT BUCHAREST
Date : 26 Jun 2002
Location : New Delhi
The following is the full text of Shri Murasoli Maran, Union Commerce & Industry Minister’s address at the Joint Meeting of 15th Session of Indo-Romanian Joint Commission and 8th Session of Joint Business Council at Bucharest:
"His Excellency Mr. Dan Ioan Popescu, distinguished members of the Romanian delegation, colleagues from the Indian delegation, representatives from business and industry in Romania and India and friends.
2. I feel honoured today to be present here for the Joint Inaugural Session of the 15th Session of Indo-Romanian Joint Commission and 8th Meeting of the Joint Business Council. It is a privilege for me and the members of my delegation to be participating in these meetings in the beautiful city of Bucharest.
3. I would first of all like to thank you, Excellency, for your most gracious hospitality and warm words of welcome.
4. Indo-Romanian relations date back from history. The strength of our relationship is time-tested and our bilateral relations have always been warm and friendly. Our relations with the new, democratic Romania continue to be warm and friendly.
5. I am happy that the Joint Commission and the Joint Business Council are simultaneously meeting to explore new dimensions in our bilateral trade and investment adding further strength to the existing economic cooperation between our two friendly countries.
6. In the Meeting held yesterday by the officials from both sides, the Indian side has given a full exposition of strengths and opportunities of the Indian economy and outlined the potential of cooperation with Romanian business and industry. However, Excellency, I would like to take this opportunity to briefly touch upon the economic scenario of India.
7. Despite the general downturn in the world economy after the terrorist attacks in United States in September 2001, Indian economy managed to sustain a growth rate at 5.4 per cent in 2001-02. This was only moderately lower than our trend growth of 6 per cent per annum over the decade. Analysts are predicting that we would register a growth of 6 to 6.5 per cent again in this fiscal. We are one of the top three fastest growing economies in the world and as one economist points out, and we believe, we would be a potential ‘Growth Star’ of the next decade.
8. We are, however, not satisfied with this growth rate. Our Tenth Five Year Plan 2002-2007 aims at more than 8 per cent annual GDP growth so that we can double our per capita GDP in a decade and make a significant dent on absolute poverty. Our macroeconomic fundamentals are strong with an inflation rate below 2% and forex reserve is US $55 Billion, the highest ever held by our Central Bank. That is why the United Nations Conference on Trade and development (UNCTAD), 2002 praises India for resisting successfully the global slowdown.
9. Today, ours is probably one of the most open and liberal investment regimes with conductive FDI environment among the emerging economies. Within a span of a decade, our peak tariff have come down from 200 per cent to 35 per cent.
10. That is why, every year our FDI flow is increasing. Last year (in 2001-02) FDI registered an impressive increase which is the highest so far in the history of India - US $4.7 Billion by adopting our own conservative computation. International Finance Corporation (IFC), a World Bank arm, has also said that the difference in FDI as a percentage of GDP between China and India is a mere 0.3 per cent. Internal survey conducted by IFC also reveals that business environment in India is better than China. We strive hard and do hope to close the gap and excel China. While our FDI target is US$ 10 Billion per year some economists feel that our economy can absorb more than US $20 Billion.
11. A new scheme for setting up of Special Economic Zones in India was announced in the EXIM Policy in 2000 to promote exports. The Special Economic Zones have some unique features. These are a deemed foreign territory on Indian soil. The highlights of the scheme are given in the brochure which will be distributed. The recently announced EXIM Policy and Union Budget for 2002-03 have further added to the attractiveness of this Scheme by providing a host of fiscal and other concessions
12. Software and IT enabled services have emerged as a niche sector for India in the global context. The software industry was one of the fastest growing sectors in the last decade with annual growth exceeding 50 per cent. Software service exports increased from US $ 4.02 billion in 1999-2000 to US $ 6.3 billion in 2000-01, registering a growth of 57 per cent. India has become one of the world leaders in this technology of the 21st century.
13. Excellency, as a result of these measures, India today offers unparalleled business opportunities for companies. Large cost effective skilled manpower, vast natural resources and a diversified manufacturing base are some of the main strengths of India.
14. Coming to bilateral issues, we recognise that the trade remains much lower than its potential and we - the Governments and businessmen together – must find innovative means of properly augmenting it. The Governments must provide a legal framework and an environment of certainty and clarity for business enterprises to identify opportunities and intensify their cooperation. We already have some key bilateral agreements in place and must work out many others. We need, above all, to take innovative measures and promote new means and instruments like consignment sales, operation through Escrow Accounts and warehousing to maximise our trade and investment.
15. It is extremely heartening to note that the Agreement on Quarantine and Plant Protection between our two countries will be signed during this Session of the Joint Commission.
16. I welcome your Excellency to India and wish both the Joint Commission and Joint Business all success in their work.