Wages, working conditions and work hours for the labour force will all play a very important role in the global supply chain, he said. Talking about how the entire world is looking at a diversified and sustainable supply chain, Sahai explained how India is in a good position: “The country is insulated from economic shocks or geopolitical uncertainty, it is safe and secure in the long run as well. We have tremendous opportunities waiting for us.”
Alluding to how there is a high tendency to be protectionist in the world now, Sahai said a global trade analyst had pointed out that while there were only 9,000 protectionist measures in place a decade back, now there are as many as 35,000. He advised entrepreneurs to focus on innovation and R&D to counter the challenges at play. “The government has to come forward and support R&D. Globally, it has been incentivised. Countries are providing 300% tax deduction. For India, it used to be a 200% tax deduction which has now come down to 100%. We need to increase the flow to R&D,” said Sahai.
The government is looking at an aggressive exports strategy by using free trade agreements (FTAs), and this will overturn the criticism of the earlier FTA regimes encouraging imports more than exports, he said. “Those who negotiated FTAs should have been conscious of the fact that these were with economies traditionally strong in manufacturing. And, hence, such a result was quite obvious. But we are now engaging with countries with whom we have a complementary economy and they are our large export destinations,” he stated.
Illustrating his point with an example, Sahai said that we have firmed up FTAs with the UAE and Australia by offering concessions on raw material and intermediate imports and getting market access for our exports. “We will be firming up one also with the UK, maybe before April, and the government is engaged with other countries as well such as the EU and GCC,” he added.
As part of his address, Sahai also brought up the significance of e-commerce retail exports in the context of growing digital trade in India. “In exports, we are looking at a multiplier effect of 10x in 3 years. E-commerce exports have been to the tune of $25 billion, it is expected to reach $250 billion in the next three years. A lot of regulatory issues have been addressed.” Sahai said the government has come up with an e-commerce hub scheme where all agencies involved would be brought under one umbrella to offer support. “We have the best products and services in India but small businesses and women entrepreneurs may not have the financial resources or market skill. E-commerce provides a ready-made answer for it. It has helped them to start, move and go on to the next goal. We are looking for those opportunities,” he stated.Pointing out that the transport sector earns $25 billion but ends up spending over $100 billion as transport services in freight costs, Sahai said that we don’t have a shipping line of global repute. “We need to develop an Indian shipping line. This can help us save $20 billion-$30 billion year-on-year. The country has tremendous potential and I hope all MSMEs will help us to realise the potential,” he added.
