Trading Against the Tide

>>Excellency , ladies and gent woman , this is one of the most unexpected sessions we
have and I do not want to pre-empt the
discussions. The reason I’m taking the
floor is to express some thanks first some
thanks 1st to you , secretary Ross , having come here at a very critical
moment , and I should also say and thank you for your
great friendship with the World Economic Forum
and personally since many, many years
and I also would like to thank
particularly the Minister of commerce
and industry and railways of India for the
cooperation we have established with
the government and after 35 years , usually it was a Confederation of
Indian industry World Economic Forum, but now we have the
two partners well established plus
very important , the government of India , and finally , I would also like to use the
opportunity to thank the President of the
Federation of Indian industries . I think a marriage that lasts for 35 years has become seldom in our world , but we could celebrate
the 35 years , and I think we will be
still able to celebrate the 50 years , the Golden Jubilee , in 15 years from now, so I leave it to you,
our most capable moderator. (Applause)>>Hello and welcome . For two countries seen
as natural strategic allies India and the
United States have recently been having a
torrid time in trying to resolve bilateral
trade disputes. The atmospherics and the
photo opportunity is fantastic but so far
that has not translated into surging trade between the world’s two
largest democracies. What is holding back
the US trade ties ? How can both benefit
from the churn in the dynamics of global trade? Will both countries ride
the trade wave as partners in arms or will Mitchell trust and suspicion mar what could
potentially be the greatest relationship
of the 21st-century? It makes the session at
the India economics Erik — summit so important
and reported and delighted to be joined by the
principal players in the joint trade ties between
our countries. — Mutual. I want to welcome one of
the sharpest economic voices in the Indian
government, the highly dynamic Indian Minister
of commerce and industry, the
blue-eyed boy . can we have a round
of applause for Prime Minister? Piyush Goyal . With us is the
principle of the US administration , tightening
the fields of private equity and
has restructured it as it is over 400 as it is over
$400 billion. — Assets. I’m delighted to welcome Wilbur L Ross. For a corporate
perspective on trade relations we are joined
by the founder and chairman of one of
the world’s largest telecommunication
companies who provides mobile and broadband
services to over 400 million people in Africa
and South Asia. Can we have a round
of applause for Rahul Kanwal ? To give us a macro view , we have the President
of the Confederation of Indian industry, and
the vice-chairman of Toyota . Last but not least,
for a view from the neighbourhood I would
like to introduce the first elected female
President of the Bangladesh Garment
Manufacturers and exporters Association of
fighting business leader who stormed a
male only club. She believes strongly
Bangladesh has arrived. Ladies and gentlemen,
welcome managing director of the (unknown
term) group. Piyush Goyal , let me start by asking
you the huge anticipation there was
in the buildup to (unknown term) and then-President Trump meeting with India’s prime minister that
there would at least be a limited trade deal that would be announced. Everyone is waiting
for that trading. What happened?>>Thank you, Prof, for
your kind words and a warm welcome to all the
honourable ministers, all the delegates from around
the world, our Indian participants
and I do hope the discussions during this
Forum will be a forerunner to much
more engagement between all of us. Thank you for your
opening remarks . Some of them were completely
unaligned with reality. (Laughter) Sum will make the
same mistake I did a few days ago and I was taken to task by the media for a recent gas , but this audience did
not know it . g affe. It could also be
something like a torrid love affair. I think the relations
between the Indian government and the United
States government at the leaders level,
at our level and at the people
to people level are better than
ever before . The leaders get along very
well personally , but also understand
each other and understand what
is good for the two countries, for the people of the
two countries and for the world as a whole. For both these countries, the oldest and largest
democracy in the world , I think trade is one aspect of a multi dimensional
relationship , but a very important aspect. Trade . it is not as if
you’re going and buying a hotel or sorting
a bankruptcy that secretary Ross
would have to do. Trade has to consider
the past, present , future, political dynamics,
local issues , long-term issues, bilateral and
multilateral commitments, so I think it is
a very complex story, and in that complexity
we are having an absolutely wonderful
engagement. The ministerial
level . all of us get along very well, we understand our
imperatives are mutual imperatives , America is a very
powerful, big economy, but also a very
sensitive country . India has an important
role to play in the geopolitics of
this region . It is the largest
democracy in the world, country which offers the full , important (inaudible) . at huge demand from people aspiring to
better quality of life and decisive leadership. All these elements are
important to address the destiny of the
world, and India is going to be an
important player in the world’s growth engine. Trade between the US
and India is robust. I heard you say you did
not find surging trade. I think imports from the
US to India are growing by nearly 30% and
exports from India to the US growing by
nearly 20% in the last year. If that is not surging
trade, I yet have to see something surging
better than that, but that is only the
forerunner of bigger and better things to happen. We are at a reasonable
trade level. Certainly our potential
has not been reached . Both (unknown term) , 70 Ross — secretary Ross . And the way our talks
are progressing I do not see any reason
why we cannot do that in the
years to come. You mentioned high
expectations in Houston and New York. For your information,
the first time I was able to meet and
further the talks and progress the
talks actively was only on the Monday following (inaudible), so I don’t
know where this speculation of an
announcement in Houston, some outcome or a
limited trade deal you would talk about, and on the Tuesday
it came out . To my mind, as concern
ministered — ministers, we also have
a responsibility to keep the media busy. We were keeping
our busy — ourselves busy in the best interests of
both countries>>We see the handshakes, the
back rubs and the Bonymaen , but we also see no trade deal. They were saying they
were willing to accommodate US interests. We don’t have a limited
trade deal let alone a free trade agreement. What are the key
roadblocks and how far are we from being able
to address those successfully?>>Thank you for
convening this group. It looks like a very apt
audience we have here and I hope we will not
disappoint you as to contend, but neither
government said there I think that was
just speculation. We think there is
no structural reason why there cannot be one pretty quickly. We each know the others issues, we have for a while. Pre-election, there were undoubtedly
some constraints on India to deal with
those matters. Now that the election has come and gone and the Prime Minister has a clear, strong position in the parliament,
it should be easier to take decisive action. There is also a lot of confusion . What is the US position about trade deficits? We feel our deficit is too high. We intend to both increase total trade and reduce our trade deficit. To us, there are
three components of trade deficit. One is what I would call inevitable components
for some countries. Namely if a country
does not have oil or natural gas of its own locale, it has to import it . It is not the fault
of the exporting country which one you have the
deficit with. That is not the kind
of trade deficit that particularly bothers us. Similarly, where there is a
true comparative advantage, there will
be trade deficit in some product
or another. We also view that as more or less a blameless trade deficit. It is the third kind , which are the ones that arise mainly
because of artificial barriers , protectionist barriers that countries have thrown up. That is the one we are concerned with and determined to reduce. We think we will make
progress there will stop . I wanted to clarify we have a focused effort
in terms of trade deficit reduction. We also believe that by focusing mainly bilaterally, we can achieve faster results for all countries
involved. We made a deal
with Canada and Mexico . A very complex and big trade deal. By far the biggest the United States
has ever made. That only took about
15 months to be negotiated. Trade deals often take it , 10, 12 years. They take so long
that the issues are not even the same at the end as they were at
the beginning. We made a deal
with Korea. We renegotiated that
trade agreement in a few months. We have a fairly
broad agreement with Japan that was also done within
a few months. For an administration that some parties think is somehow anti-trade or antitrade deals , look at the record. We have a better record on getting things
done under the Trump administration
than any other country, in terms
of big deals.>>You speak of the trade
deficit with India. I want to show
you a data set on the screen
in the corner. It compares the trade
deficit the United States has with India versus China. There is a growing sense
in India that the Trump administration is being
harsh and unfair by comparing us with
other developed countries. It is on the
screen now. You see how the trade deficit with China
keeps burgeoning, whereas the trade
deficit with India is fairly low. The point the Minister
made was important. It has come down
by $3 billion since President
Trump began. It is coming down,
whereas the trade deficit with China
is going up. Yet somehow, both
are being treated in the same way.>>We can add and
subtract two. We are aware of the differences between the trade deficits , as between the
two countries. That is not
a revelation. The trade deficit with China is the biggest
single one. If you look at
our aggregate trade deficit, there
are two major components. One is a product line that is called
automotive. The other is geographic,
that is called China. We must deal with
those two components in a very decisive way if we are going
to have meaningful overall reduction. That does not mean we should not
be dealing with unfair practices,
even if they result in smaller
trade deficits with other countries. In addition, we believe that
most of the things we are requesting, particularly of India,
which not only help the US . We think a lot of them would help India itself. India has a wonderful
opportunity right now to take advantage of trade dissension elsewhere. When I’m meeting
with Minister Goyal a bit later, we have prepared a chart of the areas where China is a big exporter and how that compares with what India
is exporting to us. What are the possible
solutions to changing that? I do not want
you to think we are just focusing on deficit. We are also focusing
on total trade . What the world needs is more total trade . This recent forecast that world trade will be down to 1.2% this year is a very bad omen. Normally global trade has been growing at a percentage point or so more than world GBP D P . If it is true it will
only grow at around 1% , that does not speak
well for world GDP. That is a separate
concern.>>The Trump administration is complaining about
unfair practices. India’s average data for larger
economies is amongst the highest in the world. They also complain
about how India regulation can change. This happened when Amazon complained about new e-commerce
policies. This is not the way
American companies can’t function. It is a good opportunity
between what is happening between China
and the United states for India to capitalise on, but they need
certainty in policy.>>I do not know
where you found the complaints about
unfair trade practices. I don’t think so. There are issues on
which we can have a difference of opinion. It is good to have an engagement to
discuss it. But to my mind,
India has been one of the most benign
countries in terms of opening up rapidly and inviting
international participation. There will all be
certain political imperatives which every country
will have to respect and every
company will have to protect. In that sense, there
will be issues we will continue to engage with. Everything cannot be
sorted out in a couple of meetings. These issues have
several dimensions. Particularly e-commerce, for example. After I became minister
of commerce, I had extensive discussions
with all the e-commerce companies. They are publicly
and collectively and individually
confirmed to me in the December guidelines . There has been no change in India’s stand as far as
e-commerce is concerned. I am happy to share with all of you here so
that there is clarity on this issue. India is very clear , considering our
domestic political compulsion , having about 120 to 130 million
people dependent on
small retail. It is about 50 to 60
million small retail shops throughout
the country providing employment and opportunities to 120 million people. Which means affecting the lives of nearly half
the population of the country. This small retail is a
very sensitive subject. My party which
is in government today, and most
of India, is clear that we cannot
let small retail die. Therefore, we
have restricted foreign direct
investment in the retail sector at 49%. E-commerce is expected to be an
agnostic platform. It is a trading platform . The platform which provides
opportunities to buyers and sellers in an agnostic fashion . It is not expected to become a platform for predatory pricing. It is not expected
to become a platform to use the muscle power
of large capital and low value
being available . And maybe offer
discounts which puts small retail
out of business. We are very clear
about it. If the loopholes that
were sought to be clarified in December , all the companies
have confirmed that they have
understood this. I have repeated this on
more than one occasion. Please do not go to smart chartered
accountants or lawyers who misguide you and help you stay within
the letter of the law . But often they do not
help you recognise the spirit of the law. I’m trying to explain
to everybody that the spirit
of Indian law is protecting small retail. Every country
in the world would like to protect
the livelihoods of their people. In that spirit,
we welcome all e-commerce companies
to India to work as an agnostic platform for trading. Do not become the
principal player directly or indirectly . Or through structured
formats . Do not look at structures
which can fall within the law
but in some sense break the spirit
of the law. That is the clear
position of the government and
will remain so. We have been clear
about it for decades , as far as the parties
concerned. The e-commerce companies have understood me clearly on this subject. We have had this
dialogue so many times. India is very clear. We do not change
rules midway . You mentioned something
about regulations ranging. I can point
out instances of worldwide regulations changing
much more often than India. We provide a very stable
and predictable regulatory system. Where there are
concerns, we try to have a dialogue. There will be occasions
where urgent measures are required,
which every country does. The US does it. If there is something
affecting US agriculture, they will
put an action to protect it. They will certainly
bring in regulation to stop that issue. In that spirit, we believe everybody has policy space. That has not affected
our discussions on negotiations. They are progressing
in the same spirit of understanding.>>Are the imperatives
of domestic politics now at loggerheads with
expectations of trade? For example, the government’s
efforts to ensure all medical devices
are well priced. America is not happy
about that because suppliers believe this
is unfair pricing. How to be reconcile the differences between what the government requires for
politics and what the Trump administration
is asking?>>We understand the
political sensitivity of the small details — retail people , also farmers and
other groups. In the US, conventional
retailers have had a hard time. But we have made
the policy decision it is more important to
get the most efficient form of retail commerce . Ultimately, that is probably
a combination of e-commerce and bricks and mortar commerce. It is a question of how rapidly things change. If 100 years from now , India still has as
many small retailers as now, it will
have held back the growth of the
country immensely. I think it is a question
of proportionality and timing and balancing. There is another factor. E-commerce tends to result
in lower cost of retail product to the consumer. Any country that
has relatively low consumer incomes, such as India,
that is the flipside . To the degree that there
is a structural issue which forces Indian
consumers to pay more . There is a penalty
being absorbed by the whole population, not just those employed
in retail. We think India needs to manage and will manage
the managing balancing act between
these competing activities. As was reported in the press yesterday, Amazon was spending one third of what it
did the year before in capex . It probably would have spent
more in India if it did not feel there
was a reduction in growth due to some
of those policies. There was also that cost to India. But at the end
of the day , the Indian government
has to decide how they will balance
those equations. We are making the
advocacy point of view . We will continue to do so. As the diplomats
say, we will have frank and mature
discussions. would be a trade deal
in five minutes. That was not us.>>Secretary Ross, predatory pricing will not be acceptable. If below the
manufacturing price, it does affect the
Indian retailer.>>That is what
negotiations are about.>>How do we reconcile this
in your view between what the Indian
government needs for its domestic constituency and
the excrement — the expectations in
the trade sector?>>This is better held in the conference room.>>The particular
leadership in every country are first
and foremost bound and beholden
to their own people and have to
take those positions respectively. Today we have in
the US President and the commerce
secretary to businessmen . Perhaps this has never
happened before. That is a good thing and
not so great thing for some countries because
they can see the mistakes made in the past where probably people
didn’t understand trade , and I would therefore direct secretary Ross’s
attention to China when in 2007 , whatever he touched
was made in China , and we were surprised
how the US has for a long period allowed a
manufacturing industry of that size and scale to
develop in China at the cost of decimating
the US trade base. This has been going on
for decades to the benefit of China. We could participate in the same process , but today we have
two business leaders in a critical part , their focus is on
China, taking it head-on, making amends
but it seems at the same time there may be
misdirection towards India. Look at India .
Facebook, Google, WhatsApp, Instagram, these are large companies today . Each is dominant
in India . So very large amount
of economic value to these economies and
your talking about hundreds of billions of
dollars of market capital (inaudible) rest in the
people of India hope in your business calculation
you will take note of that and when you fight
for those stents or Harley-Davidson’s or
other issues, they are much too immaterial for
the larger partnership the US and India
can enjoy. As the Prime
Minister said , the oldest and largest
democracies deserve a stronger strategic
partnership and I would urge when
you talk to the Indian political leadership this
is one country that has opened up absolutely and freely
for foreign investment in almost every sector. The duties are
mainly in line with the WTO duties, a place where
we welcome all foreign investment and governments have opened
up to fast without having reciprocity of taking some benefits
back from the other side. In closing I would
also say many are invested in the US. We have genuinely a very
warm welcome in the US for businesses. Your nation is rising. Dramatically, duties on good shape,
taxes are in good shape but you are also the
world power and you have some duties and of
— obligations, and we are nowhere
close to being a developing nation. We are an emerging market
in a developing nation and we need more
understanding from yourselves.. (Applause)>>I agree with
quite of the view of the points you made — a few. We do not blame China for the imbalance altogether . A lot of it, maybe
most of it , is due to incorrect
policies by prior American administrations, but the fact is we
are where we are and those policies are
no longer our policies, number one. Number two, our
issues with China are not just day-to-day trade . We have some very
serious structural issues with them
relating to technology transfer , relating to respect for
intellectual property , state-owned enterprise , and if we just focus on
trade we could have had a deal to .5 years ago, so it is a misconception
to say the issues are the same. They are not the same. There is a big,
complicated thing that requires structural
reform in China if we are to get to reasonable balance. The other thing . sure, there
is a trade-off , but Amazon and the other e-commerce
companies did not get to be
the world’s biggest by any evil mechanism. They got there because they are
extremely efficient , extremely effective
at what they do , and the question is for a country
like India, how do you balance those
economic benefit for your population
as a whole versus the let’s say special
interests of the retail segment or of domestic competitors? That is the balancing
act our discussions hopefully will
help define.>>Bangladesh has been
looking to leverage the rising trade
tensions between China and the United States by especially getting
a lot of the Apple manufacturers. Bangladesh has become
a source of envy in India and
even your ability to attract investment when it comes
to manufacturing . What is Bangladesh’s
secret sauce ?>>Bangladesh is
a development miracle, and economic
surprise and with our GDP growth,
we are growing . We are almost the
size of Wisconsin with a hundred and 65
million people down there, with many existential
challenges . The reforms and what is
happening in Bangladesh should be an example
for the world. We have been largely
overlooked. We have been growing
with America , and lately the US -China trade war
perception have s played an important
part but the latest 587 tariff
lines at the US imposed an extra
10% on 1 September, $25 million it involves
and out of the 12 million is from China
and the rest is from Bangladesh only,
4 million. We have now little more, India even less, so the country that has mostly
benefited is actually Vietnam, so Vietnam has
almost benefited up to 16.8% , so Bangladesh is hoping the businesses are really going to grow
but so far it has happened up to a
certain level. It is not galloping. It is just about .
I would not say flat but not up to
expectations. American imports . The top 30 products to China
exports the US , Bangladesh has an
overlap of around 16 products and in those
16 products, we are actually dipping,
but again , Vietnam is increasing
so there must be some magic in Vietnam . Unfortunately so. I think the trade
narrative also involves a lot around that Labour narrative . — Involves . Every time we say we are
the most sustainable and stable manufacturing hub of the world, we
go back to the same question of how labour
rights are doing in Bangladesh? There does not seem to be a substantial
shift there, whereas we have actually
done quite a lot , so we hope someday
pretty soon, we will be favourably looked upon
as we deserve , and we hope we will
see the light , and talking about India and Bangladesh at the same time , I think India, a fresh set of incentives
got declared , so manufacturers will get a 4% extra manufacturing incentive
and that will probably push growth from
India as well. I would like to say Bangladesh and India
can grow together. It need not be a competition. It could be
collaborative competition if we have trade connectivity and would support
we could grow faster . Maybe we can grow faster and appeal to the US to consider us as very collaborative and
competitive partners .>>All of us are delighted to see the way Bangladesh has grown and is . the spirit in which it has grown . Kudos to everyone in the
manufacturing sector in Bangladesh and the people
in government. President Trump is pushing
American companies to shift manufacturing
outside China. This is a once in a
generation opportunity for a fundamental
recasting of global supply chains. All of this is going to
countries like Vietnam and Bangladesh. Is there a concern that
India could miss out once again? What more would you like
to see the Indian government do?>>Let me take the
example of the automotive industry,
which is roughly 50% of manufacturing in India
and known the best. Luckily I think
over the last 20 years we have become
part of a global value and supply chain, and to a large extent
a lot about automotive components, exported , cars even exported, are competitive now . I think we are ready to
increase capacity more . We need the domestic
market increase as well as export. For us regional
cooperation is very important in the automotive
industry to be part of this global
supply chain. An example, one
of our products , sold all over the world
but components are made in various companies — countries in
Southeast Asia , this trade cooperation . We still do not
have very large economies of scale like in developed
countries so when we do these trade agreements,
we need some sunset clause. It need not be very long but it needs some sunset clause . not in all industries but some . That is the main issue . it is .7 , or 0.8 compared with
Southeast Asia. We are losing out
from factory in many areas and that
is where we need to focus a lot to get as competitive
on a global basis but Indian industry is ready
to take the challenge on being competitive. We are focused on
competition here and we would like to continue
to be focused on competition, not just for
government subsidies. She two>>Secretary Ross , (unknown term)
said to me the Trump administration
has a schizophrenic approach to relations
with India and one to work with India
on the strategic elements , but treats India
as a trade competitor. What the trouble
illustration once the benefit of the
strategic relationship while continuing
to treat India as an economic problem.>>I think we have shown we regard India as very important as a global partner. We believe we
make the best military products
in the whole world. That was a big thing and a deliberate thing. There is nothing more
sensitive than sharing your most advanced
military equipment with another country. I think that is very
much proof that we have great respect for India as a geopolitical
partner , as well as a
trading partner. I do think . people have mentioned
Vietnam a bit full stop Vietnam is a very good example
of a company that has picked out a couple
of specific segments and build big scale. Electronics . they got Korean
companies to invest. They built up skill and expertise . They are now extremely competitive . Footwear . same thing. They have done
a very good job. That is what I meant
before when I said I think part
of the thing that developing
countries should do is figure out which are
the particular segments where you can
do the best . Figure out what are
the impediments you have now. In the case of India, it
was mentioned logistics. Logistics are a
problem here. One of the things
China did much more rapidly
than India is deal with
transportation infrastructure. Logistics are a problem in India. They are a handicap. If you could solve the logistics and the scale issues, India could be much
more competitive. Those are things that do not hit US or anyone, but the
kinds of suggestions we are trying to make
to India as part of our discussion.>>You mentioned defence
and you say America is offering high-end
technology. Simultaneously, America
is threatening sanctions for purchasing a missile
defence system from Russia. Our foreign minister
said it is India’s sovereign right
to purchase weapons systems from whichever country
we want. And America’s
threatening sanctions for puncturing — purchasing from Russia.>>We understand India
has a historical relationship
with Russia. But there are issues of compatibility
with equipment. We are going through it
now with some of the NATO countries. It is a complicated
issue but one that needs to be sorted. Both from an American
and Indian point of view, there needs to be a more rational
approach.>>You mentioned that if policy and regulations do not change . But if you look at what
Amazon has invested in years gone by,
if there were actual continuity, companies and America would be
investing that much more. It sends a negative
impact .>>There was no policy
change midway . I will reiterate that. As far as Amazon is
concerned, to be several factors. They may have
over invested . I don’t know, I do
not run their business. It is up to them what
they decide to invest , where they see their
market going. Maybe now they recognise the cannot do some of
the things they were doing earlier. In the spirit of the
law that I have articulated. Though these investment
figures are from last year,
before I came in. But the important thing that may also
be looked at by the larger group and talked through
is the fact that while there may be
certain advantages of large retail
coming in and bringing down costs and to some extent a benefit to
some consumers , we have to also
recognise the fact that if the consumers are dependent on
livelihood from that small retail . If they do not have money in your pocket and they
do not have work, there will not be anything to
spend as consumers. We have to ensure that consumers continue
to have a basic income level and work
opportunities and income to spend . With India, it is one of the lowest inflation rates we have seen in the 72 years of independence. Our inflation in
the last five years has been lost
ever since 1947. We have come on from the
era of double-digit inflation and huge spikes
in inflation . In fact, it has
never crossed 4% in the last
five years. More often it
has been 2%, 2.5% , less than 2%. We have seen stability
in prices. We haven’t three words which
used to be a permanent feature of
India’s collections which did not have any
traction in 2019. One is corruption. Second is inflation. And the third is secularism. These used to be the hallmark of every
election in India. This election was one voted for on the back of
a corruption free administration . We are moving towards
making India the most honest nation
to do business. Second, we are looking to have
a more inclusive and united polity. Secularism was
not an issue in this election. Communities have left in — left in peace. Lastly, in terms
of inflation . In Hindi, there
is a phrase. It used to be
backbreaking inflation. It used to be a regular feature
of Indian elections. Backbreaking inflation is killing our
income levels and our ability to spend and have a
decent quality of life. Given the last
five years track record . and they mentioned
this in another context , that the prime minister has broken the back
of black baking — backbreaking inflation. Five years of ensuring the country does
not have to suffer stress due
to price inflation. We have a situation where the country is
growing in an organised manner. We have to take care of
every section of society . Alternate work
opportunities come up for these small retailers , it will have to be
balanced and calibrated will stop
allowing e-commerce to do some of the things they can do in
the Western developed world. For them to do that
in India, the more calibrated plan
will be required. Working opportunities for that large
section of population in alternate occupations will
have to be created. That is the roadmap that
we are working on.>>The United States
government is pressing India hard not to take 5G technology from China. That is one of the big trust areas. As a key player in this
segment, and from the Indian perspective, do
you believe that is an unfair bargain? Because the costs are
much cheaper from China than from European or
American companies. How do you view
this pressure?>>Are concerns
about Huawei have nothing to do with advancing the cause
of American telecom equipment. We do not have a direct competitor , so the notion that our views on wily wily — are a function of protectionism is incorrect. Are big competitors are people like Ericsson
and Nokia, not US. They may have involved
some sort of US European consortium, but anyone
who thinks we are doing this out of protectionism
does not know the facts. The reason we
are doing it as we think there are
genuine security issues . 5G is very different from 3G and 4G. 3G and 4G, you are able to separate peripheral parts from the
central part. 5G, that is
not possible. In 5G, if there is a back door, it is
going to infiltrate the whole system. The proportionality of risk we think is very
considerable. Secondly, while a — they are very
dependent on US technology. It is not that we have found
some magical thing they have found which is not
available elsewhere. I believe in a few
years, there will be a western alternative
that leapfrogs in technology. Since 5G is such a revolutionary
thing, it is going to take a while to roll out anyway. Our feeling is why jump into it ? In most technology , the first version
of a product is not as good as the second and third version. While we agree that
5G is important, we think there is a
genuine security risk. It is not just the risk on the front end. There are constant
upgrades , maintenance things. Every time there
is an introduction with the vendor,
there is the potential for
a security issue to develop. Our concern is based on our desire that our geopolitical
partner India does not inadvertently subjected itself
to untoward security risk. That is the nature of
our concern. At the end of
the day, India has to make its
own decision. But our concerns are security, not
protectionism.>>How real are these
security concerns?>>As he has rightly pointed
out, it is an advisory from the US. They have already
decided for America , banning these products possibly
for decades. They are relying mostly on Nokia and Ericsson. I note Samsung is coming into their
space as well. From our point of view,
I have tracked this industry for 25 years. I am not going
into whether IP was compromised. While we were away — become externally
good with their product . It is significantly superior to Ericsson
and Nokia . They have surprised me how fast they have been
able to take the technology to
another level. The power consumption
is a fraction of the Europeans. The footprint
is very small . There are very powerful features which you can use any variety of ways. Whether they compromised
some American IP s , I don’t know. China will become 100% free from any
American component within the next
few months. They have taken that on as their mission . They know the leverage the US has. India will have to
decide for themselves their relationship with
China in a larger context. India and China are
partners, they are neighbours, they have a huge population. India will take
this advice carefully, but the decision will be
taken politically by…>>What is your view
on that sanctions?>>My feel is they should
be in play. They should use
this as leverage. There are lots
of issues with China as well and India
should take advantage of that. I would rather have this leverage because
it is an important part. The benefit of
American pushback has been that technology has opened up . I’m sure they will do this for an
Indian company . One thing they have done is opened up the Chinese
technology .>>Minister, is that solution? They are now offering
a full transfer of technology. Would they give
it to you as well ?>>I will leave that
to the concerned minister. The team is very
competent, let them handle this issue. I have enough
on my plate!>>As we come to
the conclusion of this conversation, there is something I
have always wondered , secretary Ross. Are you a big Harley-Davidson fan? What is their obsession the Trump administration
has with Harley-Davidson’s . Do you write a lot of them? Why is it so big
and important?>>I’m not sure I
understood the question.>>India reduced tariffs. That has not been
good enough. Why is that one
particular kind of motorcycle such an
important part of the narrative when it comes
to India-US trade ?>>I don’t think we treat
India and fairly relative to anyone else. It is not right to say
the President is doing this that or the other
thing relative to India. The President has gone
out of his way to have a good relationship with
the Indian President. It is unprecedented in the
entire history of the US. Never has the US
sitting President had such a big public
event with a foreign leader from any country , period. If there is any doubt , that was a very
conscious and overheard act to send a very
clear message to both the Indian and
American community and most importantly
to the Indian community . this is a
qualitatively different relationship
from that that has previously
existed between the United States and India and all discussions are
conducted within that frame of reference, so that’s how that be very clear. — Let’s have that
be very clear.>>How long will we be and — how long will it be
until we have a limited trade deal and then
something more significant later?>>We should allow the
negotiating teams to work on them. Whenever there are trade
issues, all of us sit down in a very
comfortable and very, very open-minded way. We are able to resolve
these issues so it is more an issue of time , scheduling calls that will determine how
long it would take but I do not see any big issue
holding it back for any reason and I don’t think
just this announcement is holding back Indian
trade all relations, either geopolitical, either at the leaders
level or at a trade and services level. Nothing is significantly
impacted right now , but we want to actually
take a quantum leap in that, which is the direction
in which both countries and our negotiating
teams and we are working on . GERALD LEE: Thank you
for joining us at the economic summit. Thank you for
joining us. Thank you.

15 Replies to “Trading Against the Tide”

  1. I think Indian small retailers should taste what competition is like, they must understand its a business and must be prepared for any consequences. Government should stop spoon feeding them.

  2. Vision comes from the top leadership.. Modi is showing the 5 trillion dollar vision but both the finance and corporate ministers are egoistic and are not doing a good job..

  3. I am surprised that there are so many indians are libtards. ?? what happens to the leftmost idiot, are there many libtardes in india?

  4. India should be strict while doing this FTA with USA or US will eat Indian market …. Ross looks very experienced where Piyush is not!!👆👆👆👆👆👆👆👆👆👆👆👆👆

  5. Piyush Goyal seems like a man of integrity and strength…. Have just recently noticed recently how articulate he is as well.
    Mr.Mittal …well said on Huawei…!!

  6. US need to understand that USA need INDIA more than INDIA need USA, relationship b/w INDIA & USA can not be of master and slave.

  7. Indian commerce minister is still in election campaign mode, without a specific response unlike the US commerce secretary, who was very specific and pointed as far as the issues are concerned.

    What I got from this conference was that, Indian economy is going to be inefficient, rest of you can go to hell

  8. Take in Huawei if it's better…. We don't want America to boss around and influence our policies more than before. This guy is trying to give us directions which suit his narrative and help him.
    America can be India's friend… not India's boss.

  9. Due to our political system Indian politicians and beurocrats use corruption and political interference in development activity to stay in power and fill their pockets which has made our economy un competitive, and has led no institutions which can forwarded innovation.

    It's not that we lack potential, Indians prosper everywhere they go in Western economics in terms of competition.

    Now that we need growth for which free trade is a necessity, we find our institutions in effective and our economic system un competitive, thus "staring down the barrel of the gun" if we open our country to more competitive western markets.

    We are doomed because all i see is our minister begging USA to show us some mercy.

    I think India has seen all the development it can have, we don't deserve much & we can't have much if we follow our Indian political system directed by our constitution.

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