Excellencies,
Ladies & Gentlemen,
1. It is a great pleasure to join the first edition of the Indo-Pacific Business Summit and speak about Promoting Trade Facilitation in the region through improved Cross Border Linkages and Trade infrastructure, in other words touch upon the trade and economic aspect of the Indo-Pacific construct. I would like to take this opportunity to thank CII, and of course, our very active Economic Diplomacy Division, for bringing together Government, business chambers, enterprises, think-tanks and academia from all countries in the region to discuss this important subject.
2. As you are all aware, the concept of Indo-Pacific has gained increasing salience in recent years due to both geo-strategic and geo-economic reasons. Historically, the Indian and Pacific Oceans have enjoyed a deep connect, facilitating the flow of goods and people, and building commerce and cultural linkages. In that sense, the Indo-Pacific has always been a seamless contiguous region. While outlining India’s vision for the Indo-Pacific at the Shangri-la Dialogue, Prime Minister Modi clearly indicated the geographical reach of India’s idea of the Indo-Pacific, embracing Africa and extending to the Americas, which covers both the Indian and Pacific Oceans. With greater globalization and a rebalancing of power, this vast region has experienced strong and sustained economic growth spreading from across the Pacific Rim, to South-East Asia, South Asia, the Gulf region, and all the way to the East Coast of Africa. This economic dynamism has led to increased connectivity, regional integration and greater economic opportunities.
3. The Euro-Atlantic dimension of global developments has shifted eastwards. Now over 50% of global trade passes through the Indo-Pacific and it produces over 62% of global GDP. Emerging economies of the region have become the primary drivers of the global growth, shifting the economic centre of gravity to this region. The 21st Century would see increasing focus to the Indo-Pacific Region connecting Africa, Asia, Eurasia’s Pacific Coast, Oceania and the Pacific Coast of the Americas.
4. For India, the Indo-Pacific has acquired growing significance because more and more of our trade is now headed to the east of India and a significant part of it passes through the Indo-Pacific. To give you a sense, last year our bilateral trade with ASEAN was $87 billion, with China $82 billion, with Japan & Korea together it was $38 billion, with the US it was over $88 billion, and with Australia around $13 billion. In the Indian Ocean Region, our trade with Sri Lanka and Bangladesh together was around $15 billion, with UAE in the Gulf our trade totalled $59 billion and with Saudi Arabia it was worth $33 billion. In Africa, with South Africa, Kenya, Mozambique and Tanzania, we had a combined trade of around $18 billion.
5. This economic dynamism of the region is equally reflected in India’s relationship with the region. We place our Neighbourhood First and we Act East. We are strengthening relations with the states of West Asia and the Gulf as we Think West. We have also intensified our partnership with countries in Africa, Latin America, the Caribbean and Oceania.
6. The Indo-Pacific region has been integrated well into India’s foreign policy since the Look East Policy in 1994, and the Act East Policy in 2014. India has been a founding member of the Indian Ocean Rim Association (IORA) set up in 1997. We are actively involved in ASEAN centric regional architecture and have forged stronger bonds with Pacific Islands Forum and Pacific Alliance. India has also enunciated its SAGAR Doctrine of Security and Growth for All in the Region in 2015 and has articulated its Indo-Pacific Vision in 2018, along with its practical implementation in the form of the Indo-Pacific Oceans Initiative or IPOI in 2019. This first Indo-Pacific Business Summit builds upon the SAGAR doctrine and IPOI which supports building of a rules-based regional architecture centred on seven pillars, including trade and maritime connectivity. This two-day event will no doubt help provide an industry viewpoint to this construct.
7. India’s Indo-Pacific Vision envisages a free, open and inclusive region, which embraces all nations in the region and beyond in a common pursuit of progress and prosperity. The Indo-Pacific Oceans Initiative (IPOI) is practical implementation of this Vision with its seven pillars of cooperation and collaboration. Promotion of trade and enhancing connectivity and cross border linkages is one of the important pillars of IPOI. This trade, connectivity and maritime transport pillar intends to focus joint efforts of the countries in the region towards enhancement of trade facilitation, simplification of maritime trade, better management of trade routes and logistics chain, creation of common trading standards, improvement of quality of maritime transport, reducing environmental footprint, enhancing meaningful connectivity and synergising various connectivity initiatives in the region.
8. Similarly, coordinated efforts among countries on the other six pillars of IPOI, including Maritime Security, Maritime Ecology, Maritime Resources, Capacity Building and Resource Sharing, Disaster Risk Reduction and Management, and Science, Technology and Academic Cooperation can pay rich dividends. For instance, safeguarding the maritime space against piracy, technology-based solutions for addressing marine pollution, efficient response to natural and environmental disasters, sustainable management of marine resources, promoting the Blue Economy, capacity building etc. create the overall enabling environment for promotion of trade and economic cooperation in the Indo-Pacific.
Friends,
9. India has demonstrated its commitment to promotion of trade facilitation through cross border linkages and building infrastructure in our immediate neighbourhood in the Indo-Pacific. Since 2005-06, India has extended Lines of Credit worth nearly USD 31 billion to more than 64 countries. Connectivity projects are being implemented at an unprecedented pace in our neighbourhood. Railway projects with Bangladesh and Nepal, Port projects in Iran and Myanmar, respectively, and inland water projects have created new transport corridors. The energy grids of India, Bangladesh, Bhutan, Nepal and Myanmar are being linked. India has invested in power projects in Bangladesh, Bhutan and Nepal. Power trade in our neighbourhood has now become a reality. Hydrocarbon pipelines can now link India with Nepal and Bangladesh.
10. Such cross border linkages are not limited to physical infrastructure but include the digital linkages as well. The digital revolution and new technologies have added a new dimension to global interaction which includes geopolitics and geoeconomics. Data and e-commerce regulation, cyber security, digital enablers, big data, fintech - which include some developed in India such as IndiaStack, Aadhar, UPI - and the newest technologies are acquiring salience in international discussions. Our capacity to seamlessly navigate this tech world and its intersection with geo-politics and geo-economics has potential to act as multiplier in trade facilitation.
11. Climate change is one of the defining challenges of our time and has potential to disrupt all aspect of global interaction including trade and economic cooperation. India is amongst the front rank of nations in its climate ambition. Despite our development needs, we have shown strong commitment to climate action. Massive investments have been made in augmenting India’s renewable power capacity. 24% of India’s installed capacity comes from renewable resources.
Friends,
12. The Black Swan event like the current pandemic has highlighted inadequacies of the current global structure. The ability of the current global system to contain and prevent this crisis is under stress. The fundamental plank of an open economic order has been challenged during the pandemic. This has happened in the midst of a slowdown in global trade that predates the pandemic induced slowdowns. The share of trade in global GDP has not grown in the last decade. It is the same with global capital flows.
13. The flagship product of economic globalization was the global value chain or supply chain which drove world trade. Not only has trade slowed down, the pandemic has also demonstrated that such supply chains can become vulnerabilities. They generated dependencies that can be crippling even when disruptions are not at pandemic levels. This and the recent global-scale changes in the technological and economic landscape has increased our resolve to make the supply chain ‘resilient’ to future disruptions. This has also resulted in the launch of Supply Chain Resilience Initiative (SCRI) (by Japan and Australia), in April 2021 with commitment to a free, fair, inclusive, transparent, and stable trade and investment. The SCRI will help in promoting trade facilitation by identifying supply chain risks and mapping out the complementarities.
14. Last but not the least, better trade and economic cooperation can also be facilitated by comprehensive strengthening and reforming of the entire multilateral architecture, including the United Nations and its principal organs. There is a need to make global governance more inclusive, representative and participatory to facilitate greater and more meaningful participation of developing and least developed countries in global decision-making processes and structures and make it better attuned to contemporary realities.
Friends,
15. Let me end my remarks, by saying that there has been a paradigm shift in our thinking on how we pursue trade and economic growth in the new ‘normal’. Understandably, technology and innovation will play a critical role in the post-pandemic recovery, as will multilateral collaboration. To tide over the challenges, we need to strengthen connectivity, build infrastructure and facilitate trade. We are focusing on tapping more trade, investment and technology partnerships in the Indo-Pacific. Ground has been set for this with greater connectivity, trade facilitative measure, new labour laws, agricultural reforms, private sector entry into newer areas, and an incentive-driven push to promote manufacturing.
16. This Business Summit bringing together countries from all across the Indo-Pacific is an excellent platform to exchange and develop ideas for trade facilitation and post-pandemic recovery in the region. I wish the Summit a great success. I am confident that we will see some constructive discussions over the course of next few days and look forward to your recommendations.
Thank you