“Services trade is growing faster than merchandise and such dynamic changes need to be captured in the global trading system,” stated Mr. Suresh Prabhu, Minister for Commerce and Industry and Civil Aviation. He was speaking at the 6th Growth Net Summit, organized by Ananta Center and Confederation of Indian Industry (CII) with Smadja and Smadja being held in New Delhi on 18-19 June 2018.
Services trade requires movement of people, unlike merchandise trade, said the Minister. He stated that India is aiming at a $5 trillion economy by 2026-27 and goods and services exports are targeted at $1 trillion of this.
The government is working on a comprehensive strategy to boost services exports and $1 billion will be spent to promote 12 champion services sectors. For the first time, a strategy of new products in new markets is being developed. Project exports are also being promoted in regions like Africa, Latin America and Central Asia, added the Minister.
Noting that the World Trade Organisation was created as part of a rules-based, multilateral, democratic and participatory institution for expanding global trade, he said that global trade is facing ‘serious headwinds’. Countries have recognized the value of global trade for fostering growth and creating jobs. India is working with other countries to ensure that WTO remains relevant, he said.
Mr. Shishir Priyadarshi, Director, World Trade Organisation, Geneva, noted that the biggest challenge emerging today is protectionist tendency by economies such as the US. This poses a threat to global growth achieved since the crisis of 2008. Both dialogue and dispute settlement are being adopted by the members of WTO to resolve the ongoing crisis, he said.
Mr. Dan Catarivas, Director General, Foreign Trade & International Relations, Manufacturers’ Association of Israel highlighted the importance of open markets and stated that Israel is negotiating Free Trade Agreements with India, China and Vietnam. “The new economic powers which are becoming dominant will now dictate how the world economy works,” he added.
Mr. Yashi Akahoshi, President, Japan External Trade Organisation, Japan laid emphasis on the Regional Comprehensive Economic Partnership which will bring together sixteen major economies. He focused on the importance of having conducive domestic policies which promote internal employability. Mr Akahoshi also stated that measures are underway to increase trade between Japan and emerging markets like India.
Mr. David Rasquinha, Managing Director, EXIM Bank of India said that in 2008, India’s merchandise trade was 51.5% of the GDP and in 2018 the figures stand at 42.3% which is a huge drop. Similarly, the Indian exports dropped to 27.6% of GDP in 2018 from 43.5% in 2008 due to the price effect and increasing oil prices. He stated that India should focus on making its services just as competitive as manufacturing as it offers tremendous growth potential.