Amid demands from industry for a review of the visa regime for Chinese professionals, the Economic Survey, released a day before the budget, stirred a debate by suggesting that govt could have a more liberal foreign direct investment dispensation for Chinese companies as it would help lower the trade deficit, apart from helping India integrate with the global value chain.
“As far as the chief economic advisor is concerned, they bring an independent, autonomous report. It is their thought, the govt of India at present has not changed its stand,” Goyal said in Lok Sabha. In 2020, the govt made it mandatory for FDI from countries that shared a land border to seek mandatory approval, a move that was targeted at China, although Bangladesh, Pakistan, Bhutan, Nepal, Myanmar, and Afghanistan are also India’s neighbours. “The investment that comes from China is checked, wherever we do not feel it is appropriate, it is stopped,” the minister said.
Dismissing allegations by Congress’ Gaurav Gogoi of India becoming more dependent on China, he blamed UPA’s policies. “Under Congress, imports increased from $4 billion to $40-45 billion, which is more than 10 times. In our term, the increase is only 2-2.5 times. We took steps to make India self-reliant… We do not know what that MoU with China was; trade deficit went up by 30 times under the UPA,” he said.
China is India’s largest trade partner, with volumes of exports and imports pegged at over $118 billion last year. Trade deficit with China too is the highest at $85 billion.
Addressing a post-budget meeting organised by CII, he said govt had taken a bold decision by refusing to sign RCEP trade deal, for which negotiations had been started by UPA. “We would have been a nation of salesmen hawking Chinese goods,” he said.
He said Modi govt seeks to protect national interest in trade deals and cited investment commitments in EFTA treaty and tax benefits for Indian IT companies under the pact with Australia. “I want you to move faster on FTAs and quality control orders,” he said as he sought industry support, while announcing the intent to sign more trade deals.
Goyal asked industry for a list of processes and policies that were hobbling it, promising to change the rules at the Centre while pushing for changes in BJP-ruled states. Earlier, addressing a press conference on Tuesday morning, Goyal accused UPA of turning India into a “Fragile Five” economy and said there had been steady growth and development during the Modi govt’s 10 years and was among top five economies now.
