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Remarks by EAM, Dr. S. Jaishankar at the CII Annual Business Summit 2024

May 17, 2024

President CII, Shri R. Dinesh

Director-General, Shri Chandrajit Banerjee,

Ladies and Gentlemen,

It is a great pleasure to join you all at the CII Annual Business Summit 2024. And it is only appropriate that the theme this year is one of co-creating the future responsibly. After all, we are in the midst of making crucial decisions about the future of the nation. As I will share with you, this happens in a challenging global context and will both contribute to what is happening in the world, as well as be shaped by it.

2. If one looks at the last 5-10 years, there is actually a strong contrast between the direction of India and the state of the world. At home, we have seen robust growth, sweeping reforms, radically improved governance, fiscal discipline, infrastructure progress, rapid digitization and a focus on developing skills. The formula that has delivered is a combination of Make in India, making it easier to do business, enhancing the ease of living, committed implementation of Gati Shakti, large-scale socio-economic programmes, a start-up and innovation culture and the upgrading of human resources.

3. These, I remind you, have taken place overcoming the daunting challenges of the Covid pandemic. As a result, the outlook in India – not just the growth rate – the outlook in India, is positive and confident. It says so much that the party in power is actually campaigning on its record of the last decade, reflecting a mood of pro-incumbency. In fact, it is this foundation that allows the nation to plan ahead for the next 25 years, with Viksit Bharat as our goal.

4. The world however looks very different, in fact, very difficult. The impact and overhang of Covid on the global economy remains strong. There is a widespread realization of the dangers of over-concentration, be it in manufacturing or technology. We all saw for ourselves how our supply chains were disrupted. And how the demand-supply imbalance was leveraged. This concern is now manifested in the endeavours to build more resilient and reliable supply chains, diversify centres of production and to the extent feasible, de-risk the global economy.

5. Developments in the digital domain have further added to this trend. In an era that values data privacy and data security and which is poised on the threshold of an AI revolution, trust and transparency are now at a premium when it comes to sourcing and when it comes collaboration. The challenge here is less that of multiplicity of the supply chain and more one of its integrity and of its origin. Where the digital and manufacturing domains meet – as they do in the world of semiconductors – the predicament is doubly acute. For India, these are challenges that with the right leadership, are being converted into opportunities. ‘Make in India’ can enable us to enter the global supply chains in a break from the past.

6. The anxieties that stem from the Covid experience have been further magnified by the conflicts, tensions and divides of our era. A decade and a half ago, the narrative was one of harmonious globalization, of peaceful rise and of win-win situations. Even a few years ago, the prospect of significant conflicts on a prolonged basis was inconceivable. The Abraham Accords, for example, held so much promise. On key challenges like climate change and terrorism, the hope was that convergences would actually grow. SDG targets for 2030 actually appeared within reach.

7. Instead today, what is the reality we are staring at? An Ukraine conflict now in its third year. A huge escalation of violence in West Asia/the Middle East that could spread beyond. The disruption of logistics due to war, due to sanctions, drone attacks and climate events. The world is experiencing a 3F crisis of fuel, food and fertilizers. In Asia, new tensions have emerged in land and sea as agreements are dishonoured and rule of law disregarded. Terrorism and extremism have started to consume those who have long practiced it. In many ways, we are actually going through the perfect storm. For India, the task is to mitigate its impact on itself and contribute to stabilizing the world to the extent possible. It is this judicious combination of ‘Bharat First’ and ‘Vasudaiva Kutumbakam’ that defines our image as ‘Vishwa Bandhu’.

8. A different dimension of the concerns that we harbor is one emanating from a combination of excessive market shares, financial domination and technology tracking. Between them, they have actually allowed for the weaponization of virtually any form of economic activity. We have seen how both exports and imports, access to raw materials or even stability of tourism has been utilized to exert political pressure. At the same time, the power of currency and the threat of sanctions have been deployed in the toolbox of international diplomacy.

9. Quite apart from these conscious efforts, there have been collateral consequences of hard currency shortages and uncertain logistics. All these are driving countries to re-look at the working of globalization and devise their own solutions. This includes exploring new partners, it includes creating shorter supply chains, building inventories and even devising new payment arrangements. Each of these has some consequence for us.

10. What is a common thread to all that I have described – and obviously a subject close to the CII’s heart – is actually the importance of manufacturing. None of us can really deny that in the last many decades, we have fallen significantly short in this regard. There are many reasons for that, often inter-related. They include the availability of competitive – in fact subsidized – foreign alternatives, the structure of our economy, the absence of supportive policies and infrastructure, and the impact of competing priorities, such as environment. Let us also recognize that till 2014, there was also no policy leadership in this regard. Not just that, we rationalized our predicament by preaching the virtues of services to the exclusion of manufacturing.

11. The problem is that this has created today, three major challenges. The first one is that of employment, especially for SMEs who till recently did not get the requisite support to stand up against unfair competition. The second relates to technology and the obvious proposition that a nation weak in manufacturing will never be able to develop technology strengths of its own. And the third is the consequence for our national security, stemming from exposure to those whose interests are competitive, if not worse. These are some of the factors that have driven the Modi Government to make a determined effort and overcome the dangerous neglect of the past. You can see it expressed in the PLI, in the support for SMEs, in the creation of efficient infrastructure, in removing regulatory impediments and in promoting an employment and business-friendly eco system. Our commitment is both to enhance capabilities and competitiveness in orthodox manufacturing, as well as to enter the sunrise sectors of semiconductors, electric vehicles, batteries, green and clean technologies, drones and space. That is the way by which the Indian economy can leapfrog in its journey towards Viksit Bharat. But we can be successful only with the full support of businesses. So we not only need Make in India, we need Invest in India, we need Procure in India, we need Design in India and we need Research in India.

12. What can foreign policy do to advance India’s prospects on all these issues? Where economic growth and stronger manufacturing are concerned, our focus remains on efforts to accelerate the flow of requisite capital, technology and best practices. Our export promotion efforts, already yielding results, will intensify across the world. The use of credit lines and grants to familiarize the world with our products and capabilities will also deepen. There is the larger branding endeavour of the attractions of today’s India that will make a case to the world of the benefits of partnership. Our Embassies will also continue extending their fullest support to our economic and employment interests abroad. On my part, I can certainly assure that the business delegations will continue to accompany me on travels abroad and that we, in MEA, will facilitate B2B2G events.

13. However, the current times call for something more than business as usual. Because trust and reliability have become so important, foreign policy is today charged with creating the comfort levels between governments to make that happen. This is especially so in terms of de-risking supply sources and enhancing collaboration in sensitive, critical and emerging technologies. You can already see that unfold with the US in terms of the iCET dialogue that we had, and with the EU in the Trade and Technology Council. We must recognize that our economic priorities will have to align with our strategic interests, whether we are speaking of market access, investments, technologies, or even education and tourism. This will be even more so as ‘Make in India’ gathers more steam in domains like defence, semiconductors and digital.

14. An economy with India’s prospects also has to look at accessing global resources more seriously if we are to fuel our growth. For long, we have looked at Russia from a political or security perspective. As that country turns eastwards, fresh economic opportunities are presenting themselves. The spike in our trade and the new areas of cooperation should not be regarded as a temporary phenomenon. Many other recent partnerships also offer such possibilities, such as those with Australia and with Latin America, in addition to established ones like Indonesia, Africa and West Asia.

15. The world is today paradoxically rebuilding itself even as it is being disrupted. As new production and consumption centres emerged in the last few decades, there is an accompanying compulsion to create commensurate logistical corridors. By and large, changes were incremental with the only exception being completely nationally driven, but also non-transparent and non-consultative. From an Indian perspective, the time has now come to start re-engineering the logistical map of the world. Some steps have already been taken, such as the International North-South Transport Corridor that also involves the Chabahar port. A more ambitious project is on the anvil in the form of the India-Middle East-Europe Economic Corridor (IMEC), which was agreed to during the G20 Summit last September. One has the goal of taking us all the way to the Baltic and the other, takes us all the way to the Atlantic. To the East, the resumption of work on the India-Myanmar-Thailand Trilateral Highway will provide us access all the way to the Pacific. We are even examining the viability of polar routes, initially with the Chennai-Vladivostok corridor. Think of the game changing implications that they all contain. We will actually have with India somewhere at the center, from Atlantic and Baltic at one end, all the way to the Pacific, once these plans…and I quite understand that these are challenging, once they are implemented. So, today you will appreciate the importance of diplomatically carrying others in our quest for economic betterment.

16. In the era of a knowledge economy, the role of Indian skills and talent are also being re-assessed. The nature of technology advancement is itself creating a greater demand. But there is also the reality of demographic shortages in developed countries. These trends are manifesting themselves right now in an interest across the world, to conclude mobility agreements with India. On our part, we too would like to see that our talent is treated fairly and transparently. As a global workplace emerges – and believe me, it will grow faster than all of us anticipate. As a global workplace emerges – there are some immediate consequences. Expanding the scale and quality of skilling at home becomes an even more urgent imperative. This is very much in line with the Modi Government’s thinking. They are supported by the spread of the innovation and start-up culture as well. Businesses too need to do their fair share in the upgrading of our human resources.

17. As the global workplace expands, the obligation to secure our citizens abroad will also grow proportionately. Fortunately, this is an area where we have already built capabilities and created SOPs, as evidenced recently in Ukraine and in Sudan. We are also deploying technology more widely for ease of living of Indians traveling and working abroad. However, as we contemplate the relevance of our talent with the importance of ‘Make in India’, our goal is to make ourselves into a global hub for innovation, research and design as well. ‘Work in India’ is the natural outcome, I would say, a supportive basis to ‘Make In India’. But it will also have ‘Work for the World’ as its subset.

So, Ladies and Gentlemen,

18. Let me conclude by reminding you all that there are today ongoing debates both within the country and outside on contemporary challenges. Within the country, the choice is clear. There is a confidence, expressed amongst others by the Government I represent, about our direction, achievements, capabilities and talent. We firmly believe that India will develop all the requisite national strengths that will make it a leading power in the times to come. This view appreciates the creativity and the ambition of our people and is committed to providing opportunities to take that forward. It expresses an optimism about India and about our future. The alternative before the country is a return to the failed policies of the past, one that divides our society, diminishes our economic achievements and is pessimistic about our prospects. At the global level, there is a broader consensus about India as a key source of growth, a valuable addition to supply chains and as an important pool of talent.

19. I have every confidence that as the people of our country make their choice, the world will welcome our efforts in the Amrit Kaal to move towards a Viksit Bharat. It is a journey in which all of you, as creators of jobs, of technologies and of wealth, you will make a crucial contribution. Just as we, in the Government are preparing for the 125 days after, all of you will surely be applying yourselves too, to similar endeavours. That is how we will co-create our future. I look forward to a continuing partnership in the service of our nation in the times ahead.

Thank you very much for your attention.

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