‘An opportune moment for India’s tech-based firms’
In India, we are distinctly aware of the disruptions that this pandemic has caused in the global supply chains. But our response to this disruption is far from turning isolationist or protectionist. We are well aware that while globalisation is here to stay, its norms, however, may become different. The idea is, therefore, to make our systems and our markets highly adaptive to the changing scenarios. We are cognisant of the potential role we can play in a world that is looking at highly uncertain times. To this extent, and to induce reliability into our systems, we are fast developing our production and supply chains to fill in the gaps in the global supply chains, where we have the potential to do so.
India’s prowess in the IT sector has been established over the last two decades. The IT and BPM sectors of India account for over 55 per cent of the total global outsourcing market. The sector has continued to record double-digit growth despite the static growth in global tech spending. The sector is an important growth driver and contributed nearly 10 per cent to the country’s GDP. Known for its cost competitiveness and high-quality services across the world, the IT & BPM industry in India has made a significant contribution to transforming the perception of India in the world economy.
Fintech has been identified as a new and emerging area of bilateral and multilateral cooperation. The IMF had last year identified financial innovation as an important aspect of our future in the digital age. It was also highlighted that most countries see Fintech as transformative for financial inclusion, which promotes growth, opens access for poor and rural communities through lowered costs and facilitates women’s participation in the formal economy. This offers an opportune moment for India’s tech-based companies and start-ups looking for opportunities across the world. Even though there has been negative impact of the current crisis on the Fintech sector, recent trends look promising. There was an increase of around 40 per cent in the funding received by the Indian Fintech sector in the first quarter of 2020.
In the MEA, we are planning to build on our domestic successes in the Fintech sector in a structured manner and utilise the significant capabilities that have been evolved and developed in the domestic government, public and private sectors in executing similar digital platforms and e-governance initiatives in friendly and partner countries as part of Development Partnership Frameworks to project India’s soft power and for commercial benefits. We are planning to undertake pilot projects... on a wider scale. We are working with several countries on making our digital payment systems interoperable. Countries like Singapore have already launched some of our digital payment systems such as Rupay and BHIM. You would also recall that in 2018, the Prime Minister had launched a global digital platform, APIX, to connect Fintech companies and financial institutions.
Besides, our diplomatic missions have been working in collaboration with line ministries and state governments to carve out a place for India as a reliable alternative in the space of lowcost manufacturing. The missions have been instructed to promote India’s image as a safe and reliable destination where all investment-related requirements can be facilitated for manufacturing units planning to shift their base to India in the postCovid situation. In this regard, our missions have been requested to provide us with detailed inputs on Non-tariff Barriers being faced by Indian exporters in their respective countries of accreditation. The missions are also working to identify newer lines of goods and services as well as new destinations where India’s exports can be enhanced.
In the changed times and in the event of disruptions in our supply chains, countries around the world will be looking for maximum diversification of their production and supply chains in the medium to long term, weaning away from extreme dependence on any one particular country or region. This offers us with an important opportunity. Developing India into a lowcost manufacturing hub will help us position ourselves as the preferred investment destination. India’s highly functioning democratic systems and high levels of transparency in governance are our prime assets, which are important to build investor confidence. Combined with the ease of doing business and easily accessible capital, India is a promising manufacturing destination. We have to bank on our strengths and plug in the gaps, wherever possible.
Let me also briefly touch upon the issue of movement of high-skilled Indian professionals, including those pertaining to the H1B visa programme. There is some anxiety among our people and industry about restrictions on H1B visa...
As you are aware, the government of India has closely consulted all stakeholders and engaged with the US government on this issue. Prime Minister (Narendra Modi) had taken this up, along with the issue of the totalisation agreement, during the visit of President (Donald) Trump to India in February 2020.
The onset of the Covid-19 pandemic in the US and the attendant impact on the US economy has led to a change in the situation. We need to adopt a realistic yet effective approach. Accordingly, our approach has been to work at the diplomatic level and deal with each specific issue one at a time. We were able to intervene early on in our lockdown with the US Government on the issue of temporary relief for H1B visa-holders whose visas were expiring in this period, on a case-by-case basis.
We have continued to stress that the economic and trade linkages are a strong pillar of our strategic partnership, particularly in technology and innovation domains. High-skilled Indian professionals working in the US through H1B and related nonimmigrant visa regimes bridge the crucial skill gap and provide technological and competitive edge to the US companies. We have also highlighted that (the) high-skilled Indian professionals are engaged in the fight against Covid across various fields...