 A heartfelt welcome to Honorable Minister Arman Sharma, a Minister of Commerce, one of the most distinguished and experienced ministers, and also a minister that has delivered on enhancing trade and also establishing new trade agreements with neighboring countries. It's a great delight for us, Minister, to have you here with us today. And I think on behalf of the participants, we cannot start such a conversation with you today without also hearing your reflections on the re-election of President Obama and the implications on, for example, your trade portfolio. I just read in the economic times today that Democrat presidents are typically more protectionist than Republican ones. But Minister, what is your feelings about the re-election and how will the re-election of Mr. Obama have implications for your portfolio and also for India? Well, we congratulate President Obama on his re-election. It was a tough election, but he has demonstrated that he has the drive and the dynamism to lead the largest and the most powerful country in the world for the second term. Given the challenging backdrop, particularly the economic slowdown, the rising unemployment, the Eurozone crisis, the expectations of the people from the leaders when they are voting are fairly high, and people of America have reaffirmed their trust in Barack Obama. We have welcomed his election and congratulated President Obama on his victory. When he came here in 2009, he made a very positive impact. He has definitely been influenced as he has communicated with clarity while speaking to the Indian parliament by Mahatma Gandhi and his thinking and his approach and his philosophy, and he had gone to the extent to say that I would not be standing here before you as the President of the United States of America if there was no Mahatma Gandhi. Now that resonated in my country, and we agreed with his another significant observation that the partnership between the United States of America and India will have a defining influence in the 21st century world, and we look forward to irrespective of the perceptions about what approach political parties have or they've had in the past. I'm confident that our economic partnership and strategic partnership will be further consolidated. We were just waiting for the situation now to stabilize, post-election, when major initiatives can be taken by the US government, by us, not only the bilateral context, but also in the regional and global context, which is bound to happen. Thank you. I'm seeing that the Times of India is writing that Bangalore might be unhappy with the victory of Barack Obama given his staunch and often repeated opposition to outsourcing. Do you think that there will be a different kind of policy, a more open and free trade policy from the US government under Obama's second term that you saw with trade representative Kirk in the first term, or do you think it will be no changes? Well, we hope that and wish that too, because the US has the largest economy, has to take a leadership position in driving the global multilateral trade talks. The stall talks of the WTO must be revived. If we have a rule-based multilateral trade regime put in place, which is balanced and ambitious both, now ambitions are there for all the sides, I think that would be a major contribution, and this has been an expectation that would happen, the US economy is now recovering, job creation may be slow, but jobs are being created, and post-election we hope that continuity of economic recovery. Now in today's world, our lessons from the past, so we used to talk about the Great Depression and the inward-looking approach which countries followed, which was disastrous, and the global economy had to pay a huge price. That we were saying in 2008-9. Now we can't enter into 2013 quoting what happened in mid-30s or early 40s. We have to now take a positive position, and this my considered view that the economic recovery will be faster, job creation will be faster. Depending on the quantum of adverse impact, all regions would eventually recover by engaging with each other, and surely President Obama will get the support, not of the G20, but also the key economic emerging countries of the world by adopting that approach. If I understand you rightly, what you're saying is also that you expect a more proactive free trade policy? Yes, we do. There's one thing which I did not comment on the outsourcing, perhaps a short comment there. When President Obama was in Mumbai, I had said so, quoting from the report of Professor Selinger of Tuck School of Business, that for every job outsourced, two higher value jobs are created in the parent company that's in the United States of America. Statistics prove that in the first few years, in three years, 280,000 jobs outsourced, 550,000 jobs were created in the United States of America. When you look at Fortune 500 companies, 280 of them have their established presence and hubs here, and almost all of them seek their software solutions out of India. If you go by another important development, that's the research and the filing of the patent applications. If there is a U.S. company, a major company, and if they file patent applications, say X number, out of research done from the United States, and they have a subsidiary company in India, whether in Bangalore or Hyderabad, equal number of patents are being filed by the same companies out of the research done in India. This is very significant. So, it's mutually rewarding and beneficial by not engaging and by keeping out accomplished professionals who are important in today's world, which is knowledge-driven, which is knowledge-led. And you think also you will see more flexibility when it comes to visas granted for... Maybe we should be very flexible. Let's not forget that a large number of professionals from other countries are welcomed into India and they are working here. This is what a globalized economy is. If you are interdependent, interconnected, then we have to be large-hearted about these issues. We must encourage the movement of professionals and job creators. Going back to more of the multilateral aspects of trade, as you mentioned very rightly, Minister, in the 30s, during the Depression, we saw the global trade reduced by 50%. So far, the global trade has holed up pretty well since 2008 and also since Lehman Brothers fell. But at the same time, there are reports from the World Bank saying that if there was a dough around then implemented, that could create 50,000 new jobs. But everyone is very bearish on this dough around now. They say it's dead as a drunken, etc. Is there any way that you will see any kind of multilateral trade agreement in the coming years? Or is it not really about protecting what you've got and not accepting new protectionist measures taken? Well, first of all, I find it difficult to accept that there has not been any adverse impact on the global trade. 2008-09, that was the worst period. Contraction was anywhere between 13% to 16%. This year again, the feared contraction may go between 6% and 9%, if not in double digit. That is evident all over the world. Even for major trading countries like China, Germany, there has been a slowdown. And that's impacting their growth also. But if we complete the dough around, which unfortunately has been much delayed, there has never been in the history of the global trade any round which has taken so long. And we should not allow any situation developing where there were talks around to be abundant, some new approach. No, no, no, that's not out of question. Aspirations of everyone may not be met, but what it will do to the global economy in a climate of gloom when unemployment is very high and people are feeling that pinch everywhere. 50,000 jobs creation, I think that's some zeros are missing there. I recall Peterson Institute report of 2009 that if the dough around is completed, it will add minimum 500 billion to the global economy. So 1 billion means clearly a few thousand jobs. 500 billion, the job numbers will multiply many fold. But it will be positive, it will be good. But how can it happen when we're seeing this sluggish economic growth? We're seeing high youth unemployment spreading globally. How can we get into a situation where the leaders walk the talk when it comes to trade then? It seems from someone outside, even if I have been a trade minister before, like a low hanging fruit to just agree on something on trade that can at least be a concrete contribution to revive economic growth. But it's not happening. You see, I'm one person who has always been consistent in conveying one message. The only way to address this sluggishness, the challenge, the joblessness is to have vigorous economic engagement and activity. If you encourage investment, if you encourage trade, both means increase in manufacturing. That also means job creation. If you will not do it, how will you recover? Anybody having another solution, I would love to meet that person. Perhaps then all of us are less educated. And those who are analyzing it or giving the various theories, I'm not an economist by training, but well, we have to, though I did study for my graduation, that's immaterial, but that doesn't make me a pundit. But one thing we do understand that analysis and post mortems are done once the damage is there is better to have an approach which preempts disasters rather than recruiting then experts to write why it happened, why the disaster occurred in the first place. That's where leadership is tested. In hindsight, do you regret that your predecessor Kamal Nath vetoed the Dawa round when they were so close to a solution? No, I don't think so. He didn't veto. That would be unfair to my colleague and predecessor. We had an approach on certain issues the developing countries have their wish list if you may call it. Now you have 128 countries in the WTO negotiating. It's true that the key stakeholders are identified, the developed countries as well as the emerging economies. You may call them the present G20. Even if you restrict it to that, it includes a number of important developing countries and the other countries look up to them. This round is a development round. If the concerns of the development or that particular agenda is not fully addressed, I think then those who are very valid reservations, but that doesn't mean that you remain rooted in that position. Things move. If that happened within 10 months, it was India which convened the ministerial to revive in September 2009, and we'll continue to engage. We are committed. Anybody to have this impression that at any stage India had doubts about taking forward or concluding the round, no. We want it because we know it will be hugely beneficial to all the countries including India. Just to round off that piece, do you think there will be some movement on a multilateral deal in the two coming years, or are we just going to see more and more regional deals? You see, regional deals do take place. Countries have bilateral FTAs, regional economic arrangements, right from NAFTA to Markosur to India, and the economic community ASEAN to now the talk of the Asia Pacific. And in a few days from now, when the East Asia Summit takes place, a formal announcement about the launch of RCEP will take place. Last meeting, the ministerial of East Asia Summit in August in Shamrip, first time United States of America joined in and Russia joined in. So there are developments that are taking place. The U.S. is working on trans-specific partnership. But they should be supplemental to the multilateral regime. You cannot bypass the multilateral forum, which is the only legitimate place to address global trade-related matters or redress a lot of grievances. That sparked in Geneva in the WTO. So all members of the WTO therefore have a responsibility that whatever we do should eventually strengthen the multilateral regime, too. Looking at the regional aspects of South Asia, as I said also in my introduction, you shown real leadership minister in also enhancing the collaboration and establishing more liberal trade regimes among, for example, also with Pakistan creating more trade in South Asia. You think there will also be positive political results of this increased trade? And are you planning new steps in even going further in looking at South Asia as one trade area? Yes, we have the South countries, the South Asian countries are engaged with each other. And we have a softer between South Asian countries, which didn't move forward at the desired pace. And we realize that India as the largest country, the largest economy, has to take upon itself to take some initiatives and send a clear signal. So we did travel to Bangladesh, to Nepal, to Sri Lanka, and also to Pakistan. And that was a path-breaking visit which we had. Prior to that, I had the privilege to receive my Pakistani counterpart, Maktum Fahim. And what we impressed upon them that if Pakistan could consider moving from a positive list which was covering only 16, 17 percent of the tariff lines to a negative list regime, India will also take forward certain steps for further liberalization. And we have believed in a cemetery that India, without seeking reciprocity, gives out more. And we have done it. Pakistan, as they had assured, took that step last day of February, February they had promised. But during my visit, it didn't happen, but I was assured, the major agreements that we have signed on trade facilitation, creating infrastructure at the border, more is in the pipeline. Pakistan has taken another step, barely a week ago, where they have further dismantled or shortened the negative list. So today, in one stroke from 18 percent, you have more than 80 to 83 percent of the tariff lines, even with Pakistan, which are tradable. We are doing much more. And if we move to this after-preferential list, you can say that Pakistan is also moving towards the MFN status. The problem there was it's very interesting. I mean, I asked them that it's difficult to explain to this audience as to why they are sharp reactions when it comes to MFN status for India. So if anybody is familiar with the colloquial or the regional language, whether it's Urdu or Hindustani, so that it is interpreted like that and what was not communicated by the media perhaps there and the leaders, that it is, in fact, a phrase which is used by all member countries of the WTO for each other that you give MFN status. They said, how could India become that most favored nation? So it was literally taken like that. But fortunately, that is over and that we have now opened a new chapter. We are writing it together when regional integration has become the mantra. And today, of all the regions of the world, one which lagged behind was Asia. Asia is moving really forward in a very solid manner towards economic integration. ASEAN plus six, where we all are there, China is there, Japan is there, India is there, South Korea is there, Australia, New Zealand. So you're looking at the wide sweep. How could South Asia not be a part? India is already a party to the process. But to make South Asia integral to the process, we had to bring up all our neighbors, particularly Pakistan on board. And when you say about things improving, I said that it's not a question of an option. There is no other option. Only economic engagement, job creation, shared prosperity can bring about the change in South Asia, which will be good for the world. If it could happen in Europe, Europe saw many regional conflicts, two world wars, and now it's the European Union, common market. This is my belief. If people are committed, if we set that goal for ourselves, we can achieve it. This is very historic. Like we have NAFTA, internal market in Europe, Mercosur, Pacific Alliance, ASEAN establishing this. What you're seeing, saying in this is that in the future, it could also be a South Asia market, an SAM, where you can see a lot of regional growth and also following this, more interaction between the people, peace and prosperity. Yes, that will definitely create that environment. And as I have said, when I was in Islamabad, that one step Pakistan takes, India will take two steps, we have done that. There is, of course, a lot of interest from our participants when it comes to the coming year on reforms in India after many years of high economic growth, 89%. We have seen lately that the economic growth has come down to around 5.5%. We see an inflation of around 8%. That also means that the central bank cannot reduce its interest rates. But at the same time, your government and also under your leadership, you talked about this also when you were with the World Economic Forum last time, and you have been pushing for reforms. No, the reforms are here. Could you elaborate and share with us, when do we see the effects of these reforms and are there more reforms coming? What do you have up in your sleeves? You see, it's a gradual process. India has been, since 1991, when President Prime Minister Dr. Manmohan Singh was the Prime Minister, he embarked on economic liberalization and reforming process. Much has changed. We came out with the FDI policy in 1996, which in 2009, 2010, January to be precise, we rationalized, simplified and came out with one single document to make it easy to understand and raise the cap when it came to investments coming in without any approval whatsoever, particularly big investments for projects. Thereafter, of course, when you take decisions in a democracy, anywhere where multiple political parties are involved, you try to create a consensus, which we believe in doing so, so that the decisions once taken are stable, enduring, and India has demonstrated time and again, even if there has been change of governments, different political formations have taken over, a decision once taken on policy matters has never been reversed. That is the credibility of India, irrespective of what noises you hear now, that is partisan politics, believe me, what we have done is irreversible. Now, we have taken major decisions on FDI, a single brand. We had allowed it earlier, but now we have opened the window much more. From 51%, it is 100%. We have opened the door now for the multi-brand retailing. As I said, you're right in recalling, and there have been occasions when I was asked this question during my visit to the UK. I saw the lady from Tesco sitting here, and she demanded me, not that I forget what I have said in the past, that you had told me that have faith. And that is what I convey today. Through you, through this forum, to the global community, have faith in us. We are, and we will continue to be one of the most attractive destinations for investments. Now the opportunities are here. Now you say that how they will rectify. Already the proposals are coming, few stand-approved, single brand, big proposals ranging from pavers to brook brothers to Zara and beyond. You are already in the pipeline, big ones, including from IKEA, and they will be approved. It's just a matter of days when the meeting takes place, and they will all go through. For the multi-brand retailers, I'm sure they have been present in one form or the other, and they have been sourcing much from India. Now is the time for them to come. And besides that moving beyond, we have allowed FDI and Civil Aviation. We have taken a decision to raise the bar in insurance, and I hope that in the shrill discourse of our political opponents would heed to reason and national interest and go along with us. But the decisions which we have made, which have been notified, do not require any legislative sanction or approval. That is now cast in stone. That policy cannot be disturbed. It's so convincing when you tell us this minister, but I still... They're telling you the truth. Yeah, I know. That's why it's convincing. But I'm also reflecting, why didn't you do this three years ago if you could also have the authority, the paragraph, a lot of the ministries to do this without even going by the parliament? Didn't I explain that? That... Yes, we're going to start with the consensus building, but if you don't have a consensus you have a problem. But now here I had a situation where people still say that, Minister Sharma, you don't have a consensus. What do you mean? That the communists have not agreed, or the BJP has not agreed. That is very confusing for those who ask this question. It should be understood, I have said so repeatedly, consensus means consensus among the stakeholders, not unanimity. If you're looking for unanimity, no country would ever make any decision. No political leadership, no government. You will sit where you are, prove it, as we have a word in our culture, and that is taking the samadhi that you sit in a perpetual pose of meditation. You have to take decisions, you take decisions. You don't seek endorsement from those who have not been voted into government by the people. Now, if my political opponents are expecting me or the Prime Minister that will first go with the proposal that please endorse it, the answer is no. We are the elected government of the day, we have a responsibility, we are doing so in the country's interest, and the right thing. Last question, Minister, the effect of the reforms, you know, the global growth is very sluggish, maybe around 3% no, the last figures from IMF, still India is doing 5.5. It's very some for us, we are not at all comfortable. If you ask Prime Minister, Finance Minister, me, no. We are really concerned, we want to go back to the high growth. You see, we have minimum 12 to 14 million young Indians joining the workforce every year. This means you have to invest, you have to create jobs. That will come through manufacturing activity and trading, where again manufacturing gets connected. For that, it is a must for us, aid to grow at minimum 8%. Though we have a fairly high level of investment, both public and private, but it is, it has come down to 32%, 31%. For 8% growth, our investment rate must go up to 38, 39%. And we are committed to do that. We have so much in the pipeline that more investments will come in infrastructure, in institution building and things hopefully will change for the better. There are enough skeptics, I keep on reading about them and you also hear from them, but I can tell you that this country is rule based and rule governed. This country has leadership, this country has a vision. Above all, we are an aspirational society, an ancient civilization, but a very young nation. That's why I say, believe in India, there are millions and billions of opportunities that back on you. Thank you so much. I think I would like to, I think Minister, you heard from the response that your words were very well received. And I think it's very good to also end on such a positive note, since there is a lot of doom and gloom out there, especially coming from Europe. I think it's very interesting to take note of what you're saying, that the reforms are irreversible, they're cost in stone. I think it's also very interesting to take note that you're optimistic that the Obama administration will in the law, the second term will also focus more on free trade. If I understood you rightly, you also think there will be some improvements when it comes to the multilateral system. We are committed and we'll work with the US, we'll work with other key stakeholders. And you also mentioned Peterson's Institute's report showing that there can be created 500 billion US dollars in additional economic growth globally with a firm global trade agreement. And also to note that you're seeing also South Asia as a major trade market with common rules in the future, that's kind of your vision. This is very helpful and I know you have also a very, very tight schedule today, Minister. I think this was for me very, your comments were highly appreciated and we learned a lot from having you here today. Thank you so much. Thank you.