‘Globally, India a bright spot, has sufficient wheat to manage prices’

Commerce and industry minister Piyush Goyal is travelling through Rajasthan as part of the Modi government’s outreach programme. Over the weekend, in Rajasthan’s Bharatpur, he attacked the Ashok Gehlot government, referring to it as the ‘Geh-loot Sarkar’, and accused the regime of corruption. In an interview with TOI’s Sidhartha , he discussed the trade talks with the UK and other countries and suggested that there is scope for flexibility on the bilateral investment protection agreement. Although the minister ruled out a blanket review of the restrictions imposed on Chinese investments, he said that decision will be taken on a case-to-case basis. Goyal, who also holds the food portfolio, assured that there is no price pressure and the government is keeping close tabs on the situation. Excerpts:
Open market sale of wheat has started very early. What is the rationale given that it has generated fear that wheat prices may be under pressure?

This is a government that is very focused on making equitable availability of food grains and other products, at affordable prices. We want to ensure that wheat prices remain at reasonable levels and we thought it prudent to start open market sales (OMS) earlier so that nobody feels the pinch of inflation. We have sufficient buffer stocks to manage prices.
Tur dal prices are also under pressure. Do you see that as a challenge?

Production has been lower but fortunately there is good availability internationally. So, we will be able to manage supplies. Compared to anywhere in the world, India is a bright spot on inflation. Inflation will remain in the 4-5% range when the whole world is stuck with high prices.
There is a controversy around the Congress government’s foodgrain scheme in Karnataka, which is accusing the Centre of stopping them from implementing the scheme…

Not at all. They never asked us before announcing the scheme. We have a certain stock available with us, which is being put to good use by making it available across the country. They are free to procure in the market and fulfil their commitment of 10 kg per person. I hope they do not cheat the people of Karnataka by passing on only 5kg per person and adding what PM Modi has been giving free of charge. They had promised 10 kg and they should give 10 kg in addition to what the Centre is giving free of charge.

Do you see free grains, old pension scheme and other freebies emerging as one of the main election themes in the assembly and the general elections?

People of this country are very smart and recognise that PM Modi has empowered large selections of the society. If they were to look at the benefits of, say, homes to four crore families, all the freebies put together cannot give that kind of a benefit over 20 years. There are multiple benefits, including the fact that fertiliser prices have not been increased, free foodgrains are being given to the poor… when you collectively look at all this, you will recognise that PM Modi with pro-poor, pro-people policies has created an aspirational India with basic needs taken care of and empowered everyone.

Do you see all opposition parties coming together as a challenge to BJP’s prospects in 2024?

It is immaterial. For example, Trinamool Congress doesn’t have votes outside West Bengal and Congress and CPM are wiped out in the state. It’s between BJP and TMC and with the kind of bad governance that West Bengal is suffering from, the violence, the people have made their mind they want change. Similarly, DMK in Tamil Nadu or Uddhav Thackeray in Maharashtra, don’t have votes outside the states. These are desperate elements getting together to stop the development and progress of India. It doesn’t affect the prospects of BJP. We will come back with more seats in 2024.

Given that we have a short window before we enter the election season, do we see some of the negotiations translating into FTAs?

We will hear some good news on FTAs and investment protection agreements we are working on. There is a lot of excitement and desire across the world. I am getting a letter, almost every week, of one country wanting to sign an FTA with India.

Do we see the UK FTA getting finalised before Diwali?

Unfortunately, the UK went through a series of political changes, which created some delays. We don’t have a deadline but the progress being made is excellent. We have the next round of talks in the UK next week. The action is swift and decision oriented.

India has a model bilateral investment protection agreement and countries which you are discussing (on FTAs) have concerns around that. Will India be flexible on this issue?
A model by itself is a model. In some sense it’s a guideline and final negotiations always take place to work out an agreement which is for the good of both countries and ensures greater predictability and interest to invest.

When do you see goods trade turning the corner? Do we see the declining trend continuing in the first 6-9 months?

It’s a difficult time with many developed countries showing signs of recession. The Ukraine conflict continues and that has a dampening impact. I have great confidence in our exporting community that they will continue to try. Generally, we will have to be moderate and cautious.

Last year, we saw a decline in FDI, what is being done to reverse that?

As interest rates were rising in most developed countries, it resulted in a flow of capital into those countries. With inflation remaining high in the developed world, there is a pressure on flows. However, the PM’s visit to the US was full of enthusiasm. A lot of technology and manufacturing companies want to invest in India.

Some investments from a neighbouring country have been allowed and there are some other relaxations as well. Is there some flexibility in terms of checks we had imposed on China?

We have to protect India’s interests. We have to ensure that supply chains do not get affected. We are balancing our interests to expand manufacturing and promote India’s role in the supply chain. On a case-to-case basis, appropriate decisions are taken.

Is there a possibility that some companies, which are already here and they will be allowed to bring more equity?

It will be a case-to-case situation. We have allowed certain companies which are technology based or which need growth capital but after due diligence, verification of their antecedents and the needs of their business.

Some of the startups are facing governance issues, while others are facing issues accessing capital. Is there some effort by the government to address some of the governance issues and what is being done by you to resolve the capital problem?

It won’t be good for the government to interfere in the working of the startup ecosystem. The success of the IT sector teaches that we should let the sector work independently to flourish. If there are a few cases, the law will take its own course and the regulators will look at the issues. On funding, there are a number of schemes and there is a lot of interest among Indian and international investors.

This article has been republished from The Times of India