AgenciesCommerce and industry minister Piyush Goyal said that ecommerce companies are cooperating with the government after being sent questionnaires over complaints regarding the alleged violation of foreign direct investment (FDI) rules. He also spoke to Kirtika Suneja in Stockholm about issues such as India’s redlines in trade negotiations with the US, its position on the Regional Comprehensive Economic Partnership (RCEP) treaty and plans to modernise the Indian Railways. Goyal, who’s also minister for railways, was in Stockholm to attend the Swedish-India Business Leaders Roundtable. Edited excerpts:
The government has sent questionnaires to e-commerce companies and told them to comply with the rules. Are they cooperating, and is there a time frame by when they have to reply?
I’ve said before also on several occasions that while we welcome e-commerce companies to India we have explained to all of them the importance of running e-commerce as an agnostic marketplace where all suppliers get equal opportunity to offer their products and buyers have a choice to buy certain or any products on that marketplace.
There are well-defined rules that they can’t have ownership or control over the inventory at any stage and can’t be selling their own products on that marketplace, and several other associated conditionalities were attached when we permitted e-commerce. We also have a very clearly laid out policy of not allowing multi-brand retail with foreign ownership more than 49%. E-commerce companies are expected to respect these policies and the law of the land both in letter and spirit.
Certain complaints were made to the ministry that some of the e-commerce companies were engaged in selling products at highly discounted prices, leading to concerns of predatory pricing. There were some complaints about circumvention of the e-commerce policy and our multi-brand retail laws, and in all fairness, it is the government’s duty to verify, validate all such complaints, which is why I believe e-commerce companies may have been asked certain questions and the department will assess the response.
So far, I haven’t received any complaint of non-cooperation and I’ve had several interactions with e-commerce companies, and at different times they have assured me that they will work within the letter and spirit of the law, comply with India’s laws and policies fully and always be available for any clarification to satisfy the Indian authorities on the law of the land.
By when do you expect issues around the US trade deal to get resolved?
Trade deals are very complex issues. It’s not a switch off-switch on and something where we work on deadlines with a pistol on our head. We have to very carefully analyse and assess long-term impact of trade negotiations and trade transactions and deals, and neither side would like to rush it. We would like to ensure a fair deal which should be good for the people of both countries. Ambassador Robert Lighthizer and I are working through the numbers, doing a lot of number crunching and internal reconciliation with other line ministries so that what we finally decide is good for the people of India and is also good for the people of the US.
What are our redlines or non-negotiables in the trade deal with the US?
Redline issues are often there and no government compromises on any redline issue. For example, one redline issue that immediately comes to my mind is any product coming into India which has got animal feed into the food chain will be a redline if it is not properly marketed as a non-vegetarian product because of the religious sensitivities around it. Or let’s say opening up access to certain agricultural products where India is self-sufficient and we want to protect our farming community.
There are always certain issues where one takes extra precautions and ensures that it doesn’t affect the Indian ecosystem, but usually in a trade deal, there are no complete no-nos. One can always work around and find sustainable solutions which can be acceptable to all parties. The job of good trade negotiators is to find solutions.
What will be India’s position on RCEP, especially when there is opposition from industry?
Whether to join RCEP or not, this decision will be taken going forward. In what form we join it is more important. And in the form on which discussions are happening and issues being negotiated, that is an example how trade negotiations can be beneficial for India’s people and industry. How we have carefully looked at every aspect, individual industry’s concerns, benefit from market access from every country and what our needs are that other countries can fulfil. We have thought about all these and with sufficient safeguards which will take care of India’s industry and not harm them, we are thinking over all these issues.
I will assure Indian industry not to worry about it. Whatever happens will be for the good of the people and industry, boost Make in India and create employment opportunities, benefit consumers, help create infrastructure at low cost and open new avenues for India’s strength in services sector. We will go forward looking at all these for comprehensive and holistic benefit to India.
In which sectors is Sweden keen to invest in India?
In the transport sector, they have shown interest. Transport and energy are two sectors where Sweden is working a lot. Many Indian IT companies are working in Sweden. There are nearly 35,000 people of Indian origin working here, largely in the IT sector. They want many more people of Indian origin, especially professionals, to come here and work.
Do you expect any new tie-ups with Swedish companies in railways?
In railways, several companies are already present in India under the Make in India initiative. Swedish companies are working on electrification, signalling and telecom systems, train sets, coaches, metro and equipment.
We had an engagement with railway companies where Bombardier was there, Ericsson from telecom was there, ABB and SAAB were there. I gave them a few challenges. For instance, Wi-Fi has now reached 5,150 railway stations in India. In future, every train should have Wi-Fi and there are companies here which can work on it so that when we invite bids, Swedish companies can make it in India. The target is to reach 6,500 stations. The last 1,000 will take a little longer due to technical challenges as the optic fibre cable has not reached there, or the ecosystem is missing. That should take six-eight months. We will start working on Wi-Fi in trains after that.
Today, the feed on trains (data loaders) is linked to stations. As and when a train passes a station, the feed can be picked up from the stations. Going forward, all passenger trains will have Wi-Fi. We hope to achieve this target in the next three-four years.
Is this one of the big plans for the railways now that you have ruled out privatisation?
I have ruled out privatisation. It (Indian Railways) will continue to be a government entity. I do believe that we need large investment in the railways. The target is around Rs 50 lakh crore investment in the next 12 years in upgradation of infrastructure, new lines, new dedicated freight corridors, new high-speed and semi high-speed train lines and train sets, which require huge investment. We want to improve passenger services, speed of trains; we want to further improve our safety record. In the current year, from April 1, there has been zero fatality in Indian Railways.
The signalling system is going to be completely overhauled over the next five-seven years so that it adds to safety, it adds to capacity and ensures much more seamless movement of trains in a very efficient manner. All this will need a lot of capital and money and we are looking at public-private partnerships. We are looking at how railways can become a carrier where many people can serve the people.
We also believe that railways need not own the entire wagons so that Coal India can have its own wagons for moving coal, NTPC can have its own wagons for moving coal and moving train rakes. Our idea is that in partnership with Indian Railways we should be able to invite investment so that people can get better service without compromising the character of Indian Railways, which will always remain government.
Private sector has not been allowed to come into the railways, be it containers or station modernisation. How will you assure foreign investors in such a scenario?
I won’t entirely agree. There are several large private players in container movement besides Container Corporation. Several companies own their own rakes, several companies have their own private freight stations. On station modernisation, we have been able to do the pilots in Bhopal, which is nearing completion. NBCC is working on 12-13 locations to modernise the stations and simultaneously develop housing, commercial connectivity, shopping malls in a cross-subsidy model. Once these models become successful, there will be a faster roll-out across the country. What we are trying to do now is segregate station modernisation with monetisation of land. There are a lot of possibilities to involve the private sector in all these activities. I also have other plans to develop railway land such as solar installations in a big way.
We want to make Indian Railways the world’s first zero emission railway. We are fast moving towards 100% electrification of the railways and in the next four-five years, we shall be 100% electric. Having said that, one other area where I think the government and railways should work together is to see where we have surplus land in big measure and can promote industrial parks. It’s a new area and we are going to try to locate certain parcels of land that the railways owns but doesn’t need for its own requirement which can at some stage become industrial parks and become generators of large number of jobs and working opportunities while adding to the economic activity in India.
Will these parks be necessarily related to railways?
Not always. They could be related to railways but not necessarily always. Usually they are located quite near the railways land. So, there will be good connectivity and goods can come in there and move from there through the rail network very efficiently.
Is there a target for land monetisation this year?
As of now, I don’t see that we are planning too much of land monetisation in the current year for housing projects, but we could consider land monetisation for freight terminals or container terminals, wagon sidings and other such ancillary activities.
The IRCTC IPO was a success. Was that only because of the attractive pricing?
Railways is an engine of growth. Also, IRCTC has done some wonderful work in the last few years, particularly on passenger bookings and serving passengers in terms of improving the quality of catering, allowing independent companies to come and cater to passengers on the train, and the services it has been giving have helped it build databases and I think those databases have a lot of value. So they have ambitious plans to look at tourism in a big way, foray into newer areas in partnership or on their own in different fields, which I think the market recognised and gave a good value.
The offer price left room for too much of an upside...
That is good. Giving an upside to investors always gives you better traction the next time you are doing fundraising. Many successful companies the world over have been successful because they gave very good upside to their investors and were able to build up a strong loyal group of people who are always willing to participate with that company in more and more offerings.
(The correspondent was in Stockholm at the invitation of the Confederation of Indian Industry)
The government has sent questionnaires to e-commerce companies and told them to comply with the rules. Are they cooperating, and is there a time frame by when they have to reply?
I’ve said before also on several occasions that while we welcome e-commerce companies to India we have explained to all of them the importance of running e-commerce as an agnostic marketplace where all suppliers get equal opportunity to offer their products and buyers have a choice to buy certain or any products on that marketplace.
There are well-defined rules that they can’t have ownership or control over the inventory at any stage and can’t be selling their own products on that marketplace, and several other associated conditionalities were attached when we permitted e-commerce. We also have a very clearly laid out policy of not allowing multi-brand retail with foreign ownership more than 49%. E-commerce companies are expected to respect these policies and the law of the land both in letter and spirit.
Certain complaints were made to the ministry that some of the e-commerce companies were engaged in selling products at highly discounted prices, leading to concerns of predatory pricing. There were some complaints about circumvention of the e-commerce policy and our multi-brand retail laws, and in all fairness, it is the government’s duty to verify, validate all such complaints, which is why I believe e-commerce companies may have been asked certain questions and the department will assess the response.
So far, I haven’t received any complaint of non-cooperation and I’ve had several interactions with e-commerce companies, and at different times they have assured me that they will work within the letter and spirit of the law, comply with India’s laws and policies fully and always be available for any clarification to satisfy the Indian authorities on the law of the land.
By when do you expect issues around the US trade deal to get resolved?
Trade deals are very complex issues. It’s not a switch off-switch on and something where we work on deadlines with a pistol on our head. We have to very carefully analyse and assess long-term impact of trade negotiations and trade transactions and deals, and neither side would like to rush it. We would like to ensure a fair deal which should be good for the people of both countries. Ambassador Robert Lighthizer and I are working through the numbers, doing a lot of number crunching and internal reconciliation with other line ministries so that what we finally decide is good for the people of India and is also good for the people of the US.
What are our redlines or non-negotiables in the trade deal with the US?
Redline issues are often there and no government compromises on any redline issue. For example, one redline issue that immediately comes to my mind is any product coming into India which has got animal feed into the food chain will be a redline if it is not properly marketed as a non-vegetarian product because of the religious sensitivities around it. Or let’s say opening up access to certain agricultural products where India is self-sufficient and we want to protect our farming community.
There are always certain issues where one takes extra precautions and ensures that it doesn’t affect the Indian ecosystem, but usually in a trade deal, there are no complete no-nos. One can always work around and find sustainable solutions which can be acceptable to all parties. The job of good trade negotiators is to find solutions.
What will be India’s position on RCEP, especially when there is opposition from industry?
Whether to join RCEP or not, this decision will be taken going forward. In what form we join it is more important. And in the form on which discussions are happening and issues being negotiated, that is an example how trade negotiations can be beneficial for India’s people and industry. How we have carefully looked at every aspect, individual industry’s concerns, benefit from market access from every country and what our needs are that other countries can fulfil. We have thought about all these and with sufficient safeguards which will take care of India’s industry and not harm them, we are thinking over all these issues.
I will assure Indian industry not to worry about it. Whatever happens will be for the good of the people and industry, boost Make in India and create employment opportunities, benefit consumers, help create infrastructure at low cost and open new avenues for India’s strength in services sector. We will go forward looking at all these for comprehensive and holistic benefit to India.
In which sectors is Sweden keen to invest in India?
In the transport sector, they have shown interest. Transport and energy are two sectors where Sweden is working a lot. Many Indian IT companies are working in Sweden. There are nearly 35,000 people of Indian origin working here, largely in the IT sector. They want many more people of Indian origin, especially professionals, to come here and work.
Do you expect any new tie-ups with Swedish companies in railways?
In railways, several companies are already present in India under the Make in India initiative. Swedish companies are working on electrification, signalling and telecom systems, train sets, coaches, metro and equipment.
We had an engagement with railway companies where Bombardier was there, Ericsson from telecom was there, ABB and SAAB were there. I gave them a few challenges. For instance, Wi-Fi has now reached 5,150 railway stations in India. In future, every train should have Wi-Fi and there are companies here which can work on it so that when we invite bids, Swedish companies can make it in India. The target is to reach 6,500 stations. The last 1,000 will take a little longer due to technical challenges as the optic fibre cable has not reached there, or the ecosystem is missing. That should take six-eight months. We will start working on Wi-Fi in trains after that.
Today, the feed on trains (data loaders) is linked to stations. As and when a train passes a station, the feed can be picked up from the stations. Going forward, all passenger trains will have Wi-Fi. We hope to achieve this target in the next three-four years.
Is this one of the big plans for the railways now that you have ruled out privatisation?
I have ruled out privatisation. It (Indian Railways) will continue to be a government entity. I do believe that we need large investment in the railways. The target is around Rs 50 lakh crore investment in the next 12 years in upgradation of infrastructure, new lines, new dedicated freight corridors, new high-speed and semi high-speed train lines and train sets, which require huge investment. We want to improve passenger services, speed of trains; we want to further improve our safety record. In the current year, from April 1, there has been zero fatality in Indian Railways.
The signalling system is going to be completely overhauled over the next five-seven years so that it adds to safety, it adds to capacity and ensures much more seamless movement of trains in a very efficient manner. All this will need a lot of capital and money and we are looking at public-private partnerships. We are looking at how railways can become a carrier where many people can serve the people.
We also believe that railways need not own the entire wagons so that Coal India can have its own wagons for moving coal, NTPC can have its own wagons for moving coal and moving train rakes. Our idea is that in partnership with Indian Railways we should be able to invite investment so that people can get better service without compromising the character of Indian Railways, which will always remain government.
Private sector has not been allowed to come into the railways, be it containers or station modernisation. How will you assure foreign investors in such a scenario?
I won’t entirely agree. There are several large private players in container movement besides Container Corporation. Several companies own their own rakes, several companies have their own private freight stations. On station modernisation, we have been able to do the pilots in Bhopal, which is nearing completion. NBCC is working on 12-13 locations to modernise the stations and simultaneously develop housing, commercial connectivity, shopping malls in a cross-subsidy model. Once these models become successful, there will be a faster roll-out across the country. What we are trying to do now is segregate station modernisation with monetisation of land. There are a lot of possibilities to involve the private sector in all these activities. I also have other plans to develop railway land such as solar installations in a big way.
We want to make Indian Railways the world’s first zero emission railway. We are fast moving towards 100% electrification of the railways and in the next four-five years, we shall be 100% electric. Having said that, one other area where I think the government and railways should work together is to see where we have surplus land in big measure and can promote industrial parks. It’s a new area and we are going to try to locate certain parcels of land that the railways owns but doesn’t need for its own requirement which can at some stage become industrial parks and become generators of large number of jobs and working opportunities while adding to the economic activity in India.
Will these parks be necessarily related to railways?
Not always. They could be related to railways but not necessarily always. Usually they are located quite near the railways land. So, there will be good connectivity and goods can come in there and move from there through the rail network very efficiently.
Is there a target for land monetisation this year?
As of now, I don’t see that we are planning too much of land monetisation in the current year for housing projects, but we could consider land monetisation for freight terminals or container terminals, wagon sidings and other such ancillary activities.
The IRCTC IPO was a success. Was that only because of the attractive pricing?
Railways is an engine of growth. Also, IRCTC has done some wonderful work in the last few years, particularly on passenger bookings and serving passengers in terms of improving the quality of catering, allowing independent companies to come and cater to passengers on the train, and the services it has been giving have helped it build databases and I think those databases have a lot of value. So they have ambitious plans to look at tourism in a big way, foray into newer areas in partnership or on their own in different fields, which I think the market recognised and gave a good value.
The offer price left room for too much of an upside...
That is good. Giving an upside to investors always gives you better traction the next time you are doing fundraising. Many successful companies the world over have been successful because they gave very good upside to their investors and were able to build up a strong loyal group of people who are always willing to participate with that company in more and more offerings.
(The correspondent was in Stockholm at the invitation of the Confederation of Indian Industry)
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