Union Commerce Minister Suresh Prabhu on Tuesday hinted that India would improve its position in the World Bank’s ‘ease of doing business’ (EODB) rankings, which will be released on Wednesday.
Last year, India showed a major improvement and reached 100th position in EODB rankings. “Tomorrow (on Wednesday), you will be hearing better news about India improving parameters on ease of doing business. We already have improved substantially. We will make the formal announcement tomorrow (on Wednesday) with the World Bank (releasing its report),” Prabhu said in New Delhi on Tuesday.
The new indirect tax regime — the goods and services tax — was, however, not a part of last year’s rankings but it was a part of the evaluation process that happened this year. Demonetisation was also not “reflected” in last year’s rankings as it was not comparable across countries being a one-time event, according to the World Bank.
The World bank ranks countries based on 10 parameters, including categories such as starting a business, construction permits, getting electricity, getting credit, paying taxes, trade across borders, enforcing contracts, and resolving insolvency.
Last year, the World Bank said the big improvement in rankings for India has come in the areas of “protecting minority investors”, “getting credit”, “paying taxes” and “resolving insolvency” but it continues to lag in areas such as “starting a business”, “enforcing contracts” and “dealing in construction permits”.
Talking about India-US trade relations, Prabhu said on Tuesday that New Delhi is actively engaged with Washington to resolve the issues. He said that India would like to work with the US on global challenges to multi-lateral trading system and matters related to existential issues of the World Trade Organization (WTO).
“We have some trade issues with the US, but we can resolve them,” he said, adding India-US strategic and commercial dialogue is expected in January, in which US Commerce Secretary Wilbur Ross may participate. Prabhu added that India is a growing economy and it offers huge advantages for the US companies.
Citing a report, he said about 2,300 firms operating in China may be looking to shift their bases outside and “we want to offer them a choice based on intrinsic advantages that India offers”. Prabhu further added: “I have always been saying this that if you actually have a relationship with India, India can never pose a strategic challenge to the US.”
Currently, India is pressing for exemption from high duty imposed by the US on certain steel and aluminium products, resumption of export benefits to certain domestic products under their generalised system of preferences (GSP), greater market access for its products from sectors such as agriculture, automobile, auto components and engineering.
Around 3,500 Indian products from different sectors like chemicals and engineering get duty-free access to the US market under the GSP, introduced in 1976. On the other hand, the US is demanding greater market access for its farm and manufacturing products, including medical devices. India’s exports to the US in 2017-18 stood at $47.9 billion, while imports were $26.7 billion. The trade balance is in favour of India.
In another event in New Delhi, Prabhu said that the government will work on promoting the growth of the education sector to help increase the share of overall service sector in the country’s economy. “We want to increase the share of the sector in the economy, and education is an important sector in this, and we will promote it,” he said while speaking at the Higher Education Summit 2018.