Can Modi govt's farm reforms make India world leader in food trade?

 

Of all the controversial reforms Indian Prime Minister Narendra Modi has sprung on the market, the recent laws to liberalize farm sales could turn out to be the most far-reaching.

In a fractious and unruly session last month, parliament passed three laws that some say could pave the way for India to upend the global food trade, while others fear it will wreck the livelihoods of millions of farmers. Within days, rural groups and opposition leaders launched public protests.

The move toward a free market for farm sales goes to the heart of a system that directly affects more than half of the nation’s 1.37 billion people, altering government controls that millions of families have come to rely on, but that have hobbled the nation’s efforts to productively farm one of the largest areas of fertile land on earth. If they succeed, India could not only feed itself, but become a major food exporter.

“We need private sector investment in technology and infrastructure for Indian agriculture to realize its full potential and compete better in the global marketplace,” said Siraj Chaudhry, managing director and chief executive officer of agriculture services company National Collateral Management Services Ltd. But the government must make its intent very clear to win over skeptics. “This is a major policy change that impacts a large and vulnerable section of the population.”

India processes less than 10% of its food production and loses about 900 billion rupees ($12.3 billion) a year due to wastage from inadequate cold storage, said Amitabh Kant, chief executive officer at government think tank NITI Aayog.

Informal summits led to fresh stability in India-China relations, says Modi

The informal summit between India and China has led to fresh stability in relation between the two countries and has given it a fresh momentum, said Prime Minister Narendra Modi on the second day of the summit.

"The first informal summit between India and China last year in Wuhan led to fresh stability in our relations and gave a fresh momentum. Strategic communication between our two countries has also increased. The Wuhan summit instilled a new momentum and trust in our relations and today's 'Chennai Connect' is the start of a new era in India-China relations," said Modi.

There have been deep cultural and trade relations between China and the state of Tamil Nadu. For most part of the last 2000 years, India and China have been economic powers, he said.

Responding to the prime minister, Chinese President Xi Jinping said that such informal summits have helped initiate discussions on many issues and he was happy that PM Modi mooted the idea.

National Security Advisor Ajit Doval, External Affairs Minister S Jaishankar and Foreign Secretary Vijay Gokhale were also present during the talks.

Xi said: "We are really overwhelmed by your hospitality. Me and my colleagues have felt that very strongly. This will be a memorable experience for me and us. Yesterday Prime Minister, as you said, you and I had engaged in candid conversations like friends, heart to heart discussions on bilateral relations".

Calling India an important neighbour, Xi said he is looking forward to further discussions and future plans.

The informal talks at the Taj Fisherman's Cove Resort & Spa beach resort lasted for nearly an hour.

Earlier in the day, PM Modi received the Chinese president at the entrance of the resort. The two leaders shook hands and then boarded a battery operated vehicle to reach their informal meeting room. This was followed by delegation level discussions. Nearly 16 people from both the sides participated in the discussions.

PM Modi and Xi arrived at Mamallapuram on Friday for the second informal summit. The first one was held in Wuhan, China last year. Both the leaders spent nearly five hours together on Friday. Indian Foreign Secretary Vijay Gokhale, in a late evening press conference, told the reporters that the two leaders had detailed discussions on varied issues including terrorism, bilateral trade and investments.

Gokale said Modi and Xi were expected to discuss international and regional issues on the second day.

On the trade side, the discussions were expected to be centred around the Regional Comprehensive Economic Partnership (RCEP) and Chinese industries requirements for making investments in India. The bilateral trade between India and China is about $87 billion. The trade deficit is on India's side.

The second informal India-China Summit will end with a lunch on Saturday afternoon and both the sides will be issuing separate statements.

After that, Xi will fly out of India and will head to Nepal.

India, China to set up mechanism to trim trade deficit, improve investment

The two-day informal summit between Prime Minister Narendra Modi and Chinese President Xi Jinping concluded on Saturday with the two sides agreeing to set up a new mechanism to address trade deficit, improve investment and services.

On Friday and Saturday, both the leaders met for nearly six hours in the heritage town of Mamallapuram, 50 kms from Chennai.

PM Modi said that the 'Chennai Connect' would add great momentum to India-China relations and would benefit the people of the two nations and the world.

“The two leaders had an in-depth exchange of views in a friendly atmosphere on overarching, long-term and strategic issues of global and regional importance and shared their respective approaches towards national development,” said MEA.

“We had decided that we will manage our differences prudently and won't allow them to turn into disputes. We will remain sensitive about our concerns and our relationship will contribute towards peace and stability in the world. The Wuhan summit instilled a new momentum and trust in our relations and today's 'Chennai Connect' is the start of a new era in India-China relations,” said Modi.

The first informal summit between India and China last year in Wuhan, China, in April, 2018, led to fresh stability in our relations and provided fresh momentum. Strategic communication between the two countries also increased after the summit, he added.

On his part, Xi said the two leaders engaged in candid conversation like friends and had heart to heart discussions on bilateral relations. “I look forward to further discussions. I may pursue proposals on bilateral ties discussed yesterday,” he said.

Xi said informal summits suggested by Prime Minister Modi, had been a brilliant idea. "We are able to bring forth closer cooperation between both countries," he said.

Briefing the media on Modi-Xi summit, Foreign Secretary Vijay Gokhale said India and China had decided to establish a new mechanism to enhance mutual trade and investment and services. From China, it would be Vice-Premier Hu Chunhua and from India, it would be Union Finance Minister Nirmala Sitharaman. They would also discuss how to reduce trade deficit.

The high-level Economic and Trade Dialogue mechanism will help achieve enhanced trade and commercial relations, and better the trade balance between the two countries, Gokhale said.

It is important to support and strengthen the rules-based multilateral trading system at a time when globally agreed trade practices and norms are being selectively questioned. India and China will continue to work together for open and inclusive trade arrangements that will benefit all countries. Both leaders shared the view that the international situation was witnessing significant readjustment. They were of the view that India and China shared the common objective of working for a peaceful, secure and prosperous world in which all countries could pursue their development within a rules-based international order.

When asked about Chinese telecom equipment firm Huawei's 5G trials, Gokhale said it was not, but the new mechanism would discuss private and public sector investments in both the countries. President Xi welcomed Indian investments in China in the fields of pharma and IT. The two-way trade of $87 billion, is skewed towards China.

Sharad Kumar Saraf, president, FIEO, said that the deficit narrowed down to $53 billion in last fiscal and India's untapped exports potential to China, as per ITC, was $ 18 billion, much more than India's current exports of $16.8 billion.

With regards to Regional Comprehensive Economic Partnership, Prime Minister told Chinese President Xi Jinping that it was important that RCEP is balanced.

He said, Kashmir issue was not raised and not discussed. "Our position is anyways very clear that this is an internal matter of India," said Gokhale adding that radicalisation was a matter of concern to both and it was important to deal with the challenges of terrorism and radicalisation in an increasingly complex world. Both countries agreed they should work together to deal with challenges of terrorism.

He added, Chinese President talked about Pakistan Prime Minister Imran Khan's recent visit to China with Modi.

The two leaders also exchanged views on outstanding issues, including on the boundary question.

President Xi Jinping has invited Prime Minister Modi to China for the next summit and the latter has accepted the invitation. Dates will be worked out later.