Interview to the newspaper "2000" – Ambassador of India, Mr. Rajiv K. Chander
3rd December 2012
1. What are the major issues to be discussed for the forthcoming visit of the President of Ukraine Viktor Yanukovych to India? Is it planned to sign a free trade agreement and bilateral agreement on cooperation in the field of defense?
The much-anticipated visit of President of Ukraine H.E. Mr. Viktor Yanukovych to India in December 2012 during the 20th anniversary of the establishment of diplomatic relations would provide an excellent opportunity for India & Ukraine to comprehensively review our bilateral relations and forge a new partnership. Several agreements are planned to be signed during the visit.
2. What are the key indicators of the dynamics for growth of trade turnover between our countries, and how do you evaluate their prospects? Can you name the spheres of the Ukrainian conomy that are of greatest interest to Indian investors?
The bilateral trade has been on a strong growth trajectory as would be seen from the fact that over the past five years bilateral trade has more than doubled from USD 1.28 billion in 2007-08 to USD 2.86 billion in 2011-12. There has been increase of around 50% in the last one year over 2010-11. Clearly, this points to the fact that there is good potential for the growth in bilateral trade to continue. The areas of fertilizers exports from Ukraine to India and of pharmaceutical export from India to Ukraine have a lot of potential. Joint manufacturing & transfer of technology of defence related equipment would also be of interest to the Indian side.
3. Economy of the Republic of India is considered to be the one of the fastest growing in the world. It is well known that the second half of 2012, GDP growth was 5.3%, and by 2030, according to forecasts, the increase is expected to 6.7%. What is the secret of economy success of your country and how much, in your opinion, the positive experience of India is applicable to Ukraine?
Prudent government policies, investment in upgrading of basic infrastructure a strong private sector, promotion of innovation, young population with mean age of 25 years, huge domestic market with middle class ranging from 300 - 500 million leading to domestic demand driven growth, rapidly developing rural market with substantial disposable income are some of the factors which have led to sustained growth over the past ten years with strong growth expected in the coming years as well. It is best that the students, journalists, academics and experts from both our countries learn about our each other's progress and then draw the lessons that are deemed most relevant and appropriate. This would also help in identifying areas of complementarities & possibilities for future cooperation. In this context Government of India has been extending scholarships under the Indian Technical & Economic Cooperation Programme in diverse areas such as audit, finance, managing SMEs, solar energy, legislative drafting, computer sciences, IT etc. A Chair of Indian Studies has been set up at the Institute of International Relations at the Taras Shevchenko National University in Kyiv at which courses on Indian foreign policy, economy & law will be taught.
4. Starting from December 1, Ukraine imposes a restrictions on the sale of foreign-made medicines. Indian medicines are very famous in Ukraine and have one of the biggest market share of Ukrainian pharmaceutical market, therefore there is an expectation of decline in trade. Will the above mentioned measures have an impact on Ukrainian-Indian relations and is the Indian side planning a response?
Let me begin by saying a few words about the Indian pharmaceutical industry. India has been described as the pharmacy of the world.
- It accounts for over 8 per cent of global pharmaceutical production. In 2011-12 Indian pharmaceutical exports were of the order of USD 11 billion.
- India produces a fifth of the generic medicines of the world and accounts for about 70 per cent of medicines supplied to developing countries through humanitarian agencies. India produces over 60,000 generic brands across 60 therapeutic categories and manufactures more than 500 different Active Pharmaceutical Ingredients that are exported to all corners of the world including Ukraine. In the field of anti-retroviral drugs Indian medicines meet global standards at a fraction of the cost that these are manufactured in developed markets.
- India has over 120 USFDA-approved and 84 UK MHRA- approved pharmaceutical manufacturing facilities.
- The manufacturing cost of Indian pharmaceutical companies is up to 65 per cent lower than that of US firms and almost half of that of European manufacturers.
- Three out of the top 10 fastest growing generic companies globally are now from India.
- India is fast emerging as a leading manufacturer of vaccines too. Approximately 70% of the vaccines produced in India are exported and UNICEF is one of India's largest clients, which supplies vaccines to over 140 countries and accounts for 40% of the global requirement.
iven these facts it is not surprising that in the past 5-8 years Indian pharmaceutical exports to Ukraine have ranked number one in terms of volume and number two in terms of value. The Indian pharmaceutical industry is represented in Ukraine by the Indian Pharmaceutical Manufacturers Association, which has been based in Kyiv for the past ten years. They have been active in providing medicines during humanitarian situations. The fact that Indian medicines worth around USD 325 million are being imported by Ukraine actually results in much lower amounts being spent because of the cost-competitiveness of the Indian medicines resulting in substantial savings to the Government of Ukraine annually.
Considering all of this, I am sure that the benefit of providing quality and cost-effective medicine covering most ailments to the Ukrainian consumer in the health sector is there for all to see. Why would anyone want to change this to the detriment of Ukraine's health sector?
5. IT-industry in India accounts for about 5% of national GDP, while in Ukraine this figure is five times lower. Our IT-specialists prefer to work for foreign companies, depriving the country not only intellectual capacity but also the revenue. Through what mechanisms India managed to keep their programmers and IT engineers?
The information technology (IT) and information technology enabled services (ITeS) industry has been one of the key driving forces fuelling India's economic growth. IT and ITeS sector's contribution to the national GDP has increased from 1.2 per cent in 1997-98 to an estimated 7.5 per cent in 2011-12.
The Indian software and services exports including BPO exports is estimated at US$ 68.7 billion in 2011- 12, as compared to US$ 59 billion in 2010-11, an increase of 16.4 per cent. The IT services exports is estimated to be US$ 39.8 billion in 2011-12 as compared to US$ 33.5 billion in 2010-11, showing a growth of 18.8 per cent.
Between April 2000 and May 2012, the computer software and hardware sector attracted cumulative foreign direct investment (FDI) of US$ 11,262 million, according to the Department of Industrial Policy and Promotion (DIPP) of the Government of India.
Amongst the initiative taken by the Government of India to support the IT industry include the setting up of 51 software technology parks of India (STPI that have given a major boost to IT and ITeS exports. Apart from exemption from customs duty available for capital goods there are also exemptions from service tax, excise duty, and rebate for payment of Central Sales Tax. FDI upto 100 per cent under the automatic route is allowed in Data processing, software development and computer consultancy services; Software supply services; Business and management consultancy services, Market Research Services, Technical testing & Analysis services.
Some of the other major initiatives taken or planned by Government of India to promote IT and ITeS sector in India are:
- The Cabinet has recently approved the National Policy on Information Technology 2012. The policy aims to increase revenues of IT and ITeS industry from US$ 100 billion to US$ 300 billion by 2020 and expand exports from US$ 69 billion to US$ 200 billion by 2020;
- The Government of India plans to set up 15 new laboratories for testing hardware and software products under public-private partnership (PPP) model; &
- The Government of India plans to announce incentives to promote IT related export hubs in small towns to attract investors towards SEZs. The Government may also allow broadbanding of sectors, which will allow ancillary units to come up in sector-specific SEZs
6. December-January - months of a high tourist season in India. Recently, Ukrainian tourists fall in love with the budget, but of a high quality, vacation on the beaches of the southwestern state of Goa. There is also high interest in the sights of your country. Is there a possibility to apply the word "high" to the interest of Indian tourists in Ukraine, and how, in your opinion, is developing the whole Ukrainian-Indian cooperation in the field?
The number of visas issued by Embassy of India, Kyiv increased by over 50% in 2011-12. There is enormous interest in Indian culture - particularly dances, films, yoga, natural healing and spirituality. Tourism destinations in India which can range from the tallest mountains in the world to the long coast line with world famous beaches, the desert in the western part of the country to the jungles and famous flora and fauna of India all beckon tourists from different parts of the world.
There is a lot of interest amongst Indians to visit Ukraine particularly after images of beautiful Ukraine were shown all over the world during Euro 2012. I am sure if tourist visas are forthcoming then the number of Indian tourists should increase substantially. Consider the fact that nearly 500 million Indians undertake domestic travel annually and around 10- 12 million Indians take vacations abroad. It is not surprising that many countries, including Ireland, the Netherlands, Spain, Poland and South Korea, have tourist offices in India.
India has proposed a bilateral visa facilitation agreement to the Ukrainian side, which we hope will be finalized soon.
7. At the end of September, in Kiev, a festival of Indian culture successfully was completed. It was dedicated to the celebration of the 20th anniversary of the establishment of diplomatic relations between India and the Ukraine. Can you name the major cultural events to be held in Ukraine next year?
Given the great love for Indian culture in Ukraine there are always events being planned by the more than 30 Indian Dance/Culture groups that exist all over Ukraine. Then, there is Sanskriti, which is an Indian cultural center which regularly organizes programmes such as celebration of Indian festivals and a very successful food festival. As we are still in the planning stage one can only assure you that you would have a lot to look forward to next year as well!