Recently India has been engaged with a lot of nations due to trade negotiations for a free trade agreement, it tells us how important foreign trade is in the current status quo, where foreign trade accounted for about 30% of the Indian economy, in which blue economy plays a substantial role. Keeping in mind the importance of the blue economy and foreign trade center for the study of finance and economics (CSFE), IMPRI Impact and Policy Research Institute, New Delhi organized a #WebPolicyTalk, The State of Foreign Trade – #TalkingTrade on “The Blue Economy, Port-Based Development and Expanding India’s Foreign Trade”.
Our esteemed speaker of the session was Prof Mukul Asher, Former Professor, Lee Kuan Yew School of Public Policy. The National University of Singapore. The discussant Prof Prabir De, Professor, Research, and Information System for Developing Countries (RIS), New Delhi.
The chair and moderator Dr Nalin Bharti, Associate Professor, Humanities and Social Sciences, Indian Institute of Technology (IIT), Patna, spoke about the importance of a blue economy in a nation with such an expansive coastline, where about 95% of the business transportation are done by waterways. He also talked about the eminence of ports and highlighted the need for a more ecological balanced and social equitable based policy for increasing trade.
Prof Mukul Asher started the discussion by enlightening us about the Importance of the ocean in the economy, and how the Indian government has ignored the “blue economy” as a concept. Until recently where the government has shifted its focus to the blue economy and initiated various projects like Sagrmala which is for port development. Rather, he argues that projects like Sagarmala should be in conjunction with many means of transport connectivity programs to utilize the full potential of the ports.
Although this topic is of national importance, then also this topic was very less researched upon in the nation, therefore he urges researchers to take this as their researcher matter. After which he explained the key choke points of the world. India has a significant amount of foreign trade and a good number of ports but still, it’s not even near when we talk about the largest shipping hubs.
Recent initiatives in the sector of the blue economy
He referred to the fluid definition of “blue economy” and every nation having its definition, he further stressed the fact of projects like Bharatmala- road connectivity project and Udan – Air connectivity project, should work in association with the port development project. He evaluated each program and stated the development that was made in recent years.
The recent developments in the project Bharatmala were well appreciated, in the coastal and north-eastern parts of the nation. The new plans for a well-planned road system, which would focus on connectivity and strategic economic importance, are known as greenfield corridors. He then explained areas of operation of the blue economy, which are focused on by the government, and some which are still left out like thermal power utilization.
Programs to succeed in the blue economy
He highlighted the critical importance of the Indo-Pacific region and how India as a whole region was ignored in the notion of Asia-Pacific. He also told us about not only the geopolitical or trade significance of Indo- Pacific but the importance for academia and researchers keeping this area at the center of their research.
As it was told earlier that blue economy is a very fluid term, to be determined towards its goal the draft policy framework for the blue economy was created in which it identifies seven priorities areas to systematically work upon. These areas include ocean governance, planning, and tourism marine, full fisheries, and many such areas were covered, and use of science and technology for various aspects
The major project is the Sagar mala program, which was initiated in 2015, about 580 projects are being identified for implementation. It is a very long-term project, costing about $125 billion. The main object was to bring down the additional costs of transporting down. The program focuses on setting up about 6-8 new ports.
The establishment of new ports will be done keeping in mind post connectivity enhancement, Port linked industrialization, and recycling of ships for sustainability. The investment in the development of these coastal ports and the infrastructure near them has been done by many public and private investors. Capturing the importance of the blue economy, India has also helped develop ports and strengthening maritime facilities in many nations like Afghanistan, Myanmar, Bangladesh, and Indonesia.
India’s foreign trade
He first started with some numbers of India’s overall international trade, and then he focused upon current trade partners and their numbers. After which he reflected upon the sectors and the industry where India is a dominant trader. After he gave an insight about the industry where India could easily grow and increase the number of trades it is doing right now, mainly these are related to the food and consumer industry.
Fields like manufacturing where we think we might be able to grow as the large potential. He also talked about the major points where India has developed recently like new cash crops being promoted and new services being promoted like financial and consulting in India.
Broadening our aspects, he revied India’s foreign direct investment and its concentration, which he finds very narrow despite a lot of potential in the area, he believed the numbers could be about double if things are properly put together. But the field where India improved was like trade facilitation.
He concluded by suggesting some initiative which could be adopted by the nation for better international trade and the proper function of the legislature, and the government is also important and requested for being more concentrated about the topic. The urgency to collect and utilize the data was the major point that was brought.
Discussion upon the lecture
Prof Prabir De pointed out the topic of facilitation cost and time of trade is often ignored and not taken in the study, he also reflected the recent infrastructure developments took by the government which was reflected on the existing ports. Rather the proper infrastructure and operation management have heavily revolutionized the day-to-day operation of the ports.
Then he reflected the biasedness in investment in different areas of the country, like the difference between the port development in the west and not in the west and north-eastern states which has extremely high potential. He also talked about the benefits of maritime calibration in the nation itself.
Dr George John brought his insightful opinion, about exploiting ocean resources both food-based and biotechnology-based resources, based on the ideas of sustainability.
After which Prof Mukul Asher acknowledged every issue that was brought by the discussions, he not only said he would research more upon the topic but would keep in mind and be exclusive in his further pursuit.
Answering questions and concluding remarks
Answering questions about the traffic on Mumbai port and the near Special economic zone, where he talked about the recent lowering of the traffic at Mumbai port and shared his observations. Rather he highlighted that the Mundra port in Gujrat has been the port near Mumbai which is the busiest port in the nation.
Answering questions about climate change, he talked about the need of keeping in mind sustainability and climate positive in every aspect of policy. He also pointed the realist image of the nation and its potential trade that we have to make in the aspect of developing, and necessary should be done.
Answering various questions, he highlighted the recent development of seaweed production and its huge progress and the lack of implementation integrity of the nations which are lacking in India’s development. The lecture was concluded by various points that were brought by the discussants and a formal vote of thanks.
Acknowledgment: Ayush Aggarwal is a research intern at IMPRI.