The Hindu Business Line : `India must create greater openness to trade'

Mr N.R. Narayana Murthy (right), Chairman & Chief Mentor, Infosys Technologies Ltd, with Mr S.N. Menon, IIFT Chairman & Commerce Secretary, at the 39th Convocation of the Indian Institute of Foreign Trade in the Capital on Sunday. - Ramesh Sharma

New Delhi , April 17

THE Infosys Technologies Chairman and Chief Mentor, Mr N.R. Narayana Murthy, has said that India should create greater openness to trade and move ahead with a sense of urgency for reforms.

"India must create a greater openness to trade. In today's era of globalisation, with falling geographic and regulatory barriers, India cannot ignore the world market," Mr Narayana Murthy said, addressing the 39th convocation of Indian Institute of Foreign Trade here on Sunday.

Citing World Bank estimates that India could grow at double-digit rates, given the right trade reforms and competition-friendly policies, he said India now faces a moment of truth - on whether it would be able to seize the opportunities before it and become a key player in the global stage.

"We must, therefore, create a sense of urgency for reforms," said Mr Narayana Murthy.

Noting that exports have been key to economic growth in many countries, he emphasised the need to create strong international brands that are recognised world over.

Mr Narayana Murthy said 65 per cent of the Indian population relied on agriculture, while the share of this sector in the country's GDP was only 22 per cent. Citing the case of China, which pulled 1 per cent of its people out of agriculture every year to put them into the booming construction and manufacturing sectors, he said the Indian industry - which could not rely purely on domestic market for growth - should look towards exports.

Making a strong case for India to play a central role in world trade, Mr Narayana Murthy underlined that the country should encourage competition by opening up the industry to foreign investment. He said foreign direct investment in IT, automotive and business process outsourcing had triggered innovation.

The Commerce Secretary, Mr S.N. Menon, said the main role of the WTO should be to facilitate international trade and simultaneously create an environment for expansion, leading to further growth in member countries. He said the inclusion of new areas, such as competition policy, FDI, environment and labour standards and transparency in government procurement, distracted the WTO from its primary function.

"Tariff escalation has affected the market access of high value processed products from developing countries. Product regulations and standards have emerged as potential barriers to exports of developing countries... . There is also a strong feeling among developing countries that these new issues will only benefit developed countries and further aggravate the imbalance and inequity which exists in current negotiations," he added.

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