Nirmala Seetharaman, Commerce and Industry Minister (Independent Charge) and Minister of State for Finance and Corporate Affairs has her hands full, as she juggles domestic trade, taxation, as well as emerging global and strategic issues.

As the Modi Government prepares for its full Budget, the Minister believes that issues being raised by the industry can also be addressed outside the Budget. While she was politically correct on the issue of ‘subsidy’, the Minister in an interview with Business Line spoke at length on other matters, including tax concerns on special economic zones. Excerpts:

Is the Government considering withdrawal of minimum alternate tax and dividend distribution tax on SEZs?

SEZs require a comprehensive review. The issue has come up in every pre-Budget consultation. Every sector has talked about how SEZs have not done what they should have done, specifically on these two issues.

We are looking at the Indian manufacturer, who may also be an exporter, for whom the SEZs should work.

But, these also have to be seen along with the concerns of the domestic manufacturers, who are being impacted by imports.

What happens now is that the manufacturers who are in SEZs are neither able to sell in the domestic market or export. This creates a situation of great anomaly.

You have a domestic market waiting, but, being in SEZ you can’t encash on it. Besides, you are not benefiting from being in a SEZ that was designed to put you in an advantage.

How does the Government propose to sort out the ongoing corporate tax disputes?

We are looking at fair and simple way of taxation. Retrospective does not work well. On the specific issue of Vodafone, we have appointed an arbitrator.

Has the Government firmed up its thoughts on the FDI in Railways, construction, defence, and multi-brand retail?

We are very clear on our stance as far as multi-brand retail is concerned. There is no confusion. Our political victory was based on our stated opposition on the matter. As regards Defence, railways, and others discussions have started. We have not made up our minds on any one yet.

Does the US stance on India’s Intellectual Property Rights worry the Government?

We are not worried. But, we are certainly keen on engaging with the US. Our rights over the IPR will always be protected and is WTO-complaint. We stand up for our rights. And therefore with the US we will want to have an open and clear engagement. We are within our rights to talk about Indian IPR.

Will you revisit the Free Trade Agreements?

We are doing a review of each FTA. The question is why have the Indian manufacturers not been able to leverage from these agreements?

We don’t even help those who have already gone their and established.

They want some kind of financial assistance. But our banks are not geared for it. Some kind of hand holding is required. The kind of institutionalised long-term financial and other resources that have to be put to them, have not been figured into the scheme of things. There is a need for us to understand the FTA in terms of institutions that are to handhold our exporters. Situations in different regions, geographic locations are developing there. The Commerce Ministry is working now with External Affairs Ministry to understand local situations and local business requirements.

Iraq, a major trading partner, is going through turmoil. What has been the Government strategy to deal with it?

It is a developing situation, evolving by the minute. Our concerns are focussed on oil imports. Till now the Oil Ministry said it is not going to badly affect us. They are working on alternatives for crude oil sourcing. But, the situation is strategically worrying — proximity with Iran and approach of the US. American approach to Iran is also evolving. So many different factors one has to keep in view.

Indian strategic interests have to be taken care of. The Government will have to carefully watch.

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