India will be “okay” as far as the impact of the EU carbon border adjustment mechanism (CBAM) is concerned, and the country has an advantage owing to its decarbonisation measures and because competition will suffer the cost of the mechanism, he said. Goyal’s statement assumes significance as Katherina Reiche, Germany’s federal minister for economic affairs and energy, called for cutting red tape on both sides while speaking at the India-Germany Business Roundtable and inauguration of the India Centre of the German Council on Foreign Relations Thursday.
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“I think there are more problems in Europe about bureaucracy than in India…We recognise that we have inherited a lot of bureaucracy,” Goyal said at a briefing Thursday. He said India was making systemic changes based on feedback to address red-tapism and support industry. “This is a government that is an action board to support ease of doing business,” Goyal said.
But there are certain things where one has to be strict, such as quality and environmental damage, and there will be delays in environmental approvals if companies’ mitigation plans are not good enough, he said. “I will not call it bureaucracy, but call it caution, and preserving India’s future. Every country does this.” Noting that getting approvals is not easy in Europe, he said they would also have to improve. “Sometimes they delay approvals for our products, and then it is a give and take,” he said.
Investment interest
The minister said during his meetings with CEOs, several of them expressed “more than keen interest” in investing in India, with car makers exploring manufacturing opportunities. Auto components, pharmaceuticals, research and development, textiles and leather are some other areas of interest, while precision engineering, aerospace, defence and shipbuilding are the new ones, he said. “The metrics seem to suggest that these are big numbers, but we have not done a formal engagement with industry asking them for specific commitments,” he said.
Read more: Critical tech list under review to push self-reliance“We export about 1 million cars from India. Soon you will see cars made in India start coming into Europe. So, I think, in high-tech (sectors), India’s entry is increasing,” Goyal said. Ambassador of India to Germany Ajit Gupte said in the last two and a half years, German companies announced investments of $7.4 billion in India.
Unbeatable combination
Goyal said the total imports of the EU nations were upward of $6 trillion. With the “regulatory overhang that they are creating upon themselves”, Europe will have to look for trusted countries where at least many of the things that are becoming very expensive in Europe can be produced, he said. Indian scale and European technology together are an “unbeatable combination”, he said. “I see tremendous potential for India and huge job creation in India with the free trade agreement (with EU),” he said. The FTA, according to him, is a symbol of certainty, continuity and predictability.
Carbon tax
India and the EU have reached an amicable settlement on CBAM, Goyal said. “We are decarbonising our economy so fast that we will have an advantage because our competition will suffer the cost of CBAM,” he said.
India will support industries which are exporters to Europe to decarbonise faster, and Europe will support Indian industry to decarbonise quickly, he said. “We have a very robust arrangement with that.” For micro and small companies, Goyal said: “We are willing to literally take care of the entire cost of certification. And others also, there is some very expensive certification or process; we are happy to support them.”
On the EU CBAM and deforestation regulations, he said: “We are looking at verifiers being approved in India also. But almost all costs of CBAM or any deforestation and all for micro and small, (we) will take care of. For others, in a graded way.”