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Foreign Secretary’s Virtual Address to NASSCOM (June 02, 2020)

June 03, 2020

NASSCOM Chairman, Shri U B Pravin Rao
NASSCOM President, Ms. Debjani Ghosh
NASSCOM Vice President, Shri Shivendra Singh
Chairman Wipro, Shri Rishad Premji
Distinguished members of NASSCOM attending the interaction

I would like to thank NASSCOM for organising this interactive session. I also extend a very warm welcome to all of you who have joined us for this session. I am joined by Ambassador P. Harish, Additional Secretary (Economic Relations) in the Ministry of External Affairs.

2. At the outset, let me highlight the relevance of Information Technology in the present times. We are at a juncture where the use of IT and Business Process Management (BPM) services, as enablers to fight the current disruptions, has made itself evident. That we have been able to largely insulate ourselves from the worst impacts of the COVID-19 pandemic, has been enabled by the increased use of IT & IT enabled services in our social and economic systems.

3. When the current pandemic struck, countries across the world announced nationwide lockdowns as the first line of action. That billions of people were able to successfully lock themselves up at their homes, and still carry out their professional responsibilities while working from home, is owing to our collective successes in this domain. Besides, people were able to carry out some of their most basic functions online, including financial transactions from remote locations, and ordering groceries, medicines and other essentials online. Some of our most essential services including school education and healthcare have been delivered online. This pandemic has offered us a peek into what our future is likely to look like, and it will most probably be dominated by contactless deliveries, increased dependence on e-commerce, heightened use of IT enabled services for performing some of our routine functions, and enhanced use of innovative-technology led solutions for resolving some of our most complex challenges.

4. In India, we are distinctly aware of the disruptions that this pandemic has caused in the global supply chains. But our response to this disruption is far from turning isolationist or protectionist. We are well aware that while globalization is here to stay, its norms, however, may become different. The idea is, therefore, to make our systems and our markets highly adaptive to the changing scenarios. We are cognizant of the potential role we can play in a world that is looking at highly uncertain times. To this extent, and to induce reliability into our systems, we are fast developing our production and supply chains to fill in the gaps in the global supply chains, where we have the potential to do so.

5. India’s prowess in the IT sector has been established over the last two decades. The IT and BPM sectors of India account for over 55% of the total global outsourcing market. The sector has continued to record double digit growth despite the static growth in global tech spending. The sector is an important growth driver and contributed nearly 10% to the country’s GDP. Known for its cost competitiveness and high quality services across the world, the IT & BPM industry in India has made a significant contribution to transforming the perception of India in the world economy. Building on the strength of our domestic IT industry and growing demand for going digital, the Government of India (GoI), launched the Digital India Mission, under which we have been striving to transform India into a digitally empowered society and knowledge economy. Several mega IT projects have been undertaken by the Government. IT solutions in the domains of education, healthcare, urban planning and financial inclusion are focus areas of the program and this is creating several opportunities for the IT sector.

6. In the Government of India, our focus has been to increase the use of technology and digitalisation to reform our Governance, and increase financial inclusion to strengthen the social and economic standing of our people. Under the Digital India Mission, several Government services have been brought online to allow greater accessibility, promote transparency and increase accountability. India has rapidly developed, deployed and scaled-up a number of national digital platforms as part of the effort to move towards digitalization, take governance directly to the people, and facilitate "less government – more governance”.

7. A number of e-Governance platforms and open source platforms have been developed by the Government, public sector and quasi-public sector organizations in collaboration with scientific establishments and NGOs to provide vendor-neutral and inter-operable solutions, where feasible, along with development of commercial partner ecosystems. Today, India has been able to bring about issuance of Unique Identification numbers to over 1.25 billion people, with almost 99 percent coverage of adult population in India. There are several digital services that have been developed by India over the last few years, by platforms such as NICSI, UIDAI, NSDL, IFTAS, CDAC, NPCI, etc.

8. The creation of public digital infrastructure has helped make the delivery of public services and welfare benefits, particularly during the current crisis, quicker and more effective. Direct Benefits Transfer (DBT), enabled by JAM (Jan Dhan, Aadhar and Mobile), has ensured delivery of cash benefits directly into the account of beneficiaries, eliminated leakage and improved efficiency. During the COVID-19 lockdown, more than Rs 36,659 Crore weretransferred through DBT in the bank accounts of 16.01 Crore beneficiaries. Cash benefits under the Prime Minister Garib Kalyan Package are also being transferred by using DBT Digital Payment Infrastructure. With the help of tech-driven systems, we are reforming the Public Distribution System (PDS) by introducing nation-wide portability for ration card holders through a ‘One Nation One Ration Card’ system.

9. We have also incorporated greater use of IT and digital systems into the functioning of the Ministry of External Affairs (MEA), and delivering public services. We had launched a performance dashboard last year to bring transparency and accountability across different aspects of MEA’s functioning. Data relating to over 50 different activities of the MEA and diplomatic Missions is displayed on the dashboard. These indicators are related to citizen services delivered by the MEA and the Missions, diaspora engagement, trade & commerce, international engagement, and development partnership. MEA is also using digital platforms such as e-Migrate to facilitate easy and secure emigration, and the MADAD portal for online grievance monitoring and redressal. Passport and visa services have also been reformed through increasing digitalization. We have also set up an online portal for smooth coordination between different stakeholders and real time monitoring of the Vande Bharat Mission. MEA has also been a pioneer in embracing social media platforms. This is in keeping with the overall objective of the Government to enhance transparency and efficiency.

10. Fintech has been identified as a new and emerging area of bilateral and multilateral cooperation. The IMF had last year identified financial innovation as an important aspect of our future in the digital age. It was also highlighted that most countries see Fintech as transformative for financial inclusion, which promotes growth, opens access for poor and rural communities through lowered costs and facilitates women’s participation in the formal economy. This offers an opportune moment for India’s tech based companies and start-ups looking for opportunities across the world. Even though there has been negative impact of the current crisis on the Fintech sector as well, recent trends look promising. There was an increase of around 40% in the funding received by the Indian Fintech sector in the first quarter of 2020.

11. In the MEA, we are planning to build on our domestic successes in the Fintech sector in a structured manner and utilize the significant capabilities that have been evolved and developed in the domestic government, public and private sectors in executing similar digital platforms and e-Governance initiatives in friendly and partner countries as part of Development Partnership Frameworks to project India’s soft power and for commercial benefits. We are planning to undertake pilot projects for digital platforms / e-Governance initiatives in friendly and partner countries as a prelude to making available such projects through development partnerships /commercial frameworks on a wider scale. We are working with several countries on making our digital payment systems interoperable. Countries like Singapore have already launched some of our digital payment systems such as Rupay and BHIM. You would also recall that in 2018, the Prime Minister had launched a global digital platform, APIX, to connect Fintech companies and financial institutions.

12. Besides, our diplomatic Missions have been working in collaboration with line Ministries and State Governments to carve out a place for India as a reliable alternative in the space of low cost manufacturing. The Missions have been instructed to promote India’s image as a safe and reliable destination where all investment related requirements can be facilitated for the manufacturing units planning to shift their base to India in the post-COVID situation. In this regard, our Missions have been requested to provide us with detailed inputs on the Non-Tariff Barriers being faced by Indian exporters in their respective countries of accreditation. The Missions are also working to identify newer lines of goods and services as well as new destinations where India’s exports can be enhanced.

13. We have also leveraged digital tools to facilitate health cooperation with SAARC countries during the current pandemic. We are using e-ITEC network to share expertise on COVID-19 with healthcare professionals from these countries. We have also developed a ‘SAARC COVID19 Information Exchange Platform (COINEX)’ for exchange of specialized information and tools on COVID-19 among health professionals in the region.

14. In order to promote a seamless flow of goods and services in the region, the MEA is focussed on completing several of the strategic connectivity projects that we have already undertaken in the region. Several cross-border connectivity projects under Indian assistance are at varying stages of implementation, especially with Bangladesh, Myanmar, Nepal, Sri Lanka and Afghanistan. Their speedier conclusion will enhance regional connectivity and promote seamless flow of goods and services between India and its immediate neighbourhood. Indian development assistance for such connectivity under grants and Lines of Credit extends to the development of roads, rail, inland waterways, shipping, energy and aviation links. Enhanced connectivity is expected to deliver medium to longer term returns in the form of better market access and primacy of India as a sourcing provider of choice.

15. In the changed times and in the event of disruptions in our supply chains, countries around the world will be looking for maximum diversification of their production and supply chains in the medium to long term, weaning away from extreme dependence on any one particular country or region. This offers us with an important opportunity. Developing India into a low-cost manufacturing hub will help us position ourselves as the preferred investment destination. India’s highly functioning democratic systems and high levels of transparency in governance are our prime assets which are important to build investor confidence. Combined with the ease of doing business and easily accessible capital, India is a promising manufacturing destination. We have to bank on our strengths and plug in the gaps, wherever possible.

16. Our industries and business chambers are an important part of our economic diplomacy and global economic outreach. Broadly, the Indian industry is expected to think of business and lifestyle models that were easily adaptable, ensuring that business and commerce can run smoothly, even in the times of a crisis. Over-reliance on a particular country or region for sourcing our imports, or as markets for our exports, requires a re-think. The need of the hour for businesses and industries across the world is to ensure that our global supply chains remain efficient and resilient, during and after the times of a pandemic. Companies and industries, across the world and even in India, are being pushed to ensure that their resilience capabilities are developed in order to face the repercussions of unexpected events and to maintain elasticity helping them to return to the original state of business quickly. This will require initiatives that restructure the internal working of the businesses and their wider networks.

17. Additionally, we have to remain aware of the fact that the domestic demand potential in India, which remains largely untapped, is a boon to our economy. It means that we have a large amount of domestic economic potential that does not have to depend on export markets. This is something that our businesses and industries must work to capitalize on. More so, because in the last few months several of the GoI interventions have been focussed on boosting domestic demand by enhancing liquidity in the economy and increasing people’s take-home incomes. This is expected to give a major push to our domestic demand and industries should be ready to make use of the opportunity.

18. Digitalizing our economy for better and wider access has also been a key pillar of the GoI’s recently announced Aatma Nirbhar Bharat Abhiyan, under which the Government has announced plans to leverage IT and IT enabled services for making healthcare and education easily accessible, especially in the times of distress. Building on our experience of the COVID-19 outbreak, the GoI has announced the launch of e-Sanjeevani Tele Consultation Services, and capacity building through virtual learning modules (iGOT platform) in the domain of healthcare. The Arogya Setu self-assessment and contact tracing app launched by the GoI as part of our COVID action plan has been downloaded by over 11 crore people in the country. In the education sector too, technology driven systems have been announced which will help and support school education throughout the country. This is being done keeping in mind the skill requirements of a global 21st century.

19. Let me also briefly touch upon the issue of movement of high-skilled Indian professionals, including those pertaining to the H1B visa programme. There is some anxiety among our people and industry about restrictions on H1B visa as part of the US Administration’s review of their non-immigrant visa regime.

20. As you are aware, the Government of India has closely consulted all stakeholders and engaged with the US Government on this issue. Prime Minister had taken this up, along with the issue of the totalization agreement, during the visit of President Trump to India in February 2020.

21. The onset of the COVID-19 pandemic in the U.S. and the attendant impact on the U.S. economy has led to a change in the situation. We need to adopt a realistic yet effective approach. Accordingly, our approach has been to work at the diplomatic level and deal with each specific issue one at a time. We were able to intervene early on in our lockdown with the US Government on the issue of temporary relief for H1B visa holders whose visas were expiring in this period, on a case-by-case basis.

22. In our engagements, we have emphasized that this has been a mutually-beneficial partnership which should be nurtured. The Prime Minister had also underlined during President Trump’s visit to India that "the most important foundations of this special friendship between India and America are our people-to-people relations. Be it professionals or students, Indian Diaspora has been the biggest contributor to this in the USA.”

23. We have continued to stress that the economic and trade linkages are a strong pillar of our strategic partnership, particularly in technology and innovation domains. High skilled Indian professionals working in the US through H1B and related non-immigrant visa regimes bridge the crucial skill gap and provide technological and competitive edge to the US companies. We have also highlighted that high-skilled Indian professionals are engaged in the fight against COVID across various fields including doctors, nurses, tech workers developing solutions for companies fighting the epidemic. We hope the review of non-immigration visa by the US Government will take into account the long term benefits of H1B visa for US competitiveness and not affect provision of essential services at this critical hour.

24. This month’s NFAP (National Foundation for American Policy) study has shown that the unemployment rate for workers employed in Computer Occupations was actually lower last month than it was in January 2020. Similarly, the CATO study’s results on H-1B employers paying the professionals about 20% higher than the average market wage have also been highlighted. We have been highlighting these studies to our interlocutors.

25. It is important to remain engaged with all stakeholders and decision-makers/influencers, including the United States Congress. We would be happy to continue our work with NASSCOM on these issues.

26. As we have repeatedly emphasised, the COVID pandemic is a major black swan event which has disrupted global supply and value chains, slowed down economic activities, and pushed economies to the brink of recession. Yet, it is the digital space which has allowed us to shield ourselves from some of the most drastic economic fallouts of this outbreak. That we have been able to resume a good part of our economic activity can be attributed to our achievements on the digital front. We are hopeful that building on our capabilities and successes, we will be able to transform this moment of immense challenge into a series of immense opportunities and emerge as the "nerve centre of global supply chains” as envisioned by the Hon’ble Prime Minister.

Thank you.

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