#3 Tasks That Will Require Prabhu's Immediate Attention He has to come up with innovative solution to increase exports and decrease trade deficit
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Earlier this month, when Suresh Prabhu offered to resign taking the moral reasonability for the recent chain of rail derailments, Prime Minister Narendra Modi advised him to stay put, setting rumour mills afire about the PM's intentions.
As the news of cabinet reshuffle broke, many of us expected Prabhu to be shown the door.
In a move considered to be reflective of political calculations, keeping the poll-bound states in mind, Modi awarded Prabhu the Commerce and Industries portfolio setting all speculations to rest.
While the media across the country did not waste time to term it Prabhu's demotion, the man at the centre of controversy did not seem to bother much about it. He stayed focused and rolled up his sleeves and took up the charge with renewed vigour to revive Indian commerce.
To be honest, the ministry of commerce, earlier under Niramala Sitharaman, is not in a good shape. Apart from the increase in the foreign direct investment (FDI), which has increased from $ 55billion during FY2-15-16 to about $ 60 billion (FY 2016-17), there is no other achievement that the ministry can boost of. These are the three jobs, which will require Prabhu's immediate attention:
The Foreign Trade Policy 2015-2020 and various other initiatives have not done much justice to Indian's foreign trade. The total merchandise trade, which was pegged at $310 billion in Financial Year 2014-15, has come down to $270 billion in FY 2016-17.
The figure is also an indication that small and medium enterprises (SMEs) have not done well last financial year, as their contribution to India's international trade is about 50 per cent of the total value. One can blame demonetization for the recent fall. However, industry experts blame the "ease of doing business' scenario in India.
Prabhu, a chartered accountant, has to come up with innovative solution while implementing Prime Minister's dream scheme "Make In India' to increase exports and decrease trade deficit.
Prabhu will have to negotiate free trade agreements (FTAs) with more than 15 nations or group nations and the list includes European Union, Turkey, Israel and Russia. Indian traders in the past haven't benefitted much from the previous FTAs. So, the new commerce minister has to get them a fair deal which will further contribute to India's international trade.
The commerce minister will have to come up with an action plan to push the World Trade Organization to work on special safeguard mechanism (SSM), which would be used to protect farmers in developing countries like India along with a solution on public stockholding programme.
Additionally, Prabhu needs to push talks on the trade facilitation agreement on services, a move initiated by India. The next WTO meet is due October 2017, which the WTO's biennial ministerial is expected to held end of the year in December in Argentina.