Questions from the monthly magazine "Employer"

January 23, 2006

1. What is the position of India in modern world, in particular in Asia? How difficult it was to overcome hardships of transitional period to the modern market state, taking to the account such not favorable historical factors as state of former British colony, numerous population, inter-ethnic and inter-religious conflicts etc?

As a colony of the British for almost two hundred years until we became independent in 1947, we obviously did not have the freedom to shape our own political and economic destiny. During that period the interest of India, including of our economy, was inevitably subordinated to the interest of our British rulers. That changed when we won independence.

The biggest challenge we faced in the early years of independence was choosing a development path that would best suit our own circumstances. Our founding fathers were farsighted and wise. They recognized that for rapid social and economic development, India had to quickly build up an industrial infrastructure, develop a scientific and technological base, promote education including tertiary education, develop the agricultural sector, and put in place socio-economic programs that would ensure that the fruits of development reached the widest cross-section of our population. They recognized the importance of equity and justice in a democratic society that guaranteed full freedoms, including economic freedom.

While we drew from socialist economic models to ensure that investment in critical sectors was not neglected in the infant industrial economy of newly independent India, economic freedom enjoyed by our people ensured that our economy continued to benefit from the entrepreneurial genius of our people. Our economy, post-independence, remained essentially a market driven one even if state enterprises began to play an important role in certain core sectors. Clearly, our leaders of that period were not dogmatic. Mahatma Gandhi once declared that his vision of a free India was a nation that would be open to the myriad influences of the world, but not one that would be blown off its feet.

Nor did India reject everything linked to our colonial experience. Our founding fathers' vision of India was a nation where tradition co-existed comfortably with modernity. They recognized, for example, the advantages of modern education, and of retaining English as one of the many languages that would flourish in modern India. Its role in fostering higher education was clearly recognized, in particular in science and technology - an area that newly independent India accorded high priority to. English would also serve as an effective medium of communication, within the country and outside.

Needless to say, this would not be at the expense of our own languages. Our linguistic diversity was an important dimension of the richness of our society. It was important that our many languages should flourish in independent India. We remain justly proud of the fact that people of different faiths, languages and ethnicity meld almost imperceptibly to produce a fabric at once striking because of the richness of its diversity, as it is harmonious because of its underlying unity.

I, therefore, do not see our diverse ethnic and religious make-up as a handicap, as your question might suggest, but as our strength. To be sure, there have been some conflicts during the almost sixty years that we have been independent. While I would not wish to underplay those unfortunate incidents, I think the real story is how wonderfully integrated Indian society remains, and how our cherished ideals of equality, democracy, freedom, and secularism have combined to create a dynamic and vibrant society that is today brimming with promise as it looks to the future.

Thanks to the investment made following independence in different social and economic sectors - including by building institutions - a solid foundation was laid, which yields rich dividends today. India today is a country producing millions of educated, skilled and technologically accomplished citizens every year. By 1991 our private entrepreneurs had clearly demonstrated that they were well equipped to enter nearly every sector of the economy and make efficient investment decisions. Following wide-ranging economic reforms undertaken since then, the Indian market has truly come into its own. With a growth rate of almost 8%, our economy is among the fastest growing in the world today.

Our founding fathers were, indeed, farsighted in not rejecting the legacy of the English language after independence. It has contributed to the positive growth of an English educated workforce, which constitutes more than 50% of the population of over 1billion. It has played no small part in building our strengths - in sectors such as IT, Telecommunications, Pharmaceuticals, Biotechnology, Services and several other sectors. Based on Purchasing Power Parity (PPP), India is the fourth largest economy in the world.

2. What countries are the most important, the most prospective strategic partners of India? How do you estimate the present level of cooperation between Ukraine and India? In what spheres and at what level it is expedient to develop business and economic cooperation?

I think I can say with full sincerity that ours is a very balanced foreign policy. We have excellent relations with each and every continent, be it Asia, Africa, America or Europe. We have more than 160 Diplomatic Missions around the world, which testifies to the importance we place in building bonds of friendship with every country in the world.

To be sure, some aspect of cooperation may be more important with respect to one country than another. Since yours is an economic magazine, I presume you are speaking of importance from the economic perspective. It should come as no surprise that from that perspective our most important partners are the EU, United States, the Gulf, China and Japan.

As for cooperation between India and Ukraine, they go back many decades. Ukraine was an important development partner of India when it was a part of the Soviet Union. Ukrainian engineers played an important role in the establishment of several of our major steel plants, for example. Indeed, historians tell us that our relations go back many centuries, that there might exist some common ethnic and linguistic roots between India and Ukraine.

Be that as it may, at present, bilateral trade and economic cooperation is growing rapidly every year. Bilateral trade between India and Ukraine was US $ 356 million in 2003. It doubled to US $ 728 million in 2004. In 2005 it almost certainly crossed US $ 1 billion, given that as of November 2005 it already reached US $ 947.47 million. During the visit of the President of India to Ukraine, Dr. A.P.J. Abdul Kalam, it was agreed by the two presidents that bilateral trade should target the figure of US $ 5 billion by the year 2010. I am optimistic that this target would be reached. Today, India is a major buyer of your steel, chemicals and fertilizers, and machinery. Our major exports to Ukraine are pharmaceutical products.

3. Is it expedient for Ukraine to integrate to various international structures (WTO, EU, NATO)? What is the Indian experience in this aspect?

It is the sovereign prerogative of each country to decide its foreign policy, and so it would not be appropriate for me to comment on which international bodies and organizations Ukraine should be a member of. I will say, though, that in our globalized world of today, there are many advantages of being a member of an international trade body like the WTO. Which is why one sees virtually every country that is not a member of this body keen to join it. We have, I might point out, completed our bilateral consultations with Ukraine and would are ready to welcome Ukraine to the WTO.

4. In what spheres Ukrainian-Indian joint ventures can be created? What are the prospective of Indian business investing into Ukraine's economy and Ukrainian business into India's economy?

Indian investors are keen to invest in Ukraine, and we have a few joint ventures in steel and pharmaceutical sectors, in Lugansk and Sumy regions. We also have a joint venture in Tourism, again in Sumy. Ukraine has helped India in many sectors, including, for example, in renovation of coke-oven batteries of our steel plants set up during the Soviet era with the assistance of Ukrainian technical experts. There is enormous potential for joint ventures in many other sectors. It is important also to foster people to people contact to realize this potential in practical terms. We need to encourage exchange of businessmen and facilitate their travel, including by simplifying visa procedures for travel between the two countries. Indian culture, I find is very popular here, including classical dance and music and Bollywood films. We have plans to celebrate the "Year of Indian Culture in Ukraine" and "Year of Ukrainian Culture in India" in the year 2006.

5. What specific assistance and to whom does your Embassy render in development of Indian-Ukrainian business contacts? What specific projects are of interest of Indian businessmen in Ukraine and Ukrainian in India?

Our Embassy renders all forms of assistance to Ukrainian and Indian businessmen to establish contacts with each other by providing information of exporters and importers dealing with specific products. We also arrange, with the assistance of the Ukrainian Chamber of Commerce and Industry, Buyer Seller meetings, participation in exhibitions and other similar events. A Joint Business Council has been set up between Ukrainian Chamber of Commerce and Industry and Federation of Indian Chambers of Commerce and Industry and a Joint Business Forum has been set up between Ukrainian League of Industrialists and Entrepreneurs and Confederation of Indian Industry. These two organizations meet periodically to facilitate increased contacts between businessmen, which in turn help resolve problems, if any, and thus increase trade.

6. What can you say on organizations and associations (from national to local) of Indian employers? How influential are they? What methods do they use in their work? What are the traditions of trilateral (between employers, employees and government) dialog in India? How the matter of social insurance is solved in your country?

In India we have several employees associations and trade unions which protect the interests of the workers. They are also active in negotiating with the employers and management. As a democratic country, Indian companies and organizations are always keen on resolving disputes through dialogue. There are also provident funds operated by employers, as also by the Central government. Workers in government bodies are also covered by pension schemes for government employees.