Highlights of address by Ambassador Raveesh Kumar at Finland India Business Association 27 October 2020

• Covid continues to dominate all shades of conversation. The Covid crisis has pulled down the global economy together and given the interdependence of today’s world, no country can come out winner alone.

• India was one of the first countries to put up a concerted, comprehensive action plan to stop the spread of the virus and limit the number of COVID-19 infection. India announced a complete Lockdown even before the number of the COVID cases in the country touched 500 giving us much needed time to put the systems in place. More than 17,000 dedicated Covid facilities were set up with 1.6 million isolation beds. 1.1 million people are being tested daily in almost 7000 centres. Digital tools are being used extensively for contact tracing. What this meant for India was a high recovery rate and a low mortality rate.

• The Government came forward to extend support to the marginalised sections of the society, supporting small business and giving direct food subsidy to the most vulnerable. It provided free food grain to 800 million people and free cooking gas to around 80 million families. And for a long time despite disrupted logistics, we are able to deliver money directly into bank accounts of more that 400 million farmers, women, poor and needy people within a matter of days.

• India decided to actively convert the crisis into an opportunity. Even during the pandemic, it ramped up its pharmaceutical production – especially of hydroxychloroquine and paracetamol – to respond to growing global demands. In fact, we supplied medicines to 150 countries, more than half on a grant basis. Our medical teams were deployed in four of our neighbours who were in distress. We want to help the entire world when it comes to vaccine production for Covid-19. There are three leading vaccine candidates from India – Bharat Biotech, Zydus Cadila and Serum Institute in collaboration with AstraZeneca in different stages of trial.

• Hopefully, the worst on the corona situation in India is over. The number of daily infections has come down and is on a consistent downward trend. We have the prevalence rate in a two-week period lower than many countries in Europe. Economic activities have been opened up with each unlock phase and so has the easing of restrictions on movement of people and transport.

• Latest figures clearly indicate that the economy is on its recovery path though it may still take a while for all indices to return to normal.

• Exports in September posted 5% YOY growth, while imports regained 80% of normal volumes.

• Economic activity was pegged at 93% of pre-pandemic levels while the business activity index also accelerated during the month.

• Manufacturing activity was a bright spot, with the purchasing managers index rising to 56.8 — the highest reading since January 2012 — on the back of a sharp expansion in new work orders.

• The automobile and two-wheeler segments also registered a healthy performance during the month. For September 2020, total domestic tractor sales were 108,649 units, a growth of 28.4 percent compared to the same period last year. signalling strong demand from the rural economy.

• The petrochemicals and financial services industries have also witnessed an upturn.

• Activity in the dominant services sector continued to recover, with the main index rising to 49.8 in September from 41.8 in August – a marked improvement from April’s record low of 5.4.

• Several other high-frequency indicators like PMI data, GST mop-up, toll collections, e-way bills and power consumption have shown an uptick in September.

• A gradual resurgence is evident across most sectors. We are looking at a sharp V-shaped recovery next year.

• Foreign Direct Investment (FDI) has been stellar, even in these times of economic stress. Between April to August, India attracted almost $27 billion, highest ever in a five month period. This is coming on the base of an already very good previous year when India attracted close to $74 billion, its highest ever. The stock market has been performing spectacularly and in October, India was among the top three stock markets among emerging economies with average market capitalisation increasing by 7.8% to $2.1 trillion.

• Several reforms have been announced in the last few months.

• Fully commercial, private coal mining is now allowed in India, reversing an almost 50-year-old ban.

• The agriculture sector has been freed from the clutches of over regulation. The farmers are now free to sell wherever they want and at whatever price they can command. An almost $15 billion planned investment in the sector will start fructifying in the coming months.

• The FDI limit in India’s defence sector, through automatic route, has now been raised from 49% to 74%, thereby ensuring management control for foreign investors and making it attractive for them. On case-to-case basis it can even be 100%.

• The production linked incentive scheme for electronics manufacturing, which ended on July 31, was a huge success attracting all the top names from the industry, with a combined proposal to produce mobile devices and components of over $150 billion in the next five years and generating almost 1.2 million jobs. A total of 22 companies applied under the scheme including five international brands — Samsung, Foxconn Hon Hai, Rising Star, Wistron and Pegatron.

• A slew of other reforms in the aviation sector and space are also going to significantly contribute in the economic recovery.

• Covid has not interrupted India’s growth story. It continues to be strong today and will be stronger tomorrow. India has risen 142 to 63 in the World Bank’s Ease of Doing Business rankings in the last 5 years. There are opportunities for businesses in Finland for a closer engagement with India.