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Trade war will help India become trading, manufacturing base: Jaitley

Trade war will help open up opportunities for India as a trading and manufacturing base, says finance minister Arun Jaitley.

business Updated: Sep 28, 2018 13:34 IST
Trade war,Arun Jaitley,India economy
Finance Minister Arun Jaitley at his office in Delhion September 27, 2018. (PTI)

The global trade war has created “initial instability” but will gradually open up opportunities for India as a trading and manufacturing base, said Finance Minister Arun Jaitley on Friday.

Experts say that the trade war between the United States of America and China could make Indian machinery, electrical equipment, vehicles and transport parts, chemicals, plastics, and rubber products competitive in the American market.

“The trade war initially created instability, but eventually may open up greater markets. They will open up India as a bigger trading and manufacturing base and, therefore, we must closely watch the situation as to when the challenge turns into an opportunity,” Jaitley said in a video conference speech to the annual session of PHD Chamber of Commerce.

Jaitley said rising oil prices pose a challenge for the economy, as India is a net importer of crude oil. India is the third-largest importer of crude oil, and rising international crude oil prices are inflating domestic transport fuel rates in a strong demand environment. Brent, the benchmark for half of world’s oil, climbed to $80 per barrel from $71 in the last five weeks.

“Not withstanding these challenges, I’m quite certain that in the days and years to come, there are great opportunities for India in order to grow,” he said. Asking businesses to be ethical, Jaitley said the Insolvency and Bankruptcy Code (IBC) will shut the doors on “fly-by-night” operators.

“While free trade is allowed the emphasis also has to be on ethics of the business. Those who should be paying taxes must be paying taxes and the taxpayers should not be burdened with those who evade taxes. Therefore, one of the most ethical practices has to be to bring in those who evade taxes within the tax net,” he said.

“It will pay to be ethical - that is the kind of culture we are trying to introduce and that is the kind of culture Indian businesses should encourage,” he said.

First Published: Sep 28, 2018 13:14 IST