India Has Bright Future, Those Who Hike Trade With It Will Too: Piyush Goyal

India and the US are very consequential democracies and, given the relationship between the people of the two countries and between Prime Minister Narendra Modi and President Donald Trump, he is not worried about the recent tensions over tariffs, Union Commerce and Industry Minister Piyush Goyal has said. 

At the NDTV Profit GST Conclave on Tuesday, Mr Goyal also spoke about the GST reforms unveiled last week and said the government believes it will boost demand, reduce inflation and help the economy grow at a faster rate. The impact of the reduction in GST for many products on the economy, he said, should be visible in the last quarter of this year or the first quarter of next year. 

The minister, who denied any link between the GST overhaul and US tariffs, was asked by NDTV CEO and Editor-In-Chief Rahul Kanwal whether Donald Trump's unpredictability was causing him to lose sleep. Mr Goyal responded that what was keeping him awake was that PM Modi wants him and all other ministers to spend every moment serving the people. 

"We don't have to worry so much about international issues because India is a power in itself now. After all, 140 crore people, who generate demand, are a very big power. Those who miss this are at a loss. The loss is not India's," he said. 

On whether he sees the India-US situation getting resolved, Mr Goyal said the government is doing everything keeping the interests of the country, its farmers, fishermen, the MSME sector and its people first. 

"With that in mind, there are high chances of a good deal. I believe that the US and India are such consequential democracies, such important countries. Our thinking, the mutual relationship between the people, the friendship between the Prime Minister and President Trump, the constant communication between ministers - sometimes it takes time, all good things take time, they come after a lot of hard work and patience. So, I don't worry. I have complete faith that India's future is very bright and this will apply also to countries who deepen their relationship and increase trade with us," the minister said.

Exports

Asked whether the government is preparing a relief package for exporters, Mr Goyal said India's merchandise export is only 10% of India's GDP and the US tariffs will not have a significant impact on that. The exports on which the tariffs have been imposed are only 1% of the GDP, he said. 

"If you deconstruct like this, then you will realise that there are 2-3 sectors, including gem and jewellery, leather goods, shrimp and textiles, where there will be a significant impact. Leather goods worth $2 billion will be affected and shrimp worth $1.5 billion to $2 billion will be affected. So the real impact reduces a lot, unlike the impression some are trying to create... Our imports are higher than exports. So, our GDP is not dependent on exports," the minister explained. 

To a question on whether the US tariffs will complicate investment for foreign companies who want to manufacture in India and export, Mr Goyal said investors know that no other major economy is growing at a rate of 7.5-8%. 

"Tell me another economy which contributes 18-20% to the world's growth. Tell me another economy with the world's highest number of STEM students graduating - about 23 lakh every year, half of whom are women. Tell me another country which has such a young population - or average age is 28.4. There isn't another investment destination which is so compelling. So, the investors will also come to India," the minister pointed out.

GST 2.0

Mr Goyal said he believes the introduction of GST was India's most important reform since Independence and the latest rationalisation is a very important step. The reforms, he said, will reduce inflation, which will result in interest rates reducing and, thus, more money in people's pockets and an increase in purchasing power. 

"The changes in GST will be implemented from September 22. And I believe that probably by the last quarter of this year or the first quarter of next year, its impact will begin to be seen... Imagine, from the time you wake up to the time you go to bed, everything has become cheaper. Whether it is toothpaste, hair oil, cosmetics or beauty treatments," the minister said. 

"This reform will have a huge impact on the economy of India, the livelihood of people, on cost of living, and lead to ease of living. I think it will be a game changer. It will have an impact on every class of society. Whether it is the middle class, the poor, women or children," he added.