This article brings out the insights from ISB-MEA conference on Economic Diplomacy held on May 06, 2018 at Indian School of Business, Hyderabad, India. The conference mainly discussed the free trade in the world, Indian economic scenario, impact of foreign policy on Indian Economy, most critical aspect in current days, i.e. water diplomacy with the growing global warming; and Smart Cities and Sister Cities Engagement in India.

Globalization: World trade is worth $17 trillion. Data became new oil of globalization. Data is the driver of globalization. Economic diplomacy is to procure resources, and to secure the resources. It is more than typical trade and tariff regime in current days. The drivers for global economic growth are the global labour movement and FDI (Foreign Direct Investment). The countries doing well in economic diplomacy in emerging markets include China and Brazil. China, Taiwan and South Korea became hubs for manufacturing and typical assembly is happening in India. The drivers for global economy include investments, FDI, economic partnerships and investor partnerships. The current generation is seeing world class incubators. Investment attraction depends on collaborative approach. For example, InvestInCanada Hub provides single window services. For instance, India’s contribution to London include Economy, Culture, Technology, Academia, Cricket and Food.

Indian Specifics: Our major concentration should be in improving infrastructure with air, sea and land connectivity. This can improve the supply chain in the country. Specific to India, we need to fast track on technology infusion, SMEs (Small and Medium Size Enterprises) growth, and manufacturing. Manufacturing proved to the most stable sector anywhere in the world. Design in India and Market everywhere in the world. India should extend regional cooperation with Sri Lanka and Bangladesh for economic diplomacy. Indian market is becoming global market. Internal economic system consists of capital, goods and MNCs. Domestic policies should focus on development. Securing energy for Indian should be the priority. Physical connectivity and mobility of workers are also important for India. With respect to data, India has specialized knowledge. It should have control over data, access to technology and control over flow of data.

Sectoral Growth: Pharma, IT and Electronics sectors are picking up in 2018; The exports we are making in IT sector (around $100 billion) is getting balanced with the imports we are making in electronics sector (around $70 billion). Raw material for pharma is coming from China. The conference expressed that we need to identify 10 to 20 sectors of growth for India and economic diplomacy is required in those sectors in procuring raw material. For example, Maruti has 49% market share in auto sector, because of their service/support. Value addition should come in terms of new features to the products in different sectors. Economic diplomacy should lead to building value chain which can be taken to consumers. We need to integrate the entire value chain. Mobile sector in India is headed towards 5G from 3G. Need of the hour to save agricultural sector, improve exports in agri/food sectors. 50% of the Indian workforce works in Agricultural sector.

Water Management: 54% of India, has high or extreme water stress. 17% of the world population lives in India; however we have only 4% of world water resources. Based on increasing consumption, growing population and increasing income level, we need to produce more agricultural/food products in near future. The climate change, global warming, increasing population, increasing temperatures and urbanization are becoming key aspects in water resources management.

Specifics to Telangana: In Telangana state, 42% of the population lives in Urban areas. Hyderabad is becoming life sciences capital of India. Telangana is promoting young entrepreneurs with T-Bridge program which opens avenues to US/UK markets.

Specifics to Andhra Pradesh: State of Andhra Pradesh has setup AP Economic Development Board (APEDB). Under APEDB, they made around 100 tours for investments. The typical statistics were like this: For each tour they spent around Rs 30 crore; and the average investment commitments they got were around Rs 70,000 crore. In last 4 years (FY2015-FY2018), they could get investments worth Rs 4,00,000 crore to AP. The secrete behind AP’s no.1 position as investment destination in India include: e-cabinet, e-budget, 740 govt. services online, internet connectivity in entire state, doing research for foreign collaborations, and focused follow up after the events.

Current Challenges: The current challenges for economic diplomacy include Artificial Intelligence, Robotics, Big Data, Internet of Things, E-Commerce, Renewable Energy, etc. To handle these challenges, India has Digital India, Smart Cities, Startup India, Skill India, etc. The current day challenges in global economic scenario, are coming in various formats including regional formats.

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