Gopal Krishna Agarwal – Gopal Krishna Agarwal

Modi govt. has learned from past FTAs. Its priority now is building a manufacturing powerhouse

July 23, 2025

By Gopal Krishna Agarwal,

With the emergence of new geopolitical realities arising out of the unilateral announcement of reciprocal tariffs by President Donald Trump, the US cannot be considered a very reliable trade partner. And, even if a bilateral trade agreement with the US is concluded, uncertainty about the country’s future actions remains.

Trump had announced a 90-day window for tariff negotiations, which ended on 9 July. He later extended the deadline to 1 August and sent letters to 14 countries informing them about new tariff rates.

India and the US are currently holding talks over a trade agreement, with the sixth round expected to be held in August, when American trade officials will visit India. This shows India’s importance as a trading partner for the US.

There are other ambiguities around Trump’s administrative actions, and no one is sure of the outcome of US courts’ and the Senate’s interventions. Therefore, prudence demands that we go slow and wait for countries such as China, Japan, and Vietnam to negotiate with the US. India, meanwhile, can build strategic partnerships with other countries and blocs to prevent overdependence on the US market. The EU is expected to be stable and predictable in its approach, but India has to deftly negotiate the bloc’s impulse to impose non-tariff barriers under the garb of human and labour rights, environment, climate change etc.

The World Trade Organization is virtually defunct and rule–based trading order looks like a thing of the past. Every country, including India, is negotiating Free Trade Agreements (FTAs) with multiple other nations to protect its export market. In May, India concluded FTA negotiations with the United Kingdom, while talks with the EU and the US are in advanced stages. However, our approach to FTAs cannot be a simple replication of the old template and must be influenced by outcomes of the not-so-successful past trade agreements, such as the ASEAN-India FTA and the Regional Comprehensive Economic Partnership (RCEP) negotiations.

Past mistakes

The global trade and financial architecture that emerged in the post-World War 2 period supported a rule-based trading system. It allowed several poor countries to overcome the limitations of a small economy and tap into the export market. As a result, these countries — like South Korea, Taiwan, and China — were able to experience above–average growth rates for a long period of time. We missed riding the bus of free trade due to earlier policy misadventures like quota, license raj of Congress–led governments. Now our government is committed to make India a manufacturing powerhouse, but the bus of free trade has hit major road bumps.

India is focusing on ensuring competitiveness of domestic industry right now, as there is absolutely no substitute for building the manufacturing sector. Past FTAs failed to yield much benefit because they exposed domestic industries to global competition without strengthening the manufacturing ecosystem through infrastructure development, availability of land and power, and ease of compliances. India needs structural reforms to reduce input costs. The Modi government’s focus is on slashing costs of land, power, logistics, compliances, and raw material to enhance global competitiveness of our manufacturers. Several steps have been taken in the last 11 years by the Centre, but a lot remains to be done at the state–level, as most of these areas are basically dependent on state policies.

Micro, small, and medium enterprises (MSMEs) is an important sector for employment generation and integrating our manufacturing into global and regional supply chains. Therefore, before entering into any agreement, the government is ensuring full support to MSMEs. The MSMEs also have a lot to do at their end, since they face difficulty meeting international standards, which limits their competitiveness. It is important for this sector to build institutional capacity and technical know-how to follow global trade standards. Quality Control Order (QCO) was brought with this intention, but it has emerged as another challenge for Indian industries. QCOs hinder the import of raw materials and intermediate products required for manufacturing, creating a negative impact on the domestic production of goods, and reducing India’s export competitiveness. Therefore, there is a need for a more sector-specific approach to QCOs.

Our recent experiences with custom duties have shown that there is a conflict between imposition of countervailing duties and the interests of MSMEs. Such duties tend to favour big domestic producer industries at the cost of MSMEs which are the users of products that are subject to countervailing duties. So FTAs provide an opportunity for strategic tariff reduction on intermediate goods for the betterment of Indian industries. India will take a data-driven approach in determining tariffs to ensure that they don’t disrupt supply chains or discourage innovation and investment.

Agriculture sector protection, intellectual property rights, and public procurement are critical and form an important part of tariff negotiation. Hence, their interest is non-negotiable. Any concession given in these areas will be carefully evaluated and bargain precisely measured. We know that if India gives concession to one country or region, others would demand similar treatment and privileges. India should not bend over backward to seek concessions for movement of its citizens across borders as service providers. The negotiating countries use this demand to get concessions from India. Indian talent is in huge demand globally and other countries would anyway need Indian expertise. Otherwise, India can harness its human resources and potential to its own advantage.

An opportunity

Major economic decisions are not made in the fog of uncertainty. Global economic uncertainties are not fully comprehensible and controllable, therefore India’s focus is on reducing domestic policy uncertainties. It will surely boost private capital formation. India also has to attract massive foreign capital in export-oriented sectors. But this is easier said than done. The country’s image as a destination for foreign capital faces challenges due to certain decisions of the past government, especially the Vodafone tax dispute. India still has significant work to do in areas like judicial reforms for contract enforcement.

Trade considerations cannot be fully separated from strategic considerations. The China+1 and risk diversion strategy of global manufacturers are an opportunity for India to benefit from current geopolitical challenges, and therefore the country’s focus in FTA negotiations is to counter China. Since China is a major challenge for India in multiple spheres, teaming up with countries at the receiving end of China’s irredentist and mercantilist policies is a viable option. This also means that India should still work for multilateral trade deals because third-world countries get a level playing field as well as some preferential treatment under multilateral trade platforms such as WTO.

Gopal Krishna Agarwal, National Spokesperson of BJP for Economic Affairs

Operation Sindoor won’t hurt Indian economy

May 29, 2025

By Gopal Krishna Agarwal,

The BJP leader addressed fears in some quarters that India’s military response to Pakistan would impact the economy amid ongoing geopolitical tensions and a global tariff war.

Operation Sindoor will not have any adverse effect on the Indian economy, BJP national spokesperson Gopal Krishna Agarwal said on Friday. Addressing a press conference in New Delhi. Agarwal sought to dispel fears in some quarters that India’s military response to Pakistan following the terror attack in Pahalgam would impact the economy amid ongoing geopolitical tensions and a global tariff war.

There will be no negative impact, as India has never had significant economic relations with Pakistan,” the BJP leader said. “On the other hand, as Prime Minister Narendra Modi said yesterday, if Pakistan does not stop terrorism, its economy will be completely destroyed.”

Agarwal emphasised the strength of India’s defence capabilities, underlining that 65 percent of the country’s defence requirements are met through domestic procurement. India’s PSUs -long seen as a liability- have shown exemplary market performance and profitability, especially in the defence sector, with defence exports also rising rapidly, he said.

“You will find companies like Hindustan Aeronautics and Mazagon Dock have orders booked years in advance,” Agarwal said. “The BrahMos missile and the HAL Tejas combat aircraft have acquired a global reputation.”

He also highlighted India’s growing global engagement and strengthening diplomatic ties with the United States and European nations. Agarwal referred to PM Modi’s statement during the Russia-Ukraine war, in which he tweeted, “This is not the era of war.”

“This assertive message echoed globally, urging both nations to resolve their issues through dialogue. His call for peace received significant international praise and support,” Agarwal added.

The BJP spokesperson also referenced External Affairs Minister S Jaishankar, asserting that India seeks equal partners, not “preachers.”

India’s global confidence is growing.

He noted that growing global confidence in India is mirrored in domestic stability. Despite rising inflation worldwide, India has managed to keep price inflation under control at 4.4 percent, lower than the RBI’s target band. While fiscal deficit levels have reached alarming levels in countries like the United States, India has kept its deficit under control. Agarwal also noted that India’s foreign exchange reserves stand at $700 billion, even as the country continues to attract significant foreign direct investment.

He also pointed to global praise for India’s Digital Public Infrastructure, especially at the G20 summit held in 2023. This includes the Direct Benefit Transfer (DBT) scheme, which directly transfers welfare benefits into beneficiaries’ bank accounts. He highlighted the exponential growth of India’s capital markets, citing Morgan Stanley reports that project India’s capital market-currently at 81,000-to reach 1,00,000 by 2026.

The BJP leader acknowledged that challenges remain, particularly due to the ongoing global tariff war and its disruptions. However, Agarwal suggested that this may offer India an opportunity to present itself as an alternative global manufacturing hub, referencing Apple’s recent substantial investment in Bengaluru.

“Compared to our competitor countries, our reciprocal tariffs remain low. We will take advantage of this.” Agarwal said. He also noted that, according to the RBI’s May bulletin. India’s manufacturing sector is expected to remain strong even if the country does not become a global manufacturing hub-thanks to its robust domestic consumption base.

The BJP leader also referenced the recent HSBC composite PMI index for India, which stood at 61.2. Indicating expansion in both the services and manufacturing sectors.

Agarwal cited other reports, including those by Moody’s and Fitch, highlighting India’s strong growth potential. “The economy is driven by perception, and the sentiment around India is very positive,” he said.

The press conference underscored the Modi government’s ongoing commitment to fostering economic growth through strategic reforms and policy initiatives. The creation of the Deregulation Commission aims to reduce bureaucratic hurdles and improve the ease of doing business, aligning with Finance Minister Nirmala Sitharaman’s recent warning against overregulating enterprises and the role of the Competition Commission of India. Efforts are also underway to implement labour law reforms at the state level and to accelerate the finalisation of trade agreements, thereby enhancing India’s global trade prospects. At the same time, significant initiatives are being rolled out to expand the country’s renewable and nuclear energy capacities.

(The writer is National Spokesperson of BJP)

NATIONALISM, DEMOCRACY AND POLITICS

May 27, 2025

By Gopal Krishna Agarwal,

Amidst the ever-changing dynamics of global and internal politics, Prime Minister Narendra Modi shows how a leader should paddle the responsibilities of nation on one’s capable shoulders.

BY 2014, Bhartiya masses were absolutely fed up with the tyranny of the unelected bodies like National Advisory Council (NAC), judicial overreach and political corruption and voted in the national democratic alliance (NDA) under Narendra Modi with a thumping majority. People wanted a strong leader who was proud of Bharat’s heritage, practices and tradition, assured the sanctity of its international borders and guaranteed peace within, and follow the policy of Nation First.

FEAR MONGERING TACTICS

Fears were raised by the opposition that if BJP under Modi was voted to power, Bharat’s relations with Islamic countries, especially the vital Middle Eastern Block, would nosedive. None of these preposterous prophecies came true. In fact, over the years Bharat’s relations with Gulf countries has seen significant improvement. The first Hindu temple in the region was inaugurated by PM Modi in Abu Dhabi. Happy with the performance of the Modi government, people have voted him back to power for the third successive term. However, the opposition parties, particularly leader of opposition Rahul Gandhi, are leaving no stone unturned to undermine Narendra Modi to the extent that he continues with is anti-Bharat tirade in alliance with international Left-liberal forces.

REBUTTAL BY BIGGIES

Now, it seems that the nightmare of Left, social democrats and self-certified liberal leadership across the world is not going to end anytime soon. They cannot ever fully recover from the speeches from Prime Minister of Italy Giorgia Meloni, US Vice President JD Vance and President Donald Trump made in the recent past Right leaning leaders are speaking their mind, and this has encouraged candour and free speech across the globe. The Left is in retreat.

In her speech at CPAC in February this year, Meloni mentioned that Bill Clinton and Tony Blair created global leftist liberal network, and they were hailed as statesmen by this cabal. Today this same associated group, with its tentacles spread to academia, media, film and television industry brand popular conservative leaders like Modi as threats to democracy. The moral hectoring that the voters in any country that votes for a conservative, right leaning government receive is unbelievable.

INTERNATIONAL POLITICAL DYNAMICS

This is also very much evident right now in Germany where a new party Alternative for Germany (Afi)) has emerged as a popular choice. AFD prioritizes German sovereignty and culture and Western values, and the traditional left leaning parties feel threatened.

However, instead of responding to the wishes of the people, as a party is expected to in a democracy, the incumbents looked for ways to keep AID out of the electoral fray. In December last year, the Romanian presidential election was annulled by its top court on flimsy ground of Russian influence only because the winner, Calin Georgescu was considered far-right and a NATO critic. He was later declared ineligible to contest elections by the Central Electoral Bureau of Romania, and the decision was upheld in Romania’s constitutional court.

The latest in this series is the conviction of France’s right leaning leader Marie Le Pen on the charges of diversion of public funds for political purposes. She has been declared ineligible to contest election for five years. Effectively ending her political career. The playbook of the Left is simple: keep patriotic leaders away from contesting elections by unleashing a witch-hunt against them through their ideological partners in the judiciary. This allows these parties to maintain a façade of being democratic while ensuring that mass leaders do not get elected.

THE PROBLEM OF LEFT

Why is it difficult for the Left to accept that faith, practices and tradition matters to most of the people even today? Is it because they see these values as obstacles in their aim to capture the state and its instrumentalities? The idea of political correctness is also strange. Something that is obvious and appeals to common sense becomes politically incorrect just because the Left does not approve of it. Anything that is consistent to Left’s worldview becomes politically correct!

Whatever it may claim, one must understand that Leftist ideology is intrinsically anti-national and anti-democratic. It believes in complete capture of state machinery to perpetuate their rule and relies on woke ideology to brainwash the young and the impressionable. They do not believe in the ability of people to decide for their own selves.

TROUBLING RESEMBLANCE IN BHARAT

We see disturbing parallels in Bharat. Congress believes and acts as if it has the natural claim to rule over Bharat. It refuses to accept electoral verdicts and attacks the institution of the Election Commission of India and the EVMs when it loses. It shows similar attitude towards investigation authorities, as in the National Herald case and even judicial pronouncements, undermining court orders when they are unfavourable to them. In January this year, Rahul Gandhi declared that the Congress Party is not only fighting the BJP and the RSS but the Indian State itself!

A global coalition of the Right, something the Left would claim to be an oxymoron, is gradually emerging. Countries would continue to engage with one-another prioritising their national interests. It only implies that the governments would be more responsive to the needs and aspirations of its own people. This is true democracy at work. During his current official visit to Bharat, US Vice President JD Vance said, “President Trump and I know that Prime Minister Modi is a tough negotiator. It’s one of the reasons why we respect him” Strong national identity and conservative leanings do not preclude global cooperation. PM Modi is a global icon of popular conservative leader and has forged strong relations with other global leaders. It bodes well for Bharat’s global standing and its future role in current geopolitical scenario.

Need to Maximise valuations just selling off loss-making PSUs not the answer

May 20, 2025

In pre-budget parleys with Centre, party offers suggestions on boosting valuation

Improved corporate governance, restraint in setting out targets and monetization of assets are some of the suggestions from the BJF to the government to improve valuation of the PSUs as part of a better divestment policy.

The ruling party also believes that the disinvestment of the LIC is not advisable.

Talking to BusinessLine, the BJP’s economic affairs spokesperson, Gopal Krishna Agarwal, said concerns and solutions about the continued low valuation of the PSUs have been conveyed to the government in the post-pandemic resource crunch. The focus on the middle class will not exactly result in direct tax concessions. It believes tax incentives to boost consumption are a better idea.

“How does one generate resources when fiscal deficit is already quite high and the borrowings have also gone up? The only alternative for resource generation is divestment. The issue is, even when the capital market is booming to almost record highs, the PSUs are still not getting proper valuation. We believe large-scale tweaking is required. The Government has to look into the reasons,” Agarwal said

Lessons learnt

Citing the instance of Hindustan Zinc Ltd (H21), where the valuation went up post-divestment, Agarwal said corporate governance needs to be factored into any future policy regarding divestment.

“One of the important suggestions from the capital market is corporate governance. Also, we believe that the idea of the Government clearly setting out targets is also counter-productive. People know that this is coming for sale, and there is a supply overhang. Monetization of assets is also critical,” he said.

Policy for strategic sale

According to Agarwal, an overarching policy is required for strategic sale and maximising valuation. He said simply selling off loss-making PSUs is not a good option. He also categorically said that the party is not in favour of selling LIC.

“Five or six years back, perhaps Air India was getting a good price and attracting buyers. Now with a liability of 160,000 crore, who will buy it? We should not always think of offloading a loss-making company. A strategy is required. We have to learn from examples such as HZL, where the valuation went up because of corporate governance. In case of LIC, we do not believe it should be disinvested. LIC is a holding company,” he said. He said while focusing on giving incentives to middle class, the suggestion is not to give any reduction in taxes.

“We have not suggested any reduction in taxes because already taxation limits for corporates and individuals has been brought down. Relaxation in saving limits is an option as is tax incentives to boost consumption.

Gopal Krishna Agarwal, BJP’s spokesperson Economic Affairs

Integrating the Concepts of One Person Company, Small Company, Limited Liability Partnership and Presumptive Taxation to facilitate ‘Ease of Doing Business’.

February 24, 2015

The instrumentalities of One Person Company (OPC), Small Company, Limited Liability Partnership (LLP) and Presumptive Taxation are present on various statute books of India. Their application, however, has not been uniform. OPC and Small Company in the Company Act provide the benefit of limited liability, LLPs have very limited statutory compliances under the LLP Act and the provision of presumptive taxation as provided under the Income Tax Act greatly reduce the cost of doing business. As the avowed purpose for their introduction is to facilitate the ease of doing business, it is logical that they be applied in a uniform and consistent manner to realize the said objective.

Our Suggestion is if we combine the benefit of these concepts present in the three Acts- Company Act 2013, Limited Liability Partnership Act and the Income Tax Act, we can radically improve the ease of doing business in India. This is possible with minor modifications in respective laws as given in our suggestions below:

Background of respective Acts

1. One Person Company (OPC) The Companies Act, 2013 has introduced a corporate structure for businesses being run by individuals as proprietors, namely ‘One Person Company’ (OPC). Section 2 (62) defines OPC as a company which has only one person as a member. This format allows proprietors not only a limited liability cover but also a perpetual succession.

2. Section 2(85): Small Company

The Companies Act, 2013 also has introduced another format of companies known as ‘Small Company’. As per section 2(85) ‘‘small company’’ means a company, other than a public company

a) paid-up share capital of which does not exceed fifty lakh rupees or such higher amount as may be prescribed which shall not be more than five crore rupees; or

b) turnover of which as per its last profit and loss account does not exceed two crore rupees or such higher amount as may be prescribed which shall not be more than twenty crore rupees:

3. The Limited Liability Partnership Act, 2008 ( the LLP Act)

In January, 2009, the Limited Liability Partnership Act, 2008 ( the LLP Act) was implemented with the objective of permitting partnership firms to operate in limited liability environment on the same lines as to companies formed under the Companies Act. In addition to limited liability cover, partnership firm registered under the LLP Act would be required to file very few information with the Registrar and disclose very limited information. Section 34 to 38 of the LLP Act read with Rules 24, 25 and 27 deal with the disclosure requirements for LLPs. The LLP Act also has provisions for easier winding up and dissolution of LLPs. Section 63 to 65 of the LLP Act read with Limited Liability Partnership (Winding up and Dissolution) Rules, 2012 deal with these issues.

4. Presumptive taxation scheme under sections 44AD and 44AE

As per the Income-tax Law, a person engaged in business is required to maintain regular books of account and further, he has to get his accounts audited. To give relief to small taxpayers from this tedious work, the Income-tax Law has framed the presumptive taxation scheme under sections 44AD and 44AE. A person adopting the presumptive taxation scheme can declare income at a prescribed rate and, in turn, is relieved from tedious job of maintenance of books of account and also from getting the accounts audited.

The presumptive taxation scheme of section 44 AD is designed to give relief to small taxpayers engaged in any business (except the business of plying, hiring or leasing goods carriages referred to in sections 44AE).These provisions cannot be adopted by a person who has made any claim towards deductions under section 10A/ 10AA/10B/ 10BA or under sections 80HH to 80RRB in the relevant year.

The Company Act, 2013 does not give relaxation to an OPC as well as to a Small Company with regard to filing of documents and disclosure of financial information as much as has been given to a LLP under the LLP Act. The companies Act, 2013 also does not have easier winding up and dissolution provisions for OPC and Small companies as has been provided to LLP under the LLP Act. On the other hand the benefits of provisions of presumptive taxation are available only to individuals and do not extend to either to OPC and Small Company or to LLPs.