Jaitley said the rising oil prices, too, pose a challenge for the economy, since India is a net importer of crude oil.
New Delhi: Finance Minister Arun Jaitley on Friday said the ongoing global trade war may have created “initial instability”, but will gradually open up opportunities for India as a bigger trading and manufacturing base.
Calling on businesses to adopt ethical practices, Jaitley said that entities should pay their due share of taxes as the Insolvency and Bankruptcy Code (IBC) will shut doors on ‘fly-by-night' operators.
Speaking at the annual session of PHD Chamber of Commerce, Jaitley said some global trends do “adversely affect” India, but going ahead they will open up avenues for the country to grow faster.
“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 his video conference address.
Experts say that the ongoing trade war between the US and China could make Indian products, like machinery, electrical equipment, vehicles and transport parts, chemicals, plastics and rubber products, competitive in the US markets.
Jaitley said the rising oil prices, too, pose a challenge for the economy, since India is a net importer of crude oil. India is 81 per cent dependent on imports to meet its oil needs.
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 USD 80 per barrel from USD 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,” the minister said.
Asking businesses to be ethical in their practices, Jaitley said post the IBC, doors will be shut on “fly-by-night” operators and those with ethical practices will find a much greater opportunity to continue their businesses.
“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,” the Minister said.
The IBC, Jaitley said, has imposed a new ethics on Indian businesses when you take money from lenders you have to service the debt, it can't be that the lenders spend sleepless night after lending money to Indian businesses.
“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.