‘Electric vehicles cannot be dominant in India for now’
To attract more investments, India must bring in structural changes, says Vice-Chairman of US-India business forum
Edward Monser, Vice-Chairman, US-India Strategic and Partnership Forum (USISPF) and President of Emerson Electric, believes that though electric vehicles are going to expand in the Indian market, they will never be dominant. In an in interview with BusinessLine, Monser said for India to attract more investments, structural changes have to take place. Excerpts:
How do you see India’s heft toward renewable energy and alternate sources of energy?
I think India is working towards a hybrid solution. Renewables is going to be an important part of this with solar and wind energy. But coal will be a dominant player in the market with nuclear, and that condition I think will generate secure, stable and sustainable energy for the future.
While America is supporting India’s ambitious energy plans, it has also put India’s solar energy programme in jeopardy by dragging it to the WTO over domestic content requirements (DCR)…
I think solar and wind have a role to play. But, economically this can only be viable with government support, since these cannot be competitive on their own. So, that makes me nervous about the industry and investments. Improvement in solar has happened and projections on the solar side make you believe that something could happen, and that it can be competitive. But, I think, the role it will be playing will be smaller. Renewables will be 20-30 per cent of the entire energy mix, which is important.
Is the US willing to understand India’s position as far as DCR is concerned in its solar programme?
Well, the negotiations are still on, but I think both US and India will find out a solution together. The DCR issue is not unique here. It has been going on in a lot of different markets. We can find a solution in ‘Make in India’ or broadly apply it. But it needs to be significant. It has to be consistent. Then investments will come here. We see India as a manufacturing hub for the region.
India is planning to take a big leap toward the electric vehicles business. Do you think India has the capacity?
There is no electricity capacity yet for supporting a big fleet of electric vehicles. So, I think, gasoline-powered and diesel-powered vehicles will be there for a while. Electric vehicles will expand by 2030-2040, but can never be dominant.
Coming to larger issues, what is the view of the American industry on India’s foreign direct investment (FDI) policy?
Well, in the FDI policy, I think approvals are not so much of a problem as it is about moving the money. In USISPF, we discuss these issues such as if I make money in India, can I take the money out of India? If you make money in India and you have multiple legal entities, can you move the money within these entities? These things are more important than liberalising the FDI policy. These things slow down FDI. The company law has to be changed. So, some structural changes need to happen rather than opening up more sectors for FDI.
Do you think the deadlock in India-US Bilateral Investment Treaty (BIT) needs to be revived?
It is very frustrating. It is not an initiative I expect the US government to push right now.
What could be the likely outcome of the upcoming India-US Trade Policy Forum?
Closing the trade gap will make sense for both sides. Around $128-billion trade is not balanced today. More could be done with advanced agriculture, defence and energy to close the gap. And this is real, it is not theoretical, and it can be done. The goal is $500 billion worth of trade, which is available.
Source: thehindubusinessline
