Suresh Prabhu signals focus on new sectors to boost manufacturing, exports
NEW DELHI: Commerce and industry minister Suresh Prabhu has signalled a shift in India’s manufacturing and export strategy, with a focus on new emerging sectors such as genomic, while giving a thrust to export of goods that are not currently among the top 10 items shipped out of the country. The new man in Udyog Bhawan is also banking on India’s political relationships with countries such as Cuba and many in Africa to push exports to new markets.
Prabhu told TOI that India has to put in place its own model as it seeks to increase the share of manufacturing in GDP from the current level of under 20% to increase employment and also help agriculture in segments such as food processing.
“If India has to have a competitive advantage, we can’t keep copying others because that has already been used and become redundant. We have to find India’s own model and we are identifying that in consultation with global experts and our own industry.
It is not going to be easy to increase the share of manufacturing because services will always grow faster. We have to make sure that manufacturing has to keep pace with services growth,” the minister said. Prabhu is working on the launch of ‘Make in India 2.0’ along with a similar scheme for services where the thrust will be on a greater presence in the global arena.
The focus on new areas such as genomic, which will come with specific targets, will be in addition to steps to bolster existing strengths in the manufacturing sector. For instance, development of basic chemicals has been identified as a priority to cut reliance on imports from China.
“It is more like backward integration for the industry.” The success of the plan hinges on investment by the domestic industry, which he admitted was grappling with idle capacity as well as financial stress. He said exports could help use up the excess production capacity and added that there were indications that the strain on the balance sheet was easing as companies de-leveraged.
Although the government is looking to mop up investment to rev up the economy, Prabhu said there was no need to immediately review the FDI regime.
On the export side, the minister said he has flagged some of the issues, including some related to GST, with finance minister Arun Jaitley and indicated that his ministry has demanded more resources.
This comes along with a move to get export promotion councils to chalk out business plans so that sectors beyond India’s traditional focus areas of textiles, engineering and plantations are identified for greater thrust.
While he is reviving focus on project exports through a boost to project financing — especially in West Africa — to take on competition from China, the minister acknowledged that India did not have deep pockets like its neighbour.
‘Pvt sector has driven India’s growth story’
Separately, the idea is to forge partnerships. For example, he has invited Korean companies to invest in the marine space. “They will themselves import, so that will help.
Also, Korean companies have good brand equity, so the Japanese and others will be interested in buying from them. And, we will be able to use their technology and investment to export to other countries.”
Prabhu said that some of the push has paid off as countries such as China have agreed to look at India’s sector-specific concerns with commerce secretary Rita Teaotia heading the task force from the Indian side.
Besides, a comprehensive review of the regulatory architecture is under way to identify rules that are hobbling domestic companies.”India’s growth story is a private sector-driven growth story as many of the restrictive practices which were impeding their growth were removed since 1991. We will allow this spirit to grow. I have appointed a regulatory review committee under the chairmanship of secretary, industrial policy and promotion.
This will allow unleashing of entrepreneurial spirit. We will make software by removing hurdles, hardware by providing space and partnering with states.”
(This article was originally published in The Times of India)