Pharma, textiles, jewellery sectors can boost our merchandise exports

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India may have lost out to its neighbours on exports of various products because of lack of scale and technology, but the director general of foreign trade, Anup Pujari, feels national manufacturing investment zones will give a huge push to exports. In an interview with Yogima Seth Sharma, Pujari lists five priority sectors that can take India’s export on a new growth trajectory. Excerpts:

According to you, how does India fare vis-à-vis China in terms of technology and how important is technological upgradation to push up merchandise exports?

China is doing better than India, mainly because they have the mass production capabilities. India, on the other hand, may not be able to compete with China on the scale of production, but we have been upgrading technology to meet the global standards. We have introduced the export promotion capital goods scheme, under which we give rebate on import of machineries. One can argue that this import can be either for technological upgradation, or because these machineries are available at a cheaper rate elsewhere. Studies have found that majority of the machines imported under the scheme are the ones that are technologically advanced and not available in India. Besides, there is a technology upgradation fund scheme (TUFS) to help textile manufacturers upgrade to higher technology. This is a clear indication that the government remains focused on upgrading to better and advance technology.

What are the bottlenecks for Indian exporters in enhancing the scale of production? How far do you think the special economic zones (SEZs) can help us in overcoming these hurdles?

Lack of proper infrastructure is a major bottleneck for Indian exporters to scale up production. Availability of large pieces of land is a problem. Besides, there are issues related to availability of adequate power to run big factories as a result of which additional capacity is not being created. The commerce ministry is in talks with revenue officials to make India’s special economic zones more attractive by changing certain sets of rules and laws, which are coming in the way of expansion.

With demand for traditional export items from India taking a back seat in the wake of the global slowdown, which are the sectors that can give a real push to our merchandise exports?

There is tremendous potential for exports of pharmaceuticals, and we are helping exporters to showcase their abilities by conducting exhibitions across the globe. The other priority area continues to be high-technological products, textiles and gems and jewellery. The textile sector is a heavily labour-intensive sector and India being the largest producer of cotton, it makes sense for us to focus on textiles. Though our competitors like Bangladesh have taken a lead because of their capability in blended fabrics and made-ups, we are gearing ourselves in man-made fibres and technical textiles.

The government is thinking of a consistent export policy for agriculture products. How far do you think it is going to help our overall exports?

Though agricultural exports, if made into a perennial feature, will be only a small part of our overall merchandise exports, there is still huge potential for the sector, in terms of doing value addition on raw imported products and re-exporting them. Besides, a consistent export policy for agricultural commodities will help exporters develop permanent markets.

The commerce ministry has come out with a national manufacturing policy with the objective of setting up several national manufacturing investment zones in the country. How much boost will it give to our merchandise exports?

Since manufacturing is going to play a major role in the coming years in boosting our economy, the idea is to develop India into a manufacturing hub, and this can be done by setting up of NMIZs in the country. Though NMIZs will take time to come up, we are optimistic that it will make manufacturing more competitive and efficient. This will spurt growth, both in the domestic market as well as in exports.

Do we have enough skilled work force to be part of such a manufacturing revolution in the country?

The government of India has undertaken a whole lot of programmes, both individually as well as in association with international institutions, to increase the skilled work force in the country. Of late, big industries are adopting various industrial training institutes (ITI) to train the work force there to suit their requirements.

Lastly, what are the other initiatives that the ministry has undertaken to help boost sagging exports?

The commerce ministry, with the help of various export promotion councils, is trying to analyse the thrust areas of exports. The idea is to penetrate deeper into already existing markets with our existing products by improving our cost competitiveness while maintaining the quality. Innovative capabilities of our exporters will play a major role in this.


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