The Hindu Business Line : We are export-friendly: Jaitley

INDIAN exporters and services sector have become increasingly competitive globally to face the challenges and the thrust of the Government approach up till now has been industry-friendly and export-friendly, the Union Commerce and Industry Minister, Mr Arun Jaitley, said today.

In an interview to Business Line here at his Udyog Bhavan office, a day after he unveiled major fine-tuning to the current year's export-import (Exim) policy, a relaxed Mr Jaitley said that he has always been guided by two sets of approaches and attitudes.

First, he said, "We are industry-friendly and export-friendly" and second "we want to reduce governmental interference as much as possible."

Trade facilitation measures announced on Wednesday not only add to this but also eliminate corruption as the launch of digital signature and electronic fund transfer and online filing of licences are "huge step forward as they not only improve efficiency but also eliminate contact between exporters and officers," Mr Jaitley said.

Asked how he would describe his tenure of less than two years as the Commerce and Industry Minister of the country, Mr Jaitley quipped, "I don't want to get into an immodest act of commenting on myself."

However, he hastened to add, besides ushering in a helpful policy to the exporting community, the Government endeavour was always to ensure that, "We have become an important pole within the world trade talks. We are leading exporters in services and in some sectors of manufacturing. We did well on trade-related intellectual property rights (TRIPs) at the WTO. Now, we will have to improve our agricultural productivity and exports."

Elaborating further, he said that, "under the circumstances how we balance our approach where we can fight subsidies on one hand and we can protect the interests of our farmers on the other" is a further challenge.

Mr Jaitley gave full credit to the Indian exporters and said that he has become their "admirer".

"We could survive in services even without a proper infrastructure because in services human resources that matter more," he said adding that as far as manufacturing is concerned, "We need reasonable interest rate regime, infrastructure and labour laws. But despite these adversities our exporters seem to have done well with manufacturing competitiveness emerging stronger."

The Minister said that he has got the least doubt that, "We will be able to reach one per cent share in global trade ahead of the year 2007."

Last year, despite the global slowdown and Iraq war, "We were able to cross the target of 12 per cent by posting 19 per cent growth." But this fiscal, he said, it was a challenging task particularly over a year or two, the rupee has become costlier by almost 15 per cent compared to the US dollar.

He said 75 per cent of the country's exports were dollar-denominated and "a connected matter is that our exporters must try to switch over to other currencies to minimise risk of relying on a single currency but that is a process which would take time."

Moreover, the adversity of this trend was visible in the apparel sector, he said adding that despite this, the exporting community has "sustained the battle.

In the first seven months they maintained 6 per cent-8 per cent growth rate which was below the target but moderate under the circumstances."

But the subsequent two months saw exports picking up pace, he said adding this was mainly due to the turnaround in the US economy, "a huge improvement in the market that buys from us."

There was also improvement in export competitiveness and spurt of orders in Christmas and New Year eve in the foreign markets and all these made a "significant difference," he said.

When his attention was drawn to the success in services sector and the backlash it has caused in the form of ban by the Federal Government contract for business process outsourcing, Mr Jaitley said that he was "disappointed as it was a complete turnaround" from the stated official position.

"It will certainly distort the multilateral trade talks if the largest economy in the world practices protectionism and expect developing countries to provide market access in other areas."

Asked whether the firming up of modalities for negotiations under WTO is proceeding, the Minister said official talks were being held. "G-20 met with the EU Trade Commissioner, Mr Pascal Lamy, and I also met with Mr. Lamy here. I am looking to have one with US Trade Representative, Mr Robert Zoellick, in the near future."

He said the country's offer in services negotiations was only an initial one and "in the course of negotiations we will see what we get will determine as to what we give."

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