Economy

Exporters need to look beyond the US and Europe, says Sharma

Arun S New Delhi | Updated on November 12, 2017

sharma   -  Business Line

Despite a deceleration in export growth, the Commerce, Industry and Textiles Minister, Mr Anand Sharma, is confident about exports achieving the $300-billion target for 2011-12. However, his concerns include the weak demand in the US and European Union, the crisis in North Africa and West Asia, the high oil and commodity prices as well as the slowdown in India's manufacturing and mining sectors.

The Minister talked to Business Line after announcing incentives for exporters to help them tide over these challenges. (Excerpts from the interview).

Despite fiscal constraints, the Government has given exporters incentives entailing a revenue outgo of around Rs 1,700 crore. How do you justify it?

During my discussions in this regard, I never addressed this from the revenue outgo perspective. I know that there are (fiscal) constraints. But for those constraints we could have done more. I understand the compulsions of the Finance Minister, who has always been sympathetic and positive. But he has to manage the Budget and reduce the fiscal deficit. So when we take decisions, we have to look at it in the global and national context.

We are a major importing country. If you only import at very high costs with the weakening of the rupee and strengthening of the dollar, and allow your trade account to go beyond manageable limits, it will hurt the economy.

Also, the global economy has not fully recovered from the financial crisis. If our exports don't grow (due to weak demand overseas and the other domestic challenges) our manufacturing will not grow. If manufacturing goes down as it is happening now, then you will have job losses, non-creation of jobs and families losing sustainable incomes. That is why I don't go by the revenue outgo figures.

Someone said the revenue outgo will be Rs 3,000 crore (due to these incentives). If so, it is good, because you (exporters) have to earn an additional Rs 150,000 crore to get Rs 3,000 crore-worth incentives. If exporters earn an additional Rs 150,000 crore, I will be grateful.

You will know the total revenue outgo only when you have the total exports for the whole fiscal. You should also remember that as you import more, you spend more on that.

What is your vision on export diversification?

In a globalised world, when the economies are inter-dependent/inter-connected, decoupling or disengagement from any economy can never happen. Therefore, we will remain engaged with our traditional export destinations such as the US and EU. But you cannot keep waiting there (for their economies to pick up). The globe is big enough and we need to look at other parts of the world. Also, you cannot be a global player by embracing a truncated globe. Export diversification is already taking place.

India's trade deficit with China (its largest trading partner) is $20 billion. How will you tackle this?

We are looking at balancing our trade with China. We need more market access for services and the value-added products from Information Technology and pharma. China has assured us that they will look into it.

>arun.s@thehindu.co.in

Published on October 13, 2011

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