“At a time when the World Trade Organisation is lowering trade estimates, India is the only economy that is not talking about contraction. India, on the contrary, is talking of 7.5 per cent growth… There cannot be a better time for investing and manufacturing in India and looking at an environment where ease of doing business gets top priority,” says Commerce and Industry Minister Nirmala Sitharaman. According to her, in the two years that the BJP-led government has been in charge, change has been taking place “on the ground”.
In a conversation with BusinessLine, she explains how it is not policy but volatility in currency that is a concern for trade and industry. She discussed the challenges India faces not only domestically but also at the multilateral bodies’ level, and how constant dialogue can help change the situation. Excerpts:
Yes, there is 100 per cent impact evident from the spirit and mood with which Indian exporters are working. Immediately after the announcement, the first tranche of money was passed on to the RBI, which quickly transferred it to commercial banks.
As on March 31, the amount that was given to commercial banks has already been exhausted and the government and the RBI acted quickly to release more money. This shows that exporters have been shipping goods and the sector is on its toes. Also, the 3 per cent incentive under MEIS is being utilised by all sectors and not getting concentrated.
You have the UNIDO saying that in manufacturing India has reached the sixth position. You have the PMI index telling you that manufacturing is doing well. It is not just serving the domestic market, but also exports. The concern is the volatility of the exchange rate. It is the currency issue that is not rewarding exporters as well as before.
You said ‘Make in India’ is not just for exports, but also for the domestic market. This is not how the campaign is being perceived. Will you elaborate on it? Why so much priority to defence?
The ‘Make in India’ programme is a simple way of calling investors and manufacturers, both in India and abroad. The Indian middle-class wants goods of quality and is also endowed with good purchasing power. To cater to them you have to manufacture here.
The call of ‘Make in India’ is for meeting the demand that exists here plus in technology-driven sectors where investment has to come with state-of-art technology, such as defence. At present, we import… The same purchase can be made from manufacturers here. They will not only have a captive buyer, but can export the surplus.
Unless you emphasise Make in India, the manufacturing sector will not get the stimulus to reach 25 per cent share of GDP by 2022. Besides, the country’s huge population needs jobs, which will not come from the agriculture sector or proportionately from services. It has to come from manufacturing.
For governments to turn protectionist towards their local industry is not uncommon. So, when India is protecting its solar industry, why is it becoming such an issue? What will be India’s stance on the latest WTO ruling favouring the US?
Our approach, as we are appealing in the WTO, should not be seen as protectionist, but has to be understood from our need to build local capacities. India has increased commitment for renewable energy. The huge commitments made in COP 21 were not made frivolously.
If we have to meet the target, we have to look at building capacities within the country and encourage production of the complete sets of parts needed for renewable energy. That is not going to happen if you are going to ignore domestic production.
You have held talks with UK’s Immigration Minister on visa restrictions. What was the response? Would you consider raising the issue at the WTO?
In our meeting with the Immigration Minister, we went point by point on the issues. We looked at minimum salary condition and how visa applicants are being charged an additional amount to train British citizens for the jobs for which they are going. Then we raised the issue of intra-corporate transfer. I pointed out to the Minister that technically qualified individuals who take visa to go to UK for a specific job and return after it is done cannot be treated broadly as migrants or immigrants.
I would rather wait for a response from the Minister before thinking of any course of action.