New Delhi: Commerce and industry minister Anand Sharma spoke in an interview about fresh export incentives and the new manufacturing policy proposed by his ministry. Edited excerpts:
Exports are doing pretty well and we have a favourable rupee movement. What was the need for additional incentives at this point of time?
We take a view looking at the global scenario and the ground realities. It is a very depressed global backdrop with the euro zone crisis, sharp fall in demand, very limp recovery in the US. Demand from traditional destinations for our exports is much much lower compared with pre-recession years. Second, there is a deceleration in the emerging economies. You cannot sit and watch for a body blow to be delivered. At the same time, we have also been watching for the last six months that while exports were growing, it is a fact that our import bill was rising with the weakening of rupee and very high volatility in commodity prices. Therefore, whatever India imports, the high trade deficit will be there. How much this country can afford? These issues have a very clear bearing. So, if there is a rise in your import bill and not a commensurate increase in your exports in dollar, then it would be an unmanageable situation. Hence, people must understand these decisions are not taken in isolation. There are many factors that go into it before we take a decision.
Damage control: Anand Sharma at a press conference on Thursday. Photo: Satish Kaushik/Mint
The manufacturing policy your ministry has been working on for a long time is now with the group of ministers (GoM) under agriculture minister Sharad Pawar. What is the status of it now?
I should not speculate on that. The GoM is meeting tomorrow (Friday). I am fairly optimistic. There are issues to be harmonized, which we hope we will. We are a government that is committed to a forward-looking approach, to the second stage of reforms and policy initiatives that will strengthen investors’ confidence and also the trust of our global partners that this country wants to improve the investment climate and the rationalization and simplification of procedures.
Foreign direct investment in pharma has been a key concern of your ministry. But now your proposal of an oversight of the Foreign Investment Promotion Board (FIPB) has been rejected and it has been decided that the Competition Commission of India (CCI) should vet foreign investments in the sector.
I am not going to comment. I think this is a wrong perception. I don’t know from where you got it. Our concern was that there has to be a safety filter when it comes to acquisitions and mergers. That safety filter has been put.
So you are satisfied with the decision.
I am saying that is all that we asked for. We asked for FIPB. So, for the first six months, it is under FIPB. So, we have taken a conscious and considered view in the meeting chaired by the Prime Minister. Within the six months, we have also said that the CCI rules will be amended, bringing down the threshold barriers and putting in place an effective oversight of safety mechanism. Whether we do this through FIPB or CCI, it is the same.