 "MSME sector key to boosting exports: Nirmala Sitharaman")
The government is looking towards small and medium enterprises (SMEs) for revival of exports, Commerce and Industry Minister Nirmala Sitharaman told the Economic Times newspaper in an interview.
Asked whether she was worried about the dip in exports, Sitharaman said it was no longer a cause for worry. She said that the goal now was to ensure that exports picked up "conveniently", for which efforts had been "continuously on for nearly a year".
Merchandise exports fell for the second consecutive month in August, down by a marginal 0.30%.
Exports fell to $21.51 billion in August, against $21.58 billion in the corresponding period last year, government data showed on Thursday. In the month of July, exports had contracted 6.84%, to $21.68 billion.
Cumulative exports for the April-August period of FY17 stood at $108.51 billion, compared with $111.85 billion for the corresponding period in FY16.
On industry response
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Sitharaman told the financial daily that the response from the industry, and not just restricted to one sector or two, had been encouraging. She added that almost all members of the industry at large had provided "workable suggestions", in response to which the government was taking "doable steps". Stating that the government was on the "same page" as the industry, she said that short-term steps would be taken, while medium- and long-term steps would be "continuously worked out".
On investment in domestic industries, especially the SME sector
In the interview, Sitharaman said that she needed to focus on promoting investments in domestic industries and the expansion of industries. She also highlighted that the SME sector especially desired hand-holding from the government. Stating that the SME sector already contributed about 35-40 per cent of the country's exports, she said that her aim was to ensure that their share rose further.
She added that she had made "earnest" efforts to figure out the sector's hesitations regarding investing, or expanding their investments in the country. She highlighted that that she had looked into whether they were facing a credit-related issue. Stating that she wanted Indian manufacturing to "rev up", she told the financial daily: "I want 'Make in India' from that point of view...."
On export-related concerns over rupee appreciation and global growth
Referring to concerns in the export sector over discouraging global growth, she said that the only was to make a foray into certain "domains" currently unavailable to the country's industries by targeting "niche areas". She added that the government was watching major world economies closely to see if there were any steps being taken overall or in particular sectors.
Further, she said that another way was to see whether Indian industry had achieved international standards in particular sectors and then see if they "could expand in territories in which they are already present". She highlighted the pharmaceutical sector as a particularly good opportunity.
However, she did not respond to the financial daily's question regarding how the government would address the short-term concerns of the export sector regarding rupee appreciation, only saying "It will be sensitive to comment on it at this stage."
On the day of the interview itself, Spetember 15, 2016, the rupee pared losses after a day of high drama that saw the finance ministry denying reports that the government may discuss a plan to devalue the currency.
The rupee had risen to as high as 67.07 per dollar earlier in the day after a television channel reported that the finance and commerce ministries would discuss a calibrated devaluation of the rupee on September 20 to boost exports. Later, a wire agency quoted Commerce Minister Nirmala Sitharaman confirming this.
On her agenda for next three years in office
Sitharaman told the financial daily that her primary agenda was to ensure that Indian manufacturing picked up. Stating that attracting foreign investment was all well and good, she said that domestic investment had to increase too.
Another point of focus, according to her, were trade negotiations, especially with the European Union post-Brexit. Africa, she said, was another region of particular focus for her. Pointing out that project exports in Africa were picking up well, she said that was engaged in trying to convince the Ministry of Finance that it should "increase the headroom for Exim bank in ECGC (Export Credit Guarantee Corporation of India)". She added that the ministry had done so already, albeit partially.
Sitharaman stated that this would help companies which had been winning such export projects. She added that a committee had been appointed to look into the Exim bank with regard to ECGC.