New policy on FDI to give exports a push

THE NEW TEAM'S FIRST DAY

The government will work out a foreign direct investment (FDI) policy aimed at pushing up exports and increasing job opportunities. A new Exim Policy focusing on procedural simplification and reduction of transaction cost is likely to be announced by end-June or early July.

"We will have a new FDI policy, which will increase exports and generate employment. If required, we will build special mechanisms to generate employment," Commerce and Industry Minister Kamal Nath said, in his first interaction with the media after assuming office.

Prime Minister Manmohan Singh would decide whether the Foreign Investment Promotion Board (FIPB) would remain with the finance ministry or return to the department of industrial policy and promotion (DIPP), he said.

During Jaswant Singh's tenure as the finance minister, the FIPB had been shifted to North Block, while the DIPP was left with the policy-making functions.

Ruling out the government intervention to prop up the rupee, he said he would take up the matter with the finance ministry to ensure that the Reserve Bank of India (RBI) or the government stepped in whenever required.

The government would strive for a double-digit export growth on a sustainable basis, increase in agricultural exports and greater income for farmers, as opposed to traders, the minister said.

Kamal Nath, Congress MP from Chindwara, Madhya Pradesh, said the new Exim Policy, for which consultations would start on Thursday, would focus on procedural simplification and reduction of transaction cost.

To create an enabling climate for promoting exports, the board of trade would be reconstituted and an advisory group of 25-30 top exporters would be set up in the ministry, he said.

He indicated that the country's stance on bilateral and multilateral trade negotiations would remain largely the same though the focus would be on ensuring that the agriculture sector was not affected.

The minister said India would continue with its partnership with developing countries under the G20 umbrella on agriculture.

"Agriculture is not merely an occupation but a way of life in India. We are committed to protecting farmers' interests and will try to see to it that the focus is India-specific in agriculture," he said.

The government would go ahead with the proposed legislation for special economic zones, but he did not commit on a special dispensation on labour laws in these zones.

He said efforts would be made to see that the sector, which was the second highest employment provider, could help in tackling the problem of unemployment.

The FIPB decides on all foreign direct investment proposals which are not under automatic route.

He said the strategies in the area of multilateral trade negotiations must also be stakeholder driven.

Meanwhile, identifying employment generation in the textiles sector a top priority, new Textiles Minister Shankersinh Vaghela said he would prepare the industry to face international competition in the wake of phasing out of export quotas from January.

"My attempt will be to prepare the industry to face international competition, especially from China. The aim will be to get some special concessions to prepare it for the post-quota regime," Vaghela said after taking charge of his ministry today.

"We will strive to see that India's agricultural concerns, which were specific to it in nature, are highlighted and taken into account at all fora and negotiations," he said.

"We will like to simplify procedures governing industrial investment, both domestic and foreign. We have to specifically focus our attention on manufacturing sector to increase employment opportunities in the sector," he said.