The government on Thursday formed a group of top bankers and industrialists, including SBI Chairman O P Bhatt, Ashok Leyland MD R Seshasayee and Hero Honda Managing Director and CEO Pawan Munjal, to advise it on raising India’s export competitiveness and doubling overseas shipments in the next three years.
The decision was taken at a high-level Board of Trade (BoT), comprising top industrialists, bankers, export promotion councils and government officials, which met here under the chairmanship of Commerce and Industry Minister Anand Sharma.
“This has been a comprehensive review. We have decided to set up a working group. In three months, the group is going to submit a report on thrust areas to increase India’s export competitiveness and also manufacturing capacity,” Sharma told reporters here.
The working group members, which have been selected from BoT, include Bhatt, Munjal, Seshasayee, ICICI CEO and Managing Director Chanda Kochhar and Biocon Chairperson and Managing Director Kiran Mazumdar-Shaw.
“This has been a comprehensive review,” Sharma told reporters after the BoT meeting.
He said the group would give “focused inputs — recommendations which would even embrace policy and institutional changes”. The government has set a target to double exports to $400 billion in the next three years.
Sharma said Indian exporters had been developing new markets as a conscious effort after the economic crisis had hit traditional destinations. The US and the EU are among the largest traditional markets for the Indian exports.
Asked about the export performance in 2010-11, Sharma said: “I am sure that we will be able to cross the target (of $200 billion this financial year) which we have set for ourselves.”
Commenting on the third sectoral review, the minister also said the Directorate general of Foreign Trade (DGFT) was carrying out the exercise with all the industry bodies and export promotion councils and was expected to complete it by December.
“Thereafter, we will decide which are the sectors that need intervention and support.... Demand is still weak in the US and Europe,” he said.
Sectors like handicrafts, tea, tobacco and cashew are still in the red.
On the progress of the task force to reduce transaction cost for exporters, the minister said notifications were likely to be issued soon.
“We have reached a point where most of the notifications that involve revenue and other departments should be forthcoming and we will be able to ensure that we do away with the cumbersome documentation in bringing out the transaction cost,” he said.
He added that there were two main areas of concern hitting exports — the constraints of infrastructure, particularly the ports and the container movement, which involved railways and shipping.
“That (movement of goods), in fact, is a major component when it comes to transaction cost. We are in discussion with both the ministries (railways and shipping). It will take some time and effort to address those...,” Sharma said. A task force under Minister of State for Commerce and Industry Jyotiraditya Scindia has been set up to recommend steps to reduce transactions cost for exports.
“Our transaction cost adds about 8 per cent to our exports. It is a very big number and, that’s why, our concern,” he added.
Exports aggregated $121.4 billion during the April-October period.
