Textile, marine exports worst hit by strong rupee: Jaitley

The textiles and garments industry, the single largest contributor to the country's export basket, is the worst affected because of the strong rupee and the weak dollar scenario, said Arun Jaitley, the union minister for law & justice, commerce and industry.

The marine food industry was also affected significantly by the currency fluctuations, apart from the fall in prices in the international markets, Jaitley said at the valedictory session of the CII Partnership Summit 2004 here today.

However, despite these developments, the Indian exports had grown up by an impressive 19 per cent in the last nine months, the commerce minister pointed out.

With so many trade distortions prevailing currently, India needs to enter into multilateral trade agreements with different nations.

The country has entered into free trade agreements with Sri Lanka earlier, Saafta agreement with the Saarc countries last week and a bilateral trade agreement with Thailand recently, Jaitley informed.

The focus of all multilateral agreements revolves around agricultural issues, which are politically and socially sensitive.

The Indian farmers are unable to get remunerative prices as compared to the farmers in developed countries because of the higher subsidies that the latter receive, he observed.

Emphasising the need to encourage setting up of Special Economic Zones (SEZ), he said that his ministry had approved setting up of 23 zones by both private and public sector entities.

The eight existing SEZs are successfully functioning with the manufacturing units set up in these units growing at a 23 per cent rate compared to the country's manufacturing sector's growth rate of 6.5 per cent.

"Though our overall services sector exports are growing at a faster pace, the merchandise exports are suffering from handicaps, as in other developed countries, because our industries lack world class infrastructure, borrow at higher interest rates and face problems because of the existing labour laws," the minister admitted.

"We need to educate our trade union fraternity about the need to reform our labour laws so that many new jobs will be created," he urged the audience.

"The unfinished agenda of infrastructure to be the real priority for the next five years," he said, adding that during the coming years investment in India would be mostly towards infrastructure building.

"Our objective is to make India the global manufacturing hub, because it is in the manufacturing sector that there is a great potential for jobs," Jaitley said.

Chief minister N Chandrababu Naidu in his address said that the union government should bring in more administrative, labour, judiciary and electoral reforms to bring about the changes needed.

The country can become a developed nation much before the targeted year 2020, if all the state governments and the union government strive to provide conducive environment for the entrepreneurs, he emphasised.