Addressing the press on Wednesday, Prabhu said manufacturing growth can be leveraged through promoting exports.
For the first quarter of the current financial year, the rate of exports in the GDP calculated on current prices stands at 18.2 per cent, down from the 19.3 per cent rate in the corresponding quarter of financial year 2016-17.
Last week, the latest GDP data showed a three-year plunge in economic growth at 5.7 per cent in the first quarter of the current financial year, the lowest reading over the last three years of the Modi government.
Prabhu said underutilisation of exiting capacities in the manufacturing sector is partly responsible for this slow growth was partly caused due to underutilisation of existing capacity. He added these dormant capacities can be used to fire up the exports engine.
But senior government officials said a sudden change in export volumes across products should not be expected as the headwinds for global trade have been growing very slowly.
While India's merchandise exports have risen for the 11th straight month till July, the rate of growth has steadily fallen.
However, Prabhu said export revival would be attempted in the shortest possible time, also hinting at more support to exporters. However, senior Commerce Department officials have ruled out extending incentives or adding products to the already extensive list of items covered by support programs such as the Merchandise Exports from India Scheme.
The minister also laid stress on the need for India's exports to find a firm footing in the global supply chain. "Indian auto companies are already a part of that but the same is not true for many other industries." he added.
Addressing GST issues
The new minister also said that sorting out the issues faced by exporters regarding the new Goods and Services Tax (GST) regime also rank high on his agenda. Exporters have requested the ministry to change the new norms so that they are not left without crucial working capital.
Exporters are now allowed duty-free import of goods that are used for the manufacturing of export products. However, under the GST, they would have to pay the duty upfront and apply for refunds later.
Ganesh Kumar Gupta, president of exporters body FIEO, said the interest on delayed payment would be received in effect only after 60 days.
Focus on agri exports
Giving shape to an idea budding in the Ministry for quite some time now, Prabhu added that he has directed officials to start work in preparing a policy focused exclusively on agricultural exports.
Saying that it was paradoxical that in a year of good harvest, prices crash drastically, Prabhu pointed out that a pre planned policy on strategic exports of extra agri produce would help. "Domestic markets won't be enough to absorb, so exports can help." he added.
The government is also working to bring out the revamped manufacturing policy, Prabhu said, while refusing to put a specific time period on that. He added that rather than statewise, more detailed district-wise plans for industrial revival should be put in place.