Union Minister for Overseas Indian Affairs Vayalar Ravi om Tuesdayday took over as the minister of micro, small and medium enterprises (MSME) after the demise of Vilasrao Deshmukh, as his additional charge. He tells Dilasha Seth a change in the rules of foreign direct investment in single-brand retail, as asked by Swedish furniture firm IKEA, will not be permitted, if it impacts the sector. Edited excerpts:
As the government allowed 100 per cent foreign direct investment (FDI) in single-brand retail, Swedish furniture major IKEA is asking for relaxation in norms like changing the definition of MSME. What is your opinion on that?
I am not against foreign brands in India. But when they are working here, they have to go by government directions. If they have a problem, they can approach us. We are only asking them to help other institutions when they are functioning here. Definitely, we are open to hear their grievances. But then, we can’t change definition for a foreign company.
But Ikea has said when it will source from MSME sector, those companies will become bigger.As such, it wants flexibility in the definition of MSME?
Over a period of time, others will come over as SMEs. Our industry is not stagnant. There are not just 10 companies. When that 10 will go, other 10 will come. This is not Europe, this is India. Government has issued an order, they should obey it. Are these foreign brands unhappy that our people will become rich? FDI is for mutual benefit.
So would you allow relaxation in the sourcing norms for the foreign brands, as is being discussed by the Department of Industrial Policy and Promotion (DIPP) ?
I cannot offer relaxation on MSME sourcing without knowing the subject. If any relaxation that they demand affects my people and the industry I won’t accept. I have the guts to do this. DIPP cannot allow any relaxation without my consent. I have to protect my people.
Should India not allow world famous furniture brand and tweak policies, if these come in the way?
Honestly. Indian people know how to make furniture. FDI would not make much of a change, they will make the same (kind of furniture). I can understand information technology, but furniture? FDI is welcome in India. Government has allowed FDI in furniture area and that is there. But, it doesn’t mean you can eat away ordinary people like carpenter and others. In my house, all the furniture is made by the local people, and it is very good.
Is there no question of tweaking the rules?
FDI comes for what? Definitely, they want to make profit. But, it should also help Indian small scale industries, Indian people. FDI coming for making furniture should be of interest to the small scale sector as well. There should be a philosophy of employment creation too. They can create employment and can help people who are doing small business. That employment can be sustained if they source 30 per cent.
Will you talk to DIPP on this?
I will not talk to DIPP. They can talk to me. I have not initiated anything that I should voluntarily talk to them.
High interest rates seem to be hitting the MSME sector the most. What do you intend to do to protect the sector?
As the interest rates are high and it’s not affordable for the MSME sector, I will tackle it with the finance ministry and banking institutions. But I need to study.