Commerce and Industry Minister Piyush Goyal, a week after taking charge, has taken more than 12 major decisions to boost exports and boost industrial growth.
Work on some of these decisions, ranging from fast-tracking anti-dumping investigations into goods in the micro, small and medium (MSME) category to initiating research on reducing import dependence, will begin as early as next week, officials say. Most of the decisions received the minister's nod after Goyal held a 10-hour meeting with export promotion councils, industry bodies and officials from the Centre and state governments.
The government has decided to initiate investigation into the top 50 tariff lines, constituting 60 per cent of India’s imports, to find ways to reduce import dependence.
After the rupee saw a free fall and high global crude oil prices pushed up petrol and diesel prices to near record levels across the country, the Prime Minister’s Office asked the commerce ministry to prepare a list of “non-essential” imports in September last year.
While the list is yet to be prepared, a high-level advisory group nominated to control the ballooning trade deficit has recommended analysing tariff lines. A similar move was adopted last year to reduce inbound shipments from India's largest import source, China.
Goyal has pushed expediting anti-dumping investigations into MSME products, complaints against which have shot up from domestic manufacturers. Goyal, who is also minister for Railways, has suggested leveraging railways real estate. "The commerce department has been asked by the minister to use less utilised railway stations, and plan warehousing facilities that may act as logistics nodes,” a source said.
In a move to raise ease of doing business, the concept of deemed approval for establishments may also see changes after consultation with states, he added. It currently requires renewing licences annually.
Potential manufacturing clusters
The minister has asked officials to work with state governments to identify 50 manufacturing clusters across the country. “Priority will be given to micro, small and medium enterprises and most clusters will have a mix of various industries, catering to a complete value chain in a particular geography,” a Department for Promotion of Industry and Internal Trade (DPIIT) official said.
Many of these clusters will focus on import substitution, especially for goods in the engineering, textiles and electronics sectors.
“Considering that electronics imports are the largest category of inbound goods after crude oil and gold, we plan to dovetail the new manufacturing clusters with the electronics manufacturing cluster scheme of the Ministry of Electronics and Information Technology,” the official added.
There are more than 3,361 industrial clusters mapped by the DPIIT under the industrial information system database. These are spread across various categories such as industrial parks, special economic zones, national investment and manufacturing zones, and industrial corridor nodes, with varying degrees of financial and industrial benefits being offered by the government for entrepreneurs in each. Officials plan to reassess and streamline the categorisations.
The Export Credit Guarantee Corporation will now fast-track the disposal of claims and, for the first time, put in the public domain all pending claims for export loans.
According to the Confederation of Indian Industry, only 1 per cent of all loans disbursed by commercial banks go towards export financing.
The minister has pushed for merging the decade-old Board of Trade, a body which comprises representatives of private industry and advises the government on foreign trade policy, and the Council of Trade Development & Promotion, a forum of state governments, central agencies and industry bodies, set up in 2015 to ensure a continuous dialogue between government bodies.
“There is a need to look at issues more holistically and synergise export promotion with industrial growth,” Goyal told a gathering on Thursday.
The DPIIT has been asked to work with industry bodies to organise a national investor promotion event in the next six to nine months. Sources said while investment summits had mostly focused on foreign investors, the summit would focus on domestic investors equally.
Attention shifts to export credit
Commerce Minister Piyush Goyal has directed export credit agencies to shift focus from subsidies to facilitating a cheaper availability of loan in foreign currencies to exporters, by 30th June 2019.
In a similar meeting on Friday, Goyal pushed both the Export Credit Guarantee Corporation of India (ECGC) and the Exim Bank to speedily raises their loan disbursals for exporters. ECGC will enable a credit guarantee cover foreign currency lending to MSMEs while the EXIM bank will provide refinance in foreign currency to commercial banks to support all exporters. MSMEs have remained squarely in focus for Goyal, who has also directed ECGC to extend export factoring for MSMEs.
Officials from the Reserve Bank of India (RBI), present at the meeting, has been asked to look into $ 25 billion line of credit from its foreign currency reserves for swap to well performing banks, and to also look into priority sector lending norms for export credit. Concerned departments have also been asked to provide details for improving gold card scheme.