Focus on growth engines that can pull others along

By combining continuity with innovation, commerce & industry minister Arun Jaitley has attempted to provide a fresh thrust to export growth. The focus is on providing cheaper capital goods for manufacturers, import sops for services and encouraging corporate involvement in agri exports. While these measures are expected push growth, Mr Jaitley told G Ganapathy Subramaniam & Shalini Singh the duration of the ongoing war in Iraq would have a major impact on Indiaâ€™s export efforts. Excerpts from the interview: What is the main thrust of the Exim Policy? In the changed environment of global trade, the principal thrust has been to give impetus to exports. The medium-term export strategy formulated last year was correct in identifying markets and sectors to be taken up for special focus. We have taken that effort forward. We have set reasonable targets for ourselves because we believe that targets should be attainable and not potential failures. Last year, India had a 0.67% share of global trade. To my mind, this was significant, coming as it did in the backdrop of global recession, economic slowdown, 9/11 and a year that ended with a war. We have set a target of 1% of global trade by 2007. During the first nine months of the current fiscal, out export growth rate was 20.36% while China clocked 25.89% during the same period. Other economies in the region had considerably lower growth. Malaysia, Indonesia, Thailand and even the US suffered negative growth. Therefore, Indiaâ€™s growth of 16.76% was a positive. We could have normally revised our export target upwards for 2007 but we did not do so in view of external situations like war. I would say the main thrust of the Exim Policy is to accelerate export growth by finding supporting engines of growth which can pull other sectors along with it. Whether it is service sector exports, steps for corporate investments in agri exports, additional incentives to farmers, SEZs, cheaper capital goods, all measures are aimed at ensuring high growth. We have attempted to give a thrust wherever it could be provided. To what extent could the Gulf war impact export growth? A long war will leave a lasting impact. As far as Iraq is concerned, our trade with Iraq is governed by the UN. At present, we have orders worth Rs 1,000 crore, of which Rs 600 crore worth of goods are in transit. Shipments to the Gulf countries account for 11% of Indiaâ€™s total exports. Our growth rate to this market was healthy at 36% according to the latest estimates. The post-war situation may open Iraq as a trading partner, but that is only a probability. The crucial question is one of duration and it is too premature at this point to get into the specifics. Have you had any problems interacting with the finance ministry in the course of formulating the Exim Policy? I have no complaints about the finance ministry. They have extended their full co-operation to us. There are some areas we are still working on. In terms of implementation, the department of revenue has issued all the notifications simultaneously with the policy. This has probably happened for the first time. What about income-tax concessions which exporters are demanding? As the minister for commerce, I would like the concessions to continue indefinitely, but I think my wishlist would not be shared by those who also have a concern for revenue in mind. What is the highlight of this policy revision? I would say the main highlight of the Exim Policy is that seven to eight areas of impetus have been identified and incentivised. We have given services a thrust for the first time. Services have a 50% share in Indiaâ€™s GDP and we find a lot of interest among the developed countries to participate in the services arena in India. In that sense, India has emerged as a recognised service provider and receiver in the global marketplace.

Focus on growth engines that can pull others along

By combining continuity with innovation, commerce & industry minister Arun Jaitley has attempted to provide a fresh thrust to export growth. The focus is on providing cheaper capital goods for manufacturers, import sops for services and encouragin...

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