Poor shipment orders have meant that exporters haven’t been able to reap the advantage of the weakening rupee, which has slid to a record low.
A persistently weak rupee, however, has made imports costlier, widening the trade and current account deficits — a worrying sign for an economy that is slowing. Imports declined by 7.61% in July.
The Indian economy, which grew by 5.4% during April to September is headed for this worst record since 2002-03 when it grew by less than 5%.
Weakening export orders and sluggish output also dragged down Indian manufacturing growth.
The government plans to hold the first meeting of the Manufacturing Industry Promotion Board in the near future to review the state of this very critical sector as well as the progress in the implementation of the National Manufacturing Policy (NMP).
“On the foreign investment front, we have taken concrete measures and opened up FDI policy in Multi-brand retail up to 51% while stipulating that at least half of the investment will go for creating backend infrastructure,” Sharma said.