Negative news about exports is going to stop soon and fall in outward shipments has “bottomed out”, commerce and industry minister Nirmala Sitharaman told HT in a candid discussion on Tuesday.
“The pick-up in exports may be slow, and not rapid on the back of new markets (Latin America) and revival in sectors (tea, coffee, cotton, automobiles). I am glad to say that it is no longer going to be ‘Oh my god! What’s happening to exports?’” Sitharaman said.
India’s exports have been slipping for the last 17 months, recording a decline of 6.74% in April, mainly due to a sharp fall in shipment of petroleum and engineering products. Total merchandise shipments in 2015-16 fell by 15.85% to $261.13 billion, a five-year low.
Expressing confidence over the improving business environment, the minister said the government’s efforts are to build a more enabling framework for both foreign and domestic companies. “Yes, investor confidence, which will lead to a pick-up in the private sector, has improved, and it is not a hasty yes that I say. It is a cautious yes, soon private sector investments will also take place.”
On the crucial defence manufacturing sector, she said foreign giants are exploring opportunities for private participation.
“These players have met PMO officials and the cabinet secretary and we are assisting them. Now, it is for them to choose which state they want to make their manufacturing hub,” she said.
On pending visa issues with the US and the UK, which have been hurting India for a while, the minister that the government would be cautious and take both the legal route of World Trade Organsiation (WTO) as well as bilateral talks.
On the success of signature Make in India programme, she said: “Success of Make in India is going to come…Most important was to change the bureaucratic mindset so that you do not get bogged down by red tape. After this, there will be ease of doing business and opening up of new sectors, such as, defence and railways, which have started happening.”
“The government will not be the sole job creator, jobs have to be a mix of both public and private sector. What Make in India does is opening up of sectors, both for foreign investments as well as for private sector, and when this leads to industrial expansion, jobs will be created… In order to kick start this process, we have given a boost to public spending in infrastructure, where there is a huge growing demand,” she added.
Sitharaman said the Micro Units Development & Refinance Agency Ltd (MUDRA) schemes, and assistance programmes for the small and medium enterprises (SME), are aiding job revival at the grass-root level.
Speaking on the “credit paralysis” often cited by the industry, she said the government and the Reserve bank of India are taking measures to help banks and companies overcome the situation. “Steps have been put in place so that the burden on the balance sheets of banks and companies is being addressed… This will give them some breathing room.”