In a bid to address infrastructural bottlenecks, complex procedures and manufacturing hurdles, the new trade policy announced two new schemes – Merchandise Exports From India Scheme (MEIS) and Services Exports From India Scheme (SIES).
In an exclusive interview to CNBC-TV18, commerce minister Nirmala Sitharaman said the foreign trade policy is made keeping in mind labour-intensive sectors, sectors which generate more jobs, sectors which are environment friendly, sectors which are going to raise the standard of Indian production, quality of Indian products, sectors which give us a great value addition to be a part of the global value chain.
The driving force, according to her, needs to be structural, systematic and systemic reforms.
Below is the verbatim transcript of Nirmala Sitharaman’s interview with CMBC-TV18’s Rituparna Bhuyan.
Q: In several areas in this foreign trade policy we actually saw strong imprint of what Prime Minister Modi had said in his August 15 speech. Lot of inspiration from his speech as far as this foreign trade policy (FTP) is concerned?
A: Yes absolutely, you are right. The essential sprit behind this FTP has been the vision which the Prime Minister spoke about during his Red Fort address. We are looking at labour-intensive sectors, sectors which generate more jobs, sectors which are environment friendly, sectors which are going to raise the standard of Indian production, quality of Indian products, sectors which give us a great value addition to be a part of the global value chain. These are the ways in which we have reformatted ourselves.
However the driving force behind it is ultimately the larger principle which is going to govern us in the long term, is structural systematic and systemic reforms which are required. You can carry on with interest subvention, you can carry on with incentives, you can carry on with promotions but ultimately global competitiveness is sustained or is obtained on a sustainable way only when competitiveness is derived on strengths. So, we would keep that larger principle in mind and therefore focus on agriculture, therefore focus on labour intensive areas, focus on environment friendly conversion of waste to wealth and also make sure that hi-tech products which bring in value addition will be prioritised.
Q: It was interesting to know that you talked about defence products. There you have identified specific defence products. So clearly we are looking at a strategy of promoting defence exports from India. Is that the right sense?
A: Absolutely, and that is consistent with the kind of decisions steadily the department has been making. You remember a couple of months ago even as we were talking about delisting of many of the industries, many being put on to the negative list. In defence we came up with about 60 odd items which can be produced through joint ventures without having to go through the licensing procedure.
So that was indicative of the kind of things that we were working on and today the policy if it is speaking about defence it was speaking because we are consistently maintaining that we are opening up under the Make in India and a lot of newer sectors. What was Make in India all about or what is it about, it is about new processes, new mindsets, new areas of activity and new production. Areas which till now have been restricted or closed to investments from abroad, areas which have never been given joint venture opportunities of money from abroad or areas where we had strength they could not even export. So we have opened up all of them whether it is railways or defence we very clearly went ahead of doing it and we are now consistent in including them in the foreign trade policy.
Q: And even in the services sector there was a scheme in the previous foreign trade policy but here you have gone ahead and included whole lot of services exports.
A: That is right. The gamut of services even though definitionally many of us would have understood it in India services because of the contribution which is very good contribution made by IT and IT enabled sector or it was thought it was only IT and IT enabled sector but hospitality, wellness, medical tourism, R&D, research these are all sectors in which we have inherent strength as services. So if service sector have to be promoted all these sector also should get the benefit of and that is where the foreign trade policy has included all these sectors.
Q: Let me invoke the BJP spokesperson on you and this topic is related to ‘Make in India’. If manufacturing is to succeed, if exports are to succeed in the goods sector then you will need land and going forward do you see that the land related law finally coming into place and if not, what are the options with the government?
A: Let’s start with one thing. Land every state has acquired.The industrial promotion; industrial infrastructure corporations exist in every state. Many states have already acquired a lot of land which are waste land, barren land, less productive land and kept it for industrial purpose. Now, over and above this if there is a need for land for public cause whether you are having irrigation, whether you have a thermal unit, whether you have a thermal plant or you are building roads to connect the villages, these are absolutely publicly required.
Now, if after the industrial infrastructure corporation of every state having used the land packs that they have created over the decades and if there is a need for something which has to be obtained for these public cause, it is necessary for us to obtain and there in fact one of my parliament answers also I had given very clearly, even today the quantum of land if you look at it as a percentage of fertile land being used is absolutely minimum so if you are talking about land, we are certainly not talking about agriculturally fertile three crop, two crop lands. We are talking about first of all those lands which are not agriculturally really all that rich.
Secondly even for the continuity kind of an issue, you have to pick up on land which has got to be one crop land. Adequate compensation is going to be given; four times market price is being talked about. We are also making all kinds of amendments; nine amendments have already been agreed to. If after this we are going to contain ourselves saying no the farmer, it has inherent fallacy.
A farmer also requires development. He needs his land better served by better roads, better electricity, better water and so on. Let us in this debate not get tempted to leave the farmer in one side and talk about others on other side. Farmer is also a part of this, the rest of them are also responsible for the farmers welfare. So, I think this debate is getting skewed too much, skewed unfairly – unfair to the farmer and unfair to rest of the development needs. We have to balance them both and not get too much of an extreme.
Q: If worse comes to worse is there option of a joint session open in the parliament?
A: As it is after the amendments we are talking with all the parties. Nitin Gadkari has also replied all the concerns which were raised by Sonia Gandhi. So, I think reason should prevail rather than political grandstanding.