An inter-ministerial committee on Thursday discussed long and short term measures such as ramping up domestic production and removing bottlenecks with a view to boosting manufacturing, reducing import dependence and promoting exports, an official said.
The other measures which were discussed include identification of items heavily dependent on overseas inputs, extent of import dependence of those products, and bottlenecks to ensure better domestic production of inputs.
This was discussed in the meeting chaired by Commerce and Industry Minister Suresh Prabhu on addressing trade deficit and pressure on the rupee.
It was suggested to the RBI and the department of economic affairs to look at the possibility of exploring Renminbi-Rupee trade with China, with which India has a huge trade deficit of USD 63 billion in 2017-18.
The panel also discussed on the suggestion of exploring rupee/barter trade with countries including Russia, Venezuela, and Iran, the official said.
Talking to reporters after the meeting, Commerce Secretary Anup Wadhawan said, “We have a huge manufacturing capacity and the idea was to see how we can ramp it up whether through better capacity utilization or expansion of existing capacity or creation of new capacity”.
He said that respective departments will examine those possibilities.
It was decided that each department should look at “how capacities should be better utilized and if there are any bottlenecks preventing better capacity utilization then those bottlenecks should be addressed”.
Officials from ministries including coal, steel, mines, agriculture, heavy industries, IT and electronics, and chemicals participated in the meeting.
Meanwhile an official statement said that the group discussed issues of stepping up domestic production of goods across key sectors, to increase domestic availability and promote economic growth and export capacity.
The meeting was attended by several secretaries including from DIPP, commerce and power.
“Discussions were held on steps to be taken by the ministries and departments to ramp up domestic production through better capacity utilization and capacity creation and expansion in the short and medium to long term,” the commerce ministry said in a statement.
Key ministries were asked to examine measures on diversification of export base and increase domestic production in order to deal with merchandise trade deficit.
The meeting assumed significance as the rupee has hit an all-time high of 73.81 against the US dollar in the intra day Thursday. Depreciating rupee would raise India’s import bill and widen the trade deficit (difference between imports and exports).
The trade deficit was at a 5-year high of USD 18.02 billion in July. It came down to USD 17.4 billion in August.
During the April-August period this fiscal, the country’s exports recorded a growth of 16.13 percent, while imports grew by 17.34 percent.
The widening trade deficit has raised concerns over current account deficit which has driven the rupee to all-time lows amid soaring oil prices.
The domestic currency has depreciated nearly 14 percent since the beginning of this year. Besides having impact on current account deficit, the sliding rupee has made imports costlier and led to oil prices skyrocketing to record highs. India is the third largest importer of crude oil.
Oil imports during the first five months of the current fiscal rose by 53.55 per cent to USD 58.81 billion.
Since 2011-12, India’s exports have been hovering at around USD 300 billion. During 2017-18, the shipments grew by about 10 per cent to USD 303 billion.
Promoting exports helps a country to create jobs, boost manufacturing and earn more foreign exchange. – Business Standard