In the last financial year, India’s total exports crossed a new landmark of $400 billion.
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India is also close to signing a potential free trade agreement (FTA) with United Kingdom. The goal is to seal the deal by Diwali.
Another trade pact with Australia is also in the making.
All this happened during the tenure of Union Commerce Secretary B.V.R. Subrahmanyam, who retires tomorrow, September 30.
After graduating from the 1987 IAS batch, Subrahmanyam was tasked with overseeing the bifurcation of Jammu & Kashmir. Since then, he has been helping steer India’s trade policy during the pandemic.
In an interview with CNBC-TV18, Subrahmanyam said his successor would have an important task of setting up a new trade promotion body.
“A bigger change which is now required is the recasting and restructuring in the commerce department. India is one of the few economies which doesn’t have an exclusive trade promotion body. That is one of the areas which my successor will have to work on. This trade promotion body should become an autonomous kind of a body which is constantly driving the agenda of trade across the world.”
According to Subrahmanyam, PLI is an excellent programme and the only way to kickstart large-scale manufacturing in India.
“Production linked incentive (PLI) is an excellent programme. It is the only way you can kickstart large-scale manufacturing. India missed this bus 25 years ago through reservation for small-scale industries. This is the first time that the government has looked at scale seriously. So if we get onto that track it will be good for India. I am sure there will be efforts to get more sectors back home for manufacturing,” Subrahmanyam said.
He added that India’s main competition in manufacturing is its own neighbourhood — with countries like Vietnam and Indonesia wanting to attract more investment.
“The real big competition in manufacturing is actually our neighbourhood – countries like Vietnam, Indonesia who want to attract a lot of investment. So I think PLIs are doing a good job and it is constantly tweaked to ensure the results we want.”
Subrahmanyam felt that import tariffs enable the industry to kickstart domestic production. He said it is important that industry gets protection by way of tariffs to pick up levels of scale and competitiveness.
He said India's attractiveness has increased and it is important for the country to embrace international trade and finance.
“As days pass by India’s attractiveness is increasing. All our challenges are domestic and not international. The EU is resetting its relationship with China and Russia, they are looking for other partners. So who else is there other than India in terms of size and capacity? So the sweet spot is getting sweeter. There is also recognition all across government that it is important that India reaches out and embraces the world in trade and in finance. I am sure the country is fully geared to capitalise on this opportunity.”
Watch video for entire discussion.