NEW DELHI: A commerce department strategy paper has suggested a slew of measures to boost exports and reduce imports to check the massive trade deficit with China.
The paper has been prepared at the behest of commerce and industry minister Suresh Prabhu, who has been trying to reduce the gap between exports and imports with India’s neighbours. Some of the steps have helped in narrowing the trade deficit with China to $53.6 billion in 2018-19 from $63 billion in the previous financial year.
To further bridge the gap, the paper has suggested export incentives. “Efforts would be made to support exporters by pursuing tariff reduction through RCEP (proposed mega trade agreement) and by providing suitable export incentives to adequately substitute the existing MEIS (Merchandise Exports from India Scheme) scheme,” it said.
It said the ministry needs to vigorously pursue for greater market access for agriculture and dairy products, and pharmaceuticals.
The paper said Indian pharmaceutical firms face regulatory hurdles such as prolonged and unpredictable timelines for drug registration, demand for submission of detailed clinical trial data and requirement for revealing the drug formulation process at the time of filing for registration.
On this, the ministry would look at establishing an interface between Food and Drug Administrations (FDAs) of India and China for conduct of regular training programmer on regulatory standards and processes of filling dossiers in China; and relaxing product registration time from 3-5 years to one year.
It would also look at pursuing export orders where market access has been obtained from China for commodities like rice, sugar and sesame seed. Regarding import substitution, the paper noted that India’s imports from China are mainly dominated by electronics, telecom, electrical equipment and pharmaceuticals.
Citing views of telecom industry, it said China is adopting a host of discriminatory and restrictive practices against Indian companies to bar them from participation in their procurement process.
The industry has suggested steps like focusing on local manufacturing of products like printed circuit board and camera modules; and creation of the research and development fund for the sector.
Further, it said interventions are required for attracting foreign technology intensive firms, which are relocating their manufacturing facilities away from China in light of the ongoing trade war between the US and China.
“India, with its vast working population, and large consumer market is an attractive destination for companies moving their manufacturing base out of China, and also for Chinese manufacturer for collaborating for setting up production base in India,” it said.
The sectors more likely to relocate to India are electronics, consumer appliances, consumer electronics, textiles, health care equipment and heavy industry.
Published On : 25-05-2019
Source : The Economic Times
