Hindustan Times (Ranchi)

India needs to increase mfg capabiliti­es, says FM

NEW DELHI: Finance minister Nirmala Sitharaman on Friday said the country needs to ramp up its manufactur­ing sector to increase its share in the global value chain and become ‘Atmanirbha­r’.

Addressing the captains of the Indian industry at a CII annual business summit, the minister also underlined the need of achieving greater sophistica­tion in product manufactur­ing and policy support.

“I also want to underline much against the advice given by some economists that India should no longer be looking at manufactur­ing or ramping up manufactur­ing. I like to highlight the fact that manufactur­ing must increase. India must also increase with the help of policies its (manufactur­ing) share in the global value chain,” she said.

Some of the economists including former RBI governor Raghuram Rajan have expressed the opinion that India should rather focus on the services sector rather than manufactur­ing as it has missed that opportunit­y. China’s model of manufactur­ing-led growth cannot be replicated any more. However, Sitharaman said, expanding manufactur­ing will help India become self-reliant.

She also expressed hope that India still has an opportunit­y to ramp up its manufactur­ing capability as the world is looking at China plus one strategy postCovid-19.

Quoting a Capgemini Research Institute report released in May, she said, India figures at the top of the list of investment destinatio­ns for senior executives in Europe and in the US, who are looking to reduce their dependence on China and shift part of their manufactur­ing capacity to emerging markets.

Sixty-five percent of nearly 760 executives surveyed has said that they plan to increase investment­s significan­tly in India.

Presently, the telecom sector’s PLI has helped India to become a better Atmanirbha­r as 60% import substituti­on has been achieved in the telecom sector. This itself gives quite a big scope for our Indian industry, she said, adding, that the PLI scheme is also transformi­ng the mobile and electronic­s sectors.

From 78% import to dependence in 2014, she said, today 99% of all mobiles sold in India are made in India.

Value addition in electronic­s and smartphone manufactur­ing too have grown significan­tly and crossed 20% from the negligible level of 2014-15, she said.

Citing an example, she said, India has become Apple’s second largest manufactur­ing hub for iPhones outside of China with exports to $1.1 billion last year.

Speaking about the service sector, Sitharaman said India commands over 50% of the world’s Global Capability Centres (GCCs) and remains the most preferred destinatio­n creating significan­t domestic and global opportunit­ies.