Competitive environment key to 1% world share

New Delhi, January 30: | Updated: Jan 31 2002, 05:30am hrs
Industry bodies have welcomed the mid-term export strategy but cautioned that India will not be able to achieve the targeted 1 per cent share of the world trade by 2007 until a competitive business environment is created by improving infrastructure, reducing transaction costs and lowering lending rates.

Federation of Indian Chambers of Commerce & Industry (Ficci) president RS Lodha said, “The envisaged 1 per cent share in world trade for India by the year 2007 will remain unaccomplished if the proposed measures to enhance the cost-competitiveness fail to resolve the disadvantages in the form of high transaction cost, high cost of power, high cost of finance, poor infrastructure and archaic labour laws.”

Though an action committee is being set up to monitor the implementation of the medium-term export strategy, yet the acid test will be its effectiveness in resolving these inter-ministerial macro issues and those pertaining to greater involvement of states in boosting exports, he said.

Associated Chambers of Commerce and Industry of India (Assocham) president KK Nohria said, “Unless the infrastructure bottlenecks are removed, and the policy is implemented speedily, the target of 1 per cent share will be difficult to achieve.”

Welcoming the move to include cost disabilities, Mr Lodha said that these hindering factors will be curbed expeditiously to help Indian exports attain global competitiveness.

Mr Nohria said that the policy does not mention anything about easy availability of pre and post shipment export credit and lowering of interest to 5 per cent as is available to exporters in neighbouring Asian countries.

Welcoming the government’s move Confederation of Indian Industry (CII) has said that only a focussed and a strategic approach can help in bringing about a significant jump in India’s exports from the current level.

The proposal for the “Action Committee” will be useful in taking promoting exports further, it said in a statement.Ficci has welcomed the strategy as a market-oriented roadmap for boosting exports.

“The strategy paper has been scientifically drawn on analysis of empirical data and has taken into consideration, both revealed as well as real comparative, advantages of Indian exports. It gives an itemised report of price competitiveness on Indian exports after correlating the export basket of India with the import basket of our major trading partners. The detailed and well-compiled strategy document will be of great help to exporters in assessing future competition,” Mr Lodha said.