Indian product manufacturing requires greater sophistication for a greater share in the global value chain, finance minister Nirmala Sitharaman said on Friday. “The government needs to assess how to give the best policy support,” she said at the CII Annual Business Summit 2024.
Dismissing the advice given by some economists that India should not focus on ramping up manufacturing, she said, “I like to highlight the fact that manufacturing must increase,” she said.
Citing a recent report by Capgemini Research Institute, Sitharaman said India figures at the top of the list of investment destinations for senior executives in Europe and the US, who are looking to reduce their dependence on China and shift part of their manufacturing capacity to emerging markets. “Their preference is India,” she added.
Speaking at the same event, Niti Aayog CEO BVR Subrahmanyam said while the government has invested heavily in infrastructure in the last two years, the private sector is not participating, except a little bit through real estate investment trusts (REITs), infrastructure investment trusts (InvITs), along with sectors like ports and airports.
“Much more needs to be done to attract private capital into infrastructure. We need to come up with new models and new arrangements,” Subrahmanyam said.
He emphasised that India requires a lot of improvement in contract management and dispute resolution to fast-track legal processes as current lengthy processes are a drag.
Subrahmanyam said more free trade agreements (FTAs) are needed and lower tariffs are required to compete with the rest of the world. India was in discussion recently with the UK and the European Union to sign such pacts.
Subrahmanyam said that there is a need for more institutions of global scale as India has just one insurance company among the top 50 and only two banks in the top 100.
“We should not try to protect anybody. Sectors that have protected themselves end up getting more ambassador cars,” he said, adding that the Indian industry and services will grow and will live up to the potential only if “we trade more”.