By BW CFO World Online Bureau
The panel aims to double manufacturing exports over the next five years, reduce imports by two-thirds and drive up annual domestic consumption growth to about 9% from roughly 7% in the calendar year.
The panel suggested that India needs to incentivise MNCs in sectors like auto components to set up the main plants here, scrap import duties on principal raw materials for furniture and toys, fix oddities in existing free trade agreements (FTAs) and forge new ones with better economies to boost exports of manufactured products.
The Steering Committee for Advancing Local Value-Add and Exports (SCALE) – headed by former Mahindra & Mahindra managing director Pawan Goenka — has recommended that the government incentivise multinational Original Equipment Manufacturers (OEMs) to use India as a sourcing base for auto parts.
The panel, set up under the Ministry of Commerce and Industry, has submitted various suggestions for boosting exports. These include auto components, textiles, marine products, farm and processed food items, certain electric vehicles, toys and furniture.
While global trade in auto components stood at $1.3 trillion at the end of 2019, India’s share was just $15 billion, the panel said, signalling the untapped prospects. It has set an export target of $30 billion for the auto parts industry by FY26.
The country should revisit the South Asian Free Trade Agreement (SAFTA) to cope up with realities and “explore favourable trade agreements” with Canada, the US, the EU and Mexico to brighten export options, it added.
It highlighted the crucial role of the Rs 57,042 crore production-linked incentive scheme for the auto parts sector. At the same time, it also wants the government to start dedicated export hubs, incentivise spending on R&D and promote investment in auto electronics and semi-conductors.