From bad to good

The Indian industry has begun to show results, says an upbeat Union Commerce Minister, Anand Sharma
Sanjay Kapoor Delhi

Anand Sharma was appointed as the Union commerce minister when the country, as the rest of the world, was in the throes of deep and unprecedented recession. No education or experience could prepare politicians and economists for such an event that was threatening to ravage the economy by shutting down the export sector and rendering lakhs of workers unemployed. Worst hit were those who had sizable exposure to the global market. That meant textile, diamond, leather and many other labour-intensive industries that were stared at by indefinite closure.

Sharma, a lawyer with an international perspective, got down to helping and lobbying for those sectors that had been hammered by the slowdown. The template for their revival had been put together in several discussions that took place between global heads under the rubric of G-20.

Stimulus to different sectors was seen as a recipe for the revival of economies reeling under slowdown. Sharma, too, reoriented the export sector by making policy interventions and directing incentives to labour-intensive sectors to prevent job losses. After the initial loss in jobs, unemployment began to ebb, despite the fact that there was no great revival in demand in traditional sectors, as the consumer demand in the US did not pick up.

Sharma, who, for long years, has worked with African and Latin American countries to forge unity between the third world and fight apartheid, began to reorient Indian trade priorities. In an exclusive chat with Hardnews, Anand Sharma said that his ministry had worked towards market expansion and diversification. A total of 39 new markets were added under the new scheme and exports were incentivised.

Returning from one of his many trips abroad, the youthful minister was happy that the Indian industry had begun to show results. Though, he reiterated, there should be no attempt to withdraw the stimulus in the annual budget. Sharma said that Union Finance Minister Pranab Mukherjee was cognisant of the fragile nature of growth. The growth of merchandise exports surprised everyone. It grew by an astounding 11.5 per cent to $14.3bn in January, 2010. These figures were even higher than the figures projected by Commerce Secretary Rahul Khullar.

India's exports stood at a little lower than $13bn in January, 2009. Earlier exports had contracted for 13 consecutive months, when Lehman brothers broke in October, 2008. Global demand had melted due to the slowdown. After the initiatives taken up by the commerce ministry, exports started jumping in November and December, 2009.

However, due to the 13 month long contraction, the overall fall was about 20 per cent. In December, Foreign Direct Investment (FDI) also rose by 13 per cent to $1.54bn. Sharma said the total FDI inflows in 2010 could even exceed last year's figures. FDI into India stood at $20.92bn during the period of April-December, 2009-10.

The government has also raised the ceiling on automatic FDI from Rs 600 crore to Rs 1,200 crore. Sharma believes, this move would make India a more attractive destination and curb red-tapism and delays. He claimed that he had got an enthusiastic response from those who are keen to invest in India.

Sharma said that he was working towards re-energising the Doha talks that had been stuck for the last 15 months. He said that a review of the talks about the global trading order is scheduled to be held in March.

This story is from the print issue of Hardnews: MARCH 2010