On Thursday, several industry bodies met Commerce and Industry Minister Nirmala Sitharaman as part of the pre-budget consultation.
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Indian industries have expressed concern over the impact of free trade agreements (FTAs) on the country’s trade and asked the government to find ways to increase investment in manufacturing sector.
On Thursday, several industry bodies met Commerce and Industry Minister Nirmala Sitharaman as part of the pre-budget consultation and submitted their representations before the government.
Exports, increasing competitiveness of some sectors, FDI and implementation of GST were major topics discussed during the meeting.
“We had a detailed discussion on industry, investment and understood the situation which is prevailing, the industry's mind on what's happening in the Indian economy today, and also from their perspective what it is the government of India can do or states can do towards improving the situation,” Sitharaman told reporters after the meeting.
During the two-hour discussion, the participants flagged various issues including “concerns about FTA and their impact on Indian industry and commerce” and suggested measures to improve the situation, the minister said, adding that the suggestions will be taken up for discussion with the Finance Ministry during pre-budget consultation.
On the impact of the existing FTAs, the Federation of Indian Chamber of Commerce and Industry (FICCI) said: “In many cases domestic input cost increase is impacting cost of manufacturing but selling price linked to cost of imports leading to erosion of Industry’s pricing power and squeeze in margins to uneconomic levels. Therefore, it is not proving economical to reinvest in creating capacity.”
The industry body has also suggested the government to allow 100% multi-brand retail in non-food segment. “In addition, in food space, there is scope to allow 100% FDI in fresh food product retail,” FICCI said in its representation.
At present, up to 51% FDI is permitted in multi-brand retail but it is banned in B2C e-commerce.
The participants also suggested the government to focus more on the logistic cost for the manufacturers and improve the railway and road network to reduce logistics cost, especially for MSMEs and start-ups.
The Minister of State for Commerce & Industry Nirmala Sitharaman during a discussion on different aspects of industrial development with the Apex Industry Associations, in New Delhi on Thursday.
January 08, 2016 | 02:40pm IST