A strategy paper by the Indian Commerce Ministry has outlined steps like pushing exports, launching export incentive schemes, cutting import dependence and attracting foreign firms that are looking at shifting manufacturing bases from China to reduce trade imbalance. The paper was submitted recently to Commerce and Industry Minister Suresh Prabhu.
The trade deficit with China was narrowed down to $53.56 bn in 2018-19 from $63 bn in the previous fiscal. The sectors more likely to relocate to India are electronics, consumer appliances, consumer electronics, textiles, health care equipment and heavy industry.
“Efforts would be made to support exporters by pursuing tariff reduction through RCEP (proposed mega trade agreement) and by providing suitable export incentives to adequately substitute the existing MEIS (Merchandise Exports from India Scheme) scheme,” it said. It said the Ministry needs to vigorously pursue for greater market access for agriculture and dairy products and pharmaceuticals, according to a report.
The report said Indian pharmaceutical firms face regulatory hurdles such as prolonged and unpredictable timelines for drug registration, demand for submission of detailed clinical trial data and requirement for revealing the drug formulation process at the time of filing for registration.
“India, with its vast working population, and large consumer market is an attractive destination for companies moving their manufacturing base out of China, and also for Chinese manufacturer for collaborating for setting up production base in India,” it said.