‘No saying when market will revive’

Union commerce and industry minister Anand Sharma is convinced there is no need for a rethink on the government’s policy of not allowing foreign direct investment (FDI) in retail. Speaking to DNA after announcing the Foreign Trade Policy, Sharma skillfully skirted the issue of scrutiny of FDI from some countries, though he did concede to ‘resource constraints’ in taking certain policy initiatives. Excerpts

Have you achieved whatever you had set out to do in the foreign trade policy?
You see it is not for me to achieve. The government can create an enabling environment, give incentive and take policy decisions that will support the industry and the exporters. We have been mindful of the difficulties that our industry and exporters have faced, particularly the labour-intensive sectors. That is the reason our special thrust is on the labour-intensive sector.

Can you elaborate?
They (labour-intensive sector) have been given maximum support and incentive. These sectors include handicrafts, handloom, leather, gems and jewellery. Also, in the agriculture and plantation sector, tea has been included 100% under the VKGUY (Vishesh Krishi and Gram Udyog Yojana) scheme.

Also, we have introduced zero duty schemes under the EPCG (Export Promotion Capital Goods). That’s a big step towards technology upgradation. For gold jewellery, we have neutralised the tax and duty structure by entitling them with full withdrawals. Also, entitlement for carrying jewellery for exhibitions abroad has been increased. Personal carriage for business promotion has also been increased. Plus there are incentive schemes for the handicraft sector.

Is there anything that you wanted to announce but could not?
Yes, resource constraints are there. But, I have been able to do what I had in mind to ensure continuity, stability, technology upgradation. Take for instance the support to labour-intensive sectors; cutting down transaction costs; rolling out e-trade in a time-bound manner. Also, our step on giving dollar credit is significant in the backdrop of the traditional market shrinking. We have gone in for market expansion and diversification now. The list of special products has gone much bigger, and 39 new export markets have been identified.

Do you think export orders will pick up in the traditional markets (the US, Europe etc) during the coming Christmas season?
Well, I can’t speak for other countries, who wants to place orders when. That is beyond policy thinking… The fact is that 39 new markets have been identified —- 26 under preferred market scheme, and 13 under the market-linked special product scheme.

What is the reason behind your ministry announcing a two-year foreign trade policy, unlike a regular five-year policy?
I think a mid-term review is important, given the backdrop of a challenging global environment. A review will also enable us to assess which sector needs special focus.
Recently, the National Security Council is believed to have recommended that FDI from some countries such as China, Hong Kong and North Korea must go through greater scrutiny.

Has the government firmed up a view on that?
I’m sure FDI coming in goes through a careful screening mechanism. We are not barring investment from any country. There are sensitive sectors… There are mechanisms and institutions which look into the issue…. That’s why we have a system of approvals by the Foreign Investment Promotion Board.

So far, the government has not allowed FDI in the multi-brand retail sector. Is there any rethink by the government on the policy?
No, there’s no rethink by the government on the retail policy. And, I don’t think there’s any need for that either.