'We want China to invest here rather than sending cheap goods'

Cheap Chinese goods flooding Indian markets over the years has hit India's manufacturing sector hard. It also poses a serious concern for the government on how to protect small manufacturers without adversely affecting the trade between the two neighbours. The government has begun a dialogue with Indian as well as Chinese stakeholders to address the issue.

In an extensive conversation with Annapurna Singh of Deccan Herald, Union commerce minister Nirmala Sitharaman said the NDA government was going to take some small steps that could eventually make a big difference in India’s commerce with other countries of the globe.

She also spoke on some knotty issues in the new Companies Act which have hit the normal corporate functioning and also India’s preparedness in the areas of Foreign Trade Agreements which are believed to have tilted the balance of trade in favour of the partner country. Sitharaman, who is also the minister of state for finance, elaborated on what are the hurdles the government is facing in the passage of the insurance bill in Parliament.

How is the government going to reignite the manufacturing sector, which has witnessed negative to flat growth in the past couple of years? How concerned are you with Chinese cheap goods flooding Indian markets, ruining small manufacturers and the industry as a whole?

Soon after I took charge of the ministry, I visited China. This was the question I raised with the authorities there. In the meeting with the industries, I told them why don’t you come and invest in India in manufacturing the products which are giving you such good returns in our markets. I tried to convince them that their investment will be beneficial for both the countries. It will fetch profit to your country and give jobs to our countrymen. To the Indian businesses, I said they must look into areas where they have failed and why they have failed that gave an opportunity to Chinese
(goods) to take over.

Indian businesses may be wanting some kind of help from the government so that they can give a healthy competition to their Chinese counterpart?

I have told them that the government is willing to work with them, provide them help they want. Chinese goods may be cheap but they are not safe. For example, Chinese toys. They are toxic. We have banned them long ago. So China should not be feared. Our companies should be ready to give them competition.

Another concern is in the area of FTAs. It is now being said that they have not helped India and the balance of trade is heavily tilted in favour of the partner countries?

We are examining each FTAs individually. You cannot put all FTAs in one basket and dismiss them. Yes, there is a concern that FTAs have favoured the partner country. It may be true, may not be. That is being examined. But, before signing future FTAs, we have to see that they are designed in a such a way that they benefit our own Indian manufacturers and industry.

Questions are also being raised about the new Companies Act. Industry feels, in its zeal to prevent fraud, it has made normal corporate functioning near-impossible?

We have devoted a lot of our time to review the new Companies Act. On June 21, we had invited all stakeholders, extensively discussed their problems and collected inputs. Yes, there are problems in the new Act. After going through those inputs, we found that certain provisions in the Act require amendment. There are very few which require major amendments in the Act. May be one or two. For that we will go to Parliament. We are doing every bit to ensure there is ease of doing business. The entire idea is that the corporate sector should not feel that servicing of the Companies Act is a burden.

The budget proposes three new smart cities in the Chennai-Bangalore Industrial Corridor region. What is more in the pipeline for the development of that corridor?

Yes. We have proposed Ponneri in Tamil Nadu, Krishnapatnam in Andhra Pradesh and Tumkur in Karnataka. Also, a perspective plan is there for the Bangalore-Mumbai Economic corridor (BMEC). We are in the process of finalising the nodal or industrial hub for the Chennai-Bangalore Industrial Corridor (CBIC). The government has major plans along this corridor. There will be manufacturing hubs apart from smart cities along the corridor. We have also planned skill development centres along the CBIC and let me assure you that all these will start showing up in the next few months.

What about the Special Economic Zones? The government has promised their revival for aiding manufacturing sector and creation of jobs?

We will soon be ready with a new framework on SEZs. You will soon hear something on that.

The Insurance Bill has hit a new road block. Now, the problem is that you cannot call a joint session in order to get it passed. A joint session can be only called if the Bill is passed in at least one House?
That is true. But what we are saying is, it is their (UPA govt’s) bill and we have not brought any major changes in that. Let us take it this way, the UPA brought the bill and we disagreed to that. Before that, the NDA brought the bill and UPA did not let it pass.

Now, the score is settled. We must move ahead to the benefit of the nation as a whole. There are also whispers that Congress does not want to give credit to prime minister Narendra Modi before he goes to the US and that is why they are stalling the bill. I have reasons to suspect that is true.