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Need to slash cost of 'Make in India' products: Jaitley

'Country should focus on services sector'
Last Updated 12 November 2014, 19:58 IST

Finance Minister Arun Jaitley on Wednesday said that India needed to bring down the cost of manufacturing to make it more competitive and stressed on harnessing the potential in the services sector that has contributed fairly well to the country’s economy.

“We have to bring down prices of the products manufactured in India because consumers are going to buy products that are cheaper and of good quality. There is no patriotism in international trade,” Jaitley said at a services conclave organised jointly by the Commerce Ministry and industry body CII.

The minister rued that the manufacturing sector which had partly shrunk was unable to absorb the underemployment in agriculture while the services sector growth was a “low hanging fruit” that needed to be aggressively perused.

“Services is an area where we need to be aggressive. We cannot afford to be defensive. Services sector growth is a low hanging fruit in India,” Jaitley said.

The minister highlighted the importance of the services sector exports to compensate for the deficit in the merchandise exports.

He said, the government was making efforts to raise the share of the manufacturing sector from 15 per cent to 25 per cent of GDP.

Jaitley said that Indian pharmaceuticals, tourism and entertainment sectors had the potential to be globally competitive and could be the driver of services exports from India.

The Services Conclave 2014, is the second edition of the ongoing initiative of the Commerce Ministry and CII.

It assumes importance in the backdrop of increasing share of services sector in the Indian economy which stood at 57 per cent in 2013-14.

Jaitley said that he had a “vested interest in the service sector doing well”.

He said it could help cover the deficit in India’s merchandise exports.

“We have proved to be competitive services providers globally. It is here that we have to seize the initiative. Indian information technology (IT) companies are known for the services they provide. We need to become global service providers at least in some more sectors,” the Finance Minister said.

India’s $151 billion services exports make up for only 3.3 per cent of global exports and is dominated by IT and IT-enabled services.

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(Published 12 November 2014, 18:44 IST)

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