Indian exports to gain edge over China in the long run, says Nath

New Delhi, April 12 Indian exports will have a competitive edge over China in the long term as the latter addresses the backlash on its currency on account of the huge trade imbalances with other countries, according to the Union Commerce and Industry Minister, Mr Kamal Nath.

“China is under a lot of pressure on their currency. In the long run, I see the Chinese currency appreciating much more. China is conscious that their huge trade imbalances with other countries are having a backlash and that backlash is already coming on their currency.

“With declared inflation of 10.5 per cent and pressure on their currency, their costing will undergo a change. That’s what makes me confident about India achieving $200 billion exports this fiscal,” Mr Nath said at a CII meeting on foreign trade policy here on Saturday.

He said China would have to remove the “artificiality” in the currency and pointed out that India does not have to do any such thing as there was no artificial peg.

“That’s why we will have the competitive edge,” he said.

Stating that the whole objective of the annual supplement to the foreign trade policy was to continue with the economic momentum in the country, Mr Nath said the main challenge for exporters would be that of occupying space in new markets.

He urged industry bodies including CII and FICCI to submit suggestions on the products and countries that could be included in the ‘Focus Product’ and ‘Focus Market’ schemes.

The annual supplement had announced intent to calibrate the Focus Products and Focus Markets schemes so that some products of high export intensity (not covered under the FPS) but which have low penetration in countries (which are not covered under FMS) would be considered for export incentive as a focus product for that country.

A case in point could be garments exports to the Japanese market.

Meanwhile, official sources said that a Cabinet committee is likely to meet here on Tuesday to consider several measures aimed at taming the surge in steel prices.

Indications are that the committee may consider proposal to ban steel exports and reduction in excise duty on steel.

Cement ban not to affect SEZ supplies: The cement export ban will not be applicable for supplies made to special economic zones, the Commerce and Industry Minister, Mr Kamal Nath, has said.

“We will clarify that the ban does not apply for cement supplies to SEZs,” Mr Nath said at a FICCI meeting here on Saturday.

Earlier in the day, Mr Nath said that the notification on cement exports ban was issued on Friday night.