BUSINESS

Manufacturing requires advanced technology: FM Sitharaman Nirmala

Finance Minister Nirmala Sitharaman said on Friday that higher levels of complexity are needed in Indian product production in order to get a larger part in the global value chain. “The government must determine the most effective way to support policy,” she said in 2024 at the CII Annual Business Summit.

 

She rejected the suggestion made by certain economists that India should not concentrate on boosting manufacturing, stating, “I like to highlight the fact that manufacturing must increase.”

According to Sitharaman, who cited a recent analysis by the Capgemini Research Institute, senior executives in Europe and the US are most interested in investing in India if they want to lessen their reliance on China and move some of their manufacturing capacity to developing countries. “India is what they prefer,” she said.

Speaking at the same event, BVR Subrahmanyam, CEO of Niti Aayog, stated that although the government has made significant investments in infrastructure over the past two years, the private sector has not contributed much—with the exception of small amounts through infrastructure investment trusts (InvITs), real estate investment trusts (REITs), and industries like ports and airports.

“Much more work has to be done to entice private funding for infrastructure projects. We must devise fresh frameworks and configurations, said Subrahmanyam.

The speaker emphasized that expediting legal processes in India will need significant advancements in contract management and conflict resolution, since the existing drawn-out procedures are burdensome.

According to Subrahmanyam, in order to compete with the rest of the world, more free trade agreements (FTAs) and reduced tariffs are necessary. Recently, India and the UK and the EU discussed signing similar agreements.

Subrahmanyam said that the fact that India only has two banks in the top 100 and one insurance business among the top 50 indicates the need for additional international institutions.

“We shouldn’t make an effort to shield anybody. Sectors that have shielded themselves wind up with more ambassador vehicles,” he said, adding that only “we trade more” can Indian services and industries develop and reach their full potential.

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