(FE)
Commerce and industry minister Piyush Goyal on Thursday asked industry and exports bodies to stop relying on “crutches of subsidies and grants from the central government” and try to improve competitiveness and self-reliance, adding that the time for setting incremental export growth targets is over.
The minister’s comments come at a time the country is preparing to weed out most export sops as countries like the US have targeted it at the World Trade Organisation. Also, several export sectors with potential for global competitiveness continue to be crippled by lack of bold policy support. Exporters have long complained about elevated logistics costs and inflexible labour norms and also cried hoarse over a ‘strong rupee’, under the country’s managed floating exchange rate system. India’s logistics costs make up for as much as 15-16% of the consignment value, according to a 2018 paper by Bibek Debroy and Kishore Desai. The costs are higher than those of around 10% in developed nations. According to the RBI’s real effective exchange rate index, despite recent depreciation, rupee was still “over-valued” by close to 18% in April.
