NEW DELHI: The Union Government is planning to set up five manufacturing investment regions (MIRs), on the lines of special economic zones (SEZs), but covering a larger area to give a boost to growth in the manufacturing sector. Liberalising of foreign direct investment norms is also being considered, especially in the leather, pharmaceuticals and engineering goods industries.

This was stated here on Tuesday by Commerce and Industry Minister Kamal Nath, who said there was scope for further liberalisation of FDI norms in the manufacturing sector. Several recommendations had been received, he said, including in areas like leather, pharma and engineering goods, where the effort would be to remove procedural bottlenecks.

He noted that FDI inflows into the manufacturing sector had risen by 75 per cent to over $2 billion in 2005-06. The aim was to double these inflows over the next two years.

Referring to the Government's target of eight to ten per cent GDP growth, he said this would require a 12 per cent growth in the manufacturing sector which covered all industrial activities except power, water supply and mining.

The latest data showed that manufacturing grew by 10.4 per cent in April and 12.2 per cent in May this year, he said.

Petroleum Regions

Mr. Kamal Nath told newspersons that the Government was formulating a policy framework for MIRs and Petroleum and Petrochemical Investment Regions (PCPIRs).

The MIRs were proposed to cover around 100 sq. kilometres, while the PCPIRs would be spread over 250 sq. kilometres. These regions might include SEZs, industrial clusters, IT parks, export oriented units and other such established schemes. "The units located within these regions would get the benefit of world-class infrastructure but no specific fiscal incentives,'' he said.

Mr. Kamal Nath said the MIRs would not require any separate legislation.

They would host industries where India had a distinct advantage like electronic and telecom hard ware, automobiles and auto components, leather processing, footwear and leather goods.

Coastal States' action plan

On PCPIRs, he said five coastal states of Orissa, West Bengal, Karnataka, Gujarat and Andhra Pradesh had already made presentations and were in the process of finalising their action plan to establish these regions.

Regarding the opening up of the retail sector, the Minister said the Government was looking to finalise a model that would generate additional economic activity and did not displace existing employment.

Mr. Kamal Nath said the Prime Minister's Council on Trade and Industry would consider the recommendations of the Investment Commission headed by Ratan Tata next week. On the Commission's suggestion on reforming labour laws, he said some States had conveyed to the centre that they also want a flexible labour regime to attract foreign investments.

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