ENCOURAGING EXPORTERS: Union Minister for Commerce and Industry Kamal Nath presenting the gold trophy to Dileep Bhatt, Senior vice president, JSW Steel, at the Engineering Export Promotion Council's annual award function in Chennai on Thursday.  1; Photo: K. Pichumani

CHENNAI: Both the government and the industry need to boost infrastructure investments and marketing efforts to develop the Engineering Process Outsourcing (EPO) sector, as this would have a far-reaching impact on the Indian engineering industry, Union Minister for Commerce and Industry Kamal Nath said on Thursday.

Addressing the Engineering Export Promotion Council's (EEPC) annual award function in Chennai, he said the Indian EPO market had the potential to grab 30 per cent of the global market if it could cross $40 billion by 2020. The engineering sector has already emerged as the top contributor to Indian exports, growing by 20 per cent to reach $5.5 billion during the first quarter. But Mr. Nath said exports were no longer aimed at dollar generation, but at employment generation. Quoting a study by the Research and Information System for Developing Countries, Mr. Nath said exports were expected to add 21 million new jobs by 2009-10.

Special investment zones

Mr. Nath said exports were a crucial factor if the manufacturing sector was to achieve the target of increasing its GDP share from the current 16-17 per cent to 24 per cent by 2010. "Exports have to be the engine of growth in our manufacturing sector," he said, adding that the Government was creating special investment regions (SIRs) for the manufacturing sector. It hoped to provide world-class infrastructure, single-window clearance and flexibility in labour laws in these regions. Stating that Special Economic Zones (SEZs) were already driving the economy, Mr. Nath said several new SEZs had been sanctioned in Tamil Nadu. He would discuss the issue with the Chief Minister during a meeting later.

Concerns

While praising the Government's efforts, the exporters, however, raised a few concerns as well. EEPC chairman Rakesh Shah suggested that exports could grow faster if there was better inter-ministerial coordination vis-à-vis taxes and duties. "What the Commerce Ministry proposes, the Finance Ministry disposes," he said, adding that they must converge and find a common path. "Otherwise, it's like you put money in one of my pockets, and before I can feel it, it's out of my other pocket." He also demanded that the Goods and Services Tax be implemented in 2008.

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