Exim Bank chief urges more investment in high-tech goods

With the entire global economy going through a churn now, “this is the right time to weed out inefficiencies in our system and gear up our manufacturing capacity to emerge successful in the global economic scenario”, said T.C.A. Ranganathan, Chairman and Managing Director of Export-Import Bank of India.

Indian manpower

Technology manufacturing in particular is something Indian manufacturers should focus on, he said. India has the necessary manpower for that. State and Union Governments too should encourage investment in this sector, and one must seize this opportunity to produce high-tech capital goods, he said.

Delivering his special address at the 177th annual general meeting of the Madras Chamber of Commerce and Industry here today, he said India’s total manufacturing is valued at $300 billion, while it imports $90-billion worth of high-tech capital goods alone. It would be much cheaper to manufacture them in India. “We must produce what we import more,” he said.

Pointing out that over 25 per cent of the world’s total export is made up of high-tech capital goods, and India’s participation in that is very negligible, he said it is crucial to raise the country’s contribution in the global high-tech goods export. This would enable Indian companies to gain product competitiveness in the international markets, he insisted.

India’s global merchandise exports recorded a compound annual growth rate of 10 per cent during the decade following the reforms (1990-2000), which more than doubled to 21.5 per cent in the following decade, as against 8.5 per cent growth witnessed in the decade preceding the reforms, 1980-90.

Talking about the country’s growth potential, Ranganathan, quoting Jim O’Neill, former chief economist and Chairman of Goldman Sachs Asset Management, said even with unspectacular growth of a little more than six per cent a year, India’s economy could be 40 times bigger by 2050 than it was in 2000 – about as big as the US economy will probably be by then (though not as big as China).

But it could do much better than that. Growth of 8.5 per cent over the entire period is possible - with growth of more than 10 per cent over the next 15 to 20 years not out of the question - provided it makes some changes.

“If industrialists choose to ride this growth wave, they can emerge successful; and if they choose not to, they may perish. But the country’s economy will certainly grow,” he said.

He also assured federations of Indian industry and chambers of commerce of the support of Exim Bank.

ravikumar.r@thehindu.co.in

Source: thehindubusinessline