Q. What is happening
to our exports?
A. Our exports have been decelerat-
ing for almost three years since
- We started analysing each
and every sub-sect of the export
basket. We mapped entire geogra-
phies and created new metrics to
see which product can go to which
geography. The result was that we
could reverse this declining trend
and we achieved highest exports
in 2018/19. I was also work-
ing on reducing our trade deficit
with China. For the first time, we
reduced it from $63 billion to $53
billion. Our exports to China have
increased by almost 30 per cent
during this period.
Q. What can be done
to re-accelerate exports?
A. We have been trying several
things, but not everything has suc-
ceeded. For instance, I had sug-
gested that banks create a protocol
to fund exporters. Trade cannot be
done in a manner that banks want
it to be done. I am also following
up with a proposal to make exports
a priority credit lending as there is
a disconnect there. Everybody says
exports will be the priority for India.
But priority sector lending does
not capture that priority. Merchant
exporters also need to be promoted
because they are the ones who con-
nect the small scale players.
Q. Can India take advantage
of China-US trade tensions?
INTERVIEW
“A VERY CALIBRATED
APPROACH HAS TO
BE ADOPTED”
Former Commerce Minister
Suresh Prabhu tells BT Editor
Prosenjit Datta and Senior
Editor Joe C. Mathew about
the long-term strategic
plans to boost exports.
A. I had prepared a strategy on how to balance trade with China. There is a mis-
conception (about the India advantage). Why is US fighting China? It is because
of trade deficit. Why does US have issues with India? It’s again trade deficit. Sup-
pose you feel that because of the US-China trade war, we will be able to increase
our exports to the US. Then our trade deficit will increase. Why will US do this?
The geography to product metrics is very important. What we will sell to which
country and why it will go to that country should be understood through market
research. I started from the basics. I feel we have to work on it.
We are also working on participating in the global multilateral trading order,
which was appreciated by everyone, including the WTO head.
If you feel that you can only export and not import, it is a brilliant idea. But
the only problem with that brilliant idea is that it is so brilliant, so good, that
other countries would also like to adopt it. Therefore, imports and exports many
times go hand in hand.
If we say that we are going to put restrictions on their imports, they would like
to put restrictions on our imports as well. So, we have to balance it very carefully.
A very calibrated approach has to be adopted. We did that.Q. What is the current status?
A. To be able to export, you have to manufacture first. For the first time, I prepared
a vision for a $5 trillion-economy where the industry’s contribution has been pro-
jected to be 20 per cent. Another $3 trillion will come from the 12 champion sec-
tors of services that we will promote. Third, agriculture. Agricultural export itself
has the ability to boost farmers’ income. The problem with agriculture is that the
moment you have more production, the prices fall because consumption will not
increase commensurate with the production. I have also proposed that if all dis-
tricts in India can increase their GDP by two or three per cent more than normal,
India’s GDP will increase by two or three per cent more than normal. So, we took
six districts in five states as pilots, identified the uniqueness and potential of these
districts. The second phase is already on.
Export is just one part, and you cannot deal with one part unless you under-
stand the economy as a whole. That is what we are aiming at.54 I BUSINESS TODAY I August 25 I 2019PHOTOGRAPH BY REUBEN SINGH