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FDI:
Inflow's impressive growth
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02. TRADE AND ECONOMY |
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Electronics and Hardware
Manufacturing Identified as thrust areas |
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Shri
Kamal Nath, Union Minister of Commerce & Industry, called for strengthening
India's manufacturing base in electronics so that the country could
excel in both electronics hardware and software sectors. The Consumer
Electronic Sector, which is the main stay of the Indian electronics
industry, contributes about 35 percent of the total electronic hardware
production in India and colour TVs are the largest contributor to
this sector. This Sector is also currently undergoing technological
revolution. |
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Addressing the 27th annual function of the Consumer
Electronics and TV Manufacturers Association (CETMA),
Shri Kamal Nath emphasised the importance of electronics
and hardware manufacturing as a thrust area, and indicated
that the government was considering a bigger package
of fiscal and other incentives for electronics and IT
hardware manufacturing sector with the following main
objectives viz., to make the industry globally competitive;
to attract more FDI in the industry; to bring down the
prices of the end products; to reduce
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production
cost; to step up volumes to take advantage of economies
and efficiencies of scale; to increase the demand; to
compensate for disabilities until the basic infrastructure
constraints are removed; and to move towards much lower
taxation levels in the next 3-5 years.
The Indian electronic sector faces stiff challenges in
the international market, as it has to overcome infrastructural
constraints leading to high operational costs. There is
also a need for forward and backward |
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integration
of hardware and software sectors to take advantage of India's
burgeoning software sector, the Minister stressed, adding that
India had been meeting more than half of its electronics hardware
requirements through imports.
"In view of the special characteristics of Electronics/IT Hardware
sector, the challenge posed by the WTO stipulation for elimination
of duties in this segment and India entering into FTAs/PTAs
with a number of countries/trading blocks, this sector needs
a special sectoral treatment rather than being governed by general
policy framework. As a result of the efforts taken by the Department,
India has become a major destination for FDI investments in
Information Communication Technology Sector", he said.
He also mentioned that the Electronics Hardware Technology Parks
(EHTP) and the Special Economic Zones (SEZs) were tailored to
boost manufacturing in the country. "SEZ policy provides appropriate
environment for setting up of Information Technology / Information
Technology Enabled Services SEZ including SEZs for Electronics
Hardware manufacturing", he added. |
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India's Economic Engagement
with the world to exceed US$450 billion this fiscal: Kamal
Nath |
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India's economic engagement
with the world during the current financial year 2006-07
will exceed US$450 billion, if export and import of goods
as well as services are combined, Shri Kamal Nath, Minister
of Commerce & Industry, indicated in his inaugural address
at Conference in Brussels "Exports are growing at a healthy
growth averaging 25% per annum over the last three years.
We crossed the $100 billion threshold last year, and during
the current year we are poised to export 125 billion dollars
worth of goods and 75 billion dollars worth of Services.
Our imports too have risen commensurately", he said. |
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| Underlining
to India's position as the newly emerging power
both in services and manufacturing, Shri Kamal Nath
pointed out that while in India's strengths in services
was long proven, the resurgence of India's manufacturing
sector has now been established. "The service |
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sector
- which now makes up 54 per cent of the economy,
contributed more than half the total growth in the
economy in the 1990s. But we are also now among
the world's most competitive producers of steel,
automotive components, pharmaceuticals and |
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chemicals
offering an unbeatable combination of low cost and
high value. India is now emerging as a hub for mission-critical
R&D for a range of industries - from life sciences
to hardware and engineering", he stressed. |
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Indian Economy on fast
track |
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Shri Kamal Nath, Union
Minister of Commerce & Industry, has said that Special
Economic Zones (SEZs) are the future vehicle of economic
activities. Addressing the 8th Ernst & Young Entrepreneur
of the Year Awards function in Mumbai he said: "41 SEZs
are already operational, while approvals have been given
for more than 237 SEZs and about 244 proposals are before
us. We are also conceptualizing very large regions termed
Investment Regions for manufacturing which will provide
world class infrastructure and give benefits, sizes and
costing to units". |
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He also
said that India's trade - both exports and imports
- had been steadily rising and the country was fast
emerging as a favourite destination for foreign
direct investment (FDI). Such public felicitations
of entrepreneurial excellence are important as they
help in changing our perception and outlook, in
recognizing the wide gamut of opportunities available
outside the government sector in a fast growing
India, he said.
Paying a big tribute to the private sector, Shri
Kamal Nath said: "At the centre of this success
story have been our entrepreneurs who have been
injecting verve and creativity into Indian industry
as they focus increasingly on competing in global
markets. Let us take civil aviation. Today, more
than 65% of the passengers are carried by private
airlines as against none in 1991.
Similarly, in the telecommunication sector, the
major communication traffic is carried out by private
entrepreneurs. Construction is
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another
example. In fact, most of the service sector growth,
which forms 50% of our GDP, is due to the private
sector. The success of entrepreneurs in services,
in BPO, IT, Drugs and Pharmaceuticals, Films, Advertising,
Education, Health, Tourism and other knowledge base
sectors in India is only due to private entrepreneurs".
Shri Kamal Nath, Union Minister of Commerce & Industry,
today flagged the 3 firsts achieved by India in
industrial growth, manufacturing and foreign direct
investment (FDI) inflows
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For the first time in the last year 10 years,
(since financial year 1996), the six monthly (or
in a full year), the industrial growth has exceeded
10%.
• For the
first time ever, the 6-monthly manufacturing rate
of growth in India has exceeded 12% (April-September
2006). Manufacturing accounts for about 80% of India's
industrial production,
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while
mining and electricity account for approximately
10% each.
•
Foreign direct investment (FDI) equity inflows
during April-September 2006 have increased by 100%
from US$2.2 billion to US$4.4 billion - this is
also the first time that such an increase has occurred
in any six-month duration. The FDI inflow between
April-September 2006 of US $ 4.4 billion is higher
than the total yearly inflow in any period prior
to 2005-06 (only in 2005-06, we had a higher FDI
inflow of US$5.5 billion).
The National Manufacturing Initiative proposed by
the National Manufacturing Competitiveness Council
(NMCC) has envisaged stepping up of the manufacturing
sector growth from 9 to 10% to 12 to 14% in the
11th Plan period.
"However, we have already achieved the 12% growth
for manufacturing sector in the last year of the
10th Plan itself", Shri Kamal Nath said. |
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