Centre mulls new policy to upgrade capital goods sector

 The Dollar Business Bureau The government is considering a new policy to enhance India’s capital goods sector and encourage manufacturing industry as part of ‘make in India’ campaign. The Ministry of Heavy Industries and Public Enterprises along with the Confederation of India Industry (CII) has constituted a joint task force with an objective to realize the potential of domestic capital goods. The task force will take up issues faced by the industry with a view to evolving a roadmap for the capital goods sector. One of the key elements of this process is formulation of a national capital goods policy over the next few months, the CII said in a statement. Capital goods comprises of sub-sectors such as textile machinery, machine tools, electrical and power equipment, plastic machinery, construction equipment, process plant equipment and dies, moulds and press tools. With a total market size of US$ 92 billion and production worth US$ 32 billion, capital goods sector contributes to 12% of India’s manufacturing output. India’s share in global exports from the sector ranges from 0.1% to 0.6% across various sub-sectors. However, the share of exports from China, Germany, Japan, and South Korea ranges is between 7% and 16%. Chandrajit Banerjee, Director General, CII, expressed hope that a separate policy for the sector will act as a catalyst and game-changer for the entire industry. “As the capital goods sector serves, in many ways, as the engine of India’s industrial growth, a strong capital goods sector is mission critical to achieving the aspiration of the 'Make in India' campaign,” Banerjee said. The proposed policy is aimed at increasing the share of the capital goods sector’s contribution towards manufacturing output from 12% to 20% by 2022. It will also establish India among the major capital goods producing nations in the world. Key areas of focus include creation of an enabling eco-system, expansion of market, promotion of exports, development of human resources, enhancement of technology and IPR standards and focus on SMEs, the CII said. Sub-sector specific strategies have also been formulated for giving special direction and focus. These strategies include elements such as access to capital, trade remedial measures, taxation, customs duties, preferential trading arrangements, WTO issues, attracting of FDI, technological upgradation, standards, safety and environmental awareness.    

May 19, 2015 | 3:52 pm IST.