India’s Forex Bill To Hit Rs 5.37 lakh Crore By 2025 In Absence Of Export-Oriented Manufacturing: MAIT
India’s foreign exchange bill is estimated to reach Rs 5.37 lakh crore by 2025 in absence of export-oriented manufacturing base of technology products, IT hardware industry body MAIT said on Thursday.
In 2018-19, with a export of around Rs 8,500 crore, the net outflow of foreign exchange was about Rs 1.09 lakh crore, MAIT said in its report on enhancing manufacturing ecosystem in the country.
"India is looking at a foreign exchange bill of Rs 5.37 lakh crore on mobiles, PC (personal computer) and datacom product consumption by the domestic market in the year 2025 if India does not develop an export-led manufacturing ecosystem soon," MAIT President Nitin Kunkolienker said at an event organised by the industry here.
With India now looking at massive scaling in local manufacturing, the Manufacturers' Association of Information Technology recommended setting up of component hub to decrease India's disability.
"However, if India aims and achieves 20 per cent share in the global production by 2025, India can generate a net positive foreign exchange of Rs 1.19 lakh crore and contribute Rs 4.71 lakh crore to India's GDP (gross domestic product). Further, PCs as a category has the potential of generating a net foreign exchange positive of Rs 72,000 crore," Kunkolienker said.
The report said India's existing free-trade agreements have not yielded good results for the country and all the current FTAs have resulted in the loss of opportunities for Indian businesses.
"The government should now look at FTAs with consumer markets where we can get some access to market for products that we make in India," Kunkolienker said.
MAIT has recommended to develop export-oriented manufacturing ecosystem, and the government should encourage companies to set up global-scale manufacturing capacity in the country under the first phase and in the phase-II target increase in value addition.
"Currently, there is a unique phenomenon where greater value addition in India leads to greater increase in costs. To encourage manufacturing in India, a pragmatic expectation on value addition is required. Focus should be on encouraging component ecosystem and leave it to the market forces to determine the value addition feasibility," the report said.