Experts call for new policies for manufacturing revival

Underlying Regulatory Cholesterol

- SURYA SARATHI RAY

FOR THE MANUFACTURING sector to grow at a rate faster than the broader economy, and raise its share in the gross domestic product (GDP), a fresh set of policies would be required, in addition to the ones that are tried like production-linked incentives (PLI), industry executives and experts said. Rather than elevated tariffs, several sectors may be in need for cheaper imports of raw materials, critical equipment and intermediate goods for enhanced domestic value addition, they argue.

The opportunity provided by the tariff war and the demand from the US for tariff cuts could be seized to lower the customs duties on a broad range of products. Besides, on an MFN (most favoured nation) basis, tariffs could be lowered for all countries for a number of tariff lines.

Recent years have seen stagnant growth, if not decline, in the share of manufacturing in GDP. The current situation is not any better either. The growth of manufacturing output, which has a 77% weight on the Index of Industrial Production (IIP), almost halved to 2.9% in February this year compared to 4.9% in the year-ago period.