New Delhi: Acknowledging that India's manufacturing sector is in "trouble", Union Minister Anant Geete on Thursday exhorted companies to counter the challenge posed by the growing Chinese clout by selling products at globally competitive prices.
"India's manufacturing sector is in trouble for last many years. In the era of globalisation, competing in international markets has become a challenge for the country's private as well as state-owned firms," the Union heavy industries minister said at an Assocham conference.
"If we fail to compete globally, we will get isolated. We have to compete with China, which has occupied a dominant place in markets worldwide. We need to accept this challenge."
The Nikkei Markit India Manufacturing Purchasing Managers' Index (PMI) - a gauge of manufacturing performance - fell to 52.1 in September from 52.6 in August, indicating that growth in the sector lost some momentum.
"It is the government's responsibility to safeguard the interests of the country's private and public sector firms. We have to sell products in global markets at competitive prices," Mr Geete said.
Citing the example of India's steel industry, the minister said it had been facing problems for the last 2-3 years and a minimum import price (MIP) for steel had to be ascertained as finished goods from China started coming in at a price at par with India's raw material cost.
The government had in February fixed an MIP of up to $752 per tonne on certain steel products to protect domestic players from cheap imports. In August, it extended the MIP on 66 steel products for two months as against 173 items earlier.
There will be no strategic sale in any company (which falls under the department of heavy industry) during the current financial year. The government is taking all factors into account while taking a decision on strategic sale of a firm.
The Cabinet in September cleared strategic disinvestment of Allahabad-based Bharat Pumps and Compressors Limited. It is the first PSU to be put up for strategic sale by the Narendra Modi government, setting in motion the process for privatisation of the PSU.
Strategic disinvestment denotes sale of substantial portion of government shareholding in identified central public sector enterprises (CPSEs), up to 50 per cent or more, along with transfer of management control.
The Centre has set a target of Rs 20,500 crore from strategic sale in loss-making and sick PSUs this fiscal year.
However, according to officials, it is unlikely that even the process of majority stake sale in Bharat Pumps will be completed in the current financial year.
Essential Business Intelligence, Continuous LIVE TV, Sharp Market Insights, Practical Personal Finance Advice and Latest Stories — On NDTV Profit.
