Lok Sabha Question No. 2828 (UNSTARRED), answered on 2020-03-11
Subject: Promoting Domestic Manufacturing
Ministry: COMMERCE AND INDUSTRY
Asked by: Bhagwanth Khuba

## GOVERNMENT OF INDIA MINISTRY OF COMMERCE & INDUSTRY DEPARTMENT FOR PROMOTION OF INDUSTRY AND INTERNAL TRADE

## LOK SABHA

UNSTARRED QUESTION NO. 2828.

TO BE ANSWERED ON WEDNESDAY, THE  11 TH   MARCH, 2020.

## PROMOTING DOMESTIC MANUFACTURING

## 2828.  SHRI BHAGWANTH KHUBA:

Will the Minister of COMMERCE AND INDUSTRY be pleased to state:

वाणिज्य

## एवं उद्योग मंत्री

- (a) whether  the  Government  has  formulated  any  plan  to  promote  domestic manufacturing and cut imports;
- (b) if so, the details thereof; and
- (c) the  details  of  the  precautionary  steps  taken  by  the  Government  to  check diversion of imports via free trade agreement countries?

## ANSWER वाणिज ् य एवं उद्योग मंत्री ( श्री पीयूष गोयल ) THE MINISTER OF COMMERCE & INDUSTRY (SHRI  PIYUSH GOYAL)

- (a) & (b): Promoting growth of industries is a continuous and ongoing effort of the Government.  Recently, Government  has  taken various steps, in addition to the ongoing schemes, to boost industrial production of India.
1. Infrastructure:
- (i) The  National  Infrastructure  Pipeline  (NIP)  was  launched  in December, 2019, under which expenditure of Rs 102 lakh crore is  proposed  as  capital  expenditure  in  infrastructure  sectors  in India during the fiscals 2020 to 2025.
- (ii) To  reduce  logistics  cost  in  India,  Budget  2020-21  announced release of a National Logistics Policy.
- (iii) Accelerated development of highways is being undertaken. This will  include  development of  2500  Km access control highways, 9000  Km of  economic  corridors,  2000  Km  of  coastal  and  land port roads and 2000 Km of strategic highways.
2. Reduction  in  Corporate  Tax: A  new  provision  has  been inserted in the Income-tax Act with effect from FY 2019-20 which allows any domestic company an option to pay income-tax at the rate  of  22%  subject  to  condition  that  they  will  not  avail  any exemption/incentive. For new manufacturing companies

incorporated on or after 01.10.2019, the rate was brought down to 15 per cent. Budget 2020-21 announced that this reduction of corporate tax rate to 15 per cent for  new  manufacturing companies will be extended to new power generation companies as well.

3. Start-ups: The  government  proposes  to  provide early life funding, including a seed fund to support ideation and development of early stage Start-ups. Further, time period within which  Employee  Stock  Options  (ESOPs)  can  be  issued  by Startups recognized by the Department for Promotion of Industry & Internal Trade (DPIIT) to promoters or Directors holding more than 10% of equity shares, has been enhanced from 5 years to 10 years from the date of their incorporation.
4. For easing Liquidity Problems of NBFCs  and Banks Government announced capital infusion of Rs 70,000 crore into public  sector  banks, formulated  a  Partial  Credit  Guarantee scheme  for  the  NBFCs  after  the  Union  Budget  2019-20,  and merged 10 major Public Sector Banks into four.
5. Measures to promote domestic manufacturing:
4. (i) Some Trade Policy measures were announced in Budget 2020-21 to promote domestic manufacturing such as increasing  basic  customs  duties  (BCD) on  footwear, toys  and  furniture;  modification  of  Customs  Act  for  strict enforcement of Rules of Origin norms for sensitive imports; strengthening  of    safeguard  duties  and  anti-dumping  duty etc.
5. (ii) Domestically Manufactured Iron and Steel Products Policy (DMI&SP) has been notified with an objective to encourage consumption of domestically produced steel by Government organizations.  The Government has notified Steel and Steel Products Quality Control (QC) Orders and introduced  Steel  Imports  Monitoring  System  (SIMS)  to monitor steel imports.
6. (iii) The  Government  on  the  recommendation  of  Food  Safety and Standard Authority of India, has prohibited imports of different products from various countries.
7. (iv) With  a  view  to  assessing  the  impact  of    Free  Trade Agreements,  the  Government  held  regular stakeholders' consultations and received inputs from the Apex Chambers of Commerce and Industry, Industry Associations, exporters, trade experts and concerned Ministries/Departments.
8. (c): The general rule of origin under India's existing Free Trade Agreements (FTAs)  and  their  enforcement  provides  for  prevention  of  diversion  of

imports  from  non-FTA  countries.  This  general  rule  includes  both change in tariff  classification  and  a  value  addition  criteria.   Moreover, new  provisions  have  been  made  in  the  Union  Budget  2020-21  for placing the onus on the importer to verify the rules of origin for imports under the FTAs. In these provisions, verification requests can be made by the customs  authorities until 5 years from date of claim of preferential duty.

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