India needs to focus on manufacturing to boost exports: Anand Sharma

India will achieve its modest export target of $325 billion for the ongoing fiscal year (FY14), but it needs to boost its manufacturing capability to enhance it substantially, Commerce and Industry Minister Anand Sharma said.

"India has to grow in manufacturing led exports because we are not a country very much endowed when it comes to some of the natural resources which need for our economic growth particularly energy," Mr Sharma told PTI in an interview.

"Therefore, India has to become competitive in manufacturing and exports," he said.

The manufacturing sector, which constitutes over 75 per cent of the index, declined by 2 per cent in October as against a growth of 9.9 per cent last year.

During the April-October period of fiscal year 2013-14, the sector's output contracted 0.3 per cent compared to a growth of 1.1 per cent in same period last year.

The dip in the growth rate of the sector has also cast its shadow on the country's exports which has slowed down to about 6 per cent in November.

During April-November, exports rose 6.27 per cent to $204 billion, while imports aggregated at $304 billion.

Trade deficit stands at $100 billion.

Mr Sharma also exuded confidence that India would achieve its exports target of $325 billion for FY14.

"I hope that we will meet our target and we are trying for that. It is a modest target of $325 billion and as of now we are on track," he said.

He said the government has announced the national manufacturing policy (NMP) to boost the sector's growth and increase its share in the country's GDP to 25 per cent from the current 15-16 per cent in the next decade.

It also aims creating 100 million new jobs by 2022.

It envisages facilitation by the government in infrastructure development and improvement of the business environment through rationalisation and simplification of the regulatory framework.

The NMP would be a key enabler for setting of National Manufacturing and Investment Zones (NMIZs), which are industrial townships, benchmarked to the best manufacturing hubs in the world.

Meanwhile speaking to reporters in Bangalore after a review meeting with the Karnataka government, Mr Sharma said, "The multi brand retail FDI policy was approved by the Cabinet and then Parliament had endorsed it last December; the first multi brand retail FDI proposals have come- that will be Tata and Tesco, the Tesco of UK and the Tata group."

"To begin with these multi brand stores of Tata and Tesco will come in Karnataka and Maharashtra. So these will be the first two states that will be benefitting from the opening of this sector.....," he said.

Last week, UK-based Tesco Plc became the first global retailer to seek government's approval to set up multi-brand outlets in India with a plan to invest $110 million in partnership with Tata's Trent.

"...whatever is the FDI which comes in, 50 per cent of that to begin with has to go towards the back-end infrastructure that's the cold storage, the sorting, grading as well as the processing industry," he said.

"It will directly benefit the farmers as procurement and sourcing will be from farmers."

On the proposed investment by Tesco and Tata, he said, "...investments will come in tranches; first tranche will come now and then will continue because they can keep on building on it."

$110 million has been proposed in the first tranche, he added.

He also said the Karnataka government has given proposals for three more National Investment and Manufacturing Zones (NIMZ) in the state.

"Two (proposals) are with us; one is NIMZ at Bidar and second proposal received four days ago is for another NIMZ at Gulbarga."

"Both are under consideration, some further details are required which we have discussed; ....I can say that in principle approval for Bidar and Gulbarga NIMZ shall be given by the government of India," Mr Sharma said.

On the third proposal, he said, "once the proposal is received that shall be examined".

He also mentioned that the Information Technology Investment Region (ITIR) near Bangalore will be given the status of NIMZ and the incentives will be made available.

Karnataka government's request to extend Chennai-Bangalore industrial corridor up to Chitradurga has been accepted, he said. "Japan is the partner in developing, they have also endorsed and work on the master plan has almost completed....."

On the Bangalore-Mumbai economic corridor for which the UK will be the partner country, he said "....the feasibility study has been commissioned."

Responding to a question on US immigration bill, the trade minister said, "We will be taking it up very strongly with US; we are very clear that temporary relocation of skilled professionals cannot be mixed up with immigration."

"Immigration is a sovereign issue, we are not interfering with that but when we talk of highly skilled professionals' relocation for temporary movement that cannot be mixed with immigration..."

To a question on how much more increase in exports he expected in 2014, he said: "...I'm optimistic, we will do very well."

Reacting to a query that Kejriwal has said FDI will not be allowed in Delhi, he said, "...this is a national policy, the day he thinks of becoming Prime Minister, I will discuss about it."