Sensible to buy local even if it is costlier than imports: Goyal

Buying domestic products even if they are more expensive than imported items is a sensible decision as low-priced imports affect the manufacturing sector and, by extension, consumers, in the long run, Commerce and Industry Minister Piyush Goyal said on Monday.

Speaking at the 12th Horasis India Meeting, an event organised by Switzerland-based international think tank Horasis and the Confederation of Indian Industry (CII), Goyal argued buying Indian products was crucial to the ultimate survival of domestic manufacturing.

“If a product is 1 or 2 per cent costlier than an imported product... or probably even a bit costlier than an imported product, very often it’s sensible to buy Indian. Because in the short run, large international companies can dump material at low prices. But in the long run, if Indian manufacturing companies don’t survive or are not able to deal with this competition, we will have (to pay) terrible prices for the same products,” said Goyal.

In several sectors, India has seen the consequences of not having an Indian manufacturing base, the minister said. While the government bolstered its push for going “vocal for local” after the Covid-19 outbreak, Goyal had asked traders to buy, sell, and promote swadeshi products back in January.

The minister assured businesses that the prime minister’s call for a selfreliant India was not inherently inward-looking. “When we talk of Atmanirbhar Bharat, it’s not that we are closing the doors, but, in fact, we are actually opening the doors in a bigger way,” said Goyal.

“IN THE LONG RUN, IF INDIAN MANUFACTURING COMPANIES DON'T SURVIVE OR ARE NOT ABLE TO DEAL WITH THIS COMPETITION, WE WILL HAVE (TO PAY) TERRIBLE PRICES FOR THE SAME PRODUCTS"

PIYUSH GOYAL Union commerce & industry minister

“We are not saying that we only want swadeshi products in India. We want our businesses — while becoming self-reliant — to also engage with the world to get the best of technology and invite pools of low-cost capital," he said.

No crutches

Goyal stood firm against special protections for the domestic industry saying that his ministry remained focused on sustainable growth and not on giving “handouts” for exports. “Subsidies have never done any good for business. Instead, they have helped us remain dependent on crutches and never engage with the world from a position of strength and power,” he stressed.

Various export sectors have continued to demand more export incentives given that large proportions of orders continue to be cancelled and global demand remains weak. Case in point, the Federation of Indian Export Organisations (FIEO) has demanded the government immediately expand the scope of existing export promotion schemes, besides allowing rollover of forward cover without interest and penalty, and automatic enhancement of limit by 25 per cent to address liquidity challenges.

Foreign capital

On the other hand, Goyal stressed the government is committed to proactively inviting foreign investments to set up manufacturing in India to not only serve the large domestic market but also use India as a springboard to export to other markets. The minister flagged auto components, textiles, sports goods, solar cell manufacturing, integrated circuit manufacturing, and electronic vehicles as key sectors in which sustained reforms have been taken and major opportunities remain for foreign and domestic investors.

The minister also said he is willing to explore incentives for foreign investments in the wake of the Covid-19 pandemic but after necessary scrutiny.