Ficci Leader Urges Industries to Capitalize on Free Trade Agreements
Ficci President Anant Goenka expressed optimism about India’s economic momentum, particularly following a moderation in oil prices. He emphasized the importance of leveraging recent trade deals to benefit the industry. Goenka’s insights come amid a robust demand landscape, despite ongoing inflationary pressures.
Corporate Sector Performance
Goenka assessed the corporate sector’s first-quarter performance as strong, noting a continued uplift of 3-4% from previous baseline levels. He highlighted that while demand remains robust, margin impacts will vary across sectors. The automotive, banking, and telecom industries are experiencing positive momentum, whereas the IT sector faces challenges. Manufacturing is under stress, particularly due to inventory issues, which are expected to persist into the second quarter.
Trade Tariffs and Export Markets
Regarding the upcoming removal of 10% tariffs, Goenka acknowledged the uncertainty surrounding U.S. tariffs under Section 301, which may impose similar rates. He stressed the importance of the U.S. as India’s largest export market and indicated that Indian exporters are diversifying into other markets. Ongoing trade deals are being implemented to enhance competitiveness.
UK Free Trade Agreement
The UK Free Trade Agreement (FTA) took effect recently, and Goenka noted the significant potential for growth. He mentioned that many B2B partnerships have been established, which will intensify as the agreements progress. Industry capacity utilization will dictate further capacity expansion, rather than the mere announcement of FTAs. Goenka pointed out that India has a small share of UK imports, presenting vast opportunities across various sectors, including textiles and footwear.
Capacity Addition and Investment
Goenka reported that private capital expenditure reached around Rs 6 lakh crore last year, indicating ongoing investment despite uncertainties from the war and inflation. He stated that his company is advancing its capital expenditure plans due to demand exceeding supply, with expectations for growth by 2028-29 already materializing.
Concerns Over Chinese Imports
Goenka addressed concerns about goods being dumped from China, noting significant overcapacity in that market. He mentioned that the Directorate General of Trade Remedies (DGTR) has identified injury caused by dumping in certain industries. However, many recommendations for action have been rejected, and he called for more clarity on these decisions.
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