The Summit on the country’s Public Sector Enterprises has called to the PSEs to enhance their geostrategic reach through the implementation of a number of recommendations including bigger thrust on exports, for achieving the Prime Minister’s goal of building a New India by 2022.The Summit organised by the Confederation of Indian Industry(CII) has underlined that only greater competitiveness of the PSEs will help them to survive and prosper in the period of present global economic challenges.

In its report presented at the Summit, the CII has said that the Government should have five years and ten years road map of what is expected from the PSEs, clearly laying down the growth and export targets. The PSEs and their export organisations, have to work with the Government to identify the key markets of geo strategic importance. Detailed market studies should be conducted by the industry bodies such as CII to identify the opportunities and barriers by region and by country. Such studies, the Report says, may be conducted under the Market Access Initiative schemes and/or similar schemes of the Department of Commerce.

According to the report a high-level Export and Strategy Committee may be set up under the aegis of the CII to help the government to implement the five-point agenda set by the Prime Minister in April 2018 for enhancing the competitiveness of the PSEs by 2022. The committee should have members from the PSEs, different government ministries/departments, academicians and sector and market experts.

Further, there is need for PSEs to participate more actively in international events and market development initiatives. There is need to identify and list some key international events where PSEs can participate for business-to business transactions. Delegates from Indian PSEs may be taken for them to enter and grow. This is especially true for some African countries, XLMV and CIS states, where the knowledge about the market among the PSEs is low, while the markets have huge untapped potential. Thus, planned visits and specific market studies will improve their knowledge.

The Report says that the government should encourage PSEs to participate in international forums and bid for project together as a consortium, leveraging on each other’s mutual competence, experiences and strength. Rather than competing among themselves they should be encouraged to collaborate. This will improve their chances of winning projects and face competition in global markets.

As regards exports, the Report mentions while PSEs are facing certain barriers, which mat adversely impact exports, a number of measures have been initiated by the government in recent years to promote exports. These include measures to reduce logistics costs and implement trade facilitation, improve ease of doing business, implementation of goods and services tax(GST), focus on research and development and innovation and increased use of technology and digitalization, among others.

To promote exports from the PSEs, a number of MoUs have been signed between Indian PSEs and foreign organisations / entities to promote domestic manufacturing, improve skills, and promote technology transfer and exports from India. For instance, a MoU was signed on March 2018 between Garden reach shipbuilders & Engineers Limited (A PSE under the Ministry of Defence) and Bhutan’s Construction Development Corporation Limited (CDCL) for promulgation of export business and cooperation on mutual interests. PSEs have to identity products that they can exports and markets where there is demand for such products. They have to share information on market access and other barriers with the government and industry associations and work together to address them. There is an urgent need to have a short-term and long-term road map and specific strategies to increase exports of PSEs.

This include (a) identifying of new markets and exploring opportunities in existing markets though go-to-market studies(b) indentifying ways in which PSEs can club their strengths together to explore new markets (c) identifying how industry bodies can work with government to build the “ Indian PSE brand “ in export market (d) identifying ways in which Indian PSEs can partner with companies from other countries to explore new markets, and (e) identifying incentives and support that can be given to PSEs which are WTO compliant, given that Indian recently lost the case against the US for the export-linked subsides that it gives to sectors like steel and to cluster like special economic zones.

The PSEs should use their CSR funds to collaborate with research organisations to do in-depth research on export opportunities and export barriers. There is need to do more studies on how other countries are supporting their PSEs, with specific examples, and this can be discussed with the government. The ministry of Commerce and Industry is already looking into a new export strategy along with a production-based support policy to incentivize the domestic manufacturers and to promote exports. The Ministry may work with industry organisations such as CII to have a road map to (a) increase the geo-strategic reach of PSE by 2022 and (b) to develop a strategy to reduce the import bill through more value addition in India.

According to the Report, the various ministries under which the PSEs are covered need to have a uniform approach towards promoting exports from the PSEs. To move forward with an export strategy, there is a need to have a vision plan and uniform approach towards promoting exports. There is also a need for time-series structured data on exports from the PSEs, by key markets and sectors, which should be made available in public domain. Further, there is need for survey-based studies to identify the issues faced by the PSEs in exporting to key markets. The data collated from such survey-based studies can help the government in developing evidence-based and data driven policies for the growth of the PSEs in general and enhancing their exports in particular.

The Report observes, most of the PSEs abroad (whether through exports or foreign investments) are into select sectors such as coal oil, natural gas, and financial services. There are other potential areas such as education, transport consultancy and project management, which can be explored further. In these sectors, the Indian PSEs have relatively low presence in foreign markets when compared to other private entities from India. In this context, there is need to diversify the export basket across exiting and new markets. A number of countries have requirements in the form of forming joint ventures with local company, local job creation or local sourcing of raw materials. In this context, PSEs can increasingly partner with different local companies and from joint ventures which can help in easy market access.

According to the Report, regional and bilateral engagements can be leveraged with potential markets in sectors where Indian PSEs have a comparative advantage. Strong bilateral relationships have always helped in easy market access and setting up of businesses in foreign markets. For example, various bilateral arrangements and MoUs in different sectors between India and Bangladesh have helped many Indian companies, especially Indian PSEs, in the energy sector to establish significant market presence in Bangladesh.

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