FM signals Covid-style relief, asks industries to make in India

Mumbai: Finance minister Nirmala Sitharaman on Saturday signalled fresh Covid-era style policy support to cushion the impact of the West Asia conflict, while urging India Inc to step up investment and replace imports with domestic manufacturing.At the ET Awards for Corporate Excellence, Sitharaman said the govt is working on support measures for sectors hit by supply disruptions and rising input costs due to West Asia conflict.“There is also a discussion on support similar to what was given during Covid under the emergency liquidity credit guarantee scheme, something of that order for most units that have been affected by raw material supply disruptions, rising prices and insurance risk,” she said.On FDI, FM acknowledged recent outflows and some weakness in inflows, arguing that investment decisions are not driven purely by economic indicators but also by “other considerations,” including global and strategic factors, even as India is the fastest-growing major economy with stable indicators. On changes to capital gains tax and securities transaction tax, demanded by some businesses, Sitharaman said strong inflows were recorded even when both taxes were in place and stressed she was “neither saying yes nor no”, indicating it is under review.‘Will ensure availability of fertilisers, energy even at cost of fiscal pressures’The Union finance minister said the govt would prioritise ensuring availability of critical inputs such as energy and fertilisers, even at the cost of fiscal pressures, drawing upon its pandemic playbook.“When fertilizer prices abroad shot up, we still bought them at those prices and ensured that supply disruptions did not happen. Above all, the price was not passed on to farmers. Farmers continued to pay the same price,” Sitharaman said, indicating a similar approach if the current crisis intensifies.On energy security, Sitharaman reiterated that India would continue to source crude pragmatically to protect domestic needs. “What suits India’s interest will be our top priority. We will source from wherever it is available, wherever it is cheaper, and wherever it can be supplied on time to meet our requirements,” she said.The minister stressed that the policy approach would not involve trade-offs between growth, inflation and stability. “We have to work on all three simultaneously, remaining constantly vigilant and alert to changes,” Sithraman said, pointing to emerging risks including cyber threats to financial systems. At the same time, FM made it clear that govt support must be matched by stronger action from industry, particularly in boosting domestic manufacturing and reducing import dependence. “India’s domestic market still needs many goods to be manufactured within the country. Every import presents an opportunity for domestic manufacturing,” the Union minister said.Framing import substitution as a business opportunity rather than a policy mandate, Sitharaman added: “Why should we import when industry in India can produce these goods? Wouldn’t you want to produce for Indian consumers? That is a huge market.”The minister also called for greater agility and investment from corporates, including in new technologies.