Recession in the West presents opportunity to draw manufacturers to India: FM Nirmala Sitharaman

Recession in the Western part of the world like in the European countries can provide an opportunity for India to bring more investments and strengthen its manufacturing sectors, Finance Minister Nirmala Sitharaman has said.

Speaking on December 16 at FICCI's annual convention in New Delhi, Sitharaman said that India has shown the lead due to the government's favourable approach in providing technology and technology platforms. 

"The suspected long-drawn recession which is likely to affect in West will not just impact your (industry) exports but it gives us an opportunity for many of the investments which are now looking for a different place from where the activities can continue to happen. It is the best time for the Indian industry to work on strategies for drawing those manufacturers to India,” she added.

The Eurozone and most EU countries are expected to face an economic recession in the last quarter of 2022, according to the European Commission's autumn economic forecast. Their forecast predicts prices would peak at year-end and remain high in 2023. Inflation is likely to be of an average of 9.3 per cent in the EU and 8.5 per cent in the eurozone for 2022.

The Finance Minister stressed the fact that at a time when the European countries are likely to face recession, many companies may reach out to other parts of the globe - like India. The companies may have their headquarters based in European countries but they may likely consider Indian manpower, do other sourcing from India, and even manufacture here.

"We should be focusing on manufacturing, we should be focusing on new areas of services, particularly the IT-driven service sector. But it is important for us to strengthen our manufacturing," said Sitharaman.

She also highlighted the fact that start-ups in India have shown several innovative ways to develop business. Thus, India can even strengthen its manufacturing sector with the help of start ups and government policies, she added.

"If you are ready to adapt, if you are ready to commercialize, if you are ready to scale up that innovation that is coming out of these start-ups, I think we will benefit ourselves (both the startups and yourselves together)," she summed up.

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