Modi Govt approves country’s first ever capital goods policy

The Narendra Modi Government has cleared the first ever policy for the country’s capital goods sector, Union Minister for Heavy Industries Anant Geete said on Monday. “The capital goods policy was cleared by Prime Minister Narendra Modi last week,” said Geete. The policy envisages increasing exports to 40 per cent of production, from the current 27 per cent, while increasing the share of domestic production in India’s demand to 80 per cent from 60 per cent, potentially making India a net exporter of capital goods. 

“The capital goods sector is currently going through many challenges and issues and to address those challenges, the government has launched the comprehensive policy document, the National Capital Goods Policy, today,” Geete said at a Make in India week seminar in Mumbai. 

“The clear objective of the National Capital Goods Policy is to increase production of capital goods from Rs 2,30,000 crore in 2014-15 to Rs 7,50,000 crore in 2025 and raising direct and indirect employment from the current 8.4 million to 30 million,” he added. 

It also aims to facilitate improvement in technology depth across sub-sectors, increase skill availability, ensure mandatory standards and promote growth and capacity building of MSMEs.

Key policy recommendations include strengthening the existing scheme of the Department of Heavy Industry on enhancement of competitiveness of the capital goods sector by increasing budgetary allocation and increasing its scope to further boost global competitiveness.

It entails stepping up exports of India-made capital goods through a ‘Heavy Industry Export & Market Development Assistance Scheme (HIEMDA)’, launch of a Technology Development Fund, setting up new testing and certification facility and upgrading existing ones, making standards mandatory in order to reduce sub-standard machine imports, among others. The policy recommends integration of key capital goods sub-sectors as well. 

For good measure, it advocates launching a Technology Development Fund under the PPP model to fund technology acquisition, transfer of technology, purchase of intellectual property rights (IPRs), designs and drawings as well as commercialisation of such technologies of capital goods.