(from left) Amiti Sen, Associate Editor, businessline, with Bharat Kaushal, Corporate Officer, Hitachi Ltd and Executive Chairman, Hitachi India; Biswajit Dhar, Trade and Economic Policy Expert and Former President, JNU; Prerna Prabhakar, Fellow, Centre for Social and Economic Progress; and Jyoti Vij, Director General, FICCI, at a session on ‘Budget and Trade’, at Decording the Budget 2026-2027, organised by businessline in New Delhi, on February 6, 2026. | Photo Credit: BIJOY GHOSH

Will India be able to break through the current 17 per cent manufacturing to GDP ratio gridlock it is stuck in with this year’s budgetary measures and the new FTAs with the EU and the US? That was the question posed to panelists Jyoti Vij, Director General of FICCI, Bharat Kaushal, Executive Chairman of Hitachi India, Prerna Prabhakar, Fellow, Centre for Social and Economic Progress, and trade expert Biswajit Dhar by businessline’s Amiti Sen during a post budget event organised by the paper in association with industry body FICCI in New Delhi.

What ensued was a lively discussion with some cautious optimism from three of the panellists, downright pessimism from one and a few interesting prescriptions to scale up our manufacturing competitiveness and scale it to 25 per cent of GDP.

Admitting that global protectionism is proving to be a challenge, Vij said, “Indian industry’s competitiveness is increasing, not defined by cost, but by supply chain and by trusted partners and our ability to diversify our markets.” She gave the example of how quickly marine exports pivoted to newer markets.

“If you can conquer the chaos right here in India, your competitiveness goes up,” said Bharat Kaushal, pointing out how India was a unique large economy in which digital and physical infrastructure are growing at great pace together. He said even as globalisation and deglobalisation were trends going hand in hand, India’s strength was its consumption economy. “If you can bring maintenance costs down by 25 per cent in industries where cost to income ratio is nearly 98 per cent, there could be a lot of real change,” he said.

Professor Dhar said he was worried about the fact that India has committed to import $500 billion from the US, even if it is spread over five years. “This is bound to crowd out a certain amount of manufacturing in India.” He also rued that the government kept talking about reducing import dependence on China, but that it hasn’t gone down. In fact, it’s sort of increasing. 

The new FTAs

India’s manufacturing sector was not really able to exploit past FTAs with ASEAN etc. Are we better prepared this time to leverage market access with the new FTAs?

Pointing out that the earlier FTAs were with partners who were producing competing products, and they flooded our market leaving us with a higher trade deficit from them, Prabhakar said, “The newer FTAs are different in that there is a kind of complementarity. 

However in order to export more, we need to achieve scale which we currently don’t have,” she said. To achieve scale, she said, it is important to push the MSME segment and also to incentivise performance rather than mere growth. Rewards could be on Performance indicators like how much export growth is there, how much tech upgradation is taking place, she said.

Upgradation of existing tech parks and industrial clusters was also a necessary step, she added.

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Published on February 6, 2026