Mansukh Mandaviya, Minister of State for Shipping (Independent Charge) and Chemicals & Fertilizers, Government of India, talks about Recycling of Ships Bill, National Logistics Policy, Rs 14,000 crore package to boost API and medical device sectors and fertilizer sector as well as the subsidy that will be provided to the farmers among others during an exclusive interview. Edited Excerpts:
Prime Minister Narendra Modi has completed the first anniversary of his second term in office. So, let us know about the achievements of your department and what are your plans ahead?
The Modi 2.0 government has completed the first year of its term. On this occasion, I can say that in this one year, the Modi Government has solved issues – on which decisions were not taken for years – that was pending in the country since the independence era. As far as my ministry is concerned then I look after shipping, chemicals, petrochemical, fertilizer and pharma and I can say that steps related to reforms have been taken. In the context of the shipping sector, India leads the world in ship recycling industries. So, we ratified the Hong Kong International Convention via passing the Recycling of Ships Bill. Its ratification has helped us in attracting the world’s shipping line to our ship recycling industries to get their ships recycled in India. Recycling of ships in India will give a boost to India’s steel industry and furniture industry. And, many downstream industries can grow beyond through ship recycling. Sea hirers are a big opportunity in India because India has a coastline of 7,500 km and we have enchased the skills of the traditional sea hirers and channelized it to increase job opportunities of the ship hirer. I am happy to share that 2.40 lakh ship hirers across the world are from India and are working in ship line, cruise line and other areas. The speciality of this job is that you will get your salary in dollars and the minimum salary one can draw here is $2000, which is equivalent to Rs 1 lakh. We took an initiative and started working to increase the efficiency at the ports. We also brought Port Authorities Bill to bring reforms in the port sector. These are the works that we have done on behalf of the shipping ministry.
Port and port operations have played an important role amid COVID-19 pandemic crisis. How the situation now as a major part of our trade happens through the sea? Also, talk about the capacity situation at the ports and what is your outlook for the future?
Implementation of Lockdown 1.0 stopped the movement of people. Port is an activity and its closure would have stopped almost everything in the country because 95% cargo is exported and imported from the ports. For instance, suppose oil would have not imported or unloaded at the ports than it would have stopped every vehicle in the country that moves on oil. Besides the movement of food items to the faraway places in the country would have been stopped due to closure of the ports amid the lockdown. That’s why we asked the Home Ministry to add port into essential activity just a day after the lockdown was announced and then directed every port that labours should not leave the ports and work must not be stopped. As labours were not allowed to move out it was required to make arrangement for food, live, and availability of essential items for everyone. These steps were taken at the earliest and it helped us in maintaining our business of loading and unloading, which went down only 20-25% for two months and has revived by now. Thus, the activity has remained open at the ports, which helped in maintaining the export and import of EXIM cargo in the country. However, it faced some problems due to stoppage of transport facility and closure of the industry, which led to a decline in consumption. These are the things that brought down the cargo business by 25% but it has been fulfilled by now.
We have seen a sharp drop in container volume and have you provided any major relief, like relaxation in port charges, to the exporters to help them?
Indeed there was a slight fall – ranging between 30% and 33% – in export and import of the container cargo. Two things led to this decline and they are (i) Coronavirus that had its impact not only in India but across the world. This led to the closure of industries in many countries or had an impact on the production in others including India. It also had an impact on transportation and labour in India because their absence created a problem in loading and unloading at the places from where the cargo should move although it was done at the port. It occurred across the world and this led to a fall even on the port of India but it is being covered now.
Secondly, you asked about the kind of relaxations that were granted from our end then we through a circular asked the shipping lines to not take detention charge as unavailability of labour was creating a problem in loading and unloading the goods. Interestingly, the shipping lines agreed with it and didn’t slap any detention charge. Later, we also asked the CIF and ICD to not charge detention charges during Lockdown 1.0 and Lockdown 2.0. They were private and didn’t charge anything during lockdown 1.0 and then the association granted a 50% relaxation in Lockdown 2.0. It saved crores of rupees of people involved in EXIM cargo business.
We used our land as well as ports land for keeping the cargo that was imported without charging anything for the same. And, we just charged the routine charges at the warehouses, not the detention charges. These mechanisms were used to help the industry to make sure that EXIM business remains unaffected and people including industrialist involved in the business are facilitated.
Can you tell us the time by which the National Logistics Policy will be out and give a boost to the sector?
Having a logistics policy in the country is essential and when the commerce ministry is concerned then shipping, shipping line and transport can become a part of logistics. I have also shown my interest in it. The policy is being drafted by the commerce ministry but my ministry is also engaged in doing several works in that regard. Everyone together is willing to bring a logistic policy because the logistic cost is 12% and 14% in the country at present while the world’s logistic cost average stands at 9%, which means we are 5% costlier than the world. For instance, if anyone exports/imports something from India then he then logistic cost on the export or import cargo will be 5% expensive than other countries, which means that we can’t EXIM the cargo where we can earn a profit of 5%. Thus is the world will earn a 10% profit then we will earn a profit of just 5% and if they are earning a profit of 20% then we will get 15%. This is why there is a need to reduce the logistic cost in the country and a good policy is coming for the purpose. My ministry is contributing to it by boosting up the coastal shipping to reduce the logistic cost. At the same time, we are also boosting the inland waterways and multi-modal transportation. Many such things are being collected together to be a part of logistics policy. It will help in reducing the logistics cost in the country and we are heading in that direction.
Can you provide a timeline by which the policy will be out?
It is under purview with the commerce ministry and they have constituted a committee. My ministry is one of the participants in it that’s why I keep a tab on it. But, I can’t provide any specific timeline but I feel it will be out in the next few days.
Usage of hydroxychloroquine and azithromycin has taken a central stage at India and global level and India has played an important role in it. Can you tell us about the role that has been played in ensuring the availability of essential medicine and what is your outlook on its availability?
The spread of coronavirus pandemic across the world including India pushed the demand of three medicines hydroxychloroquine, azithromycin and paracetamol as they are considered effective. The world wanted to import them from India although we have the challenge of fulfilling the requirement of the country itself s well as export them. To begin with, we first banned its export to make an assessment then rationalized things. Then the Prime Minister started receiving direct calls from across the world in which many countries were asking for hydroxychloroquine while others asked for paracetamol. In such a situation, our ministry launched an initiative to find the plants that can manufacture hydroxychloroquine (HCQ) in the country and their production capacity i.e. the number of tablets that can be produced per day as well as weekly and monthly capacity. We also found the place from where they were sourcing APIs and calcium. Then it was monitored on a day-to-day basis and its empower committee was started meeting every week. And, I assessed the country’s production capacity of hydroxychloroquine and its domestic consumption and then fulfilled its internal requirement first. Then, we started exporting what was left with us. I can happily inform that the country has supplied hydroxychloroquine and paracetamol to 113 countries of the world. Out of these 38 countries have written or called to Prime Minister Narendra Modi and thanked him for the same. At the same time, I would like to say that in the post-COVID era, people in Europe and America will thank Indians during their stay or visit to their respective countries. They will thank them as India is the country that amid coronavirus crisis has saved the life of citizens of their countries by ensuring the availability of hydroxychloroquine and paracetamol in those countries.
The government was also planning to introduce some incentive-based scheme to select APIs. Update us about the plan and the stage in which it is at present and what kind of incentives would be given under it?
Prime Minister Narendra Modi quite before the start of the corona crisis in his direction to our ministry said that the country should be self-reliant in terms of availability of medicines because it is essential to protect the lives of the citizens of the country. What problem do you have? So, we identified 53 APIs and we were dependent on imports for 80% of the APIs of them. This led to a question, can we produce it within the country, if yes, then why it was not being produced here. Its assessment helped us to understand that the production cost of APIs is slighter more in India, while it is low in several countries. This low cost allows dumping of the APIs in India and this is why 53 critical APIs were not produced in India. However, PM Modi asked us to produce it within India. For the purpose, four schemes were launched in India and a package of Rs 1,4000 crore was announced. This package will be used in the creation of API Park, bulk-drug Park and a Medical Device Park. Secondly, what is the variation between the international market and our market? There are several fermentation-based APIs and we will provide production-based incentives to them. That is, the APIs that we import and are fermentation-based and there is a 20% price difference in it then we have come out with a production-based incentive scheme. Under the scheme 20% incentive will be provided to those who are engaged in the production of the fermentation-based APIs, i.e. if my production cost of a tablet is Re 1 than an incentive of 20 paise will be provided by the government of India. It will encourage domestic production of the APIs in the country. Similarly, the viability gap for chemical-based API was 10% and we have decided to provide a 10% incentive for its production.
As far as medical devices are concerned then very few medical devices are manufactured in the country like sonography machine, digital X-ray machines and thermometer among others are mostly imported. Can’t we manufacture medical devices in India? For the production of medical devices in India, we will provide an incentive in the medical device park. In addition to this, a production-based production-linkage incentive will be provided. What can be done to create viability between the production in India and other countries? Then, we found that production in India is 5% costlier than other countries and that is a region that no company is interested in making devices in India. So, India will provide 5% incentive on it and for the purpose, a package of Rs 4,000 crore has been announced. As a whole, Rs 14,000 crore will be spent to boost the critical API industries in India and for production of the medical device here in the next eight years. It will be advantageous because many companies will come to India with their technologies and produce medical devices in India. Similarly, big companies in India will also expand their plants and enhance production. This will help India in being self-reliant in terms of medicine and APIs sectors.
You said that a package of Rs 14,000 crore has been announced to boost the two sectors, namely APIs and medical devices. Can you let us know about the kind of companies who have responded towards it at the global and India level?
Two types of talks have started at our end. (i) When we started stakeholder consultations and discussed it with the Indian Pharma Association to finalize the policy/ rule than many companies came forward and said that they were willing to expand their plants. Many companies were there who informed us that we are engaged in API production but were not producing critical APIs as we could not sustain them but now they are interested in starting their production. Many multinational companies have started enquiries through Invest India and have asked us to send our policy and rule and regulations for the purpose. They also want to invest in India.
There are domestic indigenous companies who have approached many multinational companies, especially in the medical device sector, and asked them to come to India along with their technology. And, they will provide platforms to them and then both the companies will make a joint-venture in India and produce them within India. There is a buzz in the pharma sector. I believe that we will become self-reliant in the medical device sector as well as the API sector and will succeed in bringing international investments and industries will go ahead in the country.
You also look after the fertilizer sector and quite action is expected in the sector as output is going to be good due to monsoon, which is quite good. What is your outlook on this sector? There are talks related to subsidy and decontrol the urea segment. Do you think that it is a time when big changes can be seen in the fertilizer sector as the industry is struggling with financial concerns?
Fertilizer sector is a sector that is associated with the farmers of the county and we have decided that there will be no deduction in the subsidy that is granted to them. The Modi government’s attitude has always been very clear to ensure the availability of fertilizer to the farmer. You must have seen that there has not been any shortage or black marketing of fertilizer in the country in the last six years under Modi governance, i.e. Modi 1.0 and Modi 2.0. Neither the farmers have made to stand in long queues for procurement of fertilizer because we assess things and perform our activities accordingly. For example, 240-245 lakh metric tonnes of urea is produced domestically in India, while our yearly consumption stands around 300-325 lakh metric tonnes. This means that 60-70 lakh metric tonnes of urea are imported and we make plans in advance for the purpose. However, the plan is changed based upon the situation, for example, we received good monsoon last year, which helped in filling our water bodies like dams and ponds. We saw that while travelling through the plane and that’s why I called a meeting and said that water bodies are full and this means that more crops will be produced in the winter/ Rabi season. That’s why there is a need to assess production level and then make plans for import of fertilizers. This is something that helps us in managing it properly and make it available for the farmers following their requirement.
Secondly, fertilizer companies are engaged in manufacturing fertilizers and there is a need to ensure that they are not at a loss and they continue production and that is why production cost and MSP of Urea has been fixed by the government. So, the gap created between the cost and the production cost is subsidized and provided to the companies. The companies have requested us to increase the fixed cost due to which we the fixed cost has been increased by Rs 350/ metric tonnes. Thus the industry will not be at the loss. There is a need to encourage the industries as well as provide urea and fertilizers to the farmers on time. Yes, we want to reforms the fertilizer sector but it is related to putting money in the pockets through DBT.
Source: Zee Business