CII President calls for targeted manufacturing, trade diversification and disinvestment funding to boost growth

India must adopt a targeted manufacturing strategy, increase funding from disinvestment proceeds, and continue diversifying its trade to enhance competitiveness, create jobs, and integrate more deeply into global supply chains, said Rajiv Memani, President of the Confederation of Indian Industry (CII), in an interview with CNBC-TV18.

Speaking against the backdrop of the recently concluded India–New Zealand Free Trade Agreement (FTA), Memani highlighted that trade diversification is critical in a volatile global economic environment.

“Exports to the US as a percentage of our total basket have already come down from 20–21% to around 15–16%. We are seeing early signs of trade diversification, and FTAs are not just about tariff reduction—they are about building strong economic bridges between countries,” he said.

Memani pointed out that India needs a focused strategy for manufacturing high-import products such as electronics, semiconductors, and energy transition equipment.

The CII recommends that funds for this strategy could come from increased disinvestment proceeds, using the sale of government stakes in public sector units to finance infrastructure and projects aimed at enhancing competitiveness.

“Such measures will help expand manufacturing’s share in the economy and create more jobs,” he added.

On the investment front, Memani said the perception that private investment is slowing is not entirely correct.

“When we look at CII research and CMIE data from 2019 onwards, the average increase in gross block CAGR is about 15%, including the COVID years. New project announcements are up by 9–10%, and the number of stalled projects has come down,” he noted.

The CII President also highlighted the need for further reforms in the upcoming Union Budget.

“We need to be more aggressive on non-tax revenue, particularly privatisation and disinvestment. Over the next two years, we should budget for at least ₹1.5–2 lakh crore from these sources and use the funds to drive large projects, whether it is high-speed rail or helping states with privatisation of power distribution companies,” he said.

Also Read | India, New Zealand conclude FTA talks; third trade pact this fiscal

Memani stressed that improving competitiveness requires attention to power costs, judicial and statutory reforms, and overall factor cost reduction.

“As tariff barriers come down, India must ensure our production costs are competitive. Efforts to reduce power inefficiencies, currently around ₹1.50–₹2 per unit, are crucial for commercial operations,” he added.

With India already signing multiple trade agreements since 2021, including deals with the UK and Oman, Memani believes that these steps, combined with a targeted manufacturing strategy and increased disinvestment funding, will help India build a stronger economic base and integrate more effectively with global supply chains.

Watch the video for more