India’s manufacturing sector should aim for export-led growth driven by climate-friendly practices and view regulations like the ‘Carbon Border Adjustment Mechanism’ (CBAM) as an opportunity to create a global environment, Jamshyd Godrej, chairman, CII Sohrabji Godrej Green Business. The center and chairman, Godrej & Boyce, told *Business Standard* in an interview in Delhi on Wednesday.
Godrej, who is one of the founders of this institute, said that the idea of CBAM is beneficial to each country as it will encourage industries to improve sustainability while protecting against buying cheap goods.
Click here to contact us on WhatsApp
“What we are doing is to protect the Indian industry from buying cheap goods like steel from China. But we don’t do the other part. India should have something like CBM. Anyone can offer a cheap product, but if our tax laws say you can’t just bring something cheap here, you need to bring something with a better carbon footprint, or pay higher prices,” said Godrej.
He admitted that there is a popular opinion that CBAM will have a negative impact, but he believes that it will be short-lived. “When Europe is thinking about CBAM, we should have thought about our own CBAM and moved accordingly. But it is not too late; we should develop a similar system that improves the motivation of the Indian industry to be more neutral. They will benefit when they export to other countries and build a network of goods that can withstand the weather,” he said.
He added that as leading players reorganize their production with greener options, this change is likely to create a domino effect throughout the supply chain. “If a truck manufacturer like Volvo says that every component they produce will be green, the supply chain will reconsider their business,” he said.
Godrej also discussed the decline in spending in the Indian economy, which he attributed to an over-focus on self-sufficiency.
“If we had growth led by exports, the economy would be in a different situation now. Given the right policies, opportunities, and infrastructure, manufacturers can become major global players. This is where growth will come from. India’s purchasing power is growing as a function of GDP,” he said, adding, “If you don’t export, you are very vulnerable because you are dependent on the Indian economy only. If you have 20 markets and five of them are not doing well, at least 15 are doing well.”
First published: October 16 2024 | 4:54 PM IST
Source link