Addressing FICCI executive committee members in the capital, Hegde felt that the local industry should, however, be given a "level-playing field" and "reasonable" protection by way of adequate tariff without impinging on its efficiency and quality. Hegde agreed with the view that there must be domestic competition first to enable industry to become strong and viable before it is exposed to international competition.

But even where international competition had existed for many years, it had been mostly in theory rather in practice as many Indian companies could enter into cartel arrangements, he pointed out.

Referring to anti-dumping duties he explained that protection beyond a reasonable tariff level would be "counter-productive" as it would affect the user industry and consumers. In this regard he noted the divergent viewsexpressed on the levy of anti-dumping duties with some favouring it and others opposing it.

While admitting that the indigenous industry had been plagued by several handicaps, the commerce minister held that pressing for the easy option of devaluation of the Indian rupee would not compensate for inefficiency and low productivity in the industry. The rupee had been devalued by 40 per cent over the last six years, he noted and felt that devaluation as proposed by certain sections of industry could not be the only solution to these handicaps including rising inflation.

Any move in this direction would make the Indian currency valueless, significantly increase the country's repayment obligations and strain the economy. Underscoring the importance of export promotion, Hegde said that if India were to become a successful exporting economy, three vital aspects had to be kept in view -- increase in production with export surplus, improvement in quality and competitiveness.

Export surplus was the basicrequirement, especially in the case of agricultural products, plantation items, leather goods, minerals and ores where supply constraints affected the export growth.

Equally important was consistent supply of goods and India could not hope for a reasonable export price unless it was a reputed and had surplus. A policy has therefore to be evolved whereby no obstructions would be placed on continuity of supplies.