MUMBAI: Focus on manufacturing sectorand import substitution can help the country reduce the pressure on current account,Chandra Kochhar, head of the largest private sector lender ICICI BankBSE 0.85 % said today.
"India needs two structural changes, namely import substitution and growth of manufacturing sector...the country has high current account deficit. If, in addition to focussing on export growth, we can also focus on import substitution it will help in reducing the CAD," Kochhar, managing director and chief executive of ICICI Bank, said.
Import substitutes are generally meant to generate employment, reduce forex demand, stimulate innovation, and make a country self-reliant in critical areas.
The comments come within days after RBI data showed that the country's current account deficit--the gap between the forex earned and expended ---for FY13 stood at a record high of 4.8 per cent.
Speaking at an event, Kochhar said the small and medium enterprises can play an important role in ushering in the desired changes.
"SME sector can play a major role in achieving both these structural changes," she said.
Kochhar also said the government has taken a slew of measures in the recent days like gas price revision, which will help boost sentiment.