Deepak Parekh: Why can't India be protectionist like the US?

Deepak Parekh, a senior banker and one of the government appointees to Satyam's board, gestures during a news conference at the head office of Satyam Computer Services Ltd in the southern Indian city of Hyderabad January 12, 2009. The option of a merger for India's embattled Satyam Computer Services was always open, a member of the new board said on Monday. REUTERS/Krishnendu Halder (INDIA) - RTR23BD3

Encouraging the 'Be Indian, Buy Indian' slogan, HDFC Chairman Deepak Parekh on Friday said there is a need for the government to be 'protectionist' to safeguard the interests of the domestic companies.

"We also have to be protectionist...If large countries like the US and Britain are turning protectionists, why don't we become protectionist?" Parekh said at the India Today Conclave here. "We are a large country, we have a large market. We also have to protect our industry," he said.

Recently, SBI chief Arundhati Bhattacharya had also called for some protections to the domestic industry. Parekh gave the example of the steel industry which was reeling under immense pressure due to cheap Chinese imports, but is now working on higher capacity after the government introduced minimum import price.

"Our steel industry was bleeding because we were getting all steel products from China at ridiculously low prices till the government intervened and put a minimum import prices," he said.

"Now steel companies are working at 80 percent capacity against 50 percent before the government's intervention. They are able to service their loans now. I am sure the capacity will go up to 85-90 percent in next few months," Parekh said.

He said unfortunately the government cannot put anti-dumping duty on every product and so there is a need to be protectionist to promote domestic companies.

Agreeing with the fact that competition will help companies thrive better, Parekh said there is a need to look at the quality of the products which competition brings in.

"The quality of products that China is dumping are far poorer than our locally-made products," he said. Parekh said the consumers in the country are smart and do not want to buy Chinese products.

"I know that when the common man buys a car, he would not like to buy Chinese tyre or any other Chinese accessories," he said. "Be Indian and buy Indian," he added.