New Delhi, May 6 (PTI) Finance Minister Nirmala Sitharaman on Tuesday said government's policies have been tailored in a way to support manufacturing and the service sector growth.

About 60 per cent of India's GDP is contributed by the services sector, she said during 'ADB Governors' Seminar in Milan, Italy.

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"Our approach is to strengthen ourselves more on the basis of the assets that we have, whether it is in the form of human capital or technology in which we have a lead, if I can say that way, and also in sectors in which we think we can build further," she said.

India has about 600 million people who are less than 25 years of age and so the country is enjoying demographic dividend, she said.

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Key parts of Sitharaman's speech were shared by her office on social media platform X.

"So, looking at levers which we want to fully use, whether it is technology or manpower, the government's policies have been tailored in such a way that we are able to support manufacturing and the service sector in which India has a lead," she said.

With regard to manufacturing, she said, India needs to steadily increase its share in GDP from current 12-13 per cent to 18 per cent.

To boost manufacturing in the country, she said, India is focussing on 14 priority sectors or sunrise sectors like electronics, semi-conductors and pharma.

Any additional manufacturing capacity in these sectors gets the advantage of Production Linked Incentive, she said.

She further said that India wants to build any sustainable supply chain link with the global supply chain using the assets including soft skills that India have.

"We have taken a long term approach towards the supply chain keeping in mind our strategic strengths and making sure that India's capacities are leveraged," she said.

Asked about a free trade agreement with the EU, Sitharaman said, "I would want the free trade agreement to be signed."

Negotiation is about the art of making it possible, she said, adding, "you need to have everything done to make it possible to achieve. But when there are fixed positions, someone will have to bring in the elasticity there."

"So, it's not as if the world has not negotiated with one another. But it cannot be violative of the acceptable principles of free trade," she added.

During the day, Sitharaman had a meeting with Japan Bank for International Cooperation (JBIC) Governor Nobumitsu Hayashi.

She noted that over 70 per cent of the ambitious JPY 5 trillion investment target to India has been realised and India looks forward to strengthening the Special Strategic and Global Partnership as both nations build on 10 years of cooperation, the finance ministry said in a separate post on X.

The finance minister urged JBIC to facilitate more Japanese investments in India's high-growth sectors including manufacturing, semiconductors, green energy, and infrastructure.

While Japan remains India's 5th largest investor with USD 43.28 billion in FDI equity inflows, there is potential to further expand this partnership, it said.

"With bilateral trade at USD 23 billion, the Union Finance Minister highlighted immense scope to deepen collaboration in civil aviation, AI, green energy, and other key sectors," the ministry said.

(The above story is verified and authored by Press Trust of India (PTI) staff. PTI, India’s premier news agency, employs more than 400 journalists and 500 stringers to cover almost every district and small town in India.. The views appearing in the above post do not reflect the opinions of LatestLY)