Mumbai: India warned on Sunday against protectionism as the world grapples with the sovereign debt crisis, portraying itself as a relative haven of stability in troubled economic times.
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Commerce minister Anand Sharma said India was an influential emerging economy and that the country “will be part of the stabilization process when it comes to what’s happening in Europe”.
Commerce and industry minister Anand Sharma and RIL chairman Mukesh Ambani attend the opening plenary session of the World Economic Forum (WEF) India Economic Summit in Mumbai. (Reuters photo)
But he warned: “In difficult times, the tendency to look inwards, to have protective measures... is something the G-20 must reassure the world that we will not allow that to happen.
“We need it (the G-20) to engage more, not going for protectionism because that has happened since 2008-09,” he told delegates at the India Economic Summit in Mumbai.
“We must first put in place a multilateral trading system by completing the ongoing WTO (World Trade Organization) negotiation (and) correct historical imbalances to make this order more equitable and more accessible.”
Hundreds of international policymakers and industry leaders have converged in the financial hub for the annual summit, hoping that India can provide a rare chink of light as the global economy falters.
India emerged relatively unscathed from the last global economic downturn in 2008, largely because most of its demand for goods and services was met domestically.
Its tightly regulated banking and financial sectors were also less exposed to overseas troubles.
Prithviraj Chavan, the chief minister of Maharashtra, said India was on a “high-growth trajectory going into the next decade”.
“India offers a refuge for long-term investment in pensions, insurance and banking... Emerging markets will play an increasingly important role in the stabilization of the global crisis,” he said.
India, however, is still facing a squeeze from high inflation that has hit investor confidence and also threatens government ambitions to lift millions out of poverty.
India’s stock markets have slid as much as 20% this year, making them among the worst performing globally, while companies have seen falling profits due to rising input costs and weak demand from the troubled eurozone.
The central bank governor said in October that India’s economy was likely to expand by 7.6% in the financial year to March 2012, lower than an earlier forecast of 8%.
Local financial experts said they were still confident in India’s economic expansion, despite signs of a slowdown that has undercut hopes that it can help power global growth.
“India’s structural growth story is intact. It’s not broken, despite near-term concerns,” Sandeep Naik, co-head of private equity advisory group Apax Partners, told delegates.
Udayan Sen, chief executive of Deloitte India, agreed, saying that India was “trending down but not collapsing”, with continued robust demand domestically.
Business leaders at the summit called for much-needed institutional reform, as well as improvements in infrastructure spending, transparency and governance.
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