New Delhi: Commerce minister Anand Sharma on Sunday said that the worst may be over for economies hit by the global financial crisis. Whether the turnaround is adequate and sustainable remains to be seen, Sharma said at the India Economic Summit of the World Economic Forum.
“Last few weeks have brought cheer,” Sharma said.
Also See Mint’s coverage of the WEF India Summit
“There is a visible turnaround in most of the economies around,” he said. “There is also a rebound in emerging economies...which is reflected in core industries. We have to see how the situation stabilizes. We should not forget that this rebound is stimulus-linked.”
Harmonizing act: Commerce and industry minister Anand Sharma stressed the importance of ensuring better access to markets at WTO in his address at the India Economic Summit in New Delhi on Sunday. Ramesh Pathania / Mint
India’s exports, which have fallen for 12 straight months to September, are expected to rebound in the coming quarter, said Sharma. Export categories such as gems and jewellery, handicrafts and leather had turned around, while last year’s flight of capital is behind the country.
India’s outgoing chief economic adviser Arvind Virmani last month told Mint that the state of the economy “is good and it is as per the forecasts that I have been making”.
“If you look from March, basically, I had made a conditional forecast saying that if the US economy and world economy, in particular, bottoms out and we don’t have any negative surprises, then we would see a U-shaped recovery in terms of quarters...”
In a related development, the commerce and industry ministry will undertake a performance review of the sectors.
The International Monetary Fund, or IMF, in its latest edition of the World Economic Outlook, its biannual report on the world economy, stated that India and China will lead the world out of a deep recession in 2010, but that the global recovery could be sluggish.
At the India Economic Summit, Sharma stressed the importance of ensuring better access to markets at the World Trade Organization (WTO) discussions.
“The political message is clear, that negotiations should continue. We hope by the time ministers go to Geneva for the ministerial, there will be some progress,” he said.
WTO talks collapsed in July 2008 over a so-called special safeguards mechanism (SSM) that sought to provide a safety net to developing countries to raise tariffs in excess of current ceilings if imports of some agricultural products increased beyond a certain limit.
Developed and developing countries failed to agree on the details of the proposal, causing the talks to stall.
WTO member countries in September resolved to conclude negotiations by the end of 2010. That decision came at an informal ministerial meeting hosted by New Delhi in September.
Defending India’s stance at WTO, Sharma said, “By harmonizing positions, we mean closing the gaps. Harmonizing means flexibility, not compromising.”
On the easing of foreign direct investment caps, Sharma said: “Rationalization or simplification does not mean revisiting sectoral caps. The caps have been revisited by the group of ministers early this year.” He called it an ongoing process.