As the Indian economy sees a revival, global investors should invest in the world’s “most open economies”, Prime Minister Narendra Modi said on Thursday,
“Indians have the spirit to achieve what is believed to be impossible. No wonder that in India, we are already seeing green shoots when it comes to economic recovery,” he observed at a “India Global Week” conference, organised by London-based NRI group Indian Inc.
“India remains one of the most open economies in the world. We are laying a red carpet for all global companies to come and establish their presence in India. Very few countries will offer the kind of opportunities India does today,” he stated, listing the gains India had made in “total financial inclusion, record housing and infra construction, Ease of Doing Business, bold tax reforms, including the GST”.
Mr. Modi’s reference to “green shoots” or small signs of revival comes a few days after the Ministry of Finance published its Macroeconomic report for June 2020, which said activity had “picked up” in certain areas, even though the GDP growth estimates have plummeted further.
“Early green shoots of economic revival have emerged in May and June with real activity indicators like electricity and fuel consumption, inter and intra-State movement of goods, retail financial transactions witnessing pick up,” said the report, showing that while there isn’t growth per se yet, the consumption in certain areas wasn’t falling as fast as it was earlier.
Electricity consumption was down, -11% in June as opposed to -24% year on year in April 2020. E-way bill values, petroleum products consumption, and railway freight traffic were all also lower than last year but higher than last month, the report said.
IMF estimates
While confirming the IMF’s (International Monetary Fund) latest estimates of a sharp 6.4% contraction in growth rates, the Department of Economic Affairs, which authored the report, said that “in line with downward revision of global growth, India’s growth has been forecast at -4.5 % in 2020.”
Mr. Modi said that India’s “talent force” and its “ability to reform and rejuvenate” would ensure that it would lead the global revival. Inviting the investors gathered for the virtual summit, he singled out agriculture, defence, space technology and the MSME sector for funds.
Addressing international investor worries over the government’s announcement of building “Atmanirbhar Bharat [self-reliant India]”, which is seen as a possibly protectionist policy, he stated that “Atma Nirbhar Bharat is not about being self-contained or being closed to the world. It is about being self-sustaining and self-generating.”
Speaking at another session at the conference, U.S. Ambassador Kenneth Juster said India should position itself as a counterpoint to China, in comments referring to the border stand-off and to India’s earlier decision not to join China’s Belt and Road Initiative.
“As companies begin to have second thoughts on China, and even pull out of China, India should become an attractive hub for them, not just in the region but also globally”, Mr. Juster said at the event, which included India’s Ambassador to the U.S.Taranjit Sandhu.
