Sitharaman said the country met requirements of a “fair and transparent” economy, and with an increasing number of multinational companies diversifying their sourcing base, it was well-placed to become a more important part of global supply chains.
The minister called on foreign investors “to come and look at what’s happening in India rather than listening to perceptions being built by people who have not visited the ground but (were) writing reports”. The structural and governance reforms taken up by the government have strengthened the foundation of the Indian economy, which will support growth, she added.
“We’ve incentivised production so that goods produced in India are consumed in India as well as exported to other countries,” she said. The government has come up with over a dozen production-linked incentive schemes so that those supply chains can thrive in domestic as well as international markets.
Sitharaman, who is in Washington DC to participate in the Spring meetings of the World Bank Group and the International Monetary Fund, spoke at the Peterson Institute for International Economics (PIIE) and at an investor roundtable.
India’s growth is sustainable, as it “attempts to grow its manufacturing sector and not import products that we manufacture”, the minister said.
The IMF Tuesday pared India’s growth forecast to 5.9% from 6.1% for the current fiscal year and to 6.3% from 6.8% for next fiscal year. The country, however, will still remain the world’s fastest growing major economy.
WTO and Ecomm Moratorium
The World Trade Organization, Sitharaman said, should be “more open about issues” and progressive and fair to all members. “It has to give voice to all and not just hear but also heed,” she said, while calling for a review of a 25-year-old moratorium on the imposition of customs duties on electronic transmission (ecommerce trade).
“Shouldn’t there be a change in the WTO policy in terms of the moratorium? We don’t have to reverse the benefits of globalisation but make it more transparent,” she said.
A UNCTAD study of 2019 revealed that developing countries were losing $10 billion in potential revenue annually, including $497 million by India, due to the moratorium, even by a conservative estimate.