NEW DELHI (AFP) - India's prime minister said on Wednesday he would urge his fellow leaders at the G20 summit to pursue an "orderly exit" from their stimulus schemes to limit damage to emerging markets.
Manmohan Singh said winding back of stimulus schemes by industrialised countries risked hurting developing nations as overseas funds are withdrawn from their stock and debt markets.
"Though there are encouraging signs of growth in industrialised countries, there is also a slowdown in emerging economies, which are facing the adverse impact of significant capital outflows," Singh said in a statement before his departure for Thursday's summit in Russia.
"I will emphasise in St Petersburg the need for an orderly exit from the unconventional monetary policies being pursued by the developed world for the last few years, so as to avoid damaging the growth prospects of the developing world."
India is one of many emerging markets that has been hit by foreign fund outflows on expectations that the US Federal Reserve will wind down its stimulus scheme as the US economy recovers.
The impact on the Indian rupee has been compounded by domestic woes including a record current account deficit - the broadest measure of trade - and the slowest annual growth in a decade.
India's gaping deficit must be funded with foreign capital and the country is seen as one of the most vulnerable among emerging markets.
Since June 1 - after the US Fed signalled a tapering of its stimulus - overseas funds have pulled out nearly US$12 billion (S$15.36 billion) from India's stock and debt markets.
"The summit comes at a time when we in India have introduced several reform measures and taken steps to strengthen macro-economic stability, stabilise the rupee and create a more investor-friendly environment," Singh said.
"At the same time, a stable and supportive external economic environment is also required to revive economic growth."