India one of the brighter spots amid slowdown, says minister

India is not a significant part of the Chinese production chain, said Indian Finance Minister Arun Jaitley at a Singapore Summit event yesterday.
India is not a significant part of the Chinese production chain, said Indian Finance Minister Arun Jaitley at a Singapore Summit event yesterday.ST PHOTO: ONG WEE JIN

The eyes of the world may be fixed on the slowdown in China but India is mostly insulated from the fallout, according to Indian Finance Minister Arun Jaitley last night.

Mr Jaitley said at a Singapore Summit event: "India is not a part of the Chinese production chain, significantly. In fact, the two segments - commodities and oil - that have been adversely affected certainly don't adversely impact India, (which is) a net importer.

"Therefore, the more we see a low price regime, the more India continues to benefit. Notwithstanding the slowdown globally, we do stand out as one of the brighter spots."

Mr Jaitley, who was speaking in a question-and-answer session at the Marina Bay Sands convention centre, addressed concerns that the pace of the Modi government's economic reforms has been slow rather than transformational.

"I welcome a certain amount of restlessness," he said, adding: "I think the government has moved fairly rapidly. The government's direction is absolutely clear."

He told the gathering of around 400 global business leaders, investors and government officials that headway has been made on four fronts - labour, tax, power supply and land reform - and added that the government has solved most of its "legacy issues".

Earlier in the evening, Singapore's Trade and Industry Minister Lim Hng Kiang told the summit that, while global growth has been disappointing this year, Asia's growth prospects are still bright in the long term.

"Notwithstanding the current challenging macro-economic conditions, the long-term Asian growth story remains bright," he said.

Mr Lim noted that a China slowdown is perhaps the biggest concern for most investors, but said the Chinese government has made "some progress" in restructuring its economy away from investment- and export-driven growth, and towards consumption-driven growth.

"As private consumption becomes the primary driver of demand in China, the country will also emerge as a leading source of final demand in the global economy," he said.

Mr Lim also emphasised growth opportunities in the rest of Asia.

"Many countries in the region have favourable demographic trends and a fast-expanding middle class," he said.

Mr Lim dwelled on the importance of regional economic integration to "unlock" Asia's growth potential.

He named two such ongoing "mega" regional initiatives: the Trans-Pacific Partnership deal and the Regional Comprehensive Economic Partnership, which aims to deepen Asean's linkages with its six free trade agreement partners.

The three-day Singapore Summit features a dialogue with Prime Minister Lee Hsien Loong today that will be moderated by DBS chief executive Piyush Gupta.

A closed-door roundtable session will be held tomorrow for the international advisers of the Monetary Authority of Singapore, Economic Development Board, GIC and Temasek Holdings.

A version of this article appeared in the print edition of The Straits Times on September 19, 2015, with the headline 'India one of the brighter spots amid slowdown, says minister'. Print Edition | Subscribe