FDI: Maran hopeful of uptrend

By Our Special Correspondent

NEW DELHI, OCT. 17. The Commerce and Industry Minister, Mr. Murasoli Maran, today exuded confidence about the state of the economy despite global turbulence since September 11. Foreign direct investment flows had been higher than last year till the end of August and there had been ``no visible impact'' on the economy of recent developments, giving rise to hopes of upward trend continuing on the FDI front.

The total FDI inflows during January-August 2001 were estimated at $3.19 billion - 33 per cent higher than the corresponding period last year.

There had been no case of potential investors backing out though there may be some hesitation on fresh investments. Some forecasts however indicated that the U.S. economy would bounce back giving India an opportunity to provide outsourcing facilities at competitive rates, Mr. Maran said.

Mr. Maran said that India would be among the top five fastest growing economies of the world with over five per cent growth during the current fiscal and the fundamentals of the economy were quite stable. There was of course a downturn in exports even prior to September 11 but the 12 per cent export target was not being revised in order to motivate exporters. The launch of the medium-term export strategy was also being delayed for a few weeks to include the new dimensions of the latest international scenario.

Mr. Maran said that consultations with political parties prior to the coming ministerial conference of the World Trade Organisation (WTO) would begin tomorrow. ``The touchstone is national interests,'' he said and added that a stakeholders' approach would be adopted in contrast to the unilateral decisions taken by the Government at the conclusion of the Uruguay Round.

Though Mr. Maran was not prepared to give a clear answer on whether India would support a new round of trade negotiations, he did indicate that developed countries were putting pressure on the developing countries in various ways. The agenda was being set by the ``market powers'' of the U.S., the European Union and Japan. India was not happy with the Doha draft ministerial declaration which did not sufficiently focus on implementation issues. ``It is just a token,'' he said. Denying that India was isolated, he said the country has found ``good support'' among developing countries on the need to address the implementation issues before moving on to a new round.

Mr. Maran also announced the setting up of a high- level committee for the next five-year exim policy that would be co- terminus with the Tenth Plan period (2002-07). The committee would review the policy instruments and package of export promotion schemes and procedures for exports and suggest steps to rationalise and channelise the schemes. It would also identify measures for short and long-term plans to increase exports. The 12-member committee would be headed by the former Commerce Secretary, Mr. P.P. Prabhu, and include representatives from export promotion councils, trade and industry.

Exports in the textiles sector suffered the most. The impact on this sector could be gauged from the fact that it accounted for $12 billion of the total $44 billion of exports last year. Exports during April-August 2001-2 stood at $17.13 billion which is 2.3 per cent lower than last year. ``Uncertainties of the current global scenario could add to the decelerating trend,'' he said.

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