India Hopes to Grow Despite Europe’s Declining Economy

An International Monetary Fund official stated that the continuing struggle of Europe’s economy is likely to impact other economies, such as India, just as it affected private investment.

“I think it is also clear that in India, as in other economies, demand for exports would certainly be hit, and certainly for India, we’ve already seen effects on private investment,” said IMF Director of the Asia-Pacific Department Anoop Singh. “My sense so far is that the financial effects on Asia are being contained. We are seeing Asian banks, including Indian banks, stepping in where deleveraging is taking place from European banks.”

Singh continued, explaining that like the rest of Asia, India is focused on attracting private investment. However, this needs additional infrastructure investment in order to raise potential growth.

“So in India, what is planned, for example, is to introduce certain fiscal reforms that would give more space for higher infrastructure investment in India, among other factors,” Singh explained.

According to Masahiko Takeda, also of the IMF, “Reducing the fiscal deficit will create room for private investment to grow.”

He added: “But even more important are all sorts of fiscal reform measures that the Indian government can take to improve investment and business conditions in India, so that the private sector has a bigger incentive to increase their investment. And this has been the major emphasis we have put in our recent mission in India.”

India Hopes to Grow Despite Europe’s Declining Economy

An International Monetary Fund official stated that the continuing struggle of Europe’s economy is likely to impact other economies, such as India, just as it affected private investment.

“I think it is also clear that in India, as in other economies, demand for exports would certainly be hit, and certainly for India, we’ve already seen effects on private investment,” said IMF Director of the Asia-Pacific Department Anoop Singh. “My sense so far is that the financial effects on Asia are being contained. We are seeing Asian banks, including Indian banks, stepping in where deleveraging is taking place from European banks.”

Singh continued, explaining that like the rest of Asia, India is focused on attracting private investment. However, this needs additional infrastructure investment in order to raise potential growth.

“So in India, what is planned, for example, is to introduce certain fiscal reforms that would give more space for higher infrastructure investment in India, among other factors,” Singh explained.

According to Masahiko Takeda, also of the IMF, “Reducing the fiscal deficit will create room for private investment to grow.”

He added: “But even more important are all sorts of fiscal reform measures that the Indian government can take to improve investment and business conditions in India, so that the private sector has a bigger incentive to increase their investment. And this has been the major emphasis we have put in our recent mission in India.”

Global Sources Says That Rising Chinese Prices Drive Away Buyers

chinese-pricesGlobal Sources conducted a survey of 385 business buyers. According to the survey, a majority of purchasers pay prices that are too high for Chinese products. Chinese exports are losing their competitive edge against lower-cost countries, especially for low-price goods.

Sixty-eight percent of those answering the survey said that the yuan’s appreciation has changed their sourcing strategy regarding Chinese goods.

One-third of respondents predict that the yuan to will rise to 6.5 to the U.S. dollar during the next half year.

In response to the rising yuan, 54 percent said that they will import from less expensive countries such as Vietnam and India. However, buyers will still purchase from China for goods that have short delivery schedules or detailed specifications.

Global Sources’ President of Corporate Affairs, Craig Pepples said that “Given the changing price point of China products, China exporters must work harder to market themselves and justify higher prices in terms of service, product quality or production volume.”