Amid the global financial turmoil, Indian economy will grow at the highest rate and also remain an attractive investment destination, Chief Economic Advisor Arvind Subramanian said today.
"India stands out. Whatever projections you are seeing, as a highest growing country among all the major economies, India will remain a relatively attractive investment destination," he said in his presentation before a meeting chaired by Prime Minister Narendra Modi.
Talking to reporters, Subramanian said he highlighted, in his presentation, the key events which are contributing to the global financial turmoil and "why challenges are a potential opportunity for India going forward".
Referring to the problems in China, he said the slowdown there will have a "very less" impact on India as the country's export to China as share of GDP is much less, though some sectors like steel may face challenges as it has excess capacity.
However, he added that the Prime Minister has clarified that "this is not a matter of one country taking advantage of another country's performance deteriorating, it is a matter of seeing challenges as opportunity that arise".
The Chinese economy is facing slowdown and the recent devaluation of yuan has sparked turbulence in the global stock and currency markets.
Subramanian, in his presentation, also analysed the key events like the uncertainty over US Fed policy, geo-political events in US-Iran deal, Shale Gas revolution, slowdown in growth and likely impact of declining oil prices.
"Cheap oil means that for us it will help us maintain macro-economic stability because oil is a key determinant of inflation, fiscal deficit, current account deficit," he said.
Outlining the opportunities before India, Subramanian said the country has a lot of untapped potential in many areas including infrastructure.
The cost of building infrastructure needs to go down, making investment more attractive, he said, adding that various global companies like Siemens and Foxconn are looking to invest in India.
"In a sense some of these investments are also being used as a hedge against China's slowdown. So for all these reasons India will remain an attractive investment destination," Subramanian said.
Minister of State for Finance Jayant Sinha said it is important for domestic industry to step up investment as "around the world everybody believes that India is, in fact, a very attractive place to do business, long term prospects are very good and it is beacon of stability".
The government's job, Sinha said, is to clear hurdles and roadblocks towards growth and towards investments.
"We are working on that, engaging with stakeholders continuously to understand where there are impediments to investment, and once we've done that... It is up to industry then to take risk and invest," he added.
