May open economy for China, but need to be wary too: Sitharaman

Finance Minister Nirmala Sitharaman today said India and China both were keen on allowing greater access to each other’s economy, but New Delhi may have to tread the path cautiously.

Speaking at the launch of a book, “A World in Flux: India’s Economic Priorities”, at the India International Centre here, Sitharaman said, “There is a call from the ground for granting more access and allowing a lot more interaction, and possibly opening some windows.”

The minister said this was not just India’s view, “but even the Chinese had been approaching us through the Ministry of External Affairs”. “There is some sort of beginning (in the India-China cooperation). But we need to wait and watch how far it goes. It might help the economy, but a sense of caution has to be there,” said Sitharaman.

New Delhi and Beijing are also engaged in discussions for the import of rare earth magnets from China. The Chinese government has imposed restrictions on the import of critical minerals, which are essential inputs for various industries, particularly the automotive sector. China holds a dominant position in rare earth magnet processing, controlling over 90 per cent of the production and 70 per cent of the global market.

The minister said sustained economic growth was the government’s top priority. She said a major push was being given to capital expenditure each year. “I believe it (capital expenditure) is one of the primary drivers of sustained economic growth,” she said, adding a “friendly and attractive” FDI policy would attract more investment in the country.

Responding on India’s trade ties, the minister said bilateral agreements had been signed with Australia, UAE and the UK over the past four-five years. “Negotiations are progressing well with the US and the European Union,” she said.

The book “A World in Flux: India’s Economic Priorities” is a festschrift in the honour of Shankar Acharya, former Chief Economic Adviser. The book brings together essays that examine the evolving global economic landscape and India’s policy imperatives.

India