Indirectly launching criticism on countries especially China for adopting currency war strategies, Prime Minister Modi highlighted that India has followed a neighbor friendly trade policy. The Prime Minister was speaking at Advancing Asia Conference jointly conducted with IMF.
In his speech the PM stressed two points about India’s growth story. First, the country has achieved growth in the context of a vibrant democracy. India has dispelled the myth that growth and democracy can’t go together. “India’s growth rate of over seven per cent is being achieved in a country that is also a vibrant democracy.”
Secondly, the PM indicated that India’s growth in Asia is unique as it never hurt others to make trade gains. Flashing the current Chinese practice of devaluation to make exports Modi has observed that “We do not follow beggar thy neighbor policies.” Beggar thy neighbor policies are trade measures that promote own exports and discourages imports.
The Prime Minister highlighted that India grows along with its partners and supported other by having continuous current account deficits. “We have never undervalued our exchange rate. We add to world and Asian demand by running current account deficits. We are therefore good Asian and good global economic citizens, and a source of demand to our trading partners.”
On IMF governance reforms, Modi remarked that even after the quota reforms (14th). IMF quotas do not reflect the global economic realities. “Change in quotas is not an issue of increasing the ‘power’ of certain countries. It is an issue of fairness and legitimacy.”
The Conference was organized to take stock of the Asia’s economic situation and challenges for future. IMF and India has also signed an MoU to establish the South Asia Regional Training and Technical Assistance Centre (SARTTAC) in India.