India for trade pacts with China, Japan, S Korea
India's "Look East" policy is aimed at boosting manufacturing in Asia's third-largest economy.india Updated: May 06, 2006 13:13 IST
India is working on free trade agreements with China, Japan and South Korea as part of a concerted effort to strengthen its regional ties, Prime Minister Manmohan Singh said on Friday.
India's "Look East" policy is aimed at boosting manufacturing in Asia's third-largest economy, raising its share of global trade and creating much-needed jobs for its billion-plus people.
"India has a vital stake in the prosperity and stability of Asia," Singh told the annual meeting of the Asian Development Bank (ADB) in Hyderabad.
Trade pacts with China, Japan and Korea would come on top of existing deals with Singapore, Thailand and in South Asia, and Singh envisaged that one day a free trade area would cover all major Asian economies, and possibly Australia and New Zealand.
Singh, seen as the father of India's economic reforms because he was finance minister when its economy opened in the 1990s, sees more trade with its neighbours as a way to raise the share of manufacturing in India's GDP from just one-seventh now.
More people are moving off farms to seek work and Singh wants the production lines to soak up this surplus labour as well as the 12 million Indians who join the workforce each year.
Japanese Finance Minister Sadakazu Tanigaki later told the ADB meeting that Tokyo was committed to boosting its solidarity with Asia and helping to tackle its development challenges.
But protesters blame the ADB itself for some of Asia's troubles. A few thousand from People's Forum Against ADB marched through Hyderabad under the baking sun, denouncing the bank for imposing tough loan conditions on governments and overriding the rights of the poor.
"ADB leave India, leave Asia, leave the world," the members of more than 100 groups chanted as vendors did a roaring trade in cool drinks and a small contingent of police looked on.
"It's a development model that is committed to making the world safe for corporate investment," said Shalmali Guttal of Focus on the Global South.
"We're not against people borrowing to do projects, but not under these conditions and not in this form and not with this serious lack of accountability."
Singh, addressing the ADB meeting's hottest issue so far, called for a coordinated effort to correct global imbalances and urged global financial institutions to play an active role in the effort to prevent a sudden worldwide economic downturn.
"The present level of global imbalance cannot be sustained forever. It therefore calls for action both from countries which have current account surpluses and those having current account deficits," he said.
"Large disparities raise concerns about unsustainability and provoke the fear of hard landings."
China said on Thursday it would push yuan reform, as part of its long-term efforts to rebalance its economy by raising domestic demand, but would not take orders from other countries.
Some economists say the United States is responsible for China's booming exports, that it consumes too much and bears unsustainable current account and fiscal deficits, but others charge that China keeps its exchange rate unfairly cheap.
Tim Adams, US Treasury undersecretary for international affairs, told reporters on Thursday that all the Group of Seven rich countries had backed a call for China to change its ways.
"All too often this is pitted as this bilateral trans-Pacific food fight," Adams said. "When in fact it's the world talking to China about what it should do to help minimise the risk of disruptions and dislocations."