Indian market can soothe woes, Nath tells global firms

Global manufacturers can lessen their pain arising out of recession in major markets by setting up production facilities in India, which still offers a competitive environment, Commerce and Industry Minister Kamal Nath said today.     

"The financial situation has eased somewhat and liquidity is accessible in the domestic market.     

"India is still a low-cost high-quality competitive manufacturing environment. With falling shipping rates, it may be more cost-effective to set up production facilities there," Nath said at a breakfast meeting of the Boston Consulting Group at the World Economic Forum here.     

He said India would recover faster than the rest of the world from the global downturn. For example, after the industrial decline in October 2008, the November 2008 figure was positive at 2.4 per cent, Nath said, adding India's economic growth would be in the range of 7 to 8 per cent in the current fiscal ending March 2009.     

The country's GDP growth was "fairly robust" at 7.8 per cent in the first half of the fiscal. Nath said the government and the Reserve Bank of India have announced fiscal measures involving five billion dollars to mitigate the effects of the global economic crisis on the country's economy.     

The RBI has injected close to Rs 4,00,000 crore since mid-September to improve liquidity in the system by taking steps that included reduction in the cash reserve ratio and lowering key policy rates.