Prime Minister Manmohan Singh on Saturday asked European countries to take firm steps to fix the continent's financial mess, which was hitting India's economic growth and dampening global markets.
"It is our hope European leaders will take resolute action to resolve the financial problems they face," he said before leaving for the G-20 meeting in Mexico and the Earth summit in Brazil. He said the meeting of G-20 leaders be held in the shadow of the economic crisis in the Euro zone and a faltering global economy.
"This situation in Europe is of particular concern, as Europe accounts for a significant share of the global economy and is India's major trade and investment partner," he said.
At 6.5 per cent, growth in India's gross domestic product in 2011-12 was a tad lower than that in the crisis period of 2008-09 (6.7 per cent).
Industrial output, at 0.1 per cent, just about managed to remain in the positive territory in April, while merchandise exports contracted by 4.16 per cent to $25.7 billion in May, against $26.7 billion in the corresponding period last year, primarily owing to a severe demand slowdown
in the Euro zone. In April, exports rose 3.23 per cent annually. Europe accounts for 23.8 per cent of India's exports.
Imports fell 7.6 per cent to $41.9 billion in May from $45.24 billion in the year-ago period.
Earlier this month, the government had announced a set of measures to boost exports. Among the significant steps were extension of the two per cent interest subvention and the zero-duty export promotion capital goods schemes till March 2013 and approval to procure inputs domestically through duty credit scrips. The Prime Minister had also said reviving global growth was an issue that warranted immediate concern.
However, he ruled out diluting India's stand on the fight against climate change.
"I will emphasise that we must not dilute the cardinal principles of Rio 1992, particularly the principle of common but differentiated responsibilities, as well as equity...We must acknowledge the continuing differences in levels of development across the world and the need to provide financial and technological support to the developing world if we are to work together as a global community to address our most pressing environmental challenges," he said, adding India would work with like-minded countries to forge a consensus in this endeavour.