Taking on critics of outsourcing to India and the alleged loss of American jobs in the process, India's Minister of Commerce and Industry Kamal Nath asserted that Indian investments in the United States in the last two years had created more jobs in the US that American investment in India has.
In an interactive session with PBS television's talk show host Charlie Rose at the 33rd anniversary summit of the US-India Business Council, Nath said, "Indian investment in the United States in the last two years is more than the US investment in India in the last two years, and India has created more jobs in the US than the US has created in India."
"Now, the Democrats must hear this," he said, to which Rose quipped and asked if it were a campaign statement.
Nath said that "trade and investment is now a two-way street," and pointed out that American exports to India "went up by over 70 per cent last year. That's not a small thing."
"Why are they going up? Because India is a healthy economy and that's what I keep saying not only to the US, but to all developed countries," he said. "That you must ensure that there are healthy economies in developing countries and it's a great market for developed countries."
Nath said that the US needs to understand this "because healthy economies in developing countries mean greater markets. It's no use being a country of one billion people if you have no ability to buy anything."
Asked if India's remarkable growth rate would continue, Nath said there was no doubt about it and added, "We projected that we would be getting close to 10 per cent growth, but global economic outlook being what it is, we revised it downward to 8.5 per cent. Now, that itself is good."
Nath said this confidence and optimism were borne out of a notion that because of the "strong fundamentals," the Indian economy has "built up a momentum of its own and we are confident this momentum will continue whatever be the global economic outlook."
However, he acknowledged that the 3 F's -- fuel, food and finance -- were certainly cause for concern not just for India but for the whole world, and recalled that "they weren't there when I came to the USIBC last year."
Nath also said the sub-prime loan crisis that has devastated the US housing market and led to unprecedented foreclosures in the country and plunged the country into what many economists say is indeed a recession with worldwide implications, would not impact on India.
"We are quite decoupled from it," he said. "There has been no exposure by the Indian financial system to the sub-prime crisis, but of course if there is slowdown in the US, it does affect us."
But Nath said that "more important is the sentiment and that's what we need to guard against -- this sentiment of gloom. The sentiment of gloom is worse than the gloom itself, and that's what drives markets -- this sentiment and this frenzy that goes around. (But) It's not there in India."
He argued that the impact of this crisis is minimal "because our growth is not export-market driven -- it's domestic market driven. So, that keeps us in a little bit of a less vulnerable position," unlike other Asian countries whose economies are largely export-driven.
Nath also took exception to the allegations that India was responsible with its export ban for the worldwide shortage of rice, saying that "we banned the exports of only the cheap quality rice. If you want to buy rice from India, buy the good quality one. Why do you want to buy the cheap quality one."
He said, "Keep the cheap quality one for our 300 million people who earn less than $1 a day."
Nath also said the criticism that India was attempting to kill the Doha Round of global trade negotiations was "unfair and inaccurate."
He said that "India needs as much as the US, a rule-based multilateral trading system. So, for us, the Doha Round is as important as it is for the US."
But Nath asserted that "this round really needs to respect sensitivities. The United States has sensitivities on subsidies. Some countries have sensitivities on bananas. There is huge issue on coconuts. There are whole issues on tropical fruits. There are whole issues on subsistence. This round will close with each other respecting sensitivities. We need to harmonize these sensitivities."
"We are not going to get everything," he acknowledged. "No country is going to get everything, but no country is going to give away everything."
Nath said, "I don't criticize the US, I enlighten them. But we have moved forward since we were two years ago, where we were two months ago, and we continue to move forward."
The final question by Rose to the articulate and humorous Nath was that it used to be said that "every Senator in Washington used to look in the mirror in the morning and see a future president. When you look in the mirror in the morning do you see a future prime minister?"
The 600 plus audience cracked up and engaged in sustained applause, when Nath replied: "Well, I see myself. And, there's nothing better than seeing yourself."
