The current economic downturn in the U.S. is affecting India, but growing reliance on domestic consumption and investment ensures that the country is largely shielded from a global slide, an Indian legislator said in Atlanta.
Yashwant Sinha, a former finance minister, told GlobalAtlanta that the textile and information technology sectors have already started to feel the pinch of declining consumption in the U.S., but even considering the gloomiest forecasts of a U.S. recession, India’s growth should remain strong.
“Most of the bulk of the investment in our economy comes from domestic resources, not from foreign direct investment, which contributes about 1 percent of our total investment,” said Mr. Sinha, who currently serves in the Rajya Sabha, the Upper House of the Indian Parliament. “I do not think that as a result of this crisis the economic growth rate that has been in excess of 9 percent will decline substantially.”
But even though a drastic slowdown isn’t likely, India does have its problems, he said. The government’s ability to control rising prices while continuing to foster growth is a major concern.
The perception of a U.S. decline has also put a damper on financial markets, where sentiment guides the decision making process for many investors, he said.
In a phone interview with GlobalAtlanta, Mr. Sinha discussed how Indian companies and entrepreneurs have become more outwardly focused, investing abroad and integrating themselves more into the global economy.
Listen as he cites Georgia as a growing destination for Indian investment and addresses the role of the Indian diaspora in building bilateral business ties with the state and the U.S.
Mr. Sinha, also a former Indian foreign minister, is in Atlanta this week visiting family. The Georgia Indo-American Chamber of Commerce is hosting a reception in his honor at Palace Restaurant at 6:30 p.m. on Sunday, April 13.
The event costs $15 for GIACC members and $20 for non-member.