Finance Minister Arun Jaitley has expressed confidence that any economic impact arising from recent tensions with Pakistan and incidents like the surgical strikes undertaken by Indian special forces will be “extremely marginal”.
Addressing a gathering at the University of Toronto’s Rotman School of Management, Jaitley said that any impact that had been felt on the markets and the rupee had been “temporary”, and that foreign direct investment into India “continues to increase”.
“Even recently, when the news came that India had made certain surgical strikes at the launch pads where the terrorists used to cross into Indian boundaries, there was obviously a certain amount of speculation as far as the markets were concerned. The impact was not what it would have been years ago,” he said.
Economic impact arising from recent tensions will be “extremely marginal”, he said.
On the India-Canada relationship front, the two countries were committed to deepen the economic and financial relationship and enhance strategic partnership, said the Finance Minister as he invited Canadian investment in India’s infrastructure sector.
“Both countries are committed to strengthen economic ties as there is a positive environment. Negotiators from both countries will meet soon to resolve sticking points,” he said.
Jaitley on Monday met his Canadian counterpart Bill Morneau and Canada’s International Trade Minister Chrystia Freeland and reviewed progress in India Canada relationship including proposed Comprehensive Economic Partnership Agreement (CEPA) and Foreign Investment and Promotion and Protection Agreement (FIPA).
“Both countries are very keen to finalise both the proposed agreements,” Jaitley said. He said that the two countries have also agreed to enhance strategic partnership. The Minister also held a series of meetings with Canadian pension funds, bankers, financial sector companies.
“Foreign Direct Investment by Canadian investors was about 12 billion dollar in India in the past 24 months. This does not include portfolio investment by Canadian investors,” he said.
“India has a good story to tell and is moving much faster than rest of the world. The likely return on investments in India is much higher and the risk is much less than other nations,” he said.
Canadian Finance Minister Morneau in a statement said: “I am pleased to build on Canada’s longstanding relationship with India by exploring ways to deepen our economic and financial ties. It is important that Canada continues to engage with the world to create more opportunities and prosperity for the middle class.”
The two ministers will travel to the US later this week to attend the Annual Meetings of the International Monetary Fund and World Bank Group as well as a G20 meeting.
As co-chairs of the working group responsible for G20 growth strategies, both ministers are expected to highlight the importance of seizing the opportunity to invest in people and infrastructure to build a strong and prosperous global economy.
Canada and India have longstanding bilateral relations, built upon shared traditions of democracy, pluralism and strong interpersonal connections with an Indian diaspora of more than one million in Canada, Morneau said.
Building on this strong relationship, Morneau highlighted the Canada-India Finance Ministers Dialogue as an important initiative to deepen the economic and financial relationship between the two countries.