India Has No Fiscal Leeway to Offer Trade Stimulus, Khullar Says
Rahul Khullar, the top bureaucrat in India’s Commerce Ministry, comments on the government’s inability to offer exporters a stimulus package. India’s export growth accelerated in December, climbing 6.7 percent to $25 billion, Khullar said today. Merchandise shipments rose 82 percent in July 2011 from a year earlier, the fastest pace since April 1995.
“I think there is no financial or fiscal leeway for stimulus packages at this point of time. There is a very large fiscal deficit. That’s causing a crowding-out problem. It’s also causing pressure on interest rates, on monetary policy, choking investment, choking growth. If you ask me will somebody throw dollops of money at the export sector, my answer is no.”
On Kingfisher Airlines Ltd.’s request to import jet fuel:
“No decision as yet. They’ve applied to the Director General of Foreign Trade, who has examined the issue. I have also had a look at it. There’s no decision at this point of time.”
On trade with Iran after U.S. sanctions:
“That’s being resolved. A team from the department of economic affairs is going out this week, today or tomorrow, they’re leaving for Iran. They will work out, in terms of the new sanctions under section 1,245 of the U.S. act, how you work around it, both in terms of importing oil and promoting Indian exports.”
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