India, Global Economy | featured news

Leaders of the five BRICS nations fueling global economic growth plan the creation of a development bank in a direct challenge to the World Bank that they accuse of Western bias.

The dozens of vehicles that roared into northeast India this week on a rally from Indonesia symbolize deeper ties between the South Asian giant and Southeast Asia, but the dreadful roads along several parts of the 8,000 km (5,000 mile) journey also show how much remains to be done.

The Indian economy is likely to have grown at 5.5 % in the July-September quarter, posing a "difficult situation," the country's federal finance minister, P. Chidambaram, said Saturday. "When growth declines to 5.5% as it has in the first quarter [April-June] of this financial year and when the growth is likely to be around 5.5% in the second quarter of this financial year, it goes without saying we are facing a difficult situation," Mr. Chidambaram told a bankers' conference in the Western Indian city of Pune.

India's economic growth is expected to slow to around 6%, dragged by domestic issues, but the government is focused on getting the country back on a growth path, Prime Minister Manmohan Singh said.

On Friday, the government finally cleared a controversial plan to open up its lucrative retail sector to global supermarket chains in an effort to revive a flagging economy. There has been a massive political kerfuffle over how the supposed invasion of global chains will destroy India's fabled "mom-and-pop" stores, which have a stranglehold on the retail market.

India ushered in the biggest economic reforms in two decades on Friday, allowing big foreign retailers like Walmart, foreign broadcasters and foreign airlines to invest in the country, among other reforms.

The global economy is in the worst shape since the dark days of 2009. Six of the 17 countries that use the euro currency are in recession. The U.S. economy is struggling again. And the economic superstars of the developing world - China, India and Brazil - are in no position to come to the rescue. They're slowing, too.

The economies of Brazil, Russia, India and China account for 20 percent of the world economic output, and rising. That’s up four fold in the last decade, according to a report released yesterday by the International Monetary Fund. Despite the growth, problems in the core economies had made the post-2008 world a difficult one for the big four emerging markets.

The Indian government plans to take steps to boost exports and increase dollar inflows to give a much-need lift to the economy and arrest the slide in the Indian rupee, a senior official from the finance ministry said Saturday.

India's industrial output was flat in April, deepening worries of an economic slowdown in Asia's third-largest economy and upping the pressure on the central bank to cut interest rates next week.