India has edge over China as it's less open, says Roubini

Addressing a private gathering of corporate leaders and financial market professionals, Prof Roubini said inflationary pressures in emerging economies warrant a policy tightening, but many emerging markets including China are going slow on tightening in an attempt to prevent their currencies from strengthening against the dollar. However, India may not fall in that league he indicated. “India is at a relatively advantageous position than China as India is less open,” said professor Roubini. The future global growth will come largely from emerging economies from Asia to Latin America, he said adding that India and China together had a higher potential than the rest of the world. However, he did not discount the US because even in a recessionary phase it was an around $15-trillion economy as against China’s $5 trillion. China cannot remain the engine for growth,” he said. In terms of consumption expenditure, the US spends $10 trillion annually, while China and India spend $1.5 trillion and $600 billion, respectively. But by another 20 years or so India and China could be a major force to reckon with. In a panel discussion with Ajit Gulabchand, CMD of HCC, Venu Srinivsan, chairman, TVS Motor Company, Rakesh Jhunjunwala, head of Rare Enterprises and Ajit Ranade, chief economist of the Aditya Birla Group, Prof Roubini underscored India’s potential in the future growth trajectory of the global economy along with China. He also emphasised upon the need to spur up infrastructure investments. The event was organised by Edelweiss Securities.