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Pan Asian free trade to raise GDP by 3 per cent news
28 November 2006

India needs to invest $60 to $100 billion a year in infrastructure to achieve above 9 per cent growth, says the Asian Development Bank. Rajat Nag, the next managing director of the Manila-based bank says that a pan-Asian free trade agreement will raise the region''s GDP by 3 per cent reports CNBC-TV18.

Nag is an Indian born Canadian who will take over as the managing director of Asian Development Bank mid-next month after a 20-year stint there. Quoting an ADB study, he says that India can achieve 8 per cent plus growth if "infrastructure is provided for. India needs $100 billion a year, right institutions and policy."

The Economist magazine says even though China is growing faster, It is India''s growth that looks fragile because of higher inflation, factories operating at close to optimal capacity and many other reasons where India appears stretched. But Rajat Nag sees fragility coming from another direction.

An ASEAN FTA is likely to happen next month during a summit meeting in the Philippines, which the prime minister will attend. India is not prepared to make big tariff cuts on 500 -win, some may win more than others but you should focus on what you win rather than what others win," says Rajat.

An FTA would add 3 per cent to the region''s GDP. India can gain a slice if it joins in but it also needs to make sure that the benefits are spread out and again calls for better infrastructure.

 

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Pan Asian free trade to raise GDP by 3 per cent