The largest delegation of India business people ever arrived in the Netherlands this week to take part in an economic summit aimed at the growing economic ties between the two countries. The Netherlands India Business Meet continues today; one key member of the Indian delegation is Finance Minister Palaniappan Chidambaram.
"FDI has not been affected so far, but foreign portfolio investors have pulled out their money in the last eight weeks because of redemption pressures back home, not because anything is wrong with the Indian market. The governments in the crisis-originating countries have to address these issues.
Many of them have begun to do so but we are not entirely happy with those efforts so far. But hopefully, if the action plan agreed in Washington is implemented, we will see that governments will be able to face and eventually overcome the crisis."
Dutch investment
The Netherlands Foreign Trade Minister Frank Heemskerk is also attending the business meet. He sees opportunities for an increasing role in helping India with its water and port management as well as the agriculture sector. But the looming spectre of the credit crisis may affect some private investment from Dutch companies in India, he said.
"Of course companies will be more hesitant to invest - it's more difficult to get credit. But everyone knows that India is continuing to grow; it reached seven percent growth this year and is set to reach nine percent next year. So for long term investors India remains very important."
Security Council
However the credit crisis affects trade between the two countries, the fact remains that anticipation surrounding India's increasing influence on the world stage can sometimes border on over-enthusiasm, both economically and politically. India's finance minister's response to the idea that India is set to become a superpower over night is more circumspect.
"We are a large economy, more than a trillion dollars, but we have also a large population and a very large number of our people is still poor. We have challenges to address which Europe may have addressed 100 years ago. Yet we believe we need a world order in which countries like China, India and Brazil have a place at the governance table.
The West has perhaps realised rather late that the G20 will become the principle forum for addressing issues of global financial security. As far as the Security Council [of the United Nations, ed.] is concerned, we believe that India deserves a permanent place in the Council.
There are many countries that have openly supported that: Russia, Britain and France. But we are not in undue haste; we will take a place when we have earned it. We think, however, that we are an important player in Asia and in the world."
Tags: credit crisis, economic ties, Frank Heemskerk, G20, India, Netherlands, Palaniappan Chidambaram, Security Council