India and the economy: Your questions answered

By Karishma Vaswani, Asia business correspondent

Is India really rising? How is the China devaluation affecting it? Is the country wasting money on space programmes when such a high percentage of its population lives in poverty?

These are among the many questions on India and the economy we answered on our Facebook page on Wednesday morning.

Questions came in from across the world on a range of economic areas, all of which can be found on the BBC News page.

Here are a few examples:

Ram Chandra: Miss Vaswami, What is it about India that the country is not attracting big enterprises like China did. Is globalisation dead?

A lot of the complaints I hear from foreign investors who want to invest here are the same ones that used to crop up five years ago when I was last reporting for the BBC here.

Issues such as ease of doing business, red tape, shoddy infrastructure and archaic labour laws are all concerns for big companies who want to invest in India – but it IS getting better.

Manufacturing companies are looking more closely at India as an alternative base to China – as wage growth there has made it more expensive for companies to do business.

What India needs to show the foreign investment community and its critics is that it serious about taking on painful but crucial economic reforms – many in the business community have told me they’re disappointed with the lack of progress on passing important bills during the last parliamentary session

Sendoi Likwasi: Does the devaluing of China’s currency positively or negatively affect India’s economy in terms of trade?

Predicting what might happen in the currency markets is very difficult.

The Indian currency has depreciated against the US dollar since the devaluation of the Chinese yuan earlier this month, but not by as much as other currencies in the region.

One argument is that emerging market currencies like the rupee must adjust to a lower yuan in order to make their exports more competitive and compete with Chinese goods.

For India, a weaker currency means its goods are cheaper overseas – but it also means the cost of raw materials – like oil – goes up. Currently India is enjoying the benefits of a low oil environment and it looks like it will stay that way for some time to come, but the bigger concern is over what the impact of a weakened Chinese currency might do in the longer term, and whether its devaluation may trigger the start of a global currency war.

Read more » BBC
See more » http://www.bbc.com/news/business-34063747

Like Loading...

Related