'Open up FDI for 8% growth'.

MUMBAI: Michael Steiner, the new German ambassador to India, has exhorted the Indian leadership to take some difficult decisions so that it can take the reforms process further, which could in turn drive the country's economy.

Likening the situation in India with the one that prevailed in Germany in late 1990s and early 2000, he told TOI in an interview that it was only when Helmut Kohl, the then chancellor, took some difficult decisions, going against his own party, that the German economy saw growth. "It's another thing that he lost the elections. This was a time when Germany was being described as the sick man of Europe," he said.

Steiner said that similarly, the government should take the reforms process forward with the country's benefit in mind. "It is not about keeping your position. Leadership is about bringing people to somewhere, and not yourself to somewhere," he said. Steiner highlighted the opening up of the insurance sector to foreign players beyond 26% and a fast conclusion of the ongoing FTA (free trade agreement) negotiations with EU as some of the measures that would benefit India.

Steiner, a career diplomat, feels the two countries are a 'perfect match'. "India is playing the role of anchor of stability in Asia. Germany is playing a similar role in European Union in terms of the debt crisis. We have many similar features to invite for stronger cooperation," he said. One of the areas where the European major is helping India is in vocational training, one of the important features of Germany's economic success.

The German ambassador feels that for the Indian economy to maintain at least 8% growth rate, it needs to increase its share of global trade from the current 2% level. "It's a fact that you are approaching 20% of the world's population and your share in the world trade is only 2%. No way you will achieve 8% growth unless you increase the 2% share. How do you do this? You need to have better investment conditions and openness to the outside world," he said. "We (Germany and India) plan to have a trade of 20 billion euro by the end of this year." As against this, he finds it strange that its trade with Italy, a much smaller country with a population of about 60 million, is worth 100 billion euro, he said.

On the perennial question of India or China, Steiner said there are people in Germany who "don't believe in puttying all eggs in the same basket, that is China". So he thinks India must show that it's open. "This is not a demographic factor but a democratic factor."

Steiner feels that if the ongoing FTA negotiations between India and European Union, its largest trading partner, is concluded by this year end, or January next year, it would send a very powerful signal to the world that India is an open country. "Look at the change in perception (of the investing community) after the Vodafone issue. That needs to change. If it (FTA negotiations) doesn't succeed, we have to wait for the elections in 2014, which would give contrary signals that will be very negative for India," he said.


Source : timesofindia.indiatimes.com