Investment promotes equitable benefit sharing - Indian minister

If investment is encouraged between Sri Lanka and India, it would create an environment for equitable sharing of benefits. Creating a favourable environment to attract outside investment is a crucial factor, said Indian Rural Development, Drinking Water and Sanitation Minister Jairam Ramesh.

He was speaking at a lecture on The Changing Role of India in South Asia organised by the Bandaranaike Centre for International Studies (BCIS) in Colombo.

He lauded the decision of the two governments to sign the India Sri Lanka Free Trade Agreement notwithstanding the impact it has had on Sri Lanka's trade deficit.

The minister said the changing role of India in South Asia is not accidental but a result of a well thought out choice made by its policymakers to redefine its role in the region.

He opined that India's changing relationship in South Asia and in the continent in general was based on three distinctive courses of action that its successive governments have striven to pursue.

"Unilateral decision making, investment and identifying specific niches are what redefines India's role in the region," he pointed out. India had taken a gigantic leap in asserting its right to take unilateral decisions instead of reciprocity, which has been a time tested principle in the region. This paradigm shift, he contended, has been driven by the fact that India recognizes its size, strength and power as an emerging economy to engage in unilateral decision making.

The minister said the fear in South Asia that trade with India would be so imbalanced that it would create a trade deficit is not atypical given the fact that India feels the same of China, but said that such a situation could be circumvented by liberalizing trade to encourage investment that would generate an exportable trade deficit.

In identifying specific niches, India has ventured in to regional and sub-regional collaborations in harnessing the natural resources of its neighbours in a way that it does not compromise the sovereignty of the other country. India imports power from countries like Bhutan and Nepal, and is looking to exchange energy with other neighbouring countries on a win-win platform.

"The changing imperatives of India's economic growth are driving it to play an active role with its neighbours," said the minister.

He acknowledged that any relationship could be sustained on the basis of give and take. However, he emphasized that the security concern was what has stymied South Asia from becoming another ASEAN, but added that it would be unrealistic for India to wish away its security concerns. The need of the hour, he said, was to address current security fears in a sustained manner so that the complete potential of economic partnership can be exploited.

"India can be the USA of South Asia. It can be the economic magnet whereby India can be beneficial to its neighbours.

"It is in recognition of this critical role that India can play as a large country, that it constantly redefines the country's role in the region. This is crucial if India is to make a legitimate claim in international fora and at peace," said Minister Ramesh.

The session was chaired by International Monetary Cooperation Senior Minister Dr. Sarath Amunugama.