India should leverage G20 Presidency: Raghuram Rajan

New Delhi: Former RBI Governor Raghuram Rajan has advised that India should leverage it's G20 Presidency to seek greater openness towards service exports. In a television interview during the ongoing World Economic Forum (WEF) meeting at Davos, Rajan said that too much investment is going towards chip making globally, which could lead to a glut.

He also pointed out towards possible risks for India economy due to opening up of China. India is doing well in service export, the former RBI Governor said.

He added that if India could use its G20 presidency to push for greater openness towards service exports, it could help push India's growth. On the excessive focus towards investments in chips, Rajan said that the world doesn't require so many chips and it shows a lack of trust between countries as everyone wants to secure themselves by focusing on domestic manufacturing.

On China's reopening, he said that if it leads to global commodity prices edging up, then it could create problems for India as the current account deficit is already high.

He told the television channel that China is back pedalling on some of the Covid policies just to stabilise its economy.

"From India's perspective we would like commodity prices to be lower. Right now, the guess is as China comes up, commodity prices will go higher. And that will be a problem for India which is already running a fairly significant current account deficit.

"The price of oil plays an important role. But I think if commodity prices stay lower, then to some extent some of our inflationary issues become less important than they are. Our core inflation is still something to worry about," he was quoted as saying in the interview.

Too much investment is going towards chip making globally, which could lead to a glut.

Possible risks for India economy due to opening up of China. India is doing well in service exports

- Raghuram Rajan, former RBI Governor