India is a leading voice among developing countries in the WTO and other international trade fora. India took a tough stand at the 1999 ministerial in Seattle in opposition to U.S.-supported standards on labor and the environment. We do, however, seek common ground on many economic and trade issues with India and have succeeded in a number of important areas. In December 1999, we reached agreement on a timetable to lift India's quantitative restrictions on imports of over 1,400 agricultural, textile, and other consumer products. After a short slow-down, India's economic growth is returning to around six percent.
Inflation is low, exports are growing, and foreign exchange reserves are within comfortable ranges.
The rupee has been generally stable, although it has recently weakened. Government deficits at both the federal and state level are a matter of concern. Infrastructure spending has fallen sharply, and improvements are needed in the areas of transportation, communication, and energy to assure continued economic growth. While economic reform is a top priority for the Indian government, and there have been several significant advances since the current government was re-elected in October 1999, much remains to be done. The Indian parliament passed legislation in December 1999 opening India's insurance sector to foreign investment.