INITIAL POST-SUMMIT GOI REMARKS

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SUBJECT: INITIAL POST-SUMMIT GOI REMARKS


1. (SBU) SUMMARY. Prime Minister Singh and Finance Minister
Chidambaram have made positive remarks in their early days back from
the G-20 Summit held November 14-15, while Commerce Minister Nath
has made some unhelpful - but not uncharacteristic - protectionist
references. Singh and Chidambaram emphasized the importance of the
Summit attendees consisting of the G-20 rather than just the G-8.
Singh termed the summit a "success" and highlighted that developing
countries would be given additional infrastructure-focused finance.
Nath, on the other hand, seemed to disregard the G-20 Declaration's
call against protectionism, and declared he would guard against
cheap imports flooding India. End summary.

PM SINGH NOTES SATISFACTION WITH SUMMIT
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2. (U) Prime Minister Singh spoke with reporters on his return
flight to India after the Summit, emphasizing that the inclusion of
the G-20 rather than the G-8 indicates that the "balance of power is
increasingly shifting in favor of the emerging economies." He
deemed the November 15 meeting a success, with complete agreement on
several critical areas. He acknowledged that he had had
reservations about the ability of the US and Europe to agree on
common goals. Instead, all the participants had agreed to the need
for fiscal stimulus, which Singh stated was already underway in
India, pointing to high farmer support prices, farmer debt write
off, expanded social services and infrastructure expansion.


3. (U) Singh approved of the G-20's acknowledgement that the
developing countries were suffering from a crisis not of their
making. He noted that it was agreed that infrastructure investment
would be important to sustain growth in developing countries and
thus the international financial institutions (IFIs) would open new
facilities to assist towards that end. Finally, he pointed to the
reform of IFIs in their supervision and management systems and their
giving greater weightage to emerging countries.

FINANCE MINISTER SUPPORTIVE BUT NOTES "REGRETS"
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4. (U) Finance Minister Chidambaram spoke about the G-20 Summit at
the annual India Economic Forum - an offshoot of the World Economic
Forum - on November 18. He echoed the Prime Minister's satisfaction
with the inclusion of G-20 members, as a recognition that developing
countries also had a vital role to play in finding ways to address
the financial crisis. Chidambaram stated that the industrialized
countries realized they needed to engage growth centers and other
emerging economies, asserting that the G-20 has "come to stay". He
wouldn't predict whether the G-20 would replace the G-7 but did
think the G-20 would become the most important multilateral group of
countries. Chidambaram further opined that Africa is
under-represented in G-20, and Europe "a bit" over-represented, but
judged that now is not the time to deal with such concerns.


5. (U) Chidambaram then identified two "regrets" from the Summit -
President-elect Obama's absence and the failure to establish a
global oversight mechanism to identify problems to national
governments and regulators for action. The Finance Minister said
India and other "like-minded" nations wanted to know if the incoming
Administration endorsed the US views put forth at the Summit. He
also lamented the absence of a new global oversight mechanism,
although he was quick to define the role as advisory to
national-level regulators. Chidambaram reiterated that he believed
that the G-20 would not support a global regulator, but could use an
oversight mechanism. Further, Chidambaram suggested that a group of
"wise men and women" should be established to oversee implementation
of the G-20 Summit action plan and report periodically to the G-20.


COMMERCE MINISTER NATH'S PROTECTIONISM
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6. (U) Senior Indian economic officials met with Prime Minister
Singh on November 17 to discuss possible measures to assist the
industrial sector, and in particular, exporters. Among the policy
measures discussed by Finance Minister Chidambaram, RBI governor
Subbarao, and Commerce Minister Nath were assistance with insurance
and credit terms for exporters, increases in lines of credit, and

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increases in import duties in certain sectors. The RBI has already
extended pre-shipment credit for exporters from 180 days to 270
days.


7. (U) Commenting after the meeting with the Prime Minister,
Commerce Minister Kamal Nath underlined the need to stop imported
'cheap goods' from hurting domestic industry. He noted that there
was a significant overhang between India's applied rates on a wide
range of industrial goods and its WTO-bound rate. "We will take
measures to prevent cheap imports from coming in. We will not
hesitate to increase tariffs sharply for sectors like chemicals and
engineering," Nath emphasized.

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