Economic Advisory Council to the Prime Minister (EAC-PM) Chairman S Mahendra Dev has said that India should diversify exports to other countries, fasten free trade agreement (FTA) negotiations and also continue dialogues with Washington to conclude the proposed Bilateral Trade Agreement (BTA) with the US. He said despite protection policies and reduction in international trade, there are a lot of opportunities for India to increase its share in world merchandise trade. He noted that rule-based World Trade Organization (WTO) is always better than protectionism.

His remarks assume significance as the US is putting pressure on India to stop buying crude oil from Russia. The US, on October 22, imposed sanctions on Russia's two largest crude oil producers, Rosneft and Lukoil, barring all American entities and individuals from conducting business with them. The US has imposed 25 per cent tariffs on India as a penalty for purchasing oil from Russia. It is over and above the 25 per cent reciprocal tariffs on Indian goods entering American markets. Overall, Indian goods are attracting a steep 50 per cent additional import duties in the US.

Dev emphasised that India must have many more middle level manufacturing units with 200 to 500 workers. On manufacturing, among other things, small size of the firms with majority operating at less than 10 workers is the major problem. Observing that in 1700 AD, India's share in world GDP was 25 per cent, he said some estimates show that by 2043, the share of India in world GDP is likely to be 25 per cent. He said in the last three decades of post-reform India has an average growth rate of 6 to 6.5 per cent per annum.

Noting that investment rate is driver of growth, he said ‘India need to increase investment rate to 34 to 35 per cent from current 31 to 32 per cent to get 7 per cent growth.’ He said private sector should invest more in India as there is no twin balance sheet problem now. He added ‘Government capex is increasing. It will have multiplier effect’. He also said increase in rural and urban demand will facilitate more private investment. He said ‘in fact, in 2013, India was under ‘Fragile Five’ countries: Brazil, India, Indonesia, South Africa and Turkey. But we have come out of the shocks and Indian economy is resilient and fastest growing economy in the world.’