NEW DELHI: Raghuram Rajan, the former governor of the Reserve Bank of India, suggested that India use its G20 chair to promote wider openness to service exports. He issued a warning against excessive global investment in the chip industry, which could result in an oversupply. Rajan also emphasised possible dangers to India's economy from China's opening.
At the World Economic Forum in Davos, Rajan said that increasing India's exports of services might help the country's economy thrive.
"At this point, one of the areas where we are performing effectively is in our service exports. As there are much more barriers to service exports than to manufacturing exports, if the globe were more open to globalisation and if we could utilise our G-20 presidency to urge for greater openness toward service exports. That might be highly advantageous for India's development.
He continued by saying that exports of services encounter more obstacles than exports of goods. On the rush to make investments in chips, he said that the world didn't require as many chips and that this demonstrated a lack of trust between nations as everyone sought to protect their own interests by concentrating on local production.
A tremendous amount of investment has gone into chip making.There is an extreme oversupply of chips in the globe, which is unnecessary. However, every nation believes it is crucial for security reasons. That is an illustration of how a lack of trust between nations leads to excessive spending in particular areas.
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