India to continue supporting global south with forex reserves: Says FM

Union Finance Minister Nirmala Sitharaman reaffirmed India's commitment to supporting the Global South through its robust foreign exchange reserves. Speaking at a Centre for Global Development event  in Washington D.C, on Wednesday, Sitharaman emphasized India’s continued assistance to economically distressed nations, particularly in the Global South, which includes countries with lower levels of economic and industrial development. During the discussion titled "Bretton Woods Institutions at 80: Priorities for the Next Decade," Sitharaman highlighted India's proactive use of its foreign reserves to help developing nations, often without imposing any conditions. "We have extended lines of credit at highly discounted rates to many African countries for building institutions, bridges, railway stations, ports, and secretariats. We will continue this support because the Global South is with us, and we want to be with them," she said.

Much before the IMF reaches some countries in the neighbourhood in times of distress, India has given sums of money, with no conditions attached.

We have extended 'Line of Credit' at highly discounted rates to many African countries for building their institutions, bridges,… https://t.co/QIj5eKsdZk pic.twitter.com/bj5Br1xWIw

— Nirmala Sitharaman Office (@nsitharamanoffc) October 23, 2024

Sitharaman's comments came in response to Larry Summers, President Emeritus of Harvard University, who noted India's substantial foreign reserves, which exceed $700 billion, and suggested that these reserves could be utilized in developed markets. However, the Finance Minister clarified that India's reserves are already being employed in various ways, including assisting neighboring countries in distress. "Before the IMF reaches some countries in our neighborhood during times of distress, India has provided substantial sums of money with no conditions attached," she noted.
Addressing the need for reform in multilateral development institutions, Sitharaman echoed Prime Minister Narendra Modi’s longstanding call for modernization, stating that these institutions must adapt to meet 21st- century demands.
(Business Correspondent)