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June 19, 1998


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Unjustified, counterproductive, says India

India has described as ''unjustified and counterproductive'' economic measures taken by the US in the wake of nuclear tests by New Delhi, and said these interfered with the free flow of trade, investment and technology.

The Confederation of Indian Industry has urged the government not to retaliate against US companies in India.

''We consider it regrettable that impediments have been placed in the way of growing economic co-operation between India and the US. The details of these measures are being studied in the relevant agencies. We shall take all steps necessary to safeguard our economic and national interest,'' a statement released by the external affairs ministry said last night.

It said India had taken note of the US government's notification elaborating certain economic measures against India. The notification reiterates certain measures that were announced earlier and contains additional measures which are on expected lines.

"We are confident that the large, diversified and dynamic Indian economy will continue to generate expanding opportunities for our trade and investment partners. We will strive to ensure that their engagement in the Indian economy continues to grow to mutual advantage," the statement said.

A CII statement today cautioned the government against taking precipitate action while regretting the sanctions and the US attempt to get other countries to follow suit. In particular, World Bank loans for infrastructure projects should be safeguarded, it said.

Meanwhile, Finance Minister Yashwant Sinha said India was prepared to withstand sanctions announced by the US.

Sinha said India was a large country with a diversified economy and there was no reason to panic. ''The sanctions are being projected as a Royal Bengal tiger by the media,'' he said. ''I beg you (the media) with folded hands not to spread panic in this country,'' he said on his way out after inaugurating the fourteenth All-India Conference of Chief Commissioners and Directors General of Income Tax.

According to Sinha, aid already in the pipeline is unaffected while they (the US) are yet to come out with the actual size of the impact.

For example, how the US banks are likely to behave now is yet unclear, Sinha said, adding that India is yet to study the implications of the sanctions which, however, will not apply to the private sector.

In any case, Sinha said the sanctions would have a limited impact and that adequate steps would be taken to meet the challenge.

Commerce Minister Ramakrishna Hegde also asserted that the economic and trade sanctions imposed by the US against India would have little effect upon the country.

''They (sanctions) are not going to work against us. Even if they do to some extent, the fallout will be temporary,'' he said while speaking at the 29th all-India export award presentation function organised by the Engineering Export Promotion Council.

Assuring the exporting community that there was no room for fear so long as their performance was clean, Hegde said, ''It's impossible to suffer the humiliation of nuclear apartheid.''

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