The issue of large global imbalances has been debated at length since the beginning of this decade, both at international fora and also in regional conferences and seminars. In India, we have regularly highlighted this issue in our Annual Reports and Annual Policy Statements.
With respect to price developments, the downward pressure on domestic prices from the increase in manufactured imports has weakened, as the rise in import penetration rate has paused. On the other hand, the upward pressure on import costs from materials prices has also subsided owing to the decline in crude oil prices since spring 1997 and the appreciation of the yen.