With increased global integration, the Indian economy now is subject to greater influence of global business cycles. The correlation between the cyclical component of the index of industrial product (IIP) of the advanced economies and India has risen to 0.50 during the period 1991–2009 from 0.20 in during the period 1971–1990 (Chart 1).
Our duty to these market participants, who all rely on us, means that we must find common ground as fellow regulators, we must collaborate more systematically, and we must craft together a regulatory network that offers protection, consistency, and stability. I think this should answer the question, why this MOU is important.