The business sessions of the CII-organised Partnership Summit-2003 started on a positive note in Hyderabad Tuesday, with speakers on "Global Economic Outlook" labeling India and China as "bright spots" in Asia, while painting a bleak outlook for Europe, mainly because of the slowdown in Germany, and noting that US economy has started looking up with low inventories, stabilisation of unemployment and robust consumer-spending.

Speakers at the session said another war with Iraq was still looming large and its impact could be severe on the world's economy with India suffering considerably because of its dependence on Iraq for oil and the large labour force it had in the Gulf.

P K Basu, director and chief economist for south-east Asia and India, Credit Suisse First Boston, Singapore, initiating the discussion said even if a war broke out in Iraq, it would be a short-lived one.

He said India remained the fastest growing economy among world's democracies with an annual growth rate of 5.8 per cent, which was unprecedented for any democracy of over 100 million population.

It had a sizeable current account surplus which would stay for years, he added. He expected India to become a net creditor nation in the next 15 months.

The chief executive officer of MEDEF, the International French Business Confederation, Thierry Courtaigne agreed with Basu and said the EU was keen to step up investments in India.

He also wanted India and China to make investments in the EU, assuring them that it was "much more open than Japan".

Bharati Enterprises chairman and managing director Sunil Mittal regretted that some of the most well known companies remained satisfied with drilling in their own country.

He cited the example of Siemens of Germany, which opened up in China and India and was not adversely affected by the slowdown.

"You bring in your technology and take advantage of India's vast market," he suggested pointing out that the purchasing power in Asia was on the upstage.

Mittal referred to the law passed by the New Jersey authorities putting a virtual ban on back-office processing deals by its agencies in India, and said these should be treated as acts of anti-dumping under the World Trade Organisation.

He felt back-office processing in India was a cost-effective proposition for major corporates and they should take advantage of the human resources available in India.

He wanted a more aggressive marketing by India for investment inflow and said such a game paid rich dividends to China, where investment was now tapering off.