India one of our fastest growing mkts: Aus PM

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Melbourne, January 21:: India has become one of the fastest growing export markets of Australia and is expected to continue to post impressive rates of growth, Prime Minister Kevin Rudd said, while he outlined a five-point plan to combat inflation.

In his first major economic policy speech since taking over late last year, the Prime Minister described inflation as the "most pressing economic challenge Australia is facing and called the problem as one his administration ‘inherited’ from the previous John Howard government.

Rudd noted that the downturn in the economic outlook in the US, Europe and Japan comes as strong growth in the Asia-Pacific region is continuing to drive demand for Australia's rich mineral and energy resources.

"Over coming years, developments in China will increasingly shape both global and Australian economic conditions," he said.

"The Indian economy has become one of our fastest growing export markets and is expected to continue to post impressive rates of economic growth. Combined, China and India accounted for around 40 per cent of Australia's export value growth in 2006-07," Rudd said.

A key component of his inflation-fighting plan was to cut government spending to produce budget surpluses of 1.5 per cent of gross domestic product (GDP), larger than the 1.0 per cent target of the previous government.