As Prime Minister Manmohan Singh prepares to meet top US business leaders and CEOs, a leading trade body today said foreign companies were keen to enter the Indian market, but there needs to be "clarity and predictability" on issues of policy and taxation.
US India Business Council (USIBC) President Ron Somers said India needed to push reforms to encourage foreign investors.
"On our side it is predictability. It is all about clarity," Somers told PTI in an interview when asked what steps Indian government needs to take to attract US investment.
"India is open to business, but the American companies want to come in a big way. That is where clarity and predictability comes," he said.
"It is about when we make an investment; we need to know what our tax equations are. We do not want to have the goal posts changed. One region of the country has different structure than the other. There has got to be the uniformity. There has got to be the predictability," Somers said.
USIBC is the apex trade body of American companies doing businesses in India which includes a large number of Fortune 500 companies.
"When you have that perfect storm of oil imports, no iron ore exports, the hit on the current account deficit is enormous. So, FDI is crucial part of the equation. The Finance Minister said so in his budget speech in February," he said.
"Therefore the presence of the Prime Minister in town meeting with the business community in New York tomorrow evening is very important to send the signal that India welcomes your investment, needs your investment and wants your investment and encourages you as government of India in a very big way," Somers noted.
Arguing the case for building a robust manufacturing base, Somers said that should be attracted and be encouraged by market driven incentives and not by mandate.
Preferential market access (PMA), he noted, caused everybody to be thrown from loop.
"We would hope that the private sector is completely carved out, the private sector needs to do where it is best, knows to be innovative," he said.
"We need to have an understanding of each other. It is true that innovation and technologies is going to the future of both of our economies. And to have innovation, technology, you have to have environment that rewards and protects intellectual property.
"Those issues are vitally important. Intellectual property, manufacturing, market-driven and market-based incentivized and clarity and predictability on tax," he said.
Siding with India on the concerns related to certain provisions of the immigration bill, in particular those related to the H-1B and L1 visas, Somers said, "Let's have an immigration bill that does not close our borders when we are asking India to open hers.
Somers said USIBC is taking up the case of India and Indian companies on Capitol Hill and exuded confidence that its views would be incorporated in the final version of the bill.