Over the past several weeks, I met with American and Indian business leaders in Washington. I listened to stories of the obvious potential as well as their tremendous successes. I also learned about their concerns. I came here with a commitment to improve our trade relationship with India. I am, therefore, naturally concerned by the ongoing challenges to trade and investment, including high tariff and non-tariff barriers, restrictions on foreign investment, lack of transparency, and defence offset requirements.
There are also several recent policy decisions that cause significant concern and dampen sentiment about India’s investment climate. The adoption of manufacturing policies discriminatory to foreign companies and the inclusion of retrospective tax provisions in the Finance Bill are two examples. Last week, (US) Treasury Secretary (Timothy) Geithner encouraged finance minister Mukherjee to reassure foreign investors that India would continue to welcome foreign capital by advancing important economic reforms that would increase opportunities for bilateral trade and investment.
I look forward to working with the Indian government and the private sector to find mutually agreeable solutions that take our economic relationship and our business ties to the next level. As India’s business climate becomes more transparent and predictable, it becomes more attractive to companies that will create jobs in India and the US and improve the quality of life of our people.
Our relationship with India will remain strong because of common democratic values, entrepreneurial vigour, and diverse societies. Our shared passion for innovation will help power our strategic partnership. India is on track to have the largest population on the planet by 2030, and already has the fourth-largest economy based on purchasing power. India’s rise is fuelled by an optimistic, dynamic and educated population. There continues to be enormous potential for US businesses to expand their presence in India’s market, given the growth of the Indian economy.
According to a McKinsey report, India will need to invest $143 billion in health care, $392 billion in transportation infra and $1.25 trillion in energy production by 2030, to support its rapidly expanding population. India is looking for private partners to accomplish these ambitious goals. US companies are already improving India’s infrastructure by modernising supply chains, building new airports and power plants. Many leading US companies just visited India with Commerce Secretary Bryson on his infrastructure trade mission that included a stop in Jaipur, as well as Delhi and Mumbai. Our bilateral trade spurs innovation in both our countries. Software development, hardware manufacturing, aerospace and healthcare industries are all thriving in India, building out a diversified economic base. An impressive 60 per cent of Indian software and services exports support businesses in the US.
There are opportunities for innovative public-private partnerships in the areas of nano-technology, biotechnology and homeland security. Often, the most creative businesses are small to medium enterprises that can enter the Indian market with products that will make a better life for millions of Indians, if given the right support.
Sam Pitroda told Secretary Bryson that India needed new technology, tailored to address India’s unique growth challenges. Pitroda believes the creative minds behind many small US businesses are the go-to source for innovation and he urged Bryson to encourage these small companies to bring their ideas to India.
Target Engineering, one of the small companies on the trade mission, plans to open an office here in May. Several other companies have already committed to returning to India this fall for a commerce-led trade mission to east and south India.
Many opportunities for economic partnership exist in India — opportunities that are not limited to large international businesses and do not exist only at the national level.
There are dynamic Indian leaders at the state level, open and willing to engage with the US government and US businesses. As more Indians move to urban centres, state and local governments need creative solutions to energy and infrastructure challenges.
Progressive states like Gujarat, Haryana, Rajasthan and Karnataka present an incredible opportunity for US businesses of every size to enter this market. I applaud AmCham’s outreach to state-level leaders. I, too, want to continue to look beyond our usual capital city contacts to progressive chief ministers for opportunities to develop strong business ties. The US Mission in India is committed to supporting and expanding state-level trade and investment between the US and India. This facet of our cooperation holds enormous potential as we seek to leverage the innovative work and broadened connections across financial, technology, and human capital streams at the state, city and local levels. Just as state leaders from Maryland, Virginia and Delaware have recently come to India to expand business, educational, and cultural ties, we encourage India’s state-level leaders to do the same in the US.
I cannot stress enough how impressed I am with the strides our bilateral relationship has taken over the last 20 years and I know the next 20 years have the potential to create an even more robust economic relationship. I want to end by thanking you all. The American Chamber of Commerce in India has been a great supporter of the US-India strategic partnership and is a key partner in our Mission’s efforts across the board. I encourage all of you to keep reaching out to our officers in India, because you serve as an invaluable source of information n for our advocacy efforts. I am committed to ensuring that US companies can compete on a level playing field in India and operate in the same open and fair environment that Indian companies enjoy in the US.
I view our people-to-people ties as absolutely central to our partnership with India. As Secretary Clinton underscored in her speech in Chennai last year, the US is betting on India’s future — betting that advances in science and technology will enrich Indian lives and advance human knowledge everywhere. I believe many of these advances will develop from strong partnerships at the business-to-business level and the US Mission to India stands ready to support US businesses as they form these ties in India.
(Excerpts from remarks by the US Ambassador to India, Nancy J Powell at the American Chamber of Commerce’s 20th Annual General Meeting, on April 27 in New Delhi)