US President Barack Obama promised to provide $4 billion to India in loans and investments that could unlock what he called the “much untapped potential” of a business and strategic partnership between the two countries.
“We want to see more trade. We want to see more investment between the two countries that will benefit the people,” he said while addressing the India-US CEO Summit this evening, hours after he attended the Republic Day parade as chief guest, the first US President to do so.
As part of the economic package, the US Export-Import Bank would finance $1-billion worth of exports of Made in America Products, he said.
Additionally, the Overseas Private Investment Corporation will lend $1 billion to small and medium-sized enterprises in under-served rural areas of India while the US Trade and Development Agency would leverage $2 billion for renewable energy in India, the US President announced.
While annual bilateral trade had reached $100 billion, that is less than a fifth of U.S. trade with India’s neighbour, China. “We are moving in the right direction…That said, we also know that the U.S.-India relationship is defined by so much untapped potential,” Obama said. “Every one here will agree, we’ve got to do better.”
Pointing out that US exports to India currently amount to just 1 per cent of its total exports while barely 2 per cent of its total imports come from India, Obama stressed that bilateral trade relationship is defined by “much untapped potential”.
The US President also announced that the two governments have agreed to resume talks on the proposed bilateral investment treaty.
He underlined key focus areas for Indo-US businesses that includes further ease of doing business in the US, a new government panel in India to support foreign trade and investments, especially those from the US, as well as development of technology by US businesses to aid India’s infrastructure development in railways, roads, broadband and smart cities.
“We need to make sure that economic growth in both the countries is inclusive and sustainable,” he stressed.
However, he noted that there is great interest on part of US companies to find consistency, clarity, greater simplicity in regulatory and tax environment in India.
The President further said that the US-India commercial and strategic dialogue would follow up on the talks between the two leaders to monitor the implementation of all announcments.
Prime Minister Narendra Modi, too, underlined the need for greater clarity and stability in policies and expressed hopes that there would not be much inter-state variation in policies as well as decisions were being taken after bringing states on board. This, he stressed, would help economic growth.
Promising a stable tax regime, he said, “You will find environment that is open and welcoming; we will guide and walk with you; you will find a climate that encourages investment and rewards enterprises.”
He further said that the government would work to remove remaining impediments to business. Inviting investments from US businesses, the Prime Minister said that the government is working to improve the ease of doing business in the country. He also promised to look into a suggestion that the PMO should monitor all big projects and said he would personally monitor such projects.
Significantly, the Prime Minister also announced that India would be willing to accept all suggestions of the Indo-US joint working group on intellectual property rights (IPR).
“Consistency is required in policy making… IPR is an issue,” he stressed.
Modi also assured US investors that India was still open to imports and it was not in contradiction of the Make in India campaign that seeks to promote domestic manufacturing.