Modi, Obama unveil steps for new high to business, trade ties

New Delhi: India-US business links were set for a quantum jump with Prime Minister Narendra Modi's assurance of "consistent policies" and "welcoming environment" leading to US President Barack Obama announcing steps to lead to $4 billion trade with and investment in India.

US President Barack Obama and Indian PM Narendra Modi
US President Barack Obama (C), Indian Prime Minister Narendra Modi (R) and Indian President Pranab Mukherjee (L) attend a reception at Rashtrapati Bhawan, the Presidential Palace, in New Delhi on January 26, 2015. Pic/ AFP

"Over the next two years, our Export Import Bank (EXIM) will support $1 billion Made In America goods exports to India. Our Overseas Private Investment Corporation will support lending small and medium businesses across India in more than $1 billion in loans. And our US Trade and Development Agency will invest nearly $2 billion in renewable energy in India," Obama said in his address at the US-India Business Summit here Monday.

Listing out more steps, he said the US was ready to help in broadband connectivity and build better roads.

"We need to make sure that economic growth in both India and US is inclusive. Diaspora investment initiative will aid India," he said.

"US exports to India is nearly 35 percent. Indian investments in our country is growing as well. Those Indian investments are supporting jobs across America. Our growing trade relations are also a win for India. Both Indian and US workers are benefiting from the ties," Obama added.

Saying that there is a lot of "untapped trade potential", he added: "PM Modi agrees that there is a lot of scope to improve the trade relations. We have to focus on making doing business easier in both our countries."

In his address earlier, Modi said the state should be driven by policies which should be consistent so as to draw more investments, while revealing US investments in India jumped by 50 percent in the first six months of his government.

"State should be policy-driven. That will help investment. Consistency is another very important aspect that will bring more investments in the country. These things will address many problems," he said.

He assures US business that they "will find environment that is not only open, but also welcoming".

"We will guide you and walk with you in your projects. You will find a climate that encourages investment and rewards enterprise; it will nurture innovation and protect your intellectual property," Modi said.

"It will make it easy to do business; our immediate target is to bring us from the rear ranks of the world into the top 50. You will find a tax regime that is predictable and competitive. We have removed some of the excesses of the past. We will now soon address the remaining uncertainties.

Our goal is an economy where skills, infrastructure and resources will not be constraints to growth," he said, adding heavy investments in infrastructure and agriculture will improve the economy.

Noting that "in the world of economics, numbers are often an unforgiving mirror to performance," Modi said: "They are telling us that we are on the right path. Our economic growth has increased by a percentage point. Today, business sentiments in India are the strongest among major Asian markets. Consumer confidence in India has turned positive after three years.

"Growth in the eight core sectors of the economy has increased sharply. Inflation is at a five-year low. And, 110 million new bank accounts have opened in the last four months. Investments from the United States have jumped by 50 percent in the first six months of my government. And, I know that some of the pledges made in September in Washington have begun to flow in."

Stressing the India-US partnership "will be vital for prosperity at home and our economic leadership abroad", he held it will also help address "global challenges of our times".

Turning to President Obama, Modi said that with his support, "quite simply, the joined hands of India and the United States will make this world a better place for all. With your leadership, Mr. President, and with the support of our gifted people, we will turn our commitments into concrete action".

The US-India Business Council (USIBC) along with India's department of industrial policy and promotion (DIPP), the Confederation of Indian Industry (CII) and the Federation of Indian Chambers of Commerce and Industry (FICCI) organised the summit.

Before this meeting, Modi, speaking at the interactive India US CEO Forum, highlighted key priorities of his government including improving "Ease of Doing Business", and the "Make in India" initiative. He also added it is extremely important to listen to investors, as this helps speed up decisions.

Reacting to the statements by Modi and Obama, CII president Ajay Shriram expressed hope that the newly-announced US-India Strategic and Commercial Dialogue will convene soon to chart out the path for enhanced bilateral economic cooperation.

He also welcomed Modi’s commitment to making the business environment in India easier and more predictable. In this regard, he welcomed the new cell being set up in the PMO to fast track US investments in India.

It is these steps, he noted, that will help step up the US’s engagement in the Indian economy.

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