NEW DELHI: The US and India pledged to step up their economic engagement with President Barack Obama promising finance facilities worth $4 billion and a new Indian Diaspora Initiative meant to help Indian-Americans fund local businesses.
While the Indian authorities, led by Prime Minister Narendra Modi promised to address concerns related to tax and ease of doing business that US companies voiced, Obama focused on offering support to upgrade infrastructure, renewable energy and small enterprises and realize the untapped business potential between the two largest democracies.
Between all this, there was a ‘Made in America’ bias. The $1 billion financing window from US Exim Bank is meant to support Made in America exports to India, he told a conference attended by top CEOs from both the countries.
Another $1 billion is to come from the Overseas Private Investment Corporation or OPIC to support lending to SMEs in underserved markets. The US Trade and Development Agency will aim to leverage nearly $2 billion in investments in renewable energy in India. In the past, the US has complained bitterly about India’s solar energy programme that has a preference for Made in India goods.
“So, we are moving forward, there is new momentum, there is new energy, new hope that we can finally begin to realise the full potential of our economic relationship,” the US president said.
He also elaborated on major challenges, low trade volumes being one of them. “We all know that the US-India economic relationship is also defined by so much untapped potential. Of all America’s import from the world about 2% come from India. Of all America’s exports to the world, just over 1% go to India, to over a billion people. We do about $100 billion in trade with India, which is a great improvement since we took office, but we do about $560 billion a year with China. Everybody would agree, we have to do better.”
Obama then listed out the other areas of concern, some of which have been flagged by industry captains — from ease of doing business to protecting IPRs. “Here in India there are still too many barriers, hoops to jump through, bureaucratic restrictions that make it hard to start a business, to import or export, to close a deal, deliver on a deal… We need to be incentivising trade and investment, not stifling it. We need to be fostering a business environment that’s more transparent and more consistent and more predictable,” he said even as he referred to steps taken by the Modi administration. Obama said US companies are ready to help Indian counterparts to develop India specific products, upgrade infrastructure and build smart cities.