India needs to modernise and reform its economic governance to expand trade and attract the kind of foreign direct investment it needs to build infrastructure, a top US official has said.
“For India to attract the investment it needs, and to expand trade, it will first need to modernise and reform its economic governance — to improve its ease of doing business,” said Assistant Secretary of State for South and Central Asia, Nisha Desai Biswal.
Delivering the 33rd Annual Mahatma Gandhi Memorial Lecture at the University of California in San Diego, she said important steps can ensure that the country attracts the capital it needs to build the India of 2030.
Talking about the measures that India needs to take, Biswal said steps like updating its intellectual property regime so that technology and innovations have adequate safeguards, ensuring transparency, predictability, and consistency in its corporate tax code, and providing for an efficient system of adjudicating disputes are needed.
“We have already seen some steps in the right direction, and we are seeing a faster flow of investment as a result. And we are hopeful that by pursuing a bilateral investment treaty and passing a national Goods and Services Tax (GST) — two priorities of the Modi Government — India will further boost investor confidence,” Biswal said.
Prime Minister Narendra Modi, she said has also put a strong focus on clean energy — setting an ambitious target of 175 gigawatts of renewable energy by 2022.
He emerged as a leading voice amongst developing nations for combating climate change and played a key role in ushering in the ground-breaking agreement in Paris last year, she said.
The US is committed to partnering with India in realising its ambitious target and tackling pressing challenges of air pollution and environmental degradation, Biswal said.
She said with cutting-edge American technology and companies that bring the best in corporate standards and practices, commercial relationship is a big part of the India-US engagement.
“With India, our trade has increased by a factor of five over the past 15 years, to over USD 100 billion per year. And we’re laying the groundwork now to expand that trade to USD 500 billion annually,” she said.
“Given India’s monumental rise, it is no surprise that US companies have invested nearly USD 30 billion dollars in the last decade and a half. And Indian companies themselves have invested over USD 11 billion in the US, creating close to 100,000 American jobs. So a major expansion of two-way trade is in our mutual interest,” she said. Biswal said as is the case for India, every single country in the region is also grappling with the challenges of uneven and unsustainable growth.
“They must manage the skills gap so that they can build a workforce that can compete in the global market place. They must ensure that their human development indicators match their economic growth ambitions so that they can marshal the strength of all segments of their society,” Biswal said.
“And they must create an inclusive society where all of their citizens can participate in the economic, political and social fabric of their country, irrespective of gender, ethnicity, race, or religion,” she said.
“Because a youth demographic that can power the economy can also lead to its destruction if young people are disconnected and disillusioned and if fear and frustration guide their actions and inform their decisions. This is as true in Dhaka as it is in Dushanbe,” Biswal said.