Prime Minister Narendra Modi today promised an open business environment, predictable tax regime and to remove “remaining uncertainties” to US businesses as President Barack Obama raised issues of trade barriers and intellectual property while seeking ease of doing business in India, but also, significantly has assured Modi that he will look into concerns on the H-1B visa issue.
Narendra Modi asserted that his government has removed some of the “excesses of the past” and said “we will now soon address the remaining uncertainties”, an apparent reference to the retrospective taxation law of the previous government that put off global investors.
Pledging $4 billion in lending by US banks, Obama said the US is ready to help India grow by working with it in development of infrastructure like railways, ports, roads and clean energy power plants.
Both the leaders were addressing a meeting of the US-India Business Council on the second day of the US President’s visit that was attended by top corporate leaders of both the countries.
Earlier, addressing a meeting of India-US CEO Forum that he would personally take charge of implementation of big projects and monitor them.
“You will find environment that is not only open, but also welcoming. We will guide you and walk with you in projects. You will find a climate that encourages investment and rewards enterprise. It will nurture innovation and protect your intellectual property.
“It will make it easy to do business…. You will find a tax regime that is predictable and competitive. We have removed some of the excesses of the past. We will now address the remaining uncertainties,” Modi said at the USIBC meeting.
In his speech, Obama said specific things that need to be done by two countries is to make it easy for doing business in both the countries.
“There are still barriers,” he said adding there was a need to streamline regulations, cut the red tape and jump through bureaucracy.
The US President announced USD 4 billion investment in India including USD 1 billion for financing exports from US to aid Make-in-India programme here, a similar amount for small and medium industries and USD 2 billion in renewable energy projects.
Appreciating Modi’s reform initiatives to bring investments, he said, “We need to incentivise trade rather than stifle. We need to be transparent, consistent and protective of intellectual property rights.”
“We can work together to develop new technologies to help India leap forward and partner in next generation clean energy projects and upgrade railways, roads, ports, airports and broadband connectivity to provide best connectivity to the world,” he said.
He also referred to the three smart cities that US would be helping India in setting up and upgrading infrastructure.
Reviewing his visit, Obama said the two countries have “a number of concrete” steps for more investments and referred to breakthrough in civil nuclear agreement, defence cooperation, renewable energy and bilateral investment protection treaty (BIPA).
“When leaders make agreements, our agencies and bureaucracy will follow through,” he said. “We can grow and we can prosper together.”
Obama referred to the current bilateral trade of USD 100 billion and compared it to US-China trade of USD 560 billion saying, “it can give you idea of what potential India can unleash.”
“We have to make sure that growth remains inclusive and is sustained. Growth has to make people’s life better in tangible way,” he said adding growth cannot be measured in GDP figures and bottomline of balance sheets.
“In the past eight months, we have worked tirelessly to fulfil the mandate (of the people) — not just to increase our economic growth… Our task is huge and it wont happen overnight. We are conscious of our challenges but also inspired by our successes, ” Modi said.
He said the business sentiments in India were among the strongest among major Asian markets. Consumer confidence has turned positive after three years.
“Growth in 8 core sectors of economy has increased sharply. Inflation is at a 5-year low. 110 million new bank accounts have been opened in last four months. Investments from the US have jumped by 50 per cent in first six months of my government,” he said.
“And I know that some of the pledges made in September in Washington have begun to flow in. Yes, I do keep track of these things,” he said as the audience cheered the remarks.
Prime Minister said the scale of India’s dream was vast and therefore the opportunities it offered were huge.
He said prosperity of India will be an important anchor of stability for the global economy and an engine for its growth. “Above all, a prosperous India will be a force for peace and stability in the world.”
Referring to the cooperation in new areas like civil nuclear and renewable energy and defence equipment, Modi said economies resurgence in both countries gives us greater optimism of future of bilateral ties.
“As the two largest democracies, we have fundamental stake in each other’s success for the sake of our values and shared interest. Working by ourselves, we can still advance our common interest. But, if we work together, we can achieve greater success,” he said.
Obama assures Modi on concerns over H-1B visa issue
President Barack Obama has assured Prime Minister Narendra Modi that he will look into India’s concerns on the H-1B visa issue as part of his comprehensive immigration reform, US officials said today.
Obama told Prime Minister Modi that his administration would be in touch with the Indian government on issues related to H-1B visas, popular among Indian techies.
“I think what the President indicated is this is the type of issue (H-1B) that we have approached through the context of comprehensive immigration reform and so, given his ongoing efforts to work with Congress in pursuit of comprehensive immigration reform, we would be incorporating these types of issues in that process and would be in touch with the Indian government as that moved forward,” Deputy National Security Advisor Ben Rhodes told US reporters travelling with Obama.
Responding to a question on the bilateral talks held between the two leaders yesterday, Rhodes acknowledged that India’s concerns over certain aspects of the immigration reform were raised at the highest level.
“They (Modi and Obama) discussed the ongoing discussions around immigration reform in the United States where there are so many Indian-American and Indian immigrants,” he said.
“The Indian government raised the issue, as they regularly do. It usually does include the H-1B visa issue.
Indians are working in the high-tech sector in the United States, as well as broader India presence in the United States, people who are there on a temporary basis working,” Rhodes said.
In November last year, President Obama had bypassed the Congress to announce the most sweeping reform to fix America’s “broken” immigration system to protect millions of illegal workers from deportation.
The plan would let parents of US citizens and legal permanent residents remain in the country temporarily, without the threat of deportation. The measure would apply to those who have been in the US for last five years.
The executive action, said to be one of the largest measure by a US President on immigration, is expected to help a significant number of Indian techies who currently have to undergo a painful and agonising process of H-1B visas to get legal permanent status (LPR), popularly known as Green Card.
India, US CEOs discuss trade issues
US sanctions on companies in third countries, ease of doing business and intellectual property rights were among a dozen issues that figured at the India-US CEO Forum where US President Barack Obama and Prime Minister Narendra Modi were also present.
India’s top industrialists split among themselves issues of concern to the two countries and spoke on relevant areas only instead of speaking on all of them.
At the roundtable that preceded address by Obama and Modi, the Indian CEOs were allotted total time of only 18 minutes.
Sources privy to the discussions said 5 CEOs spoke for two minutes each, followed by an open discussion where the other CEOs got an opportunity to air their views.
While HDFC’s Deepak Parekh spoke on bilateral ease of doing business, Sunil Mittal of Bharti Enterprises focused on electronic cluster development and smart cities.
Reliance Industries Chairman and Managing Director Mukesh Ambani covered agriculture, innovation and skill development.
Biocon Chairman and MD Kiran Mazumdar-Shaw highlighted pharma and IPR issues plaguing the business relationship between the two nations.
Parekh, they said, also spoke on visa restrictions.
Oil and Natural Gas Corp (ONGC) Chairman and Managing Director Dinesh K Sarraf talked about India-US not having a free-trade agreement (FTA) hampering import of liquefied natural gas (LNG).
India is seeking long term assured supply of natural gas from the US at competitive prices to meet its energy needs but Washington bars sale of LNG to nations with which it does not have FTA.
Sarraf also raised the issue of Indian firms attracting US sanctions for investing in third countries like Russia and Iran.
ONGC is yet to enter into US upstream sector as it fears for its investment given the fact that it has business in many countries which may fall under restrictions due to change in geopolitics.
In the open discussion that followed, Kumar Mangalam Birla spoke on challenges faced by Indian companies investing in the US while Mahindra Group head Anand Mahindra dwelled on defence and single window clearance, sources said.
ICICI chief executive Chanda Kochhar talked about the American tax evasion law, FATCA (Foreign Account Tax Compliance Act) as well as other banking issues.
Reliance Group head Anil Ambani talked about Indo-US collaboration in solar power while Essar’s Shashi Ruia spoke on STEM initiative in the US.
Cyrus Mistry of Tata Sons and David M Cote from Honeywell co-chaired the high-profile meeting attended by captains of industry from Indian and the US.
Adani Group head Gautam Adani, Sudhir Mehta of Torrent Pharma, State Bank of India Chairman Arundhati Bhattacharya and BHEL head B Prasada Rao too are part of the 17-member Indian delegation at the Forum.
The US team included Indira Nooyi of Pepsico, Harold McGraw, Chairman McGraw Hill Financial and Ajay Banga, CEO Mastercard.
Here are the highlights:
Huge potential for all sectors in India, Prime Minister Narendra Modi said while addressing business leaders.
Economy has to grow to increase purchasing power: PM
India is full of opportunities, we have talent as well as scope; want to focus on skill, scale and speed: PM.
Agree with the suggestion to monitor big projects at PMO level: Modi.
There is a need for consistency in polices for economic growth: Modi at CEOs meet
We have worked tirelessly in last 8 months to increase economic growth and transform lives of people: Modi
Modi promises a predictable tax regime
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: Modi
Aims to be in top 50 nations in ease of doing business, says Modi.
Prosperity is no guarantee for peace; India sees world as one family: PM.
Barack Obama on his part, spoke after PM Modi’s speech:
Obama raises intellectual property rights issues.
There is natural convergence between India and the US. There is incredible business talent in India: US President Barack Obama.
PM Modi has brought new energy, vigour to redesigning the architecture in India so that more business and greater growth take place: Obama
We are moving in the right direction. There is still untaped potential that we have not realised. Lot more work needs to be done: Obama.
We want to see more trade. We want to see more investment between the two countries that will benefit the people.
Great interest on part of US companies to find consistency, clarity, greater simplicity in regulatory and tax environment in India: Obama
Exim Bank of US to commit USD 1 billion for project financing: Obama.
US Trade and Investment Development Agency to provide USD 2 billion for renewable energy projects: Obama
We can work together to develop new technologies to help India leap forward: US President.
Taxation, IP basic impediments for US businesses in India: MasterCard’s CEO Ajay Banga
Taxation and intellectual property rights issue are some basic starting point impediments for US businesses in India, a top Indian-American CEO said today.
“The fact is that there’s basic starting point impediments,” Ajay Banga, CEO MasterCard and chairman of the US India Business Council told reporters at a news conference.
“The first one is on taxation issues. The fact that they’ve said they’re unlikely to get new retrospective tax actions is a very good sign. We take that well. But there’s a whole lot of pending cases. And for a CEO and an investor having hundreds of millions of dollars of pending cases in your balance sheet is not a nice place to be,” Banga said.
American companies would love to get some resolution on those, love to see progress on the transfer pricing agreement and the general sales tax, the GST, which unifies all the taxes across the country, making it easier, not just for us but for Indian investors and Indian companies to do business in India.
“It’s useful for everybody,” he argued.
There is progress happening in all of those and that’s one of them, he noted.
“The next big one is to move on with a conversation that’s actually going to get covered through the intellectual property area. There’s a lot of discussions going on between parties on both sides, governments and individuals, on how to make progress,’ Banga said
“India is looking at a new IT policy, and all we’re saying is consult with investors and companies so when you do produce your policy it represents the best of both sides and the best of both ways of thinking,” he said.
Banga said Prime Minister Narendra Modi got elected on the idea of creating a million jobs a month and improving the quality of life of the people in the country, and “we think there are three ways to do that. US companies bring capital, technology and IT people to help in all three: manufacturing, tourism, and infrastructure”.
“In a short span of time, Modi has taken a number of initiatives to improve business climate in India. We’ve got new announcements on foreign direct investment, on railways, defence and insurance,” he said.
“We’ve got the beginnings of land and labor reform that are critical to expanding for all American companies. And all those are great signs of the progress and the importance of the chemistry and the strategic relationship that she just talked about. So that’s good for us,” he said.
Investor mood around what’s going in the US-India relationship is much stronger than it was, he said.
“And my own company, MasterCard, in the last year has invested close to a quarter of a billion dollars in picking up two companies in this country. More than 10 per cent of my workforce is now in this country. I do an enormous amount of development for mobile payments and for networking engineering and the like, out of this country. And so that’s happened in the last year,” he said.
India-US CEO meet
Cyrus Mistry of Tata Sons and David M Cote from Honeywell co-chaired the high-profile meeting. Industry captains from India and the US attended the meeting.
Industry leaders participating in the meeting include Reliance Industries Chairman Mukesh Ambani, Bharti Enterprises chief Sunil Mittal, ICICI Bank MD & CEO Chanda Kochhar, Reliance Group Chairman Anil Ambani, Infosys CEO Vishal Sikka, Adani Group head Gautam Adani, Shashi Ruia, Chairman of Essar Group, Mahindra & Mahindra Chairman Anand Mahindra, Hari Bhartia, Co-chariman and and Director of Jubilant Life Sciences, Biocon Chairman and MD Kiran Mazumdar-Shaw and Sudhir Mehta of Torrent Pharma.
State Bank of India Chairman Arundhati Bhattacharya, Oil and Natural Gas Corp (ONGC) Chairman and Managing Director Dinesh K Sarraf and BHEL head B Prasada Rao too are part of the 17-member Forum.
The US team includes Indira Nooyi of Pepsico, Harold McGraw, Chairman McGraw Hill Financial and Ajay Banga, CEO Mastercard.
The forum discussed bilateral business ties, particularly in the light of US being a major potential source of manufacturing investments.
Critical issues, including visa impediments for professionals, intellectual property rights and bilateral investment treaty are also on the agenda.
The meeting is significant in the light of Make-in-India initiative, which seeks to make the country a hub for global manufacturing, design and innovation.
India has already relaxed foreign investment caps and norms in various sectors including defence, insurance and pharmaceuticals. It also took a slew of other initiatives with a view to improving the business climate and attract foreign investment.
The bilateral trade between the countries stood at USD 61.64 billion in 2013-14. India has received USD 13.28 billion FDI from the US between April 2000 and November 2014. America is the sixth largest investor in India.