India should take steps to improve its “ecosystem” for businesses and take advantage of the slowdown in China to woo US companies who are ready to set up manufacturing facilities in the country, head of a prominent Indo-US trade body has said.
“What we are hearing from our companies that India story is strong. The slowdown in China is making India story much much stronger,” Mukesh Aghi, president of the US India Business Council (USIBC) told PTI.
He said the cost of doing business in China has gone up and is becoming more and more difficult.
“This is where there is an opportunity for India,” he said.
“India is a fantastic story. We need to get our act together in India to be able to go after this investment, which is ready to come in,” he said.
“US companies are willing to move a lot of investment in India…either manufacturing or setting up other plants for local environment,” Aghi said.
“Now we just need to ensure that the reforms taking place at the ground level, we are able to move it forward. It is an opportunity for US companies to look at incremental investment in India because of slowdown in China,” he said.
When asked why US companies have not invested in a big way in India despite some of the major reforms undertaken by the government, Aghi said the “ecosystem” required is still not there.
The FDI, he argued, has moved substantially in the IT, technology and e-commerce arena, he said.
“Areas where large projects, where you have to have land approval, you have to deal with labour laws…that’s where you see apprehension,” Aghi said.
“At the end of the day it is all about creating jobs in both countries,” Aghi said, adding that the several issues of concern to the US industry remain unresolved including intellectual property rights (IPR) and retro taxes.
At the same time, he acknowledged that several issues of concern for India remain unresolved like the one related to totalisation that would allow citizens from the two countries to repatriate their social security savings when they return to their home country.
He said the red tape of Indian bureaucracy is becoming greener now, but what the US businesses would like to see is things moving much faster on reforms front.
“I would say the red tape seems to be loosening its colour. It (bureaucratic red tapism) is still there, but is moving in the right direction. I would say red seems to be becoming greener now,” Aghi said.
“From policy perspective, what we are seeing is a very strong support from the government and bureaucracy in trying to make sure that the rules being put is has a feedback from the industry also,” he said.