India pledges IPR, stable policies, Obama $4 bn in trade financing
In their address to the Indo-US CEOs conclave on Monday both US President Barack Obama and Prime Minister Narendra Modi stressed on the natural convergence between the two countries and untapped potential to grow bilateral trade and investments.
While Modi assured intellectual property rights protection, an easier environment for doing business, fast-tracking of US investments into India and a predictable and competitive tax regime, Obama promised $4 billion in trade financing, two US trade missions in the infrastructure sector and technology assistance for building smart cities and clean energy, apart from helping in the financial inclusion project.
Obama also said the countries would fully implement the nuclear deal and cooperate in defence equipment manufacturing including technology transfer.
“We have to make it easier to do business in both the countries and streamline regulations. There are still too many barriers to business,” said Obama, adding that there is already an inter-ministerial panel for expedite American investments into India. American businesses would like greater IPR protection in India, besides transparent, consistent and predictable policies, he said.
The US would support help India improve air quality and having clean water and in solar energy technology.
Obama said bilateral trade between the two has grown by some 60% in the last few years to touch $100 billion, while pointing out that it was still far less than the business US does with China. Indicating the huge potential, he said that of all US imports, only 2% came from India, and of all US exports, only 1% was to India.
He pledged $4 billion in lending by US institutions and said the US is ready to help India grow by working with it in the development of infrastructure like railways, ports and roads. As part of this package, the US Export-Import Bank would finance $1 billion worth of exports of made-in-America products. Additionally, the Overseas Private Investment Corporation will lend $1 billion to small and medium enterprises in the US to do business in India, especially in under-served rural areas in India. The US Trade and Development Agency would leverage another $2 billion for renewable energy in India.
But he also raised issues of trade barriers and IPR protection in India.
“PM Modi has brought new energy, vigour to redesigning the architecture in India so that more business and greater growth take place… We are moving in the right direction… There is still untapped potential that we have not realised… Lot more work needs to be done… We want to see more trade. We want to see more investment between the two countries that will benefit the people,” Obama said at the meeting, which comprised top CEOs of both countries as well as members of the Union Cabinet.
He said that there was great interest on the part of US companies to find consistency, clarity, greater simplicity in the regulatory and tax environment in India.
Earlier, Modi in his address had said, “You will find an 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. 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.”
As if reassuring members of India Inc as well as foreign investors who have had to grapple with delays in project clearances, Modi said that he would personally monitor implementation of big projects.