With 9 days to go for Donald Trump to take over the presidency of the US, the US seems to have toned down its out look about India, which was till recently upbeat during the Obama days. Citing huge disparity of growth between the regions, US consul general in Kolkata, Craig L Hall said the economic landscape in India was not yet conducive for the American investors to do business.
“It’s still too hard to do business in India,” Hall said. While there were already foot prints of large enterprises doing business in India, FDI from the US could double if there was a “high standard bilateral investment treaty signed between India and the US.
The proposal, which India has put on the table, cannot even be a starting point for the US to hold talks, “The economic landscape has to look very different from where it is today,” Hall said.
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While Hall expressed concern about The Chatterjee Group’s (TCG) investment in Haldia Petrochemicals Ltd (HPL), which didn’t get enough protection from the government concerning the promoter’s stake as well as its expansion plan, he said there were American companies like the Cognizant, Jubilant Food, Mariot Hotel and Westin Hotel that still showed confidence on the Indian business scenario, especially on West Bengal.
While TCG on matters of HPL had to fight a long legal battle with the West Bengal government, which rolled up to the International Court of Law for taking over the controlling stake, its taking over of the Mitsubishi Chemical PTA India Ltd, was grossly underplayed by both the Centre and the West Bengal governments. The Centre has now given HPL the license of rolling out 100 petrol pumps across the country, but the West Bengal government is yet to allot it land for a Rs 3,500 crore refinery project, a TCG source said.
TCG’s investment in India was one of the largest American FDI to India.
However, according to Hall there was widening gap between the economies of the East & North East India and the economies of the West, South and North India. While strategically the US was keen to invest more in Eastern and North Eastern parts of India, from the US perspective the environment was not yet conducive.
Jonathan. T. Ward, principle commercial officer of the US consulate in Kolkata said the US was looking at the other way round of getting Indian investors coming to the US. At a meeting orgainsed by the MCC Chamber of Commerce, he said that the US was looking at companies in India, which came under the category of the MSME and which either had no export business or were exporting to only one or two countries. “Once such companies set up their manufacturing in the US and use the US technology, the US will take them to Europe and other parts of the world.
In terms of trade Hall said the US might be the largest trading partner of India but of the total US foreign trade, India- US trade represented only1.8%. India represented 18the largest export market of the US. While Modi and Obama had signed agreements to take US- India trade to $ 500 billion from a level of $109 billion, it was a long way to go. At present Indian exports to the US were only 2% of the total US imports, while in terms of Human Resources, Indian students were the second largest of the foreign students studying in America. There were 1,66,000 Indian students in the US in calendar year 2016 registering a 66% year- on-year jump, Hall said.