New Delhi/Washington: Prime Minister Narendra Modi on Wednesday pitched India as a trustworthy and open business partner for the United States (US), seeking American investments in areas ranging from agriculture to health care to defence in a bid to boost economic recovery in the wake of the coronavirus pandemic.
PM Modi also portrayed India as a “perfect combination of openness, opportunities and options”, said India had what was needed to power the global recovery post the pandemic, suggested that India and the US could together help the world recover, and reiterated that India’s domestic campaign for self-reliance would aid this process.
The PM’s comments, while delivering the keynote address at the India Ideas Summit organised by the US India Business Council (USIBC), come in the backdrop of increased tensions of both US and India with China, for different reasons, and a search by global businesses with bases in China for alternative investment destinations.
“The rise of India means a rise in trade opportunities with a nation that you can trust, a rise in global integration with increasing openness, a rise in your competitiveness with access to a market which offers scale. And a rise in your returns on investment with the availability of skilled human resources,” he said. Experts suggest that the PM’s emphasis on trust and openness is a clear attempt to contrast India with China.
The PM referred to his government’s efforts over the past six years to make India’s economy more open and reform-oriented and to ensure increased competitiveness, enhanced transparency, expanded digitisation, greater innovation and policy stability. India’s opportunities, he noted, could help power the global economic recovery.
Describing India and the US as natural partners, Modi said: “Now it is time our partnership plays an important role in helping the world bounce back faster after the pandemic. American investors often look out for the perfect timing to enter a sector or a country. To them, I would like to say: there has never been a better time to invest in India.”
The approach to the future, the PM also said, must be a more human-centric one while focusing on resilience against external shocks, the lack of which was exposed by the pandemic. He referred to his government’s efforts to increase self-reliance in the aftermath of the Covid-19 crisis, saying, “Global economic resilience can be achieved by stronger domestic economic capacities. This means improved domestic capacity for manufacturing, restoring the health of the financial system and diversification of international trade.” The PM claimed that through the self-reliant campaign, India was contributing towards a prosperous and resilient world.
Modi’s invitation to US business was in line with his efforts to pitch India as a trade and investment destination during the recent India-EU Summit and to build alternative supply and trade chains at a time of the heightened tensions with China following a months-long border standoff.
He invited US businesses to invest in technology while pointing out that India has half-a-billion connected people, while an equal number are in the process of being connected. He also cited a recent report to claim that there were more Indians connected in rural areas than in urban areas. There were opportunities in front-line technologies such as 5G, big data analytics, quantum computing, block-chain and internet of things, he said.
He also sought investments in agriculture, health care, energy, infrastructure, civil aviation, finance and insurance, and defence and space. India’s food processing sector is expected to be worth more than half a trillion dollars by 2025, while the health care sector is growing at more than 22% every year, he noted.
US firms can tap opportunities in India’s efforts to moves toward a gas-based economy and in clean energy, while the number of air travels is expected to more than double within the next eight years and the country’s private airlines plan to induct more than 1,000 new aircraft over the next decade.
“This is a huge opportunity for any investor who chooses to set up manufacturing facilities in India, which can become a base for supplying regional markets,” Modi said.
Turning to space and defence, he said: “We are raising the FDI cap for investment in the defence sector to 74%. India has established two defence corridors to encourage production of defence equipment and platforms. We offer special incentives for private and foreign investors.”
FDI flows into India during 2019-20 were worth $74 billion, an increase of 20% percent from the year before, Modi said, adding USIBC had informed him that the “pledged investment” from the US has crossed $40 billion this year. Amid the pandemic, India attracted foreign investments worth more than $20 billion between April and July, he added.
The annual value of India-US trade has jumped to $140 billion and the Modi government has taken steps to increase the purchase of oil and gas from the US in recent years. However, the two sides were unable to bridge differences on key issues such as market access and tariffs to stitch together a mini trade deal in time for US President Donald Trump’s visit in February.
Efforts are believed to be underway to conclude this mini trade deal before the US presidential elections at the end of the year.