Indian government must create a predictable investment climate, says US envoy

The Infrastructure Debt Fund, a consortium of Indian and American corporations and banks was eager to finance India’s massive investment in roads, grids, sea ports and airports, United States Ambassador to India Nancy J. Powell said here on Wednesday.

Addressing students and faculty of St. Mary’s College here, she said India’s economy was poised to be the world’s third largest by 2025 and according to McKinsey analysts, 80 per cent of India’s infrastructure for 2030 was yet to be built.

This offered huge opportunities for Indian and American companies, she said while pointing out that India planned to invest $1 trillion in infrastructure in the next five years alone.

She said the U.S. Export Import Bank and Overseas Private Investment Corporation were bearish on India, funding billions of dollars of projects large and small for the supply of energy, water and goods in India.

Of course, for companies to provide the technology and expertise required for India to prosper, the Indian government must create a predictable investment climate that attracts and encourages increased growth.

Ms. Powell said, “At times such efforts have been mischaracterised as concessions to the west, but recent easing of restrictions on foreign direct investment have shown macro-economic reform to be among India’s most powerful tools for maintaining and expanding its economic growth.”

Historic highs

She said, “Today we see historic highs in the two-way street of direct investment between our great nations.” The total U.S. direct investment in India stood at a mere $ 2.4 billion in 2000 but the figure went up by 10-fold by 2010. Similarly, India’s direct investment in the US economy during the same period rose from $200 million to $5 billion. Touching on the impact of President Barack Obama’s re-election for India, she recalled that he had earlier spoke dramatically about the promise of India-US partnership and called it one of the defining partnerships of the 21 century. The US supported India’s rise as a true global power -- one that looks east and west to build an Asia-Pacific region where economic interdependence drives growth and shared prosperity.

The US and India recognise the strong common interest in a stable future for Afghanistan as an important element in building a ‘New Silk Road’.