Promising a “transparent, fair and non-discriminatory” investment environment for foreign investors, Finance Minister P. Chidambaram has called upon US companies to set up local manufacturing bases in India, telling them it would be mutually beneficial to both countries.
In meetings with top corporate leaders and lawmakers in Washington on Wednesday, Chidambaram sought to assure the US business community that India’s economic policies are both pro-growth and WTO-compliant.
The assurance comes in the wake of the recent chorus of protests by lawmakers and corporates against India’s “discriminatory” policies that were reportedly hurting US exports and jeopardising American jobs. They had complained that New Delhi’s policies gave Indian companies an unfair advantage and appeared to violate the World Trade Organisation obligations.
Chidambaram met top executives from leading American companies, including Microsoft, lockheed Martin, Boeing and International lease Finance Corporation (IlFC). He also called on Senate Finance Committee chairman Max Baucus.
While noting that some concerns have been expressed about the current business environment in India, he said New Delhi was “committed to ensuring a transparent, fair and non-discriminatory investment environment for foreign investors seeking to do business in India”.
US corporate leaders highlighted issues relating to transfer pricing, impact of the Comprehensive Immigration Bill recently passed by the U.S Senate on future business prospects of Indian IT companies operating in the US, and taxation.
A statement from the Indian embassy said the US company executives were appreciative of the measures taken to address concerns on transfer pricing. The Finance Minister also apprised them of the recommendations of the Arvind Mayaram Committee on enhancing FDI caps in many sectors, and the steps being taken to implement them.
Chidambaram voiced India’s own concerns about the provisions in the Comprehensive Immigration Reform Bill relating to skilled non-immigrant visas that could affect Indian professionals and IT companies.
Commerce and Industry Minister Anand Sharma, participating in a New York event hosted by CII and US India Business Council, spoke of India’s determined bid to establish itself as a world manufacturing hub and called upon US corporates to look at India as a long term business and investment opportunity.
Outlining the policy initiatives to attract foreign direct investment, Sharma referred to the National Investment and Manufacturing Zones (NIMZ) being set up across India and the single window approval mechanism for investments.
He also mentioned the fast-tracking of critical infrastructure projects, use of technology to minimize paperwork for investment proposals, efforts to tackle the emotive issue of land and the establishment of a Cabinet Committee on Investments chaired by Prime Minister Manmohan Singh.
While acknowledging that 2012 was a difficult economic year for India, the minister asserted that the country’s strong fundamentals such as thriving domestic demand, high national investment rate (35%) and a high savings rate (31%) would continue to drive economic growth.