The perception among US corporates earlier this year that policy paralysis was afflicting India has changed following the Government’s reform initiatives, which have now paved the way for a renewed enthusiasm, FICCI President R. V. Kanoria said today.
“By and large, (allowing) FDI in multi-brand retail has been welcomed (here),” Kanoria told PTI here.
The earlier perception of policy paralysis “has now changed” in the US in view of the new set of economic reforms unleashed by India.
“There is a renewed confidence that India does mean business and the Government also means business. It is very important the perception of India remains positive,” said Kanoria, who has had several meetings with top American industrialists and US officials during his three-city tour of New York, Chicago and Washington.
Based on his wide-ranging interactions in the US, Kanoria exuded confidence that the new set of economic reforms and liberalisation would bring in more FDI in India, particularly from the US.
Referring to the energy dialogue being held in Washington, the FICCI President said there is tremendous scope for co-operation between the two nations in this sector, particularly towards clean and renewable sources.
He cautioned, however, that it is important not to be complacent at this stage.
“We should continue to tread on the reform process and take a call on some pending issues such as mobilising greater funding for the infrastructure sector, introducing GST (Goods and Services tax) on priority basis, and getting simplicity and flexibility in labour laws,” Kanoria said.
At the same, he said the US also needs to review some of its policies if it wants to develop a strategic relationship with India and they need to give further concessions in their domestic trading policies.
The US also needs to share some of its technologies such as smart grid and clean coal to benefit India.
“Right now the US is funding its own exports through concessional finance. In the clean technology area we would like to see the US supplementing the Indian financial institutions,” he said.
Kanoria added that India would have to sustain the reform process if it wants to sustain investors.
One of the apprehensions that has expressed here is that FDI in retail is a State subject and as such what happens if there is a change in Government at the State level, he said.
As such “some amount of assurance is required that States would not change their policy”, Kanoria said.