Further cementing trade ties with India, US President Barack Obama on Monday announced investments and loans worth $4 billion. Half of this will flow into renewable energy projects in India.
Jointly addressing the India-US Business Summit with Prime Minister Narendra Modi, Obama said that the US EXIM Bank will finance $1 billion in exports of “Made in America” products to India.
Another $1 billion will be given in loans by Overseas Private Investment Corporation to small and medium-sized enterprises in the country’s under-served rural areas, while the US Trade and Development Agency will invest $2 billion in India’s renewable energy sector.
Pushing for further trade and investment ties between the world’s two largest democracies, Obama pointed out that while US bilateral trade with China is $520 billion annually, with India it is still about $100 billion. “It shows trade potential between the two of us,” he said.
Simpler tax regime coming Modi, on his part, promised American businesses a tax regime that is predictable and competitive. “We have removed some of the excesses of the past. We will soon address remaining uncertainties,” the Prime Minister said.
The Prime Minister promised as much to American CEOs in the Indo-US CEO meeting, which preceded the Business Summit.
“The Americans raised the issue of retrospective taxation in a big way. Modi assured them their concern would be taken care of,” an Indian CEO who attended the meet told BusinessLine .
The Indian side of the CEO forum was led by Tata Group’s Cyrus Mistry and included bigwigs such as Mukesh Ambani, Anil Ambani, Gautam Adani, Shashi Ruia, Anand Mahindra, Vishal Sikka, Sunil Mittal, and DK Sarraf.
Other issues raised by the two sides in the CEO meeting included strengthening of intellectual property rights (IPRs), commitments on a social security agreement, dialogue on a bilateral investment treaty (BIT) and more visas for professionals from India, including health workers.
“Some US companies such as Walt Disney pointed out that while India had intellectual property laws, implementation was difficult and there was a lot of piracy happening,” said HDFC Chairman Deepak Parekh. In his speech, Modi, assured American investors that the policies in the country would “nurture innovation and protect your IPR”.
Silence on social security While Obama and Modi remained silent about a social security agreement (totalisation agreement) being pushed for by India, it featured prominently in the CEO meeting.
“The US has committed to have a dialogue with the Indian Government on a totalisation agreement. We have said that we want a time-bound agreement so that there is a definite agreement that is reached within a specific time,” Parekh said.
Indian businesses in the US could save as much as $3 billion annually in social security contributions made by short-term workers once a pact is in place.