The US-India Business Council (USIBC) applauded the latest reforms announced by the Government of India on November 10 2015, liberalizing FDI norms in industries that are starved for capital and enable the ease of doing business in the country.
“Putting more FDI proposals through the automatic route is clear signal that the government is living up to the mandate of minimum government and maximum governance. India’s recent rise in World Bank’s Ease of Doing Business, the ruling on Minimum Alternative Tax (MAT), its efforts to modernize the railways network, lifting of FDI in the insurance sector are all significant achievements that will propel more investment and innovation in the country,” said Mukesh Aghi, President of the US-India Business Council.
USIBC member companies are encouraged by the government’s efforts to undertake economic reforms and stay away from politically driven distractions,” he added.
Aghi also said that India continues to see increased FDI despite an uncertain global outlook. “If the government continues on the current trajectory of bold (FDI and regulatory) reforms, then India will easily surpass the $41 billion (Rs 2.71 lakh crore) in FDI from US companies.”
During the Prime Minister’s visit to Washington DC in September 2014, USIBC had identified upwards of $41 billion slated for investment from members over the next three years, based on a survey of 20% of USIBC’s membership.
Emphasizing the benefit of a more open economy, Aghi said, “Allowing a path to relax the norms for sourcing for single brand retailers who sell cutting edge technology will clear many of the challenges that high-tech companies have had when it comes to taking advantage of the 100% opening of the single brand retail sector.”
“In construction development, removal of two major conditions on minimum requirements area restriction of 20,000 sq m and capitalization of $5 million (Rs 33.1 crore) will provide much-needed boost to investment in the real estate development sector,” he added.
The Council is keen on further reforms in these sectors and additional liberalization that will aid the growth of bilateral trade.
Aghi added, “FDI in business to e-commerce still remains restricted. As a result, smaller Indian e-commerce companies cannot seek the capital they need to grow their business and hire more employees. USIBC will continue to urge the Department of Industrial Policy & Promotion (DIPP) to allow at least 51% FDI in e-commerce.”
Formed in 1975 at the request of the US and Indian governments, the US-India Business Council is the premier business advocacy organization, comprised of 350 top-tier US and Indian companies advancing US-India commercial ties. USIBC is the largest bilateral trade association in the United States, with liaison presence in New York, Silicon Valley, and New Delhi.