The India growth story will come under a closer scrutiny in the US when Prime Minister Narendra Modi meets the corporate elite and digital billionaires in New York and San Francisco next week. Ahead of the first India-US Strategic and Commercial dialogue (S&CD) to be held in Washington on September 22, the US has pressed India to simplify its tax regime and ease of doing business in India to attract foreign investments. “For India to achieve its goal of sustainable growth and development, it must assure global markets and international investors that it is open for business,” Nisha Desai Biswal, US Assistant Secretary of State for South Asian Affairs, said. “Efforts to simplify its tax code and increase the ease of doing business will pay huge dividends”, she added.
The slow pace of reforms by the Indian government has raised concerns among many foreign investors, including the US. In a recent report released by the World Bank on the ease of doing business index, India was ranked at an abysmal 142 out of 189 countries. Some of the proposed initiatives such as the single window system to ease doing business in India has not resulted in a significant change. India’s biggest tax reform, the Goods and Services Tax (GST), hasn’t got the approval of the Indian parliament as yet. While India’s Finance Minister Arun Jaitley has expressed confidence saying that the GST coming into effect is only a matter of time, the ground realities show that it could take longer.
India and the US are expected to enhance cooperation in new areas such as energy, environment, science, technology, space, health and education. India’s entry into groups like the Asia-Pacific Economic Cooperation (APEC) and Trans-Pacific Partnership (TPP) is likely to be taken up. The two sides will also identify possible areas of cooperation in strategy, defence and security. The two sides will also be looking to fast-track negotiations for Bilateral Investment Treaty (BIT). The BIT could prove to be a major step forward in attracting more capital in India in areas such as infrastructure, health, energy, education.
Speaking at the launch of a report, ‘India’s Rise: A Strategy for Trade-Led Growth’ by Fred Bergsten, at Peterson Institute for International Economics, Ms Biswal said: “The government’s ‘Make in India’ initiative, aimed at creating millions of jobs in the manufacturing sector, would require the Indian economy to be better integrated with global supply chains, markets and trade.”
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