India Inc India Inc: Tuesday, 27 January 2015 09:40

Obama promises India $4bn in loans, investment

US President Barack Obama announced $4-billion government-backed investment and lending programme to help India achieve its ambition of generating 100,000 MW of solar power by 2022, increase bilateral trade by five times to $500 billion and to encourage small and medium industries in India scale up.

Addressing industry captains from the two countries at two back-to back meetings at the Taj Mahal Hotel in New Delhi, Obama said, in the presence of Indian Prime Minister Narendra Modi that the US Export Import Bank will finance US exports to India of $1 billion. Since a large portion of this will be in the form of capital goods exports, it will help India add capacity, expand its economy and create jobs.

Then, the US Trade and Development Agency will provide $2 billion for renewable energy projects in India. Further, the US Overseas Private Investment Corporation will lend Indian SMEs $1 billion to scale up operations.

The US President, however, reminded his hosts that and overbearing bureaucracy, too much red tape and intrusive regulations were impediments to greater US investments in India. “There are still barriers,” he said.

For his part, Modi promised a predictable and non-adversarial tax regime and a business-friendly environment.

“You will find an environment that is not only open, but also welcoming," Modi said. "You will find a climate that encourages investment and rewards enterprise. It will nurture innovation and protect your intellectual property... We will guide you and walk with you in your projects.”

The prime minister reiterated his promise to make India among the 50 easiest places to do business in, a massive task, considering the country’s current rank of 142 out of 198 countries in the World Bank’s Ease of Doing Business Index.

“You will find a tax regime that is predictable and competitive. We have removed some of the excesses of the past. We will now soon address the remaining uncertainties,” Modi told the industry captains.

Honeywell chairman David Cote, PepsiCo chairperson Indra Nooyi, MasterCard president Ajay Banga, Tata Sons chairman Cyrus Mistry and Reliance Industries chairman Mukesh Ambani were among those present at the meeting.

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