Seeking to abate skepticism over the current business environment in India, external affairs minister SM Krishna today claimed India will restore investor confidence and regain economic momentum.
He took up the case of Indian businesses and raised their pressing issues yesterday while speaking on the eve of the crucial India-US Strategic Dialogue.
"For our businesses, too, there are pressing issues: Whether it is the worsening environment for mobility of professionals, the protectionist sentiments against the global supply chain in services industry, the refusal to even consider a Social Security Agreement that affects the lives of 300,000 non-immigrant Indian professionals in the United States, the unresolved market access issues, or, the persisting presence of India in the Super 301 Priority Watch List and the US department of labour's list," Krishna said.
Krishna's remarks came at the end of the day-long annual gala of the US India Business Council (USIBC) wherein American corporate leadership, think tanks expressed skepticism over the current business environment in India and lamented that economic reforms are not taking place.
"I also have great confidence in the future of India-US economic partnership. I know that this is a time when a degree of skepticism has entered into the sentiment of the business on both sides. I am aware of the concerns of the US businesses; USIBC has been forceful in articulating them!" the external affairs minister said in his address to the annual USIBC event.
"It is, in part, natural, if not inevitable, that as our economic engagement grows; the range of issues that we face will also expand.
"But, it is also true, that as our inter-dependence deepens, it becomes even more important to address the issues with a sense of urgency and purpose," he said.
"The progress that we have made gives us the confidence to deal with the challenges in our relationship. Our trade in goods and services has reached a milestone by crossing 100 billion US dollars last year. India has been one of the fastest growing destinations for US exports," he said and acknowledged that the US remains a major source of investment in India.
Indian companies, too, have established presence in at least 40 states in the US, with a significant part of their investments going into the manufacturing sector, and generating more than 80% of their employment locally from the United States Krishna said.
Responding to the criticism of the American businesses, Krishna tried to negate their skepticism.
"Questions have been raised about economic policy and commitment to implement reforms. Doubts have been expressed whether the story of Incredible India will remain credible!" he said.
"These sentiments are not new. Over the past two decades of extraordinary change in the Indian economy, there have been periods when the growth seemed to lose its steam and the agenda of reform seemed to slow.
"But, time and again, our economy rebounded with new vigor, on the strength of strong fundamentals, and supported by sound policies and prudent economic management," Krishna said.
"In an era of global inter-dependence, not everything is within the powers of national governments. But we are confident that we will restore investor confidence and regain economic momentum and growth," Krishna said.
Acknowledging that this is a time of vulnerability and uncertainty in the global economy and also a phase of challenges and opportunities for the two economies, Krishna said in India, there are evident concerns about economic parameters.
Measures taken in response to an earlier phase of the global economic crisis, international turbulence and volatility, and policy challenges, have all contributed to the current situation.
There are also complex and unresolved issues of equity, sustainability and opportunities and achieving the right balance between various sectors of the economy – these issues have been at the heart of political and policy debate in India, he noted.
Krishna said their confidence stems not just from the strong fundamentals of their economy, but, also from the fact that virtually every political party in India has been at some point part of the reform process.
"We have to respond to the aspirations of an increasingly young, empowered and energised India that has experienced enormous change in a short span of time, and we will do so. But, we will also need a stable and supportive international environment, including an open and growing US market, and the flow of capital and technology," the minister said.