In 2010, United States President Barack Obama arrived with the largest delegation, which included the who’s who of American business, to any country.
Four years later, Prime Minister Narendra Modi will make his maiden visit to the US, hard-selling the story why India’s rising economy has never mattered more than before as he seeks to reset the business relationship between the world’s two largest democracies.
The fact that many global chief executives and top bankers of Wall Street have met, or are expected to meet, Mr Modi, is perhaps a sign of the turnaround of India’s image as an investment destination.
Indian-born Deutsche Bank co-CEO Anshu Jain, called on Mr Modi recently. Goldman Sachs CEO Lloyd Blankfein and PepsiCo CEO Indra Nooyi are among those who are expected to meet Mr Modi in the US.
The top brass of General Motors, the world’s second-largest carmaker by sales volumes, including its global CEO Mary Barra and chairman Tim Solso have to met the PM.
These meetings with global CEOs and influential bankers are clear signs that the investors view the Modi government’s commitment on reforms and easing business environment as serious intent.
Investment decisions, besides yields and returns, are also guided by perception. In the last two years global credit rating agencies and investment banks had been unsparing in their criticism about the Indian economy’s management, which had been marred by policy logjams, project delays and a string of corruption scandals.
Given this backdrop, the $55 billion worth of Foreign direct investment (FDI) that India is likely to receive from just two sources — Japan ($35 billion) and China ($20 billion) — over the next five years is a welcome beginning. India needs more of such pledges to propel the investment rate to over 40% of GDP.
FDI, besides bringing in the crucial dollars, also plays an ambassadorial role. Seen through the prism of transcontinental conduct, corporate giants are akin to global citizens helping countries reap the benefits of comparative and competitive advantage — both economically and strategically.
India and the US can do much better when they work together, and find ways to overcome challenges brought on by global slowdown. India is on course to become the fifth largest consumer market by 2025.
It is India’s interest to roll out the red carpet to investors who cannot ignore a country where the consumption spree of the middle-class will swell to more than 700 million in the next 10 years reshaping global markets.