"Got to go, have to meet the President."
As Confederation of Indian Industry president Hari Bhartia rose to leave, Lawrence Summers strode off to tell President Barack Obama he wanted to return to teaching.
"I had no idea he was going to quit," Bhartia said, adding, "and he gave no indication he was about to announce this drastic decision to the president." That was Summers’s last official business before he resigned.
Summers quit as director of President Barack Obama’s National Economic Council – a position widely called the president’s chief economic adviser on Tuesday, 24 hours after setting off speculation about his exit.
There has been a string of departures from Obama’s administration lately, and more are in the pipeline with his chief of staff Rahm Emmanuel expected to announce his resignation any day now.
But it will be business as usual as far as India is concerned. Summers’s replacement is unlikely to change widely held perceptions in the US economy and business circles.
To a question about why India is not as favoured an investment destination as China, Summers gave three reasons, said Bhartia, adding, they were typical of the perception here.
Infrastructure: China was far ahead in this area – roads, electricity and other essentials needed for a manufacturing facility
- India doesn’t have the kind of equity Chinas has in the US higher education establishment. There aren’t enough experts here with stakes in India, not at least in the right areas.
- China leads the perception game.
- Americans are simply convinced China is a better investment destination.
“In fact, Summers told me,” said Bhartia, “India must do all it can to attract American tourists.” Let them go there and see for themselves India is a place they can invest in.
While a comparison of US investments in China and India could not be obtained readily, trade figures tell the story: India- US trade is worth only $ 39 billion compared to $ 433 billion between China and the US.
“We are working on changing the perception and breaking through this wall in the way of investments and business opportunities for India,” Bhartia said.
As a part of that effort, India and the US launched this week a new initiative to encourage investments from small and medium entrepreneurs and a CII delegation is currently touring the US.