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India prohibits FDI in too many sectors, says Obama

Noting India prohibited foreign investment in too many sectors such as retail, Barack Obama yesterday cited American business community's concern over “deteriorating investment climate” in the Asian country. VOTE: Should India allow FDI in retail

world Updated: Jul 16, 2012 01:27 IST
Indian economy,President Barack Obama,FDI

Noting India prohibited foreign investment in too many sectors such as retail, US President Barack Obama Sunday cited American business community's concern over "deteriorating investment climate" in the Asian country to endorse another "wave" of economic reforms.

Still sounding positive about Indian economy, "which continues to grow at an impressive rate," he said to some extent the country’s slower growth was a reflection of the slowdown in the global economy.

Careful to avoid a direct criticism, Obama said many in the American business community had expressed concerns that the investment climate in India was deteriorating.

"They tell us it is still too hard to invest in India. In too many sectors, such as retail, India limits or prohibits the foreign investment that is necessary to create jobs in both our countries, and which is necessary for India to continue to grow," Obama said in an interview to PTI.

His comments come within days of US magazine Time’s Asia edition describing Prime Minister Manmohan Singh as an underachiever, "unwilling to stick his neck out" on reforms.

Refraining from prescribing any solutions, Obama said, "It is not the place of the United States to tell other nations, including India, how to chart its economic future. That is for Indians to decide."

"There appears to be a growing consensus in India that the time may be right for another wave of economic reforms to make India more competitive in the global economy."

"It is important, though, to put this in the context of India’s incredible growth and development in recent decades." Obama pointed out that India had lifted tens of millions of people out of poverty to create one of the world's largest middle classes.

Describing Prime Minister Singh as "my friend and partner with whom I have worked closely", Obama said he valued the insights of the Indian leader.

Ruling out any "outside" solution to the Kashmir issue, he said the dispute could only be resolved by India and Pakistan.

"It is not the place of any nation, including the United States, to try to impose solutions from the outside.

"...all of us have a profound interest in a Pakistan that is stable and democratic."

Taking about Afghanistan and India’s role, Obama said, "India will be critical to Afghanistan’s future." India’s generous contributions had helped train Afghan police, promote development and improve the lives of the Afghan people, he said.

First Published: Jul 15, 2012 15:00 IST