Ranked 100 in Ease of Doing Business: India May Attract More FDI Now
Describing as significant the huge improvement in India's position in the World Bank's ease of doing business ranking, a top US-India business advocacy group today said this would help the country attract more FDI.
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"This is a significant movement and a very important barometer of India moving the right direction and in creating the kind of channels that will attract (foreign direct) investment," Nisha Desai Biswal, the new head of the US-India Business Council (USIBC), told PTI.
According to the World Bank's latest annual Ease of Doing Business report, India now ranks 100th among 190 countries. Last year it was placed at 130th spot.
"FDI is like water. It seeks the path of least resistance. So the more you do to lower resistance the easier and faster the FDI will flow," said Biswal, who served as the Assistant Secretary of State for South and Central Asia in the previous Obama administration.
"India's image has been on an upward trajectory," Biswal said. "Let's be clear that do people think that the reforms have gone far enough? No. Neither in India nor in the US would anybody say. I don't think the prime minister (Narendra Modi) himself would say that the reforms have gone as far as fast as he would have liked. But has there been a change in perception...yeah absolutely," she said.
India, she said, has been at the top in the last couple of years in terms of FDI interest and actual investment.
"...that is because there has been a change in perception about the opportunity, change in perception about the attractiveness of the market and a change in perception about the ability of investors to be able to navigate that market," she argued.
The USIBC, she said, wants to continue to deepen and accelerate that trajectory, because India's rise as a global strategic and security power, can only be sustained by India's rise as a global economic power.
"And so accelerating that trajectory is deeply in the interest of the Indian government and the Indian people creating opportunity for the Indian people," she said.
Biswal said to create that opportunity, one would want to attract the kind of investment, create the kind of market that will again draw the kind of growth that India desires.
"Growth and investment that works only one way is not going to be sustainable for either country," she said.
For trade and investment to be long term sustainable and this partnership to be long term sustainable it has to be a partnership that is bringing benefits on both sides, she observed.
"The trade balance is one barometer that I think needs to be looked at closely. Even Prime Minister Modi during his last visit said you know we need to look for creative ways in which we can address these kinds of issues and create and generate much more opportunity on both sides of that equation," she said.
"We also need to be quite frank about you know the global trade imbalance that is resultant from the extraordinary imbalance that exists for each country in its trade with China. So as we even our own two way trade with each other there will be in some ways a ameliorating effect because for both countries the biggest trade imbalance is the imbalance that exists between each country and China," Biswal said.
"As such there is an opportunity for both countries to grow and deepen their own partnership with each other in some ways to balance that out a little bit," she observed.
"So, I see a desire on both sides to develop this relationship in ways that meets the need of the Indian people and the American people. Trade balance is certainly an important barometer in that sense. And you know investment flows and job creation," she said.