Prime Minister Narendra Modi finally got down to business in New York meeting top-level American business honchos. He asked them to view India as a credible investment destination while assuring them of easier business environment and tax regime. He even told them that the recent cancellation of coal blocks by Supreme Court should be seen as an “opportunity.”
In over an hour-long breakfast meeting with 11 top American chief executives Prime Minister urged them to change their outlook towards India. For over a couple of years now American firms have become extremely critical of India’s trade and industrial policies.
American companies had been especially concerned over the government’s mandatory domestic procurement stance, intellectual property laws and retrospective tax amendments.
“India is open-minded. We want change. Change that is not one-sided. I am discussing this with citizens, industrialists and investors,” Modi told the CEOs while urging them to invest in India.
Soothing their nerves over the recent Supreme Court judgment on cancelling over 214 coal blocks, Modi told the CEOs to view it as an “opportunity.”
“I want to convert the Supreme Court judgement on coal allocation into an opportunity to move forward and clean up the past,” Modi said.
Last week the Supreme Court cancelled all but four coal blocks that were allocated to companies since 1993, on the grounds of illegality under the Coal Mining Nationalisation Act. The decision is estimated to impact around Rs 2.85 lakh crore worth of investments linked to the 214 coal blocks and their end-use plants.
The 11 CEOs with whom the Prime Minister held his breakfast meeting at the swanky The Pierre comprised of – PepsiCo CEO Indra Nooyi, Google Chairman Eric Schmidt, Citigroup chief Michael Corbat, MasterCard CEO Ajay Banga, Cargill’s President and CEO David W MacLennan, Caterpillar’s Douglas Oberhelman, AES’ Andres Gluski, Merck’s Kenneth Frazier, Co-founder and Co-CEO of Carlyle Group David Rubenstein, Hospira Group’s Michael Ball and Warburg Pincus’ Charles Kaye.
Modi also asked these 11 honchos to invest in the country’s infrastructure development as that “it creates jobs and enhances quality of life of our citizens.”
The CEOs were believed to have raised the issue of retrospective tax amendments to which Modi told them that no new cases will be taken up, sources told Business Standard.
In an effort to sell India to do business, PM discussed the ‘Make In India’ initiative with them wherein he asked them to produce in India to boost the sagging manufacturing sector.
This was followed by separate one-on-one meetings with chief executives of six US multinational conglomerates. These consisted of those firms that not only have a presence in India but have plans to expand their footprint in the country.
The six CEOs who called on the Prime Minister separately before he left for Washington to meet US President Barack Obama were Jeffrey R. Immelt of GE, James McNerney of Boeing, IBM’s Virginia Rometty, Henry Kravis of Kravis Kohlberg Roberts (KKR), Laurence D. Fink of BlackRock and Goldman Sachs’ Lloyd Blankfein.
Aircraft maker Boeing’s McNerney told Modi that the firm plans to “accelerate engagement with India.”
Keen to develop 100 smart cities across the country, Modi invited IBM to build the IT backbone of these cities. IBM’s Rometty also discussed software and digital India initiative with the PM.
Investment management company BlackRock informed PM that it intends to hold a global investors meet in India next year in line with Modi’s vision of making the country a favourable investment destination.
India-US ties had taken a massive hit under the Obama administration, especially with relation to business and trade. The US Chamber of Commerce had been extremely critical of some of the policies that were rolled out under the previous UPA regime.
However, ever since the BJP came to power under Modi, the American investors have expressed contentment over the government’s recent decision to increase foreign direct investment ceiling in the defence sector, railway network and insurance sector.
FDI inflows from US to India during 2000-2014 stood at around $ 13 billion, according to the department of industrial policy and promotion (DIPP).