In a stirring address to the “India Ideas Summit 2020”, Prime Minister Narendra Modi presented a strong argument for the world, and particularly the United States, to invest in India saying “India offers a perfect combination of openness, opportunities and options.” The two-day virtual Summit, organized by the US-India Business Council to mark its 45th anniversary was attended by business leaders from both countries. The theme of the Summit is “Building a better future”.
Highlighting that India celebrates openness in people and in governance, which makes for open markets and prosperity, the Prime Minister underlined the wide-ranging reforms undertaken by India which create an ideal eco-system marked by increased competitiveness, transparency, digitization, innovation and policy stability. To illustrate the scale of opportunity in India, Prime Minister Modi pointed to the fact that of the half a billion internet users in India, the number in rural areas exceeds that in urban areas. Another half a billion are in the process of being connected, together presenting a huge opportunity in the 5G and other data technologies.
The Indian Prime Minister delineated specific areas which would prove to be particularly attractive for foreign investors beginning with the agriculture sector that has recently seen extensive reform as well as to the food processing sector that is expected to be worth half a trillion dollars by 2025. Healthcare is another fast-growing sector that is an inviting destination. The Prime Minister also highlighted the energy sector, pointing to the huge investment opportunities for US companies in India’s expanding gas-based economy as well as in the clean energy sector. As India undertakes a massive creation of infrastructure including roads, highways and ports, this sector too could be profitably looked at by investors.
Another area that came in for special mention by the Prime Minister was civil aviation in which he projected a demand of a thousand planes by private airlines in India over the next decade. India could be an ideal base for manufacturing and supply to regional markets as well as a hub for maintenance, repairs and operations.
Prime Minister Modi asked investors to pay attention to the space sector in which major reforms have been undertaken to encourage growth and investment and also pointed towards the defence sector in which the FDI cap has now been raised to 74 percent. The insurance sector was also showcased as an area with a very bright future; the FDI cap in insurance is now up to 49 percent and upto 100 percent in insurance intermediaries. Very significant opportunities exist in health, agriculture, business and life insurance.
The Prime Minister’s address indicated that confidence levels in India’s growth story were high. FDI inflows in 2019-20 were $ 74 billion, a fifth more than the previous year. It was noteworthy that even during the pandemic, $ 20 billion of foreign investment flowed into India between April and July this year. India could thus be the powerhouse which enables global recovery in the years to come and the country’s campaign for self-reliance would make it stronger for partnerships. The India – US partnership, a partnership of “two vibrant democracies with shared values” could now play a significant role “in helping the world to bounce back faster after the pandemic.”
The Prime Minister’s sharply focused address is timely in terms of global developments. China’s aggressive behaviour, as well as its lack of transparency regarding the Covid-19 outbreak has led to concerns regarding its reliability as a partner in many parts of the world. These concerns have exacerbated an already deteriorating US-China relationship. Many countries, including the United States, are looking for relocating supply chains away from China and reassessing their global relationships. In this fast evolving landscape, trust and openness become important ingredients of mutually beneficial partnerships between countries. The Prime Minister’s presentation of a rising India with an open mind and open markets, as well as a country that can be trusted should prove to be a convincing argument for foreign investment partners.
Script: Amb. Navtej Sarna, Former Indian Ambassador To The US