Leverage India-US economic engagement by more SME participation, Ms Shankar
Ms Meera Shankar, India's Ambassador Designate to the US has underscored the need for greater business involvement of the small and medium enterprises (SMEs) of India and the US to strengthen bilateral economic relations.
Ms Shankar was speaking at an interactive meeting with members of the Indo-American Chamber of Commerce (IACC) in New Delhi on 16th April. SMEs from both sides, she said, should be increasingly involved in transacting trade, technology transfer, joint ventures etc. â€œLarge enterprises in both the countries have the resources and infrastructure to facilitate joint ventures and technical collaborations, but that is not true in the case of smaller enterprises, where some specialized help should be provided, she added.
Ms. Shankar underlined the need to take appropriate steps to further enrich the economic engagement, once the economic crisis bottoms out. She specifically referred to the decline in the share of US investment in the overall FDI received by India. We need to take practical measures to ensure greater U.S. investment flows, given the enormous opportunities and the positive investment climate in India. In the case of portfolio investment, she observed that the Indian stock market seemed to have bottomed out and this was a good time for FII's to return to India.
Attention was drawn by the participants to the modest interest of US investors in investing in the infrastructure sector in India and the general perception among US investors that Indian laws and regulations relating to the infrastructure sector were cumbersome and complex. Ambassador Meera Shankar observed that this was the case in the US as well. â€œIn a democratic dispensation where the rule of law and civil society have a greater say in the conduct of business, such problems often crop up. One way would be for the US companies to go for larger consortium arrangements while bidding and executing infrastructure projects, she added.
Referring to another point of view from the floor that the threshold limit of foreign equity participation in the defense sector should be enhanced, Ms Shankar opined that presently no such measure was contemplated. However, she added that the question of greater flexibility in such sensitive sectors required demonstrable benefits to the home country and that this would build the trust factor, which was critical for taking such engagements to the next level.
Mentioning that cooperation in the ICT sector was a win-win for both the US and India, Ms Shankar said that the Indian IT service companies were working mostly on digital platforms and software imported from the US. Development of this segment in India would naturally boost the demand for such equipment from the US. She also underscored the need for greater cooperation in energy, particularly renewable energy.
Calling for increasing the volume of trade between the two countries, the Ambassador Designate opined that the export basket from India happily had undergone a positive change. There are items like equipment, light machinery etc in the export basket now in addition to traditional items like spices, agricultural items etc that figured earlier.
The meeting was also addressed by Mr S Madhavan, Regional President, IACC, Mr Gautam Mahajan, Executive Vice President, IACC and Dr Vivek Lal, Regional Vice President, IACC.
Indo-American Chamber of Commerce (IACC)