Washington: Asserting that there is a renewed optimism about India in the US and around the world, a top American corporate executive has said the new Indian government needs to revive business relations and focus on manufacturing, tourism and infrastructure to spur growth.
"India's growth rate is up for the first time in two years. India's stock market has reached historic highs. There is a sense that history may well look back and say, this was the time India began to undergo a rebirth," US-India Business Council (USIBC) chairman and MasterCard CEO Ajay Banga said.
"What a difference an election can make! It's a difference driven by the people of India who united and spoke earlier this year. They ignited with a demand for change, resulting in a majority in the lower House of Parliament for a single party for the first time in many years," he said at the annual gala of the India-US trade and business advocacy body yesterday.
There is a "renewed optimism" about India in the US and around the world, he said.
Noting that Prime Minister Narendra Modi was voted to power on a mandate for economic growth and development, Banga said two things need to be done to bring these to fruition.
"The first thing this government needs to do is to revive trust in India ? trust across government and business. Second, its agenda, rightly so, puts great focus on manufacturing, tourism, and infrastructure to deliver on its promises."
He said the revival of trust of the businesses depends on clarity, transparency, consistency and predictability.
Having the Prime Minister's reassurance that there won't be retroactive taxes going forward helps, Banga said.
"Pending cases are still a concern, but there is movement in the right direction. The Prime Minister's commitment to getting a Goods and Services Tax (GST) done helps."
Referring to Modi's speech in US where he committed to create an environment with clarity that attracts foreign and domestic investment, Banga said he has accompanied this with raising the caps on FDI in railways, defence, and insurance.
"Already, investor confidence about India is better. Already, inflows of foreign direct investment have started going up," he said.
Banga said getting the FDI insurance bill passed would help. He said raising FDI in defence further could see even greater access to technology transfers.
"Raising FDI in e-commerce and deepening financial markets would help," he said.
Banga, however, said the Modi government is still in its early days. "There's some promise and some faith. There's momentum and expectation to deliver on both."
He pointed out that India's resurgence is occurring at a time of rising global instability and growing world tensions.
"We have got an increasing competition for resources, a global financial crisis that still lingers, and many more geopolitical and religious conflicts around the world," he said.
Banga said the new hope in India inspires a hope for stronger, deeper ties between India and the US. "Two-way trade that stands at USD 100 billion today can climb to USD 500 billion in the next decade."