American companies are primed to invest in civil aviation, e-commerce and multi-brand retail in India, says Khush Choksy, acting president of the US-India Business Council (USIBC). In the Capital to meet with government officials and private sector representatives, Choksy tells Subhayan Chakraborty that some of these areas have witnessed long-standing policy disputes but discussions are necessary. Edited excerpts:
Which are the sectors being eyed by American investors?
There’s a lot of interest in developing India’s secondary airport systems by companies such as UTC. They are looking at the operational and regulatory part of running an airport, in tier-II and tier-III cities. Another sector is online commerce, where Amazon has already made investments. Also, there’s multi-brand retail in rural areas which provides tremendous opportunities. In the payment systems area, a company like PayPal brings varied benefits. In sync with demonetisation and benefiting from a unified tax structure such as the goods and services tax (GST), small businesses would benefit from this.
What are the other areas on which the USIBC is focusing?
Agriculture is one. Among the kind of policy issues we have been advocating, there is focus on seed technology. We need to look at the details in a way that it achieves its objectives but does not hurt investments and new technologies. In medical devices, India’s health sector will benefit tremendously by American investments. From a public sector point of view, you want to be able to bring the price of medicines and devices down in India, but you can only do that if you bring competition into the field. When you bring price control on heart stents, the technology will not come, and the opportunity to eventually allow manufacturing here is lost. We are advocating against price control not because we are unsympathetic to the fact that you want affordable health care; however, you want to be smart about how you do these things.
Since domestic players remain apprehensive about investments in these areas, is there a disconnect between domestic firms and ones coming in?
There is no disconnect. However, there needs to be more work. That is why we have invested more in the USIBC and made certain management changes. The US’ economic relations with European nations, like Germany and the UK, are much larger than with India. Of course, there are similar issues in any healthy relationship. The USIBC believes either you can let those issues fester or you can work actively with all companies on both sides and the government.
Government officials have expressed that the new US administration is distant and rigid on some of the main areas of discussions. How do you see this playing out?
We have a new administration in Washington DC, and visits by many high-level government officials are expected to India. The assistant secretary for South Asia has come here this week. Visits by the National Security Council, the energy secretary, the defence secretary are expected. Also, Ivanka Trump will be leading the US government delegation to the global entrepreneurship summit to be held in November, probably in Hyderabad.
There have been reports that this year the annual Trade Policy Forum might not be held.
I can’t speak for the government, but I feel the Trade Policy Forum will be held. Part of any delays may be due to the fact that the US has a nomination process for the offices under the US Trade Representative to come into place. I feel the trade dialogue will be held. Business communities in both countries represented by the USIBC strongly find these platforms useful.
The issues discussed as part of earlier trade policy fora have included US firms complaining over difficulties in market access while India has pointed to their lack of competitiveness. Will we see anything new being discussed this time?
There are a lot of ongoing issues. I think the approach that we want to foster is one that creates a win-win. There have been a number of steps to liberalise India’s markets. Discussions for further liberalisation are going on, and we are keenly tracking those.
Do you feel the discussions at previous such meets have been successful in addressing bilateral concerns?
Two things have happened which are noteworthy. The business press in India has not adequately covered the success of the economic side of PM (Narendra) Modi’s visit to the US, and why US companies are very optimistic. Because there was so much in the political sphere and on global issues, I think the consequence of the joint statement they issued was really covered. For example, it talked about the US being India’s strategic partner and what it meant for the defence industry and helping get the six nuclear reactors operational and technologies like UAVs (Unmanned Aerial Vehicle) and other technologies being transferred.
What are further policy changes you hoping to see in the country?
In areas such as land acquisition and ease of doing business, there’s tremendous opportunity for India to move up. So, those are the areas where the USIBC wants to partner in, since that will lead to more foreign as well domestic investment.