Noting that India prohibited foreign investment in too many sectors, US President Barack Obama on Sunday cited concerns over a deteriorating investment climate there to endorse another “wave” of economic reforms. Still sounding positive about the Indian economy, “which continues to grow at an impressive rate”, he said to some extent, India’s slower growth was a reflection of the larger slowdown in the global economy. In an interview with PTI, the US President said many in the American business community, “one of the great champions of the US-India partnership”, had expressed concerns that the investment climate in India was deteriorating. “They tell us it is still too hard to invest in India. In too many sectors, such as retail, India limits or prohibits the foreign investment that is necessary to create jobs in both our countries, and which is necessary for India to continue to grow,” Obama said.
Refraining from prescribing specific solutions, he said, “It is not the place of the US to tell other nations, including India, how to chart their economic future. That is for Indians to decide.” However, he said, “There appears to be a growing consensus in India that the time may be right for another wave of economic
reforms to make India more competitive in the global economy.”
“As India makes the difficult reforms that are necessary, it will continue to have a partner in the US. It is important, though, to put this in the context of India’s incredible growth in recent decades,” he said. Describing Prime Minister Manmohan Singh as “my friend and partner with whom I have worked closely”, Obama said he valued the insights of the Indian leader at various international fora.
Obama’s comments drew reactions from India Inc. CII Director General Chandrajit Banerjee said, “India is resilient. However, there are some issues which need to be addressed. We still need reforms in sectors like retail, aviation, defence and insurance.” Ficci Secretary General Rajiv Kumar said India’s long-term growth prospects remained intact. “However, it is evident some significant reform measures have to be taken urgently,” Kumar said.
