Prime Minister Narendra Modi urged global businesses to “come to India” as his government seeks to build a $5 trillion economy by 2025.
His address to chief executives at a summit in New York comes less than a week after India delivered a $20-billion tax-cut stimulus to help shore up the $2.6-trillion economy that’s growing at the slowest rate in six years amid 45-year-high unemployment.
“India is waiting for you,” Modi told political and business leaders at the Bloomberg Global Business Forum. “India is the only destination for you.”
Modi, who met energy company CEOs in Houston, is meeting more than 40 major companies, including Lockheed Martin, American Tower, Mastercard and Walmart at the forum hosted by Michael R. Bloomberg, the founder and majority owner of Bloomberg LP, the parent company of Bloomberg News.
“Just recently we have decided to considerably reduce corporate tax,” Modi said, calling the move revolutionary. “If you want to invest in a market where there’s scale, come to India.”
The cut in corporate tax rates puts India on par with some of the lowest in Asia to help the south Asian nation compete with the likes of Vietnam and Indonesia for investments in the midst of ongoing global trade tensions. Attracting investments is key to revive economic growth and put the nation on the path to becoming a $5-trillion economy by 2025.
The cropped tax rates are the latest in a series of steps announced by the government, including easier foreign investment rules for companies from Apple to Huawei Technologies to BHP Group, to revive economic growth from the weakest pace since 2013. With $3 billion in foreign direct investment from American companies last year, the U.S. is the fourth largest investor in the Indian economy.
Infrastructure creation is expanding at an unprecedented pace, with highways, metros, railways, ports, airports being built, Modi said. “Each sector is seeing massive investment and tremendous potential.”
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Modi doubled India’s renewable energy target to 450 gigawatts from the current plan to set up 175 gigawatts by 2022 in his speech at the UN Climate Action Summit earlier this week. Renewable energy capacity growth in India is expected to be almost 12% lower than previously thought over the next four years.
“We believe the Earth is our mother and we do not have the right to exploit,” Modi said. “We only have the right to use it for our needs.”
Modi reiterated India’s intent to implement a $50-billion-plan for rainwater harvesting and water conservation and ban single-use plastic. The prime minister said that October 2, celebrated as the birthday of Mahatma Gandhi, would mark a “significant step” toward making India “free” from single-use plastic.
With the world’s third-largest coal reserve, Modi said India “cannot walk away from it. But we can change the way we mine it to ensure it reduces harm to the environment.”
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Modi was speaking against the backdrop of ongoing talks aimed at signing a trade deal with Washington.
India and the U.S. are working toward easing trade tensions, including a possible withdrawal of some disputes from the World Trade Organization, ahead of a bilateral meeting between Modi and Trump scheduled later this week.
Tensions ran high in June after India imposed higher tariffs on almost 30 American products in retaliation against Trump’s decision to end trade concessions, in spite of New Delhi’s steps to narrow a trade gap with Washington by raising energy imports.
Expectations for a possible trade deal, raised after the Group of Seven leaders’ summit in France last month, grew stronger on Sunday when U.S. President Donald Trump and Modi shared a stage in Houston and later walked hand-in-hand around a football stadium. Trump received Modi’s endorsement in front of more than 50,000 Indian Americans — an influential voter base.
Modi said his re-election this year with a stronger majority was a mandate for development.
“People of India are standing with a government that doesn’t hesitate in taking tough decisions to improve the business environment,” he said. “Today there is a government in India that respects the business world and wealth creators.”
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