India’s Finance Minister Nirmala Sitharaman on a visit to the U.S. told investors there is no better country to invest in than India.
While on a trip leading her country’s delegation to the International Monetary Fund and World Bank Annual Meetings, Sitharaman’s packed schedule included meetings with academics, policymakers, and influencers in New York and Washington, D.C., where she made the case for India’s economy which is showing signs of a slowdown. Sitharaman also met with counterparts in numerous bilaterals on the sidelines of the IMF/World Bank meetings.
Sitharaman held talks with U.S. Treasury Secretary Steven Mnuchin during the visit, which were described as ‘fruitful.” The two leaders agreed to continue the dialogue in the first week of November, during Mnuchin’s visit to Delhi.
During the first two days in New York Oct. 15 and 16, Sitharaman met Prof. Jagdish Bhagwati and exchanged views on a wide range of issues, including the economy, a press release from the Indian Embassy said.
She addressed a gathering at Columbia University, where she spoke on the ‘Indian Economy: Prospects and Challenges’, moderated by Prof. Arvind Panagariya, the former head of India’s NITI Ayog initiative.
On Oct 16 in New York, Sitharaman met institutional investors over breakfast at a round-table organized by the U.S.-India Strategic Partnership Forum (USISPF) and Federation of Indian Chambers of Commerce and Industry (FICCI) in collaboration with Bank of America. Later the same day in Washington DC, she attended a global investors meet organized by FICCI and USISPF.
Investors can find no better place in the world than India that has a democracy-loving and investor-respecting government, Sitharaman said at the meeting. She made the usual talking points about India being one of the fastest growing economies today, with the “best-skilled” manpower and a government that is continuously doing what is required in terms of reforms, operating under the rule of law, an independent judiciary and a vibrant press.
On Oct 17, Sitharaman made the same case in her meeting in Washington, D.C. with representatives of U.S. industry brought together at a round table organized by the U.S.-India Business Council and the Confederation of Indian Industry.
She also met a group of economists at the Indian Embassy, for a “healthy exchange” of views about the state of the global economy in general, and the Indian economy in particular, the press release said.
G20 and BRICS
The Indian Finance Minister led the Indian delegation to the G20 and BRICS meetings Oct. 17 and 18, again discussing the challenges to the global economy and possible responses to mitigate them.
Sitharaman emphasized that the G20 has the responsibility to effectively navigate global policy co-ordination by identifying and taking strong measures for building buffers and catalysing a second wave of reforms. She called for “concerted action” in the face of the global slowdown, highlighting a the same time that emerging market economies, face the challenge of achieving economic growth and inclusive development while pursuing sustainable financing.
In this context, she discussed the structural reforms being undertaken by India, including the recent measures such as reducing the base corporate income tax from 30% to 22% (and 15% for new manufacturing companies) thereby making India one of the lowest corporate tax imposing countries in the world today.
This, according to New Delhi, will spur investment.
Alongside the corporate tax reform, Sitharaman pointed to the Aadhaar initiative’s direct benefit transfer as well as Universal Health Care policy.
At the G20 Finance Ministers and Central Bank Governors meeting Oct. 18 in which, the deliberations centered on international taxation and Stablecoins. On the discussions at the session regarding the work underway on developing a consensus solution on tax challenges arising from digitalization, Sitharaman called for a unified approach to the nexus and profit allocation challenges, which she argued is a promising one that merits serious attention. A solution that is simple to implement, simple to administer and simple to comply with was needed, she said.
Sitharaman also attended the BRICS Finance Ministers Central Bank Governors (FMCBG) meeting on Oct 17.
IMF and the World Bank
At the Development Committee (DC), the ministerial-level committee of the IMF and the World Bank, Sitharaman criticized protectionist policies and trade wars, which she said have generated uncertainties that will ultimately impact flow of capital, goods and services. She called for “concerted action” to strengthen the spirit of multilaterism and develop a new paradigm of global cooperation. She advocated for strong global coordination and urged countries not to wait for the slowdown to become a crisis. In the DC Plenary Session Oct. 19, she highlighted three key issues: (i) not neglect sustainability, efficiency and transparency in debt and tax policies in pursuing investment led growth; (ii) investments must generate domestic revenues that can be channelized into effective public spending in health, education and skilling so that youth can get jobs and benefit from the economic growth; and (iii) strong policies and good governance for inclusive growth are essential to sustain investments.
Sitharaman’s overall message was on the need to strengthen global co-operation at the multilateral level, besides governmental initiatives.
The IMF, she said, should provide solutions specific to important growth geographies to help alleviate the current conundrum. She reiterated Government’s disappointment on inconclusive close of 15th GRQ.
Other leaders Sitharaman met, apart from U.S. Treasury Secretary Mnuchin, included Chancellor of Exchequer United Kingdom, Sajid Javid; Secretary of State for Development of the United Kingdom, Alok Sharma; Finance Minister and Deputy Prime Minister of South Korea, Hong Nam Ki; President of the World Bank, David Malpass; Special Advisor to Japanese Prime Minister and Candidate for Asian Development Bank, Masatsugu Asakawa; Governor of JBIC, Tadashi Maeda; Global CEO of Standard Chartered, Bill Winters; First Deputy Prime Minister and Finance Minister of Russia, Anton Siluanov; Finance Minister of the Kyrgyz Republic, Baktygul Jeenbaeva; Finance Minister of Switzerland, Ulei Maurer; the Australian Treasurer, Josh Frydenberg; the Finance Minister of Maldives, Ibrahim Ameer; and the Senior Minister of Singapore, Tharman Shanmugaratnam