Open for business: Finance Minister pitches India as attractive destination for investment and manufacturing

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India’s Finance Minister Nirmala Sitharaman and U.S. Treasury Secretary Janet Yellen Oct. 14, 2021. Photo: Twitter @FinMinIndia

India’s Finance Minister Nirmala Sitharaman pitched India as an attractive investment and manufacturing destination during her visit to Washington, D.C., on the sidelines of the World Bank and IMF Annual Meetings.

In a packed schedule that included one-one’s with counterparts in the U.S., business leaders, the G20 group of countries, and at the IMF, as well as business meetings in Boston, Sitharaman emphasized New Delhi’s commitment to structural reform in key sectors of the economy.

Sitharaman’s visit came as the World Bank in a report predicted a 9.5 percent growth rate for India, putting paid to doubters concerned about the economic impact of the pandemic.

Minister Sitharaman along with Reserve Bank of India Governor Shaktikanta Das met Oct. 14, 2021 with Treasury Secretary Janet L. Yellen, and Federal Reserve Chair Jerome Powell, for the 8th U.S.-India Economic and Financial Partnership, the first since the pandemic hit.

In a Joint Statement, Yellen and Sitharaman said they had “productive discussions on a range of subjects, including the macroeconomic outlook and recovery from the pandemic, financial regulatory and technical collaboration, multilateral engagement, climate finance, and anti-money laundering and combating the financing of terrorism (AML/CFT).”

The latest meeting “reflected the growing importance of the U.S.-India relationship and the increasing economic and financial ties between our two economies,” the two sides said adding they expect to continue to further strengthen the bilateral financial relationship.

For the first time, a session on climate finance was included, “reflecting our respective commitments to driving urgent progress in combating climate change and the critical role of climate finance in achieving this shared global goal,” the Joint Statement said, emphasizing public-private partnership to reach goals.

Other areas on which the two reemphasized their commitment was the central role of multilateral cooperations in addressing global challenges; took note of progress made in sharing financial account information between the two countries under the Inter-Governmental Agreement pursuant to the Foreign Account Tax Compliance Act (FATCA); continued collaboration for increased cooperation in sharing of information for tackling offshore tax evasion.

India is slated to take over the Presidency of the G20 group of nations after Indonesia, and “As India prepares for its 2023 G20 Presidency, the United States stands ready to support India in hosting a successful and productive year,” the Joint Statement said.

They pointed to their “strong collaboration” on financial regulatory issues under the U.S.-India Financial Regulatory Dialogue, banking and insurance sector reform, capital markets development, payment system modernization, and data protection frameworks.

The Joint Statement said the two countries look forward to discussions on emerging financial sector topics, such as cross-border payments and payment systems and the development of the International Financial Services Centre at GIFT City.

“We are continuing our successful collaboration on attracting more private sector capital to finance India’s infrastructure needs, which will support growth in both countries,” the Joint Statement said, adding that cooperation to tackle money laundering and combating the financing of terrorism through increased information sharing and coordination, would continue.

During a breakfast meeting at the IMF, Sitharaman noted that New Delhi continues its commitment to economic reform. “…  India has also continued its agenda of structural reforms during the pandemic. Wide ranging reforms, including in the sectors of agriculture, labour and asset monetisation are expected to contribute towards acceleration of economy,” the Finance Ministry quoted her saying.

Sitharaman, like Modi during his visit, met a slew of U.S. business representatives the day before her meeting with Yellen and Powell.

At the U.S.-India Business Council roundtable Oct. 13, Sitharaman addressed leaders from insurance, private equity, technology, energy and pharma sectors.

Among those she met was B. Marc Allen, chief strategy officer of Boeing where discussions covered skilling, R&D, manufacturing automation, innovation and the aerospace sector. Sitharaman underlined Boeing’s collaboration in the Make-In-India and Atma Nirbhar Bharat initiatives and Boeing’s interest in investing there in coming years.

Others she met included Curtis L. Buser, CFO of Carlyle, which has been in India since 1998; Milind Pant, CEO of Amway, where discussions ranged from R&D to manufacturing automation, innovation and nutrition sectors; CEO of Novavax Stanley C. Erck with whom she detailed India’s healthcare reforms, R&D in medical science, health and well-being and growing opportunities for investing in India.

“Business leaders thanked the minister in laying down the vision for future growth and congratulated the Government in steering the economy during the #COVID19 pandemic and expressed keen interest in scaling up their investments in India,” the Finance Ministry tweeted Oct. 13.

Sitharaman also participated in the 4th G20 Finance Ministers and Central Bank Governors (FCMBG) Meeting held Oct. 13, currently under Italy’s leadership, on the sidelines of the IMF-World Bank Annual Meetings. The group discussed developments in the global economy, global economic recovery, pandemic support to vulnerable countries, global health, climate action, international taxation and financial sector issues.

Sitharaman noted that for transitioning from crisis to recovery, one of the major challenges is ensuring equitable access to vaccines for all. The Finance Minister suggested that keeping up the support, building resilience, enhancing productivity and structural reforms should be the group’s policy goals.

She praised the G20 in rallying pandemic response and supporting vulnerable countries through debt relief measures and suggested on focusing efforts on making the benefits reach the intended countries.

Sitharaman emphasized that moving forward, the centrality of climate justice based on the United Nations’ Framework Convention on Climate Change and principles of Paris Agreement.

Prior to Washington, D.C., Minister Sitharaman addressed a roundtable meeting with institutional investors in Boston. The meeting was organized by the Federation of Indian Chambers of Commerce and Industry and the US India Strategic Policy Forum, saw a range of sectors represented, from software to consulting and investment management, ANI reported. Here too, she pitched the financial reforms India was implementing for ease of business in the financial sectors.

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