WASHINGTON--(BUSINESS WIRE)--The U.S.-India Business Council (USIBC) praised India’s recent budget announcement, which sets forth clear parameters that will spur and sustain greater investment in the country’s infrastructure sector. “The sheer confidence this budget represents is worthy of our praise,” said Ron Somers, President of the U.S.-India Business Council.
In his much-anticipated Budget address, the Finance Minister outlined proposals that will favorably support greater impetus to invest in the ‘India opportunity’. India’s economy is one of the world’s fastest growing economies, exceeding an 8% growth rate.
Infrastructure development is featured as a high priority in the 2011-2012 Indian Budget: $6 billion in tax-free bonds have been approved by the Indian Finance Ministry, as well as floating the prospect for establishment of a major infrastructure debt fund, which will be benefited by the creation of a deeper corporate bond market.
American industry also praised the liberalization toward foreign institutional investment (FII) in equity mutual funds. “The opening of the mutual fund industry to FIIs is a step that will serve to mobilize significant amounts of capital and expertise in India’s financial markets,” commented USIBC President Ron Somers. “This change, along with the raised FII investment limits in some infrastructure bonds and strides leading to a predictable, streamlined investment tax regime, will ultimately bolster India’s efforts to build-out the country’s infrastructure. U.S. Industry stands ready to be full participants in this activity,” Somers said.
U.S. firms read as a favorable indicator the Government of India’s stated goal to eliminate bottlenecks in the country’s food distribution system, which may hint at a soon-to-be-announced opening of the country’s multi-brand retail sector. India is presently battling major food price-rise and inflation. These twin challenges can be addressed by improving efficiencies in the farm-to-market supply chain, which will be benefited by inviting into this sector both technology and investment. “The beneficiaries of modern retail, resulting from improved access to food distribution outlets, will be farmers,” Somers said. The Union Finance Minister pointed out in his budget remarks “the massive inefficiencies in India’s agricultural supply chains, whose high cost hurts rural farmers most.”
“India’s next evergreen revolution, spawned by the greater efficiencies in India’s farm-to-market supply chain that will be brought to bear by the entry of organized players in this sector, is a ‘game-changer’ that will benefit the millions of Indians who make their living in the rural agricultural sector, ” Somers said.
In addition to the ‘hard’ and ‘soft’ financial infrastructure attributes of the budget, combined with the prospect of the opening India’s multi-brand retail sector, U.S. Industry hails India’s signal to enhance spending in the defense and security sectors. India’s has embarked over the next year on a $46 billion upgrade of its military. U.S. firms are eager to partner with Indian counterparts to bring ‘best technology’ to India’s armed forces and security establishment.
The U.S.-India Business Council, formed in 1975 at the request of the Government of India and the U.S. Government to advance commercial ties between the world’s two largest free-market democracies, is the largest bilateral trade association in Washington, DC, comprised of nearly 400 member-companies. Terry McGraw, Chairman and CEO of The McGraw-Hill Companies, currently presides as USIBC’s Chairman.