US President Barack Obama indicated it might be time for “another wave of economic reforms” in India, given the stagnation in investment and job creation.
In an interview to PTI, Obama was careful not to be directly critical of the negative investment climate in India but cited the concerns of the US business community to make his points. Many in the US business community, “one of the champions of the US-India partnership”, have expressed concerns that the investment climate in India is deteriorating, he said.
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.”
Still sounding positive about the Indian economy, “which continues to grow at an impressive rate,” the US President said that to some extent, India’s slower growth is a reflection of the larger slowdown in the global economy.
Refraining from prescribing any solutions, the President said, “it is not the place of the United States to tell other nations, including India, how to chart its economic future. That is for Indians to decide.” He, however, added, “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.”
While pledging support for India as it “makes the difficult reforms that are necessary”, Obama stressed that India had lifted tens of millions of people out of poverty to create one of the world’s largest middle classes and the call for reforms should be seen in the context of its “incredible growth and development in recent decades”.
“Indian innovation is an engine of the global economy. And even with the recent challenges, the Indian economy continues to grow at an impressive rate. The Indian people have displayed a remarkable capacity to meet India’s challenges,” 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 including the recent G20 meeting in Mexico.
He said at the G20 they agreed that one of the best things they could do to get the global economy growing faster was to renew the focus on growth and job creation in their own countries. “That’s my priority in the US. Of course, one of the most effective ways we can create jobs is to continue expanding trade and investment, including between the US and India.” The President said they needed to keep strengthening long-term economic vitality and competitiveness, including the education of the people of the two countries, science and technology, and the modern infrastructure that allows them to move goods and services faster.