NEW DELHI — Indian officials have rejected U.S. President Barack Obama's reported concerns that India's investment climate is deteriorating. Officials in New Delhi are pushing back, saying India is friendly to foreign investors.
In an interview with the Press Trust of India Sunday, U.S. President Barack Obama said that in too many sectors, such as retail, India limits or prohibits foreign investment. Indian Commerce Minister Anand Sharma responded to the American leader's comments a day later, saying “observations are observations.”
“There is a difference between perception and reality, reality is different," said Sharma. "India has an abiding commitment to economic reforms and liberalization. We would like to assure all our partners that we have an investor friendly climate.”
PTI quoted President Obama as saying that American businesses “tell us it is still too hard to invest in India.”
Obama praised the Indian economy, saying it is growing at an impressive rate. But he said there appears to be a growing consensus in India it may be the right time to press ahead with another wave of economic reforms.
Minister Sharma says the Indian government has put policies in place to welcome investors. “In all the global projections, if you look at the IMF [International Monetary Fund] and the World Bank reports, for the next three years also, India will remain one of the top three destinations attractive for investors,” he said.
Corporate Minister Veerappa Moily said President Obama is not properly informed and blamed “international lobbies” for spreading negative information about India.
Lawmakers from opposition parties also criticized the American president’s remarks.
President Obama’s observations have come in the wake of growing concerns expressed by many foreign and domestic investors about India’s failure to further liberalize its economy and about the hurdles posed by India’s regulatory framework.
During a visit to India last week, Singapore’s Prime Minister Lee Hsien Loong called India’s business environment “complicated.”
Some Indian officials agreed that there is need to make India's more business-friendly for outside investors.
“I don't think we are taking any different view that we need to strengthen the investment climate,” said Montek Singh Ahluwalia who heads India’s Planning Commission.
In recent weeks, Indian Prime Minister Manmohan Singh too has spoken about the urgent need to take steps to boost foreign as well as local investment, which has been falling in recent months.
Analysts say Singh wants to take steps to move ahead with reforms in sectors such as retail and insurance, but opposition from political allies has made the task difficult.