US firms pledge $45-billion investments

Prime Minister Narendra Modi, who had wooed top Silicon Valley majors during his US trip last year, spent 90 minutes last night with CEOs representing companies in sectors spanning new economy to entertainment, energy to telecom, food to pharma. 

Setting aside the regulatory concerns that businesses such as Apple, Walmart or Amazon have faced in India, American companies have promised to invest at least $45 billion (Rs 3 lakh crore) over the next two to three years. 

The commitment came at a roundtable interaction in Washington DC between Prime Minister Narendra Modi and 20-odd chief executive officers on Tuesday night.

Modi, who had wooed top Silicon Valley majors during his US trip last year, spent 90 minutes last night with CEOs representing companies in sectors spanning new economy to entertainment, energy to telecom, food to pharma.

He told them investor confidence has returned as India is scripting a new growth story.

“We will continue to make our tax policies more predictable. We have made major strides towards predictability by signing a number of Advance Pricing Agreements with the United States. At the same time, like the US, we are cracking down on tax evasion and unfair tax avoidance,’’ he said. 

The top stars betting big on India were Rupert Murdoch’s STAR group and Jeff Bezos-led Amazon.

Amazon committed a fresh investment of $3 billion, in addition to the $2 billion it announced in 2014.

“I can assure you it’s only the beginning. It’s day one, like we say it at Amazon,’’ Bezos said.

STAR, with interests in TV, entertainment and web wants to invest another $5 billion in the country in about three years.

"We see huge potential in the Indian market and have been one of the largest foreign investors in India and the largest in the media and entertainment sector," said Uday Shankar, chairman and CEO of STAR India.

US India Business Council (USIBC) president Mukesh Aghi said American Tower Company and Emerson are the other companies to have made big investment announcements at $4 billion and $1 billion, respectively.

Aghi told Business Standard that the meeting with Modi “was held in a positive environment”.

Industry concerns related to riders in the guidelines for foreign direct investment in e-commerce and those linked to mandatory local sourcing in retail that blocked Apple's plans to set up fully owned stores were not discussed, he said. 

USIBC, which organised the interaction, said $45 billion was a conservative estimate and the amount could double keeping in mind the National Democratic Alliance’s “initiatives in Digital India and other economic reforms.”

Modi addressed the council’s 41st annual leadership summit, where he interacted with the business heads including Cisco’s John Chambers, Bezos, Abbott’s Robert Ford, American Tower Corp’s James Taiclet, Boeing’s Marc Allen, Cigna’s David Cordani, Lockheed Martin’s Marillyn Hewson, Mastercard’s Ajay Banga and Pepsico’s Indra Nooyi. The Indian side was represented by Sun Pharma’s Dilip Shanghvi, Tata Consultancy Services’ N Chandrasekaran, Wipro’s Abidali Neemuchwala and Tech Mahindra’s C P Gurnani. Confederation of Indian Industry (CII) president Naushad Forbes and president designate Shobana Kamineni were there too.

Chambers, who’s also USIBC chairman, said that in September 2014, member companies had indicated an investment of $41 billion over a two to three year period.

“Today, I am happy to announce that in less than two years, about 20 per cent of USIBC member companies have already invested $28 billion.”

He said the pace of investment would accelerate in the next two to three years.

Expressing confidence that the country will remain the fastest growing economy over the next five years, he said, “Prime Minister Modi has rapidly become the model for not just developing countries, but the entire world.”

Modi in turn invited American companies to join the India journey.

“It is a journey with exciting possibilities of not only building a better balance sheet for your company but of building a better India, building a better America, and building a better world.”