WASHINGTON: MasterCard CEO Ajay Banga has called for major economic reforms in India’s critical sectors of manufacturing, tourism and infrastructure investment, which he argued would help create millions of jobs and accelerate the pace of economic development in the country.
Banga, who is also currently the chairman of the US India Business Council (USIBC), said that the US companies need a trusting and open business environment to invest in India, which he noted is missing.
“India’s got to create jobs — lots of them. Increased manufacturing, tourism and infrastructure investment can help do that. US investors have the capital, the technology and the IP (intellectual property) to invest. Lifting FDI caps in insurance will help attract that capital. Lifting caps in defence would help spur technology-transfers,” he said.
“But along with FDI caps and the like, what investors really need is transparency, predictability and consistency,” Banga said, addressing a crowd of the most senior in the industry and government officials in the US-India commercial space, including the Union Finance Minister P Chidambaram and the Commerce and Industry Minister Anand Sharma.
In his speech, Banga recognised recent challenges in the relationship, citing issues which have caused great concern to investors including India’s tax policy, local manufacturing restrictions, and challenges to innovation and intellectual property.
“India has an opportunity to grow its pharmaceutical industry, foster innovation, and create competition. It’s in everyone’s interest to find solutions with the private sector. But that prospect is jeopardised when IP is jeopardised,” he said.
Banga also drew attention to the problematic provisions in the proposed US immigration bill which discriminate against global technology providers and harms job creation in both countries.
“We believe it’s in our interest not only to open doors to more skilled workers, but also to ensure immigration reform doesn’t discriminate against our partners nor limit US companies from choosing where they source the IT support they need,” he said.
“India-US business relations have always been at the heart of the US-India partnership. The fact that the US-India relationship is under attack by the pain, points I’ve just mentioned on both sides makes the search for common ground more timely and crucial,” he said.
“The US is better… India is better… the world is better… when we deepen the commercial and national security ties between the largest and longest-running modern democracies. This is what we have to do,” he asserted.
Banga called for deeper industry collaboration between the US and India and the need for political leadership to step up and create transparent, predictable, and consistent business environments in both countries.