Long way to go for India to benchmark itself in Singapore, Hong Kong: USISPF chief

India needs to remove barriers to ease of doing business, says the head of a leading Indian-American business advocacy group, asserting that the country has made some progress but has a long way to go to match Singapore or Hong Kong.

Mukesh Aghi, the president of the US India Strategic and Partnership Forum (USISPF), said that India-US relations are strong and growing positively in every aspect.

“If you look geo-politically, the Quad seems to be moving forward. Look at I2U2 moving forward,” he said PTI.

Noting that a booming Indian economy is helping the US, he said Air India’s Boeing order has created more than a million high-paying jobs in America.

“We expect Indigo to order as well. India is pulling the economic engine of growth for the United States,” Mr. Aghi said.

In one of the largest aircraft orders by an airline, Tata Group-owned Air India last month announced it would buy 470 narrow-body and wide-body planes from Airbus and Boeing, which the total value of the deal is estimated to be worth $80 billion (over ₹6.40 lakh crore).

Air India will buy 250 aircraft, including 40 wide-body A350 planes, from European aviation major Airbus, and 220 planes from US aircraft maker Boeing under separate deals.

“Well, it’s great (momentum). If you look at FDI, it is increasing. If you look at what is happening on the manufacturing side, as people are trying to de-risk their position in China, they are looking at China with a strategy, India is becoming a good alternative,” Aghi said.

Apple is a classic example, he said, insisting that the company is now committed to making 20 million iPhone 14s in India.

“Then we are looking at other companies which are doing the same thing. So, I think the momentum is there. What we need to do is make sure that we keep removing the impediments and the ease of doing business becomes world-class as we will compete for manufacturing to come from China to India,” Mr. Aghi said.

“I think the Ministers of State, in collaboration with the Central Government, need to look at what the challenges are, for example, the Labor Act, which is still an obstacle. Land acquisition, it has challenges. When you’re trying to build a greenfield project, you need to obtain multiple permits. Make them easier, smoother,” he said.

In logistics, when you’re part of a global supply chain, you’re trying to move complex equipment between customs, make it faster and make sure your capital isn’t stuck in customs or at the airports themselves, he said.

“We’ve made a lot of progress, but we still have a long way to go if you benchmark ourselves against Singapore or Hong Kong or other geographies by themselves,” Mr. Aghi said.

Trade between the two countries has increased to over $70 billion without any trade deals, he said, adding that there is momentum, which is “very positive”.

“Then you can look at it on the immigration side. We’re seeing things moving forward, especially with the green card wait time. Congressman Raja Krishnamoorthi introduced legislation, so your wait time, which is over 10 years now, will get much, much shorter.

“So in every aspect what we see is that the relationship is positive, strong, and the momentum is moving in the right direction,” he said.

Mr. Aghi also said that with so many Indian techies on H-1B visas losing their jobs, it will have an impact on India-US relations.

“It affects the relationship because you have Indian citizens contributing to the local economy. It is normal that in any economic cycle, people will lose their jobs. We need to give them a runway to embark on another position,” he said.

The USISPF has written to immigration authorities to give them six months instead of 60 days to stay in the country after they lose their jobs, he said.

“You have to understand, while unemployment in the US is around 3.8%, in Silicon Valley, unemployment is around 2%. So, there is a huge demand for these technologies. And if you give them enough time, they will become tax-paying citizens of this society,” he said.

“You have to understand when they are unemployed, most of them don’t go to a government puppet. They live off their savings. So, I think the impact is not there from a payment perspective.

“It’s important to understand that they can find their highly qualified people. They can find jobs. We just have to give them time, and that’s what we’re doing,” Mr. Aghi said.

The Biden administration acted quickly and basically guaranteed that all deposits were protected at the now-collapsed Silicon Valley Bank. “I think that builds confidence,” he said.

They provide some loans to Indian startups. So this weekend has an impact on confidence. But now, when this policy is agreed upon by the Biden administration, things are back to normal, he said.

“What we’re saying is people are moving their assets from a small bank to a larger bank itself. I think that’s the trend we’re going to see. We’re seeing that across the United States, regional banks are hurting right now because people’s confidence has weakened, there and they are moving their assets to a bigger and bigger bank.

“But that is, that is a normal process. People get bumps, they learn from it and then move on. So, I don’t think it has a long-term impact on either the investors in India or the investing in the US,” Mr. Aghi said.

Author: Amit Kumar
Amit Kumar is a highly experienced financial expert with over 10 years of experience in banking and finance. He shares his insights on loans, finance, and business strategies through engaging articles on this Loan & Business site, offering practical advice for anyone seeking to improve their financial situation. Amit's mission is to empower his clients and readers to make informed financial decisions and achieve their financial goals.

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