Here we mention four take-aways from Obama’s visit that can help Indian economy and stock market in the coming few months and years.
1. Boost in trade and investment ties: The US president announced USD 4 billion of new initiatives that will aim at boosting trade and investment ties as well as jobs in India, and will end up opening a whole new source of financing for social development ventures in the country through a new Indian diaspora investment initiative. This USD 4 billion includes USD 2 billion of leveraged financing for renewable energy investments in India and USD 1 billion loans for small and medium business developments across the country through Overseas Private Investment Corporation (OPIC). There have also been talks and declarations for US trade missions to focus on development of infrastructure in India majorly in rail, roads, airports and ports. All these measures will not only encourage overall development in India but will also boost the energy and infrastructure sector, and small and medium sized businesses across the country.
2. Promises of ‘ease of doing business’: While seeking ease of doing business in India, President Obama mentioned issues of trade barriers and intellectual property, to which PM Modi has promised an open business environment, a predictable and easier tax regime and removal of ‘remaining uncertainties’. PM Modi not only emphasized on quicker implementation of projects but also on encouraging a conducive environment for new investors and nurturing innovation and protecting intellectual properties. The coming budget should hopefully address to a couple of these issues as the countdown for implementation of these promises has already begun. An easier and more understandable tax regime would not only help the existing businesses but will also attract more foreign investments and implementers to our country.
3. Boost to ‘Make in India’: Both countries have decided to renew their defence framework agreement for the next ten years as well as operationalize Defense Technology and Trade Initiative (DTTI) with focus on co-development and co-production in India, not only for Indian market but also for the global market. This will not only lead to technology transfer from the US to India in the crucial defence sector but will also give a big boost to Prime Minister Modi’s ‘Make in India’ program.
4. H1B Visa troubles to be resolved: The US President has assured PM Modi that he will look into India’s concerns on the H-1B visa issue as part of his comprehensive immigration reforms. This has been causing a lot of trouble to Indian businesses that wish to expand their base in USA and also to a lot of India based IT companies. So, this might end up giving some much needed relief to some of the globally working sectors of our country.
President Obama’s visit yielded few substantive achievements. Still, the joint statement and other documents released during the visit all emphasised on the progress and movement being made towards attaining long-sought objectives. The message from Mr. Obama and Mr. Modi is likely this: “We’ve done all we can to bring these goals to the door of success. Now it’s time for our deputies to work out the remaining details.” And hopefully all these plans and objectives will come ahead from those back burners where they have been cooking up for quite sometime now.