Prime Minister Narendra Modi on Monday tried to woo US investors with the promise of a predictable tax regime by removing "remaining uncertainties" and an open business environment even as US President Barack Obama called for a big push to trade so as to realise the untapped market for US goods in the country.
At the same time, the US President emphasised the need to make sure that economic growth both in the US and India is inclusive.
At the CEOs Forum and business summit, the two leaders made forth their views clear with top corporate leaders of both the countries.
"We can work together to develop technologies that will help India move forward. US is ready to help in broadband connectivity and build better roads. We need to make sure that economic growth in both India and US is inclusive," Obama said.
Obama also pledged $4-billion in US government-backed investment for trade with India and at the same time raised concerns in the US over trade barriers, intellectual property rights and sought consistency and simplicity in regulations and taxation policies.
At a meeting with CEOs of both countries hosted by Prime Minister Narendra Modi in New Delhi, Obama said that US Export-Import Bank would finance $1 billion in exports of 'Made-in-America' products.
"Specifically, over the next two years, our EXIM Bank will commit up to $1 billion in financing exports, `Made-in- America' exports to India.
"Overseas Private Investment Corporation will support lending to small and medium business across India that we anticipate will ultimately result in more than $1 billion in loans in underserved rural and urban markets," he said.
Obama said US Trade and Development Agency will aim to leverage nearly $2 billion in fresh investment in renewable energy in India.
Obama, however, sought redressal of issues relating to intellectual property rights to significantly increase trade. He said US exporters are "very concerned" about issues like IPR as the US economy was increasingly becoming a knowledge-based economy.
He said "absence of an effective IP protection" in India was affecting business. "We tend to operate at the higher ends of the global value chain."
Modi in his address, referred to the retrospective taxation announced by the previous government and asserted that his government has removed some of the "excesses of the past" and "will now soon address the remaining uncertainties," which he did not elaborate.
"You will find environment that is not only open, but also welcoming. We will guide you and walk with you in projects. You will find a climate that encourages investment and rewards enterprise. It will nurture innovation and protect your intellectual property.
"It will make it easy to do business.... You will find a tax regime that is predictable and competitive. We have removed some of the excesses of the past. We will now address the remaining uncertainties," Modi said at the USIBC meeting.
He said there was huge scope for investment in infrastructure in India - for enhancing road network and broadband connectivity – that, he said, will help business grow significantly.
He also promised to take charge of implementation of big projects which he would personally monitor. "We will match your expectations... I am always available. I will listen to you."
Referring to federal structure in the country, he said he would work with state governments to narrow the gap in approach between the centre and states and address conflicts.
In his speech, Obama also sought "consistency" and "simplicity" in regulatory and tax environment in India to ease trade flows between the world's two largest democracies.
"There is great interest on part of US companies to find consistency, clarity, greater simplicity in regulatory and tax environment in India. If that occurs I think we are going to see lot more business in India. That is consistent with many of the reforms Prime Minister Modi has articulated," he said.
Promising ease of doing business, Modi said it would involve less paperwork, more digitalisation and same format for various projects. Skill, scale and speed will be the mantra for the government, he said.
Obama, however, complemented Modi for bringing new energy and vigour in redesigning the "architecture" in India to facilitate greater growth and investment.
"Modi has brought new energy and vigour to redesigning the architecture here in India so that more business, greater growth, greater investment can take place," he said.
Obama also noted that specific things are needed to be done by both countries to make it easy for doing business.
"We need to incentivise trade rather than stifle. We need to be transparent, consistent and protective of intellectual property rights."
"We can work together to develop new technologies to help India leap forward and partner in next generation clean energy projects and upgrade railways, roads, ports, airports and broadband connectivity to provide best connectivity to the world," he said.
Obama said the two countries have taken "a number of concrete" steps for more investments and referred to breakthrough in civil nuclear agreement, defence cooperation, renewable energy and bilateral investment protection treaty (BIPA). He also referred to the three smart cities that US would be helping India in setting up and upgrading infrastructure.
"When leaders make agreements, our agencies and bureaucracy will follow through," he said. "We can grow and we can prosper together."
Pointing to the untapped US-India trade potential, Obama said the current bilateral trade of $100 billion compares poorly with US-China trade of $560 billion, adding, "it can give you idea of what potential India can unleash."
But, he said, "We have to make sure that growth remains inclusive and is sustained. Growth has to make people's life better in a tangible way," he said adding growth cannot be measured in GDP figures and bottomline of balance sheets.
Prime Minister Modi said the scale of India's dream was vast and therefore the opportunities it offered were huge.
''We are conscious of our challenges but also inspired by our successes, " Modi said.
He said both business sentiments and consumer confidence in India has improved and growth in core sectors of the economy has increased sharply. Inflation is at a 5-year low and ''investments from the US have jumped by 50 per cent in the first six months of my government."
"And I know that some of the pledges made in September in Washington have begun to flow in. Yes, I do keep track of these things," he said.
He said India's prosperity will be an important anchor of stability for the global economy and an engine for its growth. "Above all, a prosperous India will be a force for peace and stability in the world."