India has attractive business climate for US: State Dept

Posted By: Religare
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India has attractive business climate for US: State Dept
The US State Department has rejected claims that, American investment in India has declined and insisted, that India is still one of the top business and investment destinations for the US.

According to the US State Department, the recent deal by India to acquire 10 C-17 heavy-lift military aircraft from the US worth $ 4.1 billion is, indicative of the fact that, India and the US remain huge trade partners. The defence deal will give an edge to India's air transport and military competence and is the largest defence pact between the two countries.

The US is eyeing huge opportunities in the world's second fastest growing economy. The country wants an increase in the FDI limit of the present 26 percent allowed in India's insurance sector. With rise in income and urban middle class in India, the demand for insurance is set to rise in the coming years. Thus, the US wants its corporations to participate in India's financial sector growth and it believes that, this would be beneficial for both the nations.

With India proposing to open up its multi brand retail sector by allowing 51 percent FDI, it is an opportunity for US giants like Wal-Mart to gain a foothold in India's retail market.

India aims to spend a mammoth $1.2 trillion on its infrastructure development in the near future. This would give huge opportunities to US companies to invest in renewable and non-renewable energy sector in India.

India is the twelfth largest trading partner for the US. Between the years 2005 and 2009, India's exports to the US rose by nearly 180 percent and US exports to India increased over four times and total bilateral foreign direct investment between the two countries grew by nearly 165 percent.

View: Statistics can be misleading. If read carefully it seems that while export to import is not balanced in case of US. Which is important. Also most of the time when we are talking about FDI, it done't include government's purchase ofweapons from US.   

Read more about: economy
Story first published: Monday, July 4, 2011, 9:30 [IST]
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