• | 3:20 pm

‘Atmanirbhar’ tilt may drag down India’s growth, US envoy cautions

US wants to see an India that doesn't look at self-reliance as a ‘fortress’ but instead ‘with the strength of Indian companies that can compete with anyone in the world, Garcetti says

‘Atmanirbhar’ tilt may drag down India’s growth, US envoy cautions
[Source photo: Chetan Jha/Press Insider]

India’s ‘atmanirbhar’ mission with the ‘rhetoric’ that everything has to be made in India could slow down the pace of trade and economic development, US ambassador Eric Garcetti said. 

Speaking at an event organized by the Indo-American Chamber of Commerce (IACC) on Tuesday, Garcetti said the US wants to see an India that doesn’t look at self-reliance as a “fortress” but instead “with the strength of Indian companies that can compete with anyone in the world.”

“If you tax inputs, many of you in manufacturing know that, you are taxing your outputs—you are not taxing us, you are not protecting the market. What you are doing is limiting a market,” he said at the conference to discuss ‘Strengthening Indo-US Relationship in Amritkaal-Aatmanirbhar Bharat’ in New Delhi. 

“This is not a paradigm of old that invaders are coming to extract…This is a relationship of equals that when we break down the walls in both of our countries whether they are bureaucratic, regulatory, taxation, whether part of the federal system, etc., can release more jobs, prosperity and more strength,” Garcetti said. 

Defence minister Rajnath Singh, who also attended the event, clarified that the aim of ‘Aatmanirbhar Bharat’ is not autarky—India does not want to cut off from the global system and work in isolation. 

“It is rather the commitment to collaborate with friendly countries. The ‘Aatmanirbhar Bharat’ campaign promotes companionship based on ‘Vasudhaiva Kutumbakam’ (The World is One Family),” he stressed.

Garcetti also batted for better taxation and regulatory framework in India as he noted that “opaque corporate tax practices” still are a “barrier” to too many American companies that want to be in India. 

He also stressed on the need to change export policies if India is to achieve its goals.

“Nobody wants a slow permit whether that is for entering or exiting a country,” he said.

Speedy customs clearance, and tax and regulatory stability always encourage better growth, he observed. 

The US ambassador also called for better protection of intellectual property. 

American companies are looking to invest in India “but we have to ensure that there is protection for intellectual property,” he said. 

“Courts often decide that there is a violation of intellectual property but then there is no consequence,” he added.  

Garcetti asserted this is also important to Indian companies as they are producing patents at such a “roaring rate” now compared to the past.

“The strengthening of this is not just with the good rule of law and decisions but the consequences will incentivize more investments as people will know that investment, deep investment into research and development will be protected for a longer period of time,” he said.

The diplomat flagged the slow pace of foreign direct investment into India, highlighting that the investments are going to countries like Vietnam and Mexico.

“Right now, we have a $40 billion trade deficit with India and even greater one with China and we want to see the foreign direct investment from China shift here (India),” he said.

Addressing top executives attending the conference, Garcetti said, “I would selfishly like to see more of that happen here (India) and I need your help.” 

Singh, meanwhile, described India and the US as natural partners who must move forward together in both business and strategic sectors amidst the current global geopolitical scenario. 

The defence minister said American investments can play a vital role in realizing Prime Minister Narendra Modi’s vision of ‘Viksit Bharat’. 

India’s fast-growing economy, its demographic dividend, skilled workforce, and huge domestic market guarantee high returns to US companies, he asserted. 

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