American business leaders say the global financial turmoil will make it
more difficult for emerging economies like India's to attract foreign
investment. However, Indian officials expect the country's economy to escape
relatively unscathed. Anjana Pasricha reports from New Delhi, where industry
leaders from the two countries met to push for deeper commercial ties.
The chairman of the United States India Business
Council, Indra Nooyi, says American industries can play a larger role in several
critical areas in India, such as creation of modern infrastructure and boosting
agricultural productivity.
India-born Nooyi is chairman and chief
executive officer of American cola giant PepsiCo.
Nooyi warns that
financial crisis rocking the United States will make it harder to attract
investment. She spoke at a meeting of the US-India Business Council in New
Delhi.
"We recognize that the competition for capital is fierce -
especially at this moment," Nooyi said. "Cash is in short supply and there are
many pressing infrastructure needs in the United States, too. But India can
attract the investment with the right policies."
American business
leaders say the Indian government must create the "right environment" by
ensuring that contracts and government levies are not changed after projects get
underway.
Indian leaders have been calling for tens of billions of
dollars in investment to build roads, ports and power plants, as the country's
growing economy grapples with worsening infrastructure
bottlenecks.
India's economy is expanding at more than eight percent a
year, making it the world's second fastest growing economy.
India's
Science and Technology Minister Kapil Sibal told American business leaders that
economic growth may lower marginally, but will continue to be strong.
"With the financial meltdown we are already seeing soothsayers of
despair suggesting that India's growth rate will not cross seven percent. But
even seven percent, in a situation of this nature, is perhaps good enough for us
to move forward," Sibal said.
Indian officials have expressed optimism
that the country's banks and other financial institutions will be unaffected by
the crisis triggered by the collapse of American investment banks
But
they admit that the country could see lower investment, in the coming year, as
the world grapples with a liquidity crunch. India's stock markets have already
been hit as foreign investors have pulled out billions of dollars, since the
crisis.