In a role reversal, a high-level delegation of US Exim Bank officials and businessmen camped in India for over a week to hard-sell their expertise in services, power and transportation.
With the buzz around the Modi government’s Digital India and Smart City, it is no wonder the US Exim Bank chose India as its first destination to promote business.
Fred P Hoghberg, Chairman and President, Export-Import Bank of the US, spoke to BusinessLine on business prospects with India. Excerpts:
How do you see trade between the US and India?
It is getting stronger and stronger by the day. (India-US bilateral trade in goods and services crossed the $100 billion threshold last year.) Since our goal is to support employment in the US, we can work with both importers in India and exporters in the US. We work with Jet (Airways), both Reliance groups (Mukesh Ambani and Anil Ambani) and many Indian companies with set-ups in the US.
What are your objectives on this visit?
We are ready to support Indian companies in the power sector, including renewable and nuclear, besides transportation, especially the aviation sector. Air traffic in India is growing at 20 per cent per annum — one of the fastest growing markets in the world. We want to make sure that when Air India, Jet (Airways) or SpiceJet decide to expand their fleet we will provide financing so that they chose Boeing planes. Similarly, we will provide finance if Indian companies choose to buy power or solar equipment from the US.
Do you see a threat to reforms with the Modi government hitting roadblocks in Parliament?
Well, reforms are hard to do because you are trying to change behaviour and change the ways things were done. What I admire is that there is an enormous effort both in realisation and desire to make sure that this economy moves faster, and provides one million jobs. Part of this may take some reforms, including a bankruptcy code, GST and land acquisition. I think both India and US will find ways to reform and make things easier and simpler to do business in India. This will ensure economic growth and provide higher income for Indians. I think the US can play a role in it because we are good in services and provide opportunities for Indian companies to locate to the US. Of course, reforms may take some time and face a roadblock here and there but the direction is right.
Do you face similar challenges in implementing reforms?
Well democracies are challenging. So in a democracy things do not move quickly because you are trying to build a broad consensus. This takes time. Even in our country the Council is finding ways to make things better be it on employment practices, wages, and environment or making export easier under Trans-Pacific Partnership. But it takes more time in a democracy because you want the changes to be doable, long lasting and reliable.
How do you perceive the Digital India or Smart City projects?
I think India has an opportunity to leap-frog its growth with Digital India. Implementation of more app-based government services will be of great help to the economy. I think US companies can provide their expertise in this. As far as Start up India is concerned, I think the great advantage for India is its large English speaking population. Secondly, India is an entrepreneurial country. It is the entrepreneurs who help create great companies that can generate employment. So, that spirit of entrepreneurial culture will put India in the forefront.
What kind of support have you extended so far?
We have provided loans of $7.5 billion, which would have supported exports in the range of $9-10 billion. India is very high on the list of credit support. Under President (Barack) Obama we have provided more support for loans, guarantees and insurance from Exim Bank to companies in India compared to the tenure of President (George) Bush and President (Bill) Clinton. We have a strong record and still have a year to go.
What are your views on the Modi government’s push to attract investment?
Well, manufacturing is at the heart of exports. Certainly, President Obama feels strongly (about this). There has been a large emphasis on Make in America and send them abroad. Modi has taken a similar approach. As Exim Bank we can provide finance if India is looking to source equipment or a chip from the US that can be used in manufacturing in India. We have already supported lot equipment used in the satellite, transportation and power sectors.