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PM Narendra Modi needs a more business-friendly stance

The prime minister's five-day visit to the United States is unlikely to lead to the kind of multibillion-dollar deals he recently signed with Japan and China.

Kate Duguid | September 29, 2014 | Updated 14:35 IST
Prime Minister Narendra Modi
Prime Minister Narendra Modi (Photo: PTI)

Prime Minister Narendra Modi used his speech at Madison Square Garden to make an emotional sales pitch on Sunday morning. His suggestion that Indian-Americans invest freely in their ancestral land was met with wild cheers from the capacity crowd. But even for a politician with a rock star's popularity, the country's business-unfriendly reputation remains a formidable obstacle.

Modi has chosen his target well. The prime minister's five-day visit to the United States is unlikely to lead to the kind of multibillion-dollar deals he recently signed with Japan and China.

FULL COVERAGE:PM Narendra Modi in US

The Modi-government's decision to stall a World Trade Organization (WTO) agreement on harmonising customs standards has irked the American corporate world. Before their members loosen their purse strings, lobby groups want US President Barack Obama to press the prime minister to remove barriers to freer trade in everything from agriculture to pharmaceuticals and telecom.

Instead of seeking the buy-in of big business for his recently launched 'Make in India' campaign, Modi appealed to the Indian-American community to invest in "our motherland". In return, he promised a lifetime visa for anyone able to prove Indian origin.

But it will take more than a relaxed immigration policy to crowd-source investment dollars. A severe power shortage and inadequate transport infrastructure dim the country's appeal as a destination for labour-intensive manufacturing. A "doing business" rank of 134 among 189 economies covered by the World Bank doesn't help, either.

Modi gets the challenge. "Ease of business" would be a priority, he said, promising the Indian-American community that there would be "no more running from pillar to post to deal with the government." Nor would he repeat the folly of previous governments of "making one law after another." Fulfilling those promises, though, will take an equal commitment from stodgy state governments - getting them to change their tune will be the real test of the prime minister's business-friendly riff.

(The author is a Reuters Breakingviews columnist. The opinions expressed are her own.)

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