Taxation and intellectual property rights issue are some basic starting point impediments for US businesses in India, a top Indian-American CEO said on Monday.
"The fact is that there's basic starting point impediments," Ajay Banga, CEO Master Card and chairman of the US India Business Council said.
"The first one is on taxation issues. The fact that they've said they're unlikely to get new retrospective tax actions is a very good sign. We take that well. But there's a whole lot of pending cases. And for a CEO and an investor having hundreds of millions of dollars of pending cases in your balance sheet is not a nice place to be," Banga said.
American companies would love to get some resolution on those, love to see progress on the transfer pricing agreement and the general sales tax, the GST, which unifies all the taxes across the country, making it easier, not just for us but for Indian investors and Indian companies to do business in India.
"It's useful for everybody," he argued. There is progress happening in all of those and that's one of them, he noted.
"The next big one is to move on with a conversation that's actually going to get covered through the intellectual property area. There's a lot of discussions going on between parties on both sides, governments and individuals, on how to make progress,” Banga said.
"India is looking at a new IT policy, and all we're saying is consult with investors and companies so when you do produce your policy it represents the best of both sides and the best of both ways of thinking," he said.
Banga said Prime Minister Narendra Modi got elected on the idea of creating a million jobs a month and improving the quality of life of the people in the country, and "we think there are three ways to do that. US companies bring capital, technology and IT people to help in all three: manufacturing, tourism, and infrastructure".
"In a short span of time, Modi has taken a number of initiatives to improve business climate in India. We’ve got new announcements on foreign direct investment, on railways, defence and insurance," he said.
"We’ve got the beginnings of land and labour reform that are critical to expanding for all American companies. And all those are great signs of the progress and the importance of the chemistry and the strategic relationship that she just talked about. So that's good for us," he said.
Investor mood around what's going in the US-India relationship is much stronger than it was, he said.
"And my own company, MasterCard, in the last year has invested close to a quarter of a billion dollars in picking up two companies in this country. More than 10 per cent of my workforce is now in this country. I do an enormous amount of development for mobile payments and for networking engineering and the like, out of this country. And so that's happened in the last year," he said.
