The US State Department has expressed concern over the non-adoption of flexible attitude and better policies for foreign investors. According to him, India is not a better place for foreign businessmen.
US State Department expressed concern about doing business with India
India may have managed to make a better place in the World Bank’s Ease of Doing Business ranking, but American businessmen still do not consider doing business here much worthwhile. This has been said in the latest report of the US State Department. According to the report, India remains a difficult place to do business. Additional economic reforms are needed to ensure sustainable and inclusive growth.
Despite being the fastest growing major economy in the world, India’s private sector investment has not increased. While Foreign Direct Investment (FDI) in India has grown significantly during the first two years of Prime Minister Narendra Modi’s tenure, the growth rate has been slow in the last one year.
Supply chain disrupted by tariff hike
The Modi government launched two rounds of tariff hikes in 2018, in response to India’s large trade deficit with China and balance of payments concerns. In this regard, the report said, “Whatever the real intent, these tariff hikes disrupted the supply chain of both the domestic industry and foreign investors. Both new investment and expansion of existing investments in India were cancelled. This forced foreign investors to think.
Loss due to delay in settlement of commercial disputes
According to the World Bank’s Ease of Doing Business report, it takes an average of about four years to resolve a commercial dispute in India, which is the third longest rate in the world. Indian courts are short of staff and lack the necessary technology to resolve a huge backlog of pending cases. Nationwide 30-40 million cases are estimated by the United Nations. In such a situation, it becomes very difficult for foreign investors to do business in India.
Also read: Former Chief Economist of the World Bank expressed concern over India’s inflation rate, the figure reached the highest level of 30 years
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