Will the PM be able to woo back the US investor?
R Prema in New Delhi
Investments in India from the United States have been on a steady decline and the Bharatiya Janata Party-led coalition government at the Centre is at its wit's end to try and reverse the trend.
The Prime Minister's Office was hopeful that US President Bill Clinton's high-profile visit would turn the tide, but nothing significant materialised. The question now doing the rounds in the Capital is whether Prime Minister Atal Bihari Vajpayee would manage to woo back US investors during his trip to the US next month.
Indications till date, however, do not inspire much confidence. With merely a month to go before Vajpayee's visit, it is still not clear whether he will meet with the CEOs of Fortune companies during his 12-day visit. All that is known, in this context, is that he would hold a meeting with infotech titans of Indian origin.
A five-page Brief Note on USA, submitted to the prime minister on Monday, bares all. The direct investment from the US in India had peaked to $736.6 million during the United Front government's reign in 1997. It, however, plummeted the next year in 1998 to less than half at $347.1 million. Last year, there was a marginal improvement with $431.2 million worth of US funds pouring into India. However, in the first five months ending May this year, FDI from the US stood at just $177.1 million.
The PMO has yet to indicate whether there are any plans to replicate the Chinese exercise of wooing US business during Vajpayee's visit. Sources, however, are sceptical whether the prime minister will be able to impress upon the US investors and convince them that his government is not swayed by the Sangh Parivar's cry to halt further inroads of the multinational corporations in India.
During his visit to the US, the Chinese premier Jiang Jemin had the US captains of industry and top business doting on him. Ever since, US Inc has been lobbying for the Chinese in the US Congress. Surely, the PMO could use the visit to launch a massive public relations exercise to impress the US investors, but it is still looking for answers as to why the US investors are slowly reducing their presence in India.
The only hope is that there is still time for the PMO to take urgent steps. In the four weeks before the visit, it can fix up a meeting between top US CEOs and Vajpayee. The apex machinery for hammering out the policy is already in place as every day, principal secretary in the PMO, Brajesh Mishra, has been holding meetings with the senior bureaucrats to prepare a blueprint for Vajpayee's public relations exercise in the United States.
On Tuesday, Mishra had a 2-hour-long meeting with the commerce and industry secretaries to gauge why the Americans have lost interest in India as an investment destination.
According to the paper prepared for Vajpayee, the actual inflow of foreign investments by all countries in the last decade has been to the tune of $20,843.7 million, while the US contribution has been hardly 11.8 per cent.