NEW DELHI: Although bilateral trade between India and the US is at its highest at $200 billion (2023), India’s tax structure is working as a deterrent for more US companies to invest here, said US Ambassador to India Eric Garcetti on Tuesday.
"Opaque corporate tax practices still are a barrier to too many companies that want to be here. Every CEO is saying tell me about India. They want to invest," he said.
Ambassador Garcetti cited how a US shoe manufacturing firm opted out of considering India to manufacture their products and chose Vietnam instead due to the ease of doing business there.
The US is the third largest Foreign Direct Investment (FDI) provider to India at $6 billion, which can increase if tax barriers are relaxed.
"We want the foreign direct investment from China to shift, but FDI is not flowing into India at the pace it should be. Instead, it’s going to countries like Vietnam. I would selfishly like to see more of that happening in India," Ambassador Garcetti said.
In order for India and the US to expand their trade partnership, there need to be changes in export policies and export control, he suggested.
"India is the America of South Asia and we would want to see an increase in trade. Nearly 3 million people in India are employed by US based companies," Ambassador Garcetti added.
In a bid to further enhance and strengthen bilateral ties, he said that there is need for both the countries to get rid of the walls, be it bureaucratic, taxation related, regulatory or part of the federal system which would unleash more jobs, prosperity, investments and strength.
Ambassador Garcetti has been in India for a little less than 10 months and he says he has travelled across 18 states already in a bid to know more about the country. He also acknowledged the fact that India is a strong force in the Indo Pacific and noted how it was going out of its way to help others – like in the Red Sea area rescuing ships of other nations.