Wooing Wall Street execs

Indian Prime Minister Narendra Modi is slated to meet with top Wall Street executives during his trip to the United States this week in an effort to lure American investors into the emerging economy.

Modi will meet with Goldman Sachs CEO Lloyd C. Blankfein and Boeing CEO Jim McNerney, as well as General Electric Chairman Jeff Immelt. He’s also scheduled to meet with top executives from MasterCard, PepsiCo, IBM and Google.


Economists say American companies are looking to tap into India’s population of 1.2 billion, including a rapidly rising middle class. And Modi will look to tout the growing demographic in an attempt to draw investments.

“To attract more foreign direct investment in the United States, Mr. Modi quite simply needs to improve the business climate in India,” said Anish Goel, a senior South Asia fellow at the New America Foundation.

“Despite the enormous potential, many U.S. firms remain wary of entering the Indian market, and they will continue to be until Modi demonstrates that the counterproductive policies of the previous government are no longer applicable,” Goel added.

Businesses have been skeptical of India’s government, fearful of corruption and outdated government infrastructure. Experts said Modi has a difficult task at convincing investors to open their wallets.

From entertainment piracy concerns to intellectual property issues, businesses cite varying degrees of concern about investing in India.

“Persuading Americans to invest there will be an uphill climb for the prime minister because of India’s business-unfriendly policies,” said Bill Reinsch, president of the National Foreign Trade Council.

Earlier this month, China announced a $20 billion, five-year investment pledge to India, and many economists will be watching to see if the U.S. surpasses that number.

One of those business announcements could come Tuesday, when Microsoft CEO Satya Nadella is slated speak in New Delhi, though Microsoft has been tight-lipped on the details.

“India is an attractive destination for U.S. investors because of its size and because it is a rule-of-law country, unlike China — although not always a particularly efficient one,” Reinsch said.

India’s booming economic growth has slowed some in recent years, with its gross domestic product growing at 3.2 percent in 2013. While that is hardly an anemic growth rate, it’s a sharp decline from the 5.1 percent GDP growth in 2012, or the 7.5 percent GDP growth in 2011, according to the CIA World Factbook.

“If Modi and Indian policymakers seriously want to enrich the economic livelihood of their citizens and lure more FDI from the U.S., India must embrace greater economic freedom by implementing effective regulatory reforms and tackling corruption, among other things,” said Anthony Kim, a senior economic policy analyst at The Heritage Foundation. “Otherwise, the global economy will leave India behind.”

The newly elected Modi comes with a business reputation in the international community. He was a state minister before becoming prime minister, which is the equivalent to serving as a governor in the United States, said Joshua Meltzer, an India expert at the Brookings Institution.

“From a business perspective, Prime Minister Modi comes with great credibility,” Meltzer said. “That in itself will be welcome by the business community because they want to see that he has the capacity that will drive change.”