Page 5 - IACC Newsletter November 2012 Issue no. 7

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President’s Message
Dear Members,
The convincing re-election of President Obama signifies the continuity of policies and programs. Equally lauded was his
assurance given to Indian Prime Minister Dr. Manmohan Singh that India -focus of the US Administration will be guided
by pragmatism and the important roles both countries play in the global arena. One can expect that the economic
partnership between the two countries will be heightened in the light of many positive developments that are taking
place in both countries.
Let me touch on some unconventional segments that the US-India engagement will be beneficial. Urban transport,
railways, particularly movement of freight traffic and housing and townships are major sectors that can draw
considerable US investment into India. Urban transport in India needs to be toned up to ease the pressure on the
existing networks. Overcrowded buses choked up roads, over-aged vehicles etc. are some of the banes of Indian
transport landscape and such problems are more crucial in towns and cities. Foreign investment is allowed in the sector
but not many have come forward to invest in this sector. Lack of policy clarity, bureaucratic delays, inadequate
protection to the assets and rolling stocks etc. are perceived to be reasons that are holding back not only FDI but also
investment from the Indian private sector.
Metro or mass rapid transport systems are the order of the day to de-congest the cities and to ensure quality transport
systems. We have world- class metro systems in Delhi, Kolkata and the projects in cities like Mumbai, Chennai and
Bangalore are at various stages of implementation. There is considerable scope for private- public partnership in
building these networks. The US presence in the implementation and in providing rolling stocks to metro networks is
virtually nil. Japan is providing funds and the rolling stocks are procured from Korea and Germany. This is an area where
there can be focused attention of the US corporations, since such projects are not only implemented in time, but also
even before time.
Dedicated freight corridors are going to redefine the goods movements in India. Eastern and western corridors will be
completed by 2016 and the feasibility study for the next four corridors will be completed by the end 2013. Several
billions of dollars have already been invested in the corridors where the works have already started. World Bank and
Japanese development agency, JAICO are funding the projects which provide excellent opportunities for private
investment. For instance, in the eastern and western corridors, around 150 kms of land will be developed along the side
lines of the track, which will ensure world class logistics to manufacturing units that will come up there. US firms can
take advantage of these emerging opportunities.
Finally, in the realty sector, the US investment is mostly in terms of PE investment. But Indian laws allow investment in
the development of townships and satellite towns subject to certain area restrictions. Since the cities are becoming