On a road show in North America to try and boost capital flows into India, Finance Minister P.Chidambaram has assured investors that New Delhi is committed to key economic reforms and fixing some issues in the Indian system.
"Message is that we are committed to key issues like fiscal consolidation, containing inflation, improving the supply side, project implementation, independent regulators for critical sectors. It is always useful to talk to foreign investors," he told reporters in Washington on Friday.
The minister, who is here to attend the annual International Monetary Fund-World Bank spring meeting has held road shows in Toronto, Boston and New York to attract foreign investors to India.
"I think everybody recognises that India is an attractive market. Everybody recognises that India is a market in which you can do business and make reasonable profit," said Chidambaram. But "there are some drawbacks in our system, which we need to fix".
On their part, the CEOs had voiced concerns over "slowness of decision making, obstacles to implementing projects, some ambiguity in tax laws and some ambiguities in policies."
Chidambaram also expressed confidence that India would soon achieve its potential growth rate of eight percent. Noting that India's savings rate has been between 30 and 36 percent, he said this should translate into a growth rate of 8 percent.
"If we continue to grow at eight percent for, say, seven years or eight years or ten years, like China did at 10 percent for over ten years, it compounds, and we become a giant economy," he said.
Chidambram said he believed in the long run, it is in India's interest to negotiate a bilateral Free Trade Agreement (FTA) with the US.
In the absence of a rule-based multilateral WTO regime, "I suppose countries would enter into free trade agreements," he said noting that India had entered into such bilateral agreements with several countries which by their very nature are "discriminatory."
"It isn't the best way. But it's second best," he said.