Efforts to revive India’s infrastructure sector growth since the new government took charge have made noticeable progress in 2015-16. Unfortunately, the most critical problem remains land acquisition and project bottlenecks. State execution capabilities along with the availability of infrastructure project financing will be vital to the success of the government’s flagship infrastructure initiatives like the Smart Cities Mission and Atal Mission for Rejuvenation and Urban Transformation (AMRUT).
In the past few years, certain states have demonstrated a commitment to economic growth. These states have placed an emphasis on energy security leading to industrial growth and job creation, with a focus on projects large and small. In addition, there are states whose leaders have expressed a strong commitment to stream lining their processes and to emulate other successful state-initiated models.
Advocacy efforts going forward will focus on policies tied to critical issues including land use & acquisition, successful PPP implementation, project financing and reforms that directly impact investors and companies.
- Encourage the establishment of a dedicated PPP implementation structure and facilitation mechanism for private sector, including an independent dispute resolution body.
- Introduce single window clearances for smooth bureaucratic procedures, improve decisiveness, including fast tracking approvals processes and reduce the need for multiple approvals.
- Foster the development of a long-term debt market in India, one with enough depth to be able to finance capital-intensive infrastructure projects.
- Streamline clearance and permitting processes for infrastructure projects, specifically related to land acquisition; encourage land acquisition before inviting bids.
- Advocate for a fair, transparent, and streamlined bidding process. Shift the selection process away from the lowest bidder and towards the best value including Life Cycle Assessment (LCA) relevant and environmental performance. Encourage a more inclusive pre-tendering process that involves experienced consultants to ensure accuracy in scope and understanding of project risk and finance.
- Lowe tariffs in a range of key components and products that will deepen collaboration between American companies and their Indian counterparts, including current duties on heavy equipment and machinery, gas turbines and chemicals.
- Support full implementation of India’s Infrastructure Debt Fund, ensuring its success as an effective financial vehicle mobilizing investment into India’s Infrastructure sector.
- Emphasize that quality, safety, and maintenance - elements where U.S. firms excel – should be incorporated into contract procurement for Indian-led projects.
- Approach infrastructure development across all sectors in a coordinated fashion that includes substantial and contiguous parcels of land being acquired for projects before inviting bids from contractors, (as opposed to bidding projects with a minimal percentage of land on the assumption that the remaining land required will be acquired and financed over time).
- Highlight specific business friendly states that have demonstrated a track record of performance that ensures a fair and stable investment environment for global investors.
- Provided successful trade promotion, including exports of U.S. equipment, technologies, and services to meet India’s Smart Cities Initiative needs through joint workshops and roundtables with the United States Trade Development Agency (USTDA) and the Ministry of Urban Development in India.
- Led Cleantech and Smart cities trade missions to India to promote member companies products and services with key Central and State Governments.
- Interfaced with major banking institutions and export credit agencies, including the Export-Import Bank of the United States and the Overseas Private Investment Corporation, to facilitate financing for projects and other technologies suitable for India’s energy infrastructure sector.
- Hosted Government of India Reverse Trade Missions and facilitated site visits to showcase USIBC members’ smart cities projects and technologies.
For more information, please contact Sumona Guha.