India can tap a lot more of foreign direct investment (FDI) from the US, provided it sends the right signals, said Raymond Vickery Jr., former US Assistant Secretary of Commerce and Global Fellow, Wilson Center.

The US sent out $400 billion as foreign direct investment to various countries last year, while India received $35 billion as FDI from all sources. Given that India needs $1.7 trillion for beefing up its infrastructure, it can easily tap a significant portion from the US, provided it improves the ease of doing business in India, he said.

India could do this by improving its position on contracts (respecting the sanctity of the contract and then enabling a proper and swift resolution when there are disputes). Besides there must be certainty of tax without the fear of retrospective taxation, he said.

Although the government had given the assurance that it would not reopen past disputes, he said the bad law was still in the books. India needs to beef up its roads and ports infrastructure, he said, noting that this would help improve the ease of doing business. “We are not asking India to do anything against its own self-interest,” he said.

Economic engagement has been the engine that has driven India and United States to cooperate on strategic matters, he said pointing to defence contracts and cooperation on terrorism as good examples.

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