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India dismisses Obama concern over economy

(AFP) / 16 July 2012

NEW DELHI - Indian politicians on Monday rejected US President Barack Obama’s concerns about the investment climate in the country, which has recently suffered a sharp slowdown in economic growth.

Obama, in an interview to the Press Trust of India (PTI) news agency in Washington, said the American business community had told him it was “still too hard” to invest in India.

“In too many sectors, such as retail, India limits or prohibits the foreign investment that is necessary to create jobs in both our countries, and which is necessary for India to continue to grow,” Obama said.

His comments were swiftly dismissed by politicians from the ruling Congress party as well as the opposition, which has been fighting to stop reforms in the retail sector.

“The government has taken enough measures and put policies in place which welcome investors,” Anand Sharma, the commerce minister, said.

“For the next three years India will remain one of the top three destinations attractive for investors.”

The opposition Bharatiya Janata Party calling Obama’s comments “laughable”.

“We have to ensure our national interests on our own,” BJP spokesman Mukhtar Abbas Naqvi was quoted as saying by PTI.

India recently posted 5.3 percent quarterly growth — the slowest in nine years — down from scorching nine percent-plus expansion a few years ago.

Foreign investors have expressed alarm, in particular, over India’s plans for retroactive taxation of some transactions — a step aimed partly at recouping over $2 billion in capital gains tax from British telecoms giant Vodafone.

Veerappa Moily, the corporate affairs minister, blamed international companies for colouring Obama’s views and said the Indian economy remained strong.

“Certain international lobbies like Vodafone are spreading this kind of a story and Obama was not properly informed about the things that are happening,” he told reporters in Bangalore on Sunday.

“Not even a single financial institution has collapsed in this country, whereas many such things have collapsed in US and other countries,” he added.

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