The Indian government on Sunday strongly reacted to US President Barack Obama's remarks over the deteriorating investment climate in India, noting that international lobbies kept him in the dark about the country's strong economic potential.
"Certain international lobbies like Vodafone are spreading this kind of a story and Obama was not properly informed about the things that are happening, particularly when India's economic fundamentals are strong," Corporate Affairs Minister M Veerappa Moily was quoted as saying to news agency Press Trust of India.
Moily held that it is not the economic parameters but the views of certain entrepreneurs that led to the impression of a sluggish investment climate. The Corporate Affairs Minister added that the government is working towards eliminating such perceptions.
"That is also being removed. Once that perception is removed, I think in 2-3 months, we are back again with a kick-start to pick up the same speed as we had done in the last decade," he said.
Several opposition parties also retorted to Obama's remark over the foreign investments restrictions in Indian sectors, saying that the decision to impose such limitations is in the hands of policy makers and not up to the US President.
Moily dismissed the view that the nation is facing an economic crisis, and said that the US and several other countries had endured such crises at least twice in the past four years. He added that India posted an 8 to 9.5 percent growth rate, which would have crossed ten percent if not for the economic crisis in Europe and the US.
He also said that several countries, mainly the U.S., account for merely 19 percent of Foreign Institutional Investors (FIIs) and Foreign Direct Investment (FDI) in India, whereas ten other countries including Mauritius, Cyprus and Singapore contribute as much as 55 percent of such investments in the nation.
With the U.S. pushing for FDI especially into India's retail sector, the government is under immense pressure to allow investments in multinational retail companies in the country. In December last year, India was forced to hold back its decision on opening its retail sector for FDI owing to strong opposition from the unorganized retail sector, which has about 40 million Indians employed.