Google CEO Sundar Pichai and Apple CEO Tim Cook meet with senior officials and CEOs of U.S. and Indian companies at the White House in Washington, DC, June 23, 2023 Listen to the speech of Indian Prime Minister Narendra Modi during the meeting.
Brendan Smirovsky | AFP | Getty Images
Indian Prime Minister Narendra Modi has forged strong ties with the CEOs of America’s largest technology companies, providing India with the foreign support it has craved for more than a decade.
A former Indian government official who spoke to CNBC on condition of anonymity said the relationships have also boosted Modi’s image ahead of crucial elections starting on Friday.
As China’s economy slows, India’s economy will grow further, which has led many U.S. CEOs to support Modi’s policies.
Tensions between Washington and Beijing have also prompted U.S. conglomerates to diversify their manufacturing base into countries such as India to avoid disruption from any potential conflict.
“Shifting supply chains away from competitors makes India a very important linchpin,” Manjari Chatterjee Miller, senior fellow for India, Pakistan and South Asia at the Council on Foreign Relations, told CNBC. figure.
The support of major U.S. companies also helps shield Modi from criticism of India’s continued purchases of Russian and Iranian oil, as most major economies have imposed sanctions on the two countries.
Experts told CNBC that Apple’s expansion into India, in particular, has given Modi political clout and created more investment interest in U.S. companies ahead of the election.
“A big-name story like Apple’s good for Modi — not only does it help the economy, but it also gives him political swagger,” said Pravin Krishna, the Chung Distinguished Professor of International Economics and Business. ) express.
As India’s national elections begin, Modi has established an ongoing dialogue with a series of powerful Silicon Valley executives.
The election will end in early June and more than 960 million citizens are expected to vote. Polls show Modi’s Bharatiya Janata Party is expected to win.
Indian Prime Minister Narendra Modi (right) meets Elon Musk (left) in New York, the United States, on June 20, 2023. supply)
Press Information Bureau of India | Anadolu Agency | Getty Images
Tesla CEO Musk plans to travel to New Delhi next week. Ahead of Musk’s visit, Modi’s government reduced import taxes on electric vehicles for manufacturers investing $500 million to set up production centers in India. The move apparently piqued Tesla’s interest.
Sources said the last meeting between the two leaders was in New York in June, where Musk raised the issue of India’s high import taxes. After Musk’s one-on-one meeting with Modi, he said Tesla hopes to build a factory in India soon.
However, Tesla’s desire to expand in India goes beyond just manufacturing and selling electric vehicles. Tesla is also interested in learning more about India’s lithium reserves discovered in 2023, two sources told CNBC. As electric vehicles gain popularity, a shortage of lithium, a key component for electric vehicles, has sparked an arms race among manufacturers around the world.
Modi’s relationship with corporate America has grown exponentially over the past 18 months as U.S. tensions with China prompt the West to look to India for opportunities.
Nvidia CEO Jen-Hsun Huang flew to India in September to meet with the prime minister and discuss how the artificial intelligence program would work. During the visit, Huang revealed plans to partner with India’s Tata Partners and Reliance to build the country’s artificial intelligence infrastructure.
When Modi paid a state visit to the White House in June, letter CEO Sundar Pichai, apple CEO Tim Cook, AMD CEO Su Zifeng and others attended the roundtable meeting to discuss opportunities for cooperation with India in the field of artificial intelligence.
Modi faces challenge for more investments
To ensure that American companies continue to invest in India, Modi needs to overcome some huge obstacles.
“Land laws and labor laws are the primary issues,” Frank Wisner, the former U.S. ambassador to India, told CNBC.
Current Indian laws make it difficult to hire and fire workers and purchase land, which could cause problems for U.S. businesses trying to expand.
Miller added that if Modi’s government is re-elected, it will also take on the task of reducing India’s high youth unemployment rate of 44% and implement training programs to strengthen the country’s manufacturing base. Experts told CNBC that it may be difficult for U.S. companies to continue expanding in India if the underlying issues holding back India’s growth are not resolved.
General Atlantic advisory board member Dinyar Devitre, who has served on several public boards including Altria, Kraft Foods, SAB Miller and IHS Markit, told CNBC.
Currently, funds are pouring in. Over the same period, investment in China declined.
Dave Mazza of Roundhill Investments said ETF data showed investors continued to allocate funds to India. So far this year, inflows to India are $2.5 billion, followed by Japan at $3.5 billion. At the same time, China experienced nearly $1 billion in capital outflows.
“India remains one of the most compelling growth and investment stories of the decade,” Jitania Kandhari, managing director at Morgan Stanley Investment Management, told CNBC. Kandhari acknowledged that valuations were high, but added that “profits constant”.
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