Indian Prime Minister Narendra Modi hold a meeting at UN Headquarters in New York, September 24, 2019, on the sidelines of the United Nations General Assembly.
Saul Loeb | AFP | Getty Images
Prime Minister Narendra Modi met with dozens of top U.S. executives in New York on Wednesday, according to a memo obtained by CNBC.
J.P. Morgan CEO Jamie Dimon, Bank of America CEO Brian Moynihan, Walmart CEO Doug Mcmillon, 3M CEO Mike Roman, Lockheed Martin CEO Marillyn Hewson, Mastercard CEO Ajay Bhanga, Marriott CEO Arne Sorenson and 30 others were in attendance.
Modi is the only foreign leader to gather with so many top U.S. executives during the week of the United Nations General Assembly, an annual confab that brings world leaders together to discuss global policy issues.
At the private, two-hour meeting, discussions covered investing in India and addressing the challenges U.S. companies face while doing business in the emerging market country.
The timing of the meeting comes as more foreign companies move production and sourcing out of China to Vietnam, the Philippines, Malaysia and other low-cost manufacturing hubs. India is also on the list, but experts say Modi wants India to be higher up.
Navigating India’s complex business policies has been a source of concern for U.S. companies trying to expand operations in India. Obtaining construction permits, acquiring land, securing lines of electricity plus setting up bank accounts, are just a few of the issues firms face on the ground.
Others criticized India’s high tax rate for foreign goods.
Tariffs in India are relatively high in comparison with other countries. According to the WTO, India’s average tariff rate in 2018 was 17.1% versus an average of 3.4% in the U.S.
Two government officials close to Modi say India’s slowing economy and high unemployment could push him to consider making changes that would make it easier for American firms to conduct business inside India.
India does have a compelling consumption story, with 1.3 billion people, half of whom are under the age of 25. India is also expected to be the world’s top smartphone market in a few years, outpacing China.
But the size of this meeting, which organizers say includes as many as 40 executives, means they will likely shy away from addressing specific issues each company is facing on the ground.
However one that could come up is e-commerce.
Walmart and Amazon have both been challenged by a new e-commerce ruling that came into effect earlier this year, forcing both companies to discard many items and readjust their strategy in India. The ruling was put into effect just months after Walmart acquired Indian e-commerce player Flipkart for $16 billion and during Modi’s campaign to be reelected. The protectionist policy was seen as a way to shield small businesses and mom and pops in India.
A report from Reuters in July said that “Walmart told the U.S. government privately in January that India’s new investment rules for e-commerce were regressive and had the potential to hurt trade ties.”
Its unclear whether e-commerce was addressed during the bilateral meeting between President Donald Trump and Prime Minister Modi in New York on Tuesday, following a warm exchange between the two leaders in Houston over the weekend.
Both Trump and Modi were seen holding hands, walking around the stadium at a concert-like event in front of 50,000 attendees where both leaders spoke about the importance of the U.S.-India relationship.
In the past, Trump has described Modi as “tariff king” and criticized the country’s high tax rate, including a 50% tariff on Harley-Davidson motorcycles.
“The leaders need to find a way to see eye to eye on trade, said Robert Blackwill, who was U.S. ambassador to India from 2001 to 2003 and was the recipient of the 2007 Bridge-Builder Award for his role in transforming U.S.-India relations to CNBC.
CEOs at Wednesday’s meeting will likely want a better understanding of Modi’s economic agenda after he surprised the world by unveiling a comprehensive tax package last week. News of the tax cuts instantly sent Indian stocks rallying. Last Friday, Indian ETFs were up 6%.
Two big private equity investors, Stephen Schwarzman of Blackstone and Henry Kravis of KKR, will also attend the meeting, according to sources.
In a recent interview with Indian TV network ET, Schwarzman said, “The Indian economy, even though [it] is going softer now is growing much faster than several economies around the world. It has issues that it is dealing with now. We can still do exceedingly well in real estate even after being among the largest foreign investors.”
Marriot’s Sorenson, who leads the world’s largest hotel operator, was also there. Marriott currently has 118 hotels in the country and an additional 59 hotels in development.
David Joyce, vice chair of General Electric, also attended. All of GE’s major business lines are in India including aviation, gas energy and health care. GE has 20 manufacturing sites and technology centers in the country.