June 27 (Bloomberg) -- India seeks to expand its economic presence in Afghanistan as the international coalition fighting the Taliban withdraws combat forces through 2014, India’s ambassador to the U.S. said yesterday.
“Our intention is to invest and endure, and that’s the approach we are taking,” Ambassador Nirupama Rao said at a Bloomberg Government breakfast yesterday in Washington. “We already have committed about $2 billion of investment in Afghanistan and we are prepared to do more.”
India is hosting an investment summit on Afghanistan in New Delhi tomorrow that will draw government bodies and companies from around the world, including 12 companies from the U.S., Rao said. It’s part of a global effort to help develop Afghanistan’s economy and improve its economic and military security, she said.
The U.S. also is encouraging a greater role for India in Afghanistan. At a meeting last week between Secretary of State Hillary Clinton and India’s Foreign Minister S.M. Krishna, the two countries agreed to hold three-way talks with Afghanistan.
India has become a vital element of long-term U.S. commercial and global strategy, with Defense Secretary Leon Panetta calling the South Asian nation a “linchpin” in the Pentagon’s strategy of rebalancing its forces toward the Asia-Pacific region.
President Barack Obama’s administration on June 12 exempted India from financial sanctions for continuing to import oil from Iran.
The waiver was granted because “we have been reducing our oil imports from Iran over the last two to three years and the percentages have gone down,” Rao said. India’s sources of oil imports have diversified to include Saudi Arabia, Iraq, other Persian Gulf states, and Venezuela, she said. “As you see this diminishing of imports from Iran, the total numbers have visibly indicated we are sourcing less from Iran.”
The U.S. is assisting India in diversifying its energy sources and tapping shale-gas reserves, said Rao who became India’s ambassador to the U.S. in September. She was previously her nation’s foreign secretary after serving at Indian missions in countries including Russia, China and Sri Lanka.
India is part of a group of nations with emerging-market economies that include Brazil, Russia, China and South Africa, or BRICS. India is facing slowing growth, a record trade deficit and a budget gap that has exceeded targets.
It may become the first of the BRICS nations to lose its investment-grade credit rating, Standard & Poor’s said this month, citing slowing growth and political roadblocks to economic policy making.
“I wouldn’t say that the engine is stalling,” Rao said. “It will pick up speed again. The government is very aware of the various factors that have contributed to a certain deceleration in the growth rate of the gross domestic product and of the economy.”
India’s GDP rose 5.3 percent in the three months ended March from a year earlier, compared with 6.1 percent in the previous quarter, according to the Central Statistical Office.
“There have been some supply-side bottlenecks within the country,” she said. “There’s been some inflationary trends and the fact that in Europe things are not looking that good has affected our trade, our exports.” she said.
“The fundamentals of the Indian economy are very, very strong,” she said.
With U.S. presidential campaign under way, India is eager to see that the U.S. remain open to attracting talent from around the world, Rao said.
“We would not like to see any rising trends in protectionism, because this is a country whose strength and vitality is built on immigration,” she said.
Indian companies have invested about $27 billion in the U.S. in the last few years, she said. Indian companies also have a presence in about 43 states in the U.S., creating about 203,000 direct and indirect jobs, Rao said.
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