President Obama's weekend statement on India, where he expressed concern over the investment climate in the country, has evoked sharp criticism making it further difficult for the Indian Prime Minister Manmohan Singh to go ahead with economic reforms.
Obama's remarks to PTI on Sunday, echoing the American industrialists' view that the investment climate in India is deteriorating and there appears to be a growing consensus in India that the time may be right for another wave of economic reforms to make India more competitive in the global economy, was outrightly rejected by the Indian Government, the Opposition and some segments of the industry.
Of course, Obama's statement echoes the sentiments of a certain section of Indian as well as foreign investors and economists. The wrong timing of Obama's comments has made it difficult for the reform-friendly Singh to push his plans.
India is seeing a decline in its economic growth for sure, which at present is at 5.3 percent, the lowest in nine years and its currency is weak against the dollar, while inflation has been on an upward trend in the recent months. Some of the policies by the Indian government such as proposing a provision for retro taxing in its income tax act have dampened investors' sentiments.
Apart from this, the biggest demand of the foreign investors to open up the retail sector for Foreign Direct Investment (FDI) has made little headway. The Indian Prime Minister who doubles up as the finance minister has said that there is need for policy stimulus. Despite all this, Obama's comments found no takers in Asia's third largest economy.
Even the opposition parties and some of the partners in the ruling UPA coalition, who otherwise find themselves disagreeing on every move of the Government, were also united in criticizing the President.
Veerappa Moily, India's Corporate Minister, reacting strongly to Obama's comments said that the President was not properly informed and blamed international lobbies for spreading negative information about the country.
Certain international lobbies like Vodafone are spreading this kind of a story and Mr Obama was not properly informed of the things that are happening, particularly when India's economic fundamentals are strong, Moily added.
The opposition parties too joined him in criticizing the President.
If Mr Obama wants FDI in retail and India does not want, then it won't come just because he is demanding it, said the Bharatiya Janata Party leader Yashwant Sinha.
FDI in retail is a burning issue in India, though the Prime Minister has indicated that he would like to bring in consensus at the earliest. It seems a difficult task as some parties of the ruling coalition along with the opposition parties are against it tooth and nail.
Even the industry bodies in different states and the retailers in the country are opposed to opening up of the economy for retail, alleging it would kill the Indian smallscale traders.
Singh, who is considered the poster boy of Indian reforms, had hinted earlier that he would initiate reforms to raise the investor sentiment, and FDI in retail is widely expected to be one of those measures. Now the sharp reactions to Obama's statement from all quarters of the country, and with many state elections lined ahead later this year and early next year, it will be a next-to-impossible task for Singh to go ahead with FDI in retail.