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Here's what US has to tell India on smart cities

April 28, 2015 17:38 IST

A smart cityThe US on Tuesday asked India to resolve land acquisition problems and address issues concerning foreign direct investment for attracting funds for smart city projects.

". . .right now we are very much in the nascent stage of finding ways forward with India on smart cities issues.

“We do not have clarity on financing for the many projects that need to be done," US Ambassador Richard Verma said.

In order to be successful, Indian state and central governments as well as the industry will need to take the lead in providing finances for smart cities, he said, adding that they are still deciding how much funding they will allocate.

"Land acquisition, foreign direct investment and other questions still remain unresolved.

"The expectation of large amounts of private sector finance, either domestic or foreign will be a challenge.

“These concerns mean many projects may not be commercially viable at the outset," Verma said.

He was speaking at the annual general meeting of the American Chamber of Commerce.

Verma said the challenge for the US government and companies will be to work with Indian partners on creative approaches to develop appropriate, long term financing that will help realise these ambitious plans.

Prime Minister Narendra Modi has a vision of developing 100 smart cities as satellite towns of larger cities and by modernising the existing mid-sized cities.

On the two-way commerce, the US Ambassador said trade in goods and services between the two countries is growing and has crossed $100 billion.

"Fifteen years ago, our bilateral trade in goods and services stood at $19 billion. I am happy to share that. . .our bilateral trade in goods and services finally crossed that elusive $100 billion threshold last year and now stands at about $103 billion," he said.

He added that the US is ready to work with India to increase the trade to $500 billion.

"If we achieve this goal sometime in the next several years, our economic relationship will be 25 times larger than it was just fifteen years ago. Right now, US and Indian ventures create over a million jobs in India and tens of thousands in the US," Verma said.

He said that another five-fold increase will link the livelihoods of millions of new workers in the US and India to the success of the India-US partnership.

On the Bilateral Investment Treaty, he said ‘a high standard’ agreement would further enhance investor confidence.

"We are also working hard to assess the prospects for moving forward with a high-standard BIT.

“Our teams met at the end of March to discuss India's draft model text. . . India has already signed on to high-standard investment protection with other strategic partners such as Japan in 2010, so we know it is possible and doable," Verma added.

The US Ambassador said government and industry of both the sides have to work continuously to achieve the $500 billion target.

"We recognise at the Embassy that we’re not going to hit that mark standing still. So we are working just as energetically with the Indian government now," he said.

Verma also said that increasingly, Indian companies are helping to power America’s growth and job creation.     

"So we are looking for a negotiated outcome that yields the same minimum standards of protection for both Indian and US investors," he said.

He also said that the US is formalising the involvement of Commerce Secretary of the US and India’s Commerce Minister in a newly reconstituted Strategic and Commercial Dialogue.

"We expect the inaugural meeting of the expanded dialogue to take place in Washington this summer and are focused on reconstituting the US side of the CEO Forum in support of the dialogue," Verma said.

On smart cities, he said as India grows, its need would also increase not just in infrastructure, but also in health, education, energy, and other areas.

Some experts estimate that India will need infrastructure improvements of $1.5-2 trillion over the next 10-15 years.

Some demographers predict India will grow to a population of 1.8 billion by 2050.

He said the US government and industry can play a leading role in helping India manage this unprecedented growth.            

"That is why we recently concluded an agreement establishing an Infrastructure Collaboration Platform to formalise cooperation between multiple agencies of our two governments.

“This platform can support US and Indian companies to work together on a range of infrastructure projects all over India," Verma said.

America is aware of the challenges about developing these cities, but ‘we’re also focused on what we can and should do now’, he said.

"One thing we are able to do now is to meet with our Indian counterparts to start to define the contours of what they expect and what we can do, and vice versa," he added.

He informed that USAID is working on a 'Smart Energy Cities' initiative that consists of a series of pilot projects showcasing the policies, technologies, and business models needed to turn clean energy into a commercial opportunity.

The business and development approaches that these programmes might prove should spur additional investment opportunities, he said, adding that both the nations also recently agreed to expand the highly successful US-India Partnership to Advance Clean Energy.

The expansion includes support for turning Vizag, Ajmer, and Allahabad not only into Smart Cities, but into Smart Energy Cities, he said.

Citing examples of smart cities in the US -- New York and Houston -- the US Ambassador said e-infrastructure could support Indian smart cities.

Many experts, Verma said, agree that cities and governments that 'digitize' will grow faster through better urban planning, government response to citizen needs and concerns, and better management of limited resources.

"So when you’re thinking about whether your businesses can participate in Smart Cities, remember that may be the highway that Ajmer really needs is an electronic one that helps the city stimulate its economy, creates jobs, and manages its energy grid," he said.

It will take public and private initiative and cooperation to meet the needs of future cities and their residents, he said, adding that ‘our objective is to provide the smartest solutions to work with India to address the challenges of a growing population and urban migration.’

"Doing so will create great business opportunities while also helping India, the US, and the world become more safe, stable, and prosperous".

Further, he said the US was pushing forward actively with the Indian government on more than 70 projects.

"These efforts are already generating results," he said.

Earlier this month, Verma said Transportation Secretary Anthony Foxx visited to sign a Transportation Memorandum of Cooperation with Transportation Minister Nitin Gadkari.

"This cooperation deepens our existing cooperation on items like road safety and includes important new activities related to the development of smart cities and sustainability," he said.

On smart cities, he said the US would look at intelligent transportation systems, multi-modal planning, livability, and infrastructure financing.

"On sustainability, we agreed to cooperate on vehicle fuel efficiency standards and promotion of dedicated freight corridors to facilitate the movement of goods from India’s ports to major cities of the region," he said.

In March, he informed, an United States Environmental Protection Agency team visited New Delhi to launch air quality cooperation.

The EPA engaged with Indian officials about ways and opportunities to implement the Environmental Protection Agency’s AirNow-International and mega cities partnerships programmes.

"Our next step will be to submit a written proposal to the Indians on the implementation of AirNow-International," he added.


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