Industry Speaks: CII President Rajiv Memani on India-US Trade Talks and Private Capex Momentum

 

🇮🇳 India Won’t Trade Sovereignty for Deals: CII President on US FTA Talks

In a candid conversation with ANI, Confederation of Indian Industry (CII) President Rajiv Memani shared critical insights on India’s strategic stance on the ongoing India-US trade deal negotiations. He asserted that Indian industry is fully prepared for any outcome—even if the much-anticipated Free Trade Agreement (FTA) with the United States doesn’t materialize.

“India will only do this deal when it is in India's interest and America's interest. There is no compulsion,” Memani stated.

He praised the government for conducting thorough consultations with stakeholders across sectors, ensuring every industry voice was heard before positioning India in negotiations. According to him, while the industry welcomes a favorable FTA, national interest must remain paramount.

🛠️ FTA Is a Strategic Game—Not a Race

Memani clarified that the FTA must yield better-than-average terms for Indian industry to support it. Tariff cuts, especially the 26% duty imposed on certain goods, are a key concern. A favorable deal would make Indian exports more competitive in US markets.

However, he acknowledged that the lack of a trade deal could lead to competitive disadvantages, particularly in sectors like automotive and textiles. For example, Mexico, with its near-zero tariffs via existing FTAs, could outcompete Indian automakers, while Vietnam already enjoys a 20% tariff edge in garments.

“The maximum alternative replacement will come from Mexico, with some possibility from Vietnam,” Memani predicted.

🧭 Long-Term Vision Over Quick Gains

Even if a deal is inked, Memani cautioned that the benefits won't be immediate. He called trade deals a "long game" where industries, and even the government, must prepare for structural adjustments to harness the full potential.

He suggested that an FTA might prompt American companies to invest in India to take advantage of local manufacturing for exports, and that Indian firms too would need to boost their global competitiveness.

📊 Private Capex: Quiet but Consistent Surge

In response to growing speculation around a slowdown in private capital expenditure (capex), Memani offered a data-backed rebuttal.

“There’s an atmosphere suggesting that private capex is not happening—but actually, it is,” he asserted.

He emphasized that listed companies with strong balance sheets, low debt, and capital market access are moving ahead with investment plans. While a dip in momentum was observed over the past 6–8 months, Memani attributed it to global trade uncertainties and not to domestic business sentiment.

🚧 Bottlenecks Slowing Big Projects

Memani identified two key obstacles in capital deployment for large-scale infrastructure projects:

1. Skilled Manpower Shortage: Projects requiring thousands of workers are facing delays due to lack of timely workforce mobilisation.

2. Environmental Clearances: These now take up to 12 months, significantly slowing capital deployment timelines.

He called for urgent reforms to streamline project execution, particularly for MSMEs that often benefit from large project spillovers.

💰 Corporate Credit Doesn’t Tell the Whole Story

Responding to concerns about flat credit growth, Memani explained that corporate balance sheets are currently strong, and funding is coming from a mix of internal accruals and capital markets—not just traditional bank loans.

In retail lending, while housing and personal loans are doing well, the Reserve Bank of India (RBI)’s regulatory tightening has moderated growth in select segments.

🏙️ Urban Consumption and Capex Sentiment

Memani admitted that urban consumption has seen a slight dip in recent months, but the overall capex sentiment remains intact. He remains confident that India’s growth story is backed by fundamental financial strength, proactive government support, and global investor interest.

---

🧩 Conclusion: India’s Trade and Investment Outlook—Pragmatic, Purpose-Driven, and Poised for Growth

CII President Rajiv Memani’s comments signal a mature, measured, and strategic approach by Indian industry. Whether navigating complex trade negotiations with the US or accelerating domestic capital deployment, the message is clear: India is open for business—but not at the cost of national interest.

With robust corporate fundamentals, readiness for global collaboration, and ongoing reforms, India’s economy is on track to navigate challenges and capitalise on long-term opportunities.

---