It's a pleasure to be here this afternoon. Let me begin by thanking the US-India Business Council for extending me a very warm welcome. My special thanks to Chairman, Ajay Banga, and President, Mukesh Aghi, for arranging this occasion for us to meet very early in my tenure. It's great to be among old friends and to have this opportunity to meet others whom I don't know. I look forward to working with all of you to enhance bilateral trade and investment.
The past year has been transformational in many ways. It was exactly a year ago that Prime Minister Modi took over the reins of a new government, riding on an unprecedented mandate for development and reform. Since then, the government has pushed forward with the reform agenda at a remarkable speed, focusing on infrastructure development, manufacturing, technological advancement, skills development and financial inclusion, through new and innovative programmes like Make in India, Digital India, Smart Cities and the Jan Dhan Yojana.
Behind all these initiatives lies the Prime Minister's vision of making India a global manufacturing hub, with state of the art infrastructure and a skilled workforce. He wants to transform India into a digitally empowered society with universal internet connectivity, digital identity, mobile phone banking and e-services. He wants India to take its rightful place as a fast growing economy, tapping the huge potential of its young population.
To realize this vision, foreign investments and transfer of technology would be important components. We need a business environment that fosters innovation and encourages investment. This recognition has led the government to introduce several reforms aimed at improving the ease of doing business in and with India. Procedures have been simplified, including creating a single window for a number of services. A high level committee is working to recommend a simpler mechanism to start a business in India. A land ordinance has been issued for expediting land acquisition for key infrastructure projects. A new Foreign Trade Policy for 2015-20 has been released, with a special emphasis on improving the ease of doing business.
Special attention is also being devoted to providing a transparent and predictable tax regime for investors. Soon after assuming office, the government clarified rules on transfer pricing and introduced procedures like safe harbor provisions. A roadmap for reducing corporate tax from 30% to 25% has been announced in the recent budget. The GST Bill has been tabled in Parliament with the intention of implementing it by April next year.
The past year has also seen liberalization of FDI in several sectors including defense, railways, medical devices, insurance and pension funds. Latest figures show a 30% jump in FDI received by India during April 2014 to February 2015 amounting to $ 41.22 billion. A similar growth was registered by portfolio investment rising to $ 42.35 billion in 2014.
Political stability at the centre, coupled with a strong commitment to reform, have ensured that the Indian economy is on the path to a robust recovery. India is emerging as one of the fastest growing economies in the world, with an expected growth rate of 7.5% this year and over 8% next year.
There is a growing sense of optimism about India's growth prospects. The IMF, World Bank and others have predicted a growth rate of over 7%. Moody's has upgraded India's rating outlook to "positive", confirming an improvement in the growth and macro-economic prospects of the country. This confidence has percolated down to the business community, which is showing a renewed interest in the Indian economy.
These positive developments at home have been accompanied by a fresh momentum in our bilateral relationship, thanks to two highly successful summits between Prime Minister Narendra Modi and President Barack Obama, which have helped in resolving some long-pending issues and identifying new areas of cooperation. The Delhi Declaration of Friendship, has upgraded the bilateral strategic dialogue to a Strategic and Commercial Dialogue, reflecting the importance we attach to strengthening our commercial ties. Both sides have also committed to enhance bilateral trade to US$ 500 billion and work towards a Bilateral Investment Treaty.
A number of bilateral dialogues and working groups, which had not met for several years, like the Trade Policy Forum, the High Technology Co-operation Group and the CEO Forum, have met over the past year, laying the foundation for future joint activities. The next round of meetings is slated to take place over the course of this year and we will see much more activity in the coming months.
Our defence cooperation has emerged as a major pillar of the India-U.S. strategic partnership, with the renewal of the Defence Framework Agreement, collaboration for joint research, technology transfers and co-development and co-production of defence systems. Liberalization of FDI in the defence sector will serve to further boost this relationship. The government has recently revised the initial validity of industrial licenses for defense sector to seven years, extendable up to three years, to further promote the ease of doing business in this sector in view of the long gestation period of defense contracts.
An India-US Investment Initiative has been established to facilitate FDI, portfolio investment, capital market development and financing of infrastructure. Likewise, a US-India Infrastructure Collaboration Platform has been set up to promote deployment of cutting edge U.S technologies to meet India's infrastructure needs in power, urbanization, shipping, freight transportation, etc. An inter-ministerial committee has also been constituted to fast-track investment proposals from U.S. companies and address implementation related issues.
In the energy sector, civil nuclear energy and solar energy are two areas with a high growth potential where we expect enhanced cooperation in future. An ambitious solar energy target of 100 gigawatts, by 2022, has been set, which will offer new opportunities, for India-U.S. clean energy partnership.
The Make in India program, the smart cities initiative and the Digital India program have opened up several opportunities for collaboration with US companies. For instance, the US has agreed to partner with India on developing three major cities (Allahabad, Ajmer and Vishakhapatnam) as smart cities with the help of US industry. City-wise task forces have been set-up for formulating concrete action plans. Similarly, we have seen in the past few months, major US companies like Ford, GE and Abbott open state of the art manufacturing facilities in India, taking into account the growth potential of not just the Indian market but the region as a whole and using India as an export hub for their products. We have seen companies like Google and Intel come forward to partner on the Digital India campaign.
Equally, the Indian industry has enhanced its presence in the US economy, making huge investments, creating jobs and generating incomes. We have Indian companies in IT, pharmaceuticals, infrastructure and automobiles which are forging ahead in their respective areas to build close ties with their local communities. As per an industry estimate, Indian companies have invested close to $17 billion in the US.
Given such extensive business ties, there are bound to be some issues of concern to the industry on both sides. Fortunately, we have developed sufficient bilateral mechanisms to address such concerns in a constructive and cooperative spirit. The USIBC can play an important role in this context by being a proactive voice for the industry on both sides.
Let me conclude by emphasizing that we are in a very momentous phase of our relationship. India is moving quickly on its commitment to reform, throwing up tremendous opportunities for working together. I am confident that the U.S. Business and Industry, will continue to seize the potential, and our cooperation will reinforce our strategic ties in a long-term framework.
Once again I thank the USIBC and look forward to our continuing association in the days to come.