(Bloomberg) -- The US ambassador to India said he wants to boost investment from American pension funds and private equity firms like KKR & Co. and Blackstone Inc. into the South Asian economy to take advantage of its rapid growth.

Eric Garcetti said he’s working to convene events, along with India’s government, to bring investors to the country in the second half of the year, likely in Mumbai.  

“By and large we don’t have really any major pension funds, state and local pension funds, directly investing here. And that’s a goal of mine to bring more,” he said in an interview Thursday in New Delhi. “I think most people who aren’t here are knocking on the door saying, ‘What do we do?’” 

Major pension funds and PE firms are eager to invest more in India, especially in its growing infrastructure and manufacturing sectors, Garcetti said, but many are held back by old concerns about the ease of doing business in the country. A new government in India after elections in April-May will need to do more to improve the business environment, he said.

“There’s a huge eagerness. This is not a tough sell,” he said. However, India is “still a relatively unpredictable place” when it comes to doing business, and the US has urged authorities to ensure more “predictability and locking these things in for the long haul,” he added.

On Thursday, Bloomberg News reported Blackstone plans to add $25 billion of Indian private equity assets to its portfolio over the next five years, a sign of the country’s rising importance to global investment firms. 

Opportunities, Challenges

Garcetti, who is almost one year into his stint as Washington’s top envoy to New Delhi, has been outspoken about the opportunities for foreign investors in India but also the challenges they face like its difficult business environment and opaque tax practices. 

He’s recently had to deal with a rise in diplomatic tensions between the two countries after India criticized the US State Department’s comments about a controversial citizenship law and the arrest of an opposition leader just weeks before elections. 

On Wednesday, New Delhi summoned the US deputy mission chief to a meeting after the State Department called for a fair and transparent legal process for cases related to the opposition.

Garcetti said Thursday “it’s part of American foreign policy to restate principles, but people shouldn’t over-read into that.” He added that the US has “deep warmth and a high level of trust in our Indian counterparts.”

Relations have also been complicated by US allegations that an Indian government official had helped to orchestrate a plan to murder a Sikh activist in New York last year.

The Biden administration has sought to build closer ties with Prime Minister Narendra Modi’s government, describing the friendship between the two countries the “most consequential in the world,” a phrase reiterated by Garcetti Thursday. 

India is seen as key to Washington’s strategy of countering China’s growing assertiveness in Asia. It also has appeal as an alternative location for businesses looking to diversify their supply chains from China.

Garcetti said if India can continue economic measures such as a reduction in trade barriers, greater investment in infrastructure and boosting exports, the country could unlock the 10%-plus growth rates enjoyed by major East Asian economies in the past.

“It’s a chance for India to have the same rapid rates of growth,” he said. 

India has had some success winning foreign investment from companies looking to reduce their reliance on China’s supply chains, including from Apple Inc. and Samsung Electronics Co. 

On Thursday, Garcetti said an obstacle for foreign investors remains India’s tradition of protectionism and state control of business. 

“I think people find that if they go to Mexico, if they go to Vietnam, there’s more willingness to say, ‘Hey, what can we do to bring you here?’” the ambassador said. “India is still a little bit more like, ‘You need to be here and we’ll give you a little bit of help.”

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