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US consortium could help build three Indian smart cities

President Barack Obama’s visit to India next week has created speculation that US companies are about to take an active role in India’s programme to build 100 smart cities. 

Large projects require strong Indian partners along with financing solutions to move forward– Ajay Singha, the executive director of the American Chamber of Commerce in India

Local media say the two sides will sign a landmark agreement to build three smart cities to improve US firms’ access to India’s infrastructure sector.

Allahabad, Ajmer and Vishakhapatnam are identified as possible locations.

Obama held bilateral talks with Prime Minister Narendra Modi in September last year, when Modi visited Washington. The return visit is expected to further develop the outline agreements reached then.

Although the US side has not revealed many details of Obama’s agenda, John Kerry, the secretary of state, told reporters at the Vibrant Gujarat Summit in Gandhinagar last week that talks would focus on climate change, defence, nuclear energy and economic partnership.

Sources in the Indian government told The Economic Times that that two sides had agreed in principle to build three smart cities during the September meetings, and that the agreement had been reaffirmed at the Vibrant Gujarat Summit earlier this month. The sources said the two countries would sign an agreement to this effect in Delhi.

A number of US businesses are understood to have formed a consortium to take part in the projects. Among them are network giant Cisco Systems, computer firms IBM and EMC, electrical engineer GE, industrial conglomerate 3M, building systems provider Honeywell, lift manufacturer Otis, bearing manufacturer Timken and engineering design firm Louis Berger.

Ajay Singha, the executive director of the American Chamber of Commerce in India, said in a statement: "The consortium has been set up to look at business opportunities in sectors including smart cities and aims at identifying and bidding for projects across the country. 

"Large projects require strong Indian partners along with financing solutions to move forward. The consortium will jointly interface with governments at the state and central levels and operate as a cohesive group offering multiple solutions to suit a diverse bunch of re requirements."

An inter-ministerial committee for US investments in India set up by the Department of Industrial Policy and Promotion is expediting prospective US investments in India and how to speed them up by looking into some of the US concerns on tax, land acquisition and regulation.

This committee has already met twice to discuss prospective areas of US investments, including infrastructure, to achieve concrete results during the Obama trip, sources said.

The Modi government plans to develop 100 smart cities and had proposed an allocation of $1.1bn in the last Union Budget.

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