Regarding “New Delhi Says Tata to Nationalization” (Sadanand Dhume, East Is East, Oct. 14): Under Prime Minister Narendra Modi, India is embarking on the most transformative supply-side, free-market reforms in a generation. The Modi government is not only privatizing state-owned enterprises but also overhauling taxes, relaxing foreign direct investment (FDI) rules and deregulating labor and agriculture markets.

The Indian Parliament recently voted to abolish retroactive taxation, giving foreign investors a favorable, predictable...

Indian Prime Minister Narendra Modi at the U.N. General Assembly in New York, Sept. 25.

Photo: EDUARDO MUNOZ/REUTERS

Regarding “New Delhi Says Tata to Nationalization” (Sadanand Dhume, East Is East, Oct. 14): Under Prime Minister Narendra Modi, India is embarking on the most transformative supply-side, free-market reforms in a generation. The Modi government is not only privatizing state-owned enterprises but also overhauling taxes, relaxing foreign direct investment (FDI) rules and deregulating labor and agriculture markets.

The Indian Parliament recently voted to abolish retroactive taxation, giving foreign investors a favorable, predictable climate for capital accumulation. Investors received additional succor when the FDI caps in the insurance and telecom sectors were lifted. With labor reforms, India’s notoriously strident unions have been chastened; they must now issue two-months notice before striking, and firms need fewer approvals from the government for redeploying labor. Thanks to agriculture liberalization, Indian farmers are free to engage in contract farming and can sell directly to private buyers instead of through government-controlled stockyards. India further reduced the cost of doing business by cutting corporate tax rates to 15% from 25% for start-ups, and to 22% from 30% for established companies.

In August Indian Finance Minister Nirmala Sitharaman announced an ambitious plan to lease state assets to the private sector, including 42,300 kilometers of power lines, 26,700 km of highways, 8,200 km of pipelines and 400 railway stations. The asset monetization is expected to raise $80 billion, or 3% of India’s GDP. While the U.S. debates how to pay for $1 trillion in infrastructure spending, India will earmark asset monetization proceeds for new infrastructure, ensuring that such expenditures do not hemorrhage the fiscal deficit.

As the U.S. and Europe turn their backs on open markets by taxing, borrowing and spending trillions, New Delhi is increasingly becoming a beacon of inspiration for those who believe in free markets and free people.

Nathan Punwani

United States-India Relationship Council

Scottsdale, Ariz.