"The fundamentals are strong. India's demographic advantage presents an enormous opportunity," he said in an e-mail interview with the Wall Street Journal.
"That said, India cannot presume that investment will flow there without making the tough choices and implementing the progressive steps to create a welcoming business climate," added Banga, President and Chief Executive of MasterCard Worldwide.
As chairman of the USIBC, representing about 350 top American companies doing business with India, Banga said that he intended to focus on creating 'a competitive environment between various state governments in India that are moving forward faster than others' to 'help propel reforms - state by state, as well as at the Centre.'
"And if you are looking to the horizon for the next hill to climb, we need to be pushing for a Bilateral Investment Treaty, as well as flesh out the contours of something much bigger - an Economic Co-operation Arrangement between the world's two largest free-market democracies," he said.
Among the key issues that the USIBC plans to champion was the need to resist protectionist impulses in both countries, Banga said.
"This must be a priority for USIBC in India, as well as in the US. As importantly, we need a visa regime in the United States that moves professionals with specialised knowledge back and forth freely to build on the knowledge economy that is at the heart of the US-India commercial relationship."
Noting that in the run-up to the 2004 presidential elections, 'there was a worrying uptick in rhetoric on targeting outsourcing and other Indian service businesses this front', he said "We hope we have outgrown this in 2012. But we must remain vigilant."