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Focus on FDI: U.S to India
By agencies
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Tuesday, 02 May 2006, 19:30 IST
NEW DELHI: The U.S on Monday urged India to further liberalize its Foreign Direct Investment norms and address issues related to intellectual property rights to attract U.S investments.
Franklin L Lavin, U.S. Under Secretary of commerce for international Trade said, Indias FDI policy should be more flexible to allow more foreign equity and ensure level-playing field for foreign and domestic companies.
India attracts $5.9 billion of FDI from U.S. while flow of FDI into Singapore is $56.9 billion due to the simple FDI procedures, he pointed.
India should be a global leader in the pharma sector but its lack of attention to IPR has proved to be a hindrance in its growth, he added. Addressing issues concerning the American business houses, Lavin said, India needs to sort through the challenge of its high trade barriers.
The more India can lower its barriers, the better off its people will be. While India has significantly lowered tariffs on non-agricultural products, agricultural tariffs remain around 40 percent. He further said that India should allow entry of private companies in the agriculture sector to strengthen it. He said, As a significant exporter of services and in light of the benefits that India can achieve through the WTO Doha round, we believe that it would be beneficial for India to lower these high agricultural tariffs.
Speaking at the AGM, U.S charge daffaires, Robert Blake said that India and U.S are strategic trade partners and Washington would continue to support India in its growth endeavors. On Indias need for nuclear energy, he quoted U.S secretary of state, Condoleezza Rice as saying: India needs at least eight nuclear reactors. If two of these contracts are given to U.S companies, it would benefit both the countries with employment generation and revenues.
Despite U.S. exports to India doubling in the past four years from $4 billion to $ 8 billion, Blake too sought removal of trade barriers in India to further boost bilateral trade.
Lavin too said that despite the good trade statistics and progress made by India because of the reforms; India has to make up for its slow economic growth. Even with 30 percent growth in U.S. exports to India last year, the vast market of India accounts for less than one per cent of all U.S. exports, he said.