India, U.S. to set up fresh mechanism for bilateral ties

Tuesday, 25 September 2007, 07:00 Hrs
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New York: India and the U.S. have decided to set up an institutionalised framework for identifying areas of mutual trade and promoting bilateral trade in three key areas - rural industries, agro-products and small and medium enterprises.

The decision came Monday at a meeting of the Private Sector Advisory Group (PSAG), set up last year by the two countries to provide strategic advice to boost bilateral trade, which is targeted to double in the next three years.

"The meeting was useful and both sides have exchanged views on the areas where we can develop mutual cooperation," Commerce Minister Kamal Nath told reporters after the meet.

According to Nath, both sides have also exchanged their concerns over certain areas where they were looking for better cooperation and stronger ties.

"We looked at rural industries, agro sector, small and medium enterprises including the health sector. The meeting was useful and it has refreshed the US-India trade policy forum which was launched during Prime Minister Manmohan Singh's visit (to the US)," he said, adding that there should be an institutionalised mechanism to look into the benefits of enhancing trade.

During the discussions, both sides found several areas of cooperation where they could mutually benefit. There were suggestions from some members in the US side that insurance companies be urged to have facilities for providing treatments in India.

"Almost 50 million Americans are not covered by health insurance. One of the suggestions from the US side was that the insurance companies can offer health services in India, which comes at a cheaper rate," Nath said.

"The visa for nurses is another issue on which they are keener than us," he pointed out.

The PSAG also discussed about US companies that have Indian partners investing in India's ultra mega power projects.

"The US side also wanted a titanium plant. We need to find out whether we can allow 100 percent FDI (foreign direct investment) in it."

According to Nath, Finance Minister P. Chidambaram has expressed his concern over the absence of Indian bank branches in the US.

"Chidambaram pointed out that 52 American banks have branches in India, while there are only six Indian banks which have branches here," he said.

Nath said India was becoming a major investor in the US - mainly in the manufacturing and pharmaceutical sectors.

The PSAG's next meeting will take place in January-February in India. The group was set up to provide new ideas that could enhance the bilateral trade and investment environment.

The US representatives at PSAG included C. Fred Bergsten, Director, Peterson Institute for International Economics; Carla Hills, Former US Trade Representative, currently Chairman and CEO of Hills & Co.; John J. Castellani, President, Business Roundtable and Ron Somers, President of the US India Business Council.

The representatives from India included Isher Judge Ahluwalia, Chairman, Indian Council for Research on International Economic Relations; V. Krishnamurthy, Chairman, National Manufacturing Competitiveness Council and Lt. Gen. (ret.) S.S. Mehta, Director General, Confederation of Indian Industry.
Source: IANS
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