U.S. urges India to create better investment climate in energy
By siliconindia staff writer | Thursday, 18 December 2003, 08:00 Hrs
NEW DELHI - The United States yesterday urged India and other South Asian nations to create a better investment climate in the power and energy sectors to pave the way for further economic growth in the region. Speaking at a one-day conference on promoting foreign direct investment in the energy and power sectors in South Asia, U.S. Embassy Charge d'Affaires Robert O. Blake said that there is a vast potential for foreign direct investment in South Asia's energy sector. He, however, noted that doing business in the Indian energy sector continued to be impeded by the fact that the sector has operated with chronic financial difficulties, technical inefficiencies, and heavy dependence on public subsidies. Blake said that the U.S. was working hard to develop a better investment climate in India, building on the transformation in the overall U.S.-India relationship. Blake emphasized that energy cooperation between India and the US is an increasingly important part of our agenda, noting that India joined 14 other countries to launch the International Partnership for the Hydrogen Economy in Washington last month. Saying that the U.S. wants to work with India to create a more dynamic energy marketplace, Mr. Blake offered the U.S. energy sector's products and know-how that could mitigate the growing unmet energy needs of India and other countries of the region. He said that the attractiveness of India's energy sector for foreign investment had been damaged by distortions and financial problems in the current system. Citing the Dabhol experience and the difficulties of some independent power producers, Blake emphasized the need for fair and transparent resolution of disputes, essential to restore foreign investors' confidence and unleash more investment flows in the energy sector. Blake noted that the U.S. continued to be India's partner in promoting power sector reforms through USAID's $ 20 million Distribution Reform Upgrades Management Project (DRUM). The conference was organized by the U.S Chamber of Commerce and the South Asia Regional Initiative for Energy (SARI/E) office of the U.S. Agency for International Development. A key focus of SARI/E's work is to promote regional dialogue on economic cooperation among South Asian countries.