Franklin Lavin, U.S. under-secretary of commerce for international trade appealed to India Dec. 6 to go the extra mile in opening up its booming economy to foreign investment. "U.S. companies are very serious about doing business with India," said Franklin Lavin. He was ending an eight-day visit to India accompanied by a 250-member corporate contingent. The executives accompanying Lavin represented companies in sectors ranging from information technology and telecoms to health care and energy. There were also representatives of companies in the nuclear field, such as GE Energy -- which builds nuclear reactors that would stand to benefit if the U.S.-India nuclear deal wins final legislative approval.
Washington's desire to penetrate the Indian market with its increasingly affluent middle class, estimated at 300 million people, was shown by the sheer size of the trade mission, the largest to go abroad in U.S. history, Lavin said. "This is the right time to be in India," he added, referring to India's fast-growing economy, which expanded by 9.2% in the second quarter.
However, despite 15 years of economic reforms, there were still significant hurdles to investing in Asia's fourth-largest economy, Lavin told the Indo-American Chamber of Commerce in a speech. He pointed to foreign investment curbs in sectors such as retail, financial services, broadcasting and telecommunications. "It gives me no joy to report that in the World Banks Ease of Doing Business study, India ranks right at the bottom -- 173 of 175 countries in the area of enforcing contracts," he added. "An estimated 74% of software in India is pirated, and India is one of the worlds leading manufacturers of counterfeit pharmaceuticals."
There were also still questions about India's commitment to economic reforms, Lavin said, asking whether the country was "on a long-term path of reform, or are we simply looking at 'the Indian moment'?" The U.S. has been pushing India to step up the pace of economic reform as it seeks a bigger foothold in the Indian economy. But the ruling Congress government has been under pressure from its communist allies which prop it up in parliament to go slow on reforms, citing fears that India's teeming poor will get swamped in a free-market economy.
Bilateral trade between the two countries in goods and services totals $40 billion annually, which the two sides are committed to doubling in three years.
Copyright Agence France-Presse, 2006