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Lavin samples Delhi delights, Indian business

December 05, 2006 11:45 IST

On Sunday, US Under Secretary for International Trade Franklin L Lavin sampled the delights of Delhi streets.

He travelled on the Metro (crowded even on a Sunday), got off at Chawri Bazaar, tried a golgappa (minus the fire-water which his aides persuaded him was swimming with streptococcus bacilli) and got a feel of India.

On Monday, as Indian and American officials shrugged off their jackets, rolled up their shirtsleeves and got down to wrestling with stubborn bureaucracies and entrenched mindsets, Lavin said they chipped away at all the problems and impediments in Indo-US commercial relations.

"The Indian government is as complex as the US government," he told Business Standard in an exclusive interview. "We got together to ask each other: Is there really a problem? In general, we found that there was a high level of convergence between Indian and US investors."

But he conceded that there were sectoral issues. In the biggest ever delegation of US companies to any country ever, a number of US health equipment manufacturers felt that product licensing norms in India were less rigorous than world norms.

So health ministry officials, the Indian and the US private sector spent a morning debating how the Indian regulatory system could be made more rigorous in the interests of quality and intellectual property right protection.

Lavin said there were other more serious impediments: US companies were prohibited from owning entire businesses in the pension, insurance, telephony, cable and satellite and retailing sectors.

He agreed that Indian companies had a problem too: Indian banks had applied for licenses to operate in the US but were still waiting for clearance. But this, he attributed to scrutiny of an independent regulator. "The US has 120 foreign banks. 19 per cent of US bank assets are under foreign control. So it is not as if there are bars on foreign ownership," he said.

He added that there were federal and state-level controls on investments in the insurance sector in the US, but added that no Indian insurance company had applied to open branches in the US.

It was not that only the US had grouses. "The issue probably raised the most here is visas. But Ambassador Mulford has smoothened things out. The number of visas processed over the last one year has increased by 60 per cent. From 500,000 visas issued by the embassy last year, the number has gone up to 800,000."

Lavin said in the pharma sector, protection of intellectual property was another issue. The Indian pharma industry had evolved and become more sophisticated and better IPR protection was in Indian industry's own good. "You can't have people pirating my product and using another name," he said.

He said the US and India were paying for a history of neglect of commercial relations. This had caused a problem of mindsets on both sides, most evident over the fears and concerns about the Indo-US civil nuclear deal. But it was all changing.

"You can always tell at meetings when people are trying to obstruct; and when people are trying to find solutions. People are trying to find solutions here," he said.

Aditi Phadnis in New Delhi