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US wants India to lower trade barriers

February 11, 2011 11:28 IST
India could lead the global economy in the 21st century if it takes further steps on economic reforms and opens up more sectors to foreign players, the US said on Friday.

"If India continues its walk down the path of reform, if it continues to become more open to the investments and the innovations of foreign companies... it will stand a much better chance... to lead the global economy in the 21st century," said US Commerce Secretary Gary Locke in Mumbai.

He also raised the issues of reciprocity in trade between the two countries and a need to remove cross-border barriers, saying that India continued to be ranked low on ease of doing business because of such hindrances.

Locke pointed to high duties like 19 per cent levies on civil aviation aircraft and 50 per cent on apples, besides raising issues like limits on foreign direct investment in key sectors and inadequate protection of intellectual property.

"These measures explain why India is still ranked only 134 out of 183 countries on the World Bank's Ease of Doing Business Report," he said, addressing business leaders at a conference organised by industry body FICCI.

Locke, who was in India on a four-day visit, met Indian CEOs, including Reliance Industries Chairman Mukesh Ambani, who were part of the US-India CEO Forum.

They discussed a wide range of issues, including clean energy, standards and education.

Locke said: "We have made important progress this week, not just to lay the groundwork for more sales of US goods in India, but to take another real step towards strengthening the bonds between the governments, the businesses and the people of India and the US."

Locke was here on a high-technology trade mission, which he had announced during President Obama's trip last November.

He was accompanied by 24 companies, promoting technologies and services related to civil nuclear energy, civil aviation, defence, homeland security and communications.

In the first 11 months of 2010, US merchandise exports to
India totalled $17.6 billion, up 17 per cent from the same period last year. The bilateral trade was $36.5 billion in 2009-10.

Locke said the US is seeking a level-playing field and "merely" asking for the same treatment foreign companies and investors receive in America, and added that his country has benefited by having an open trade policy.

"The simple fact is that the United States would not be the innovative, dynamic country it is today without being so open to the ideas, the innovations, and, indeed, the capital of foreigners," he said.

Locke said the full potential of Indo-US ties will be realised only when India addresses these concerns, and added that standard of living here will improve if trade barriers are lifted.

India's barriers can only protect "some domestic industries in the short-term...there is much work left to be done", he added.

Even in the US, concerns were raised that "foreign investors would try to control America's destiny", but these fears have proved to be "unfounded", as the historical evidence suggests, Locke said.

America has delivered on the promises made during the Presidential visit to India, and the final nine companies were removed from the "entity list" over the last fortnight, he added.

Locke said these include subordinate entities of the Indian Space Research Organisation and the Defence Research and Development Organisation, which were barred as part of sanctions following India's 1998 nuclear tests.

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