Search the Internet          Tips  Sites: Finance, Investment

Communal violence hitting FDI into India: US envoy

The United States on Tuesday said Indo-Pak tensions, recent communal violence in Gujarat and 'uncertainty' over divestment policies were putting brakes on flow of foreign investments into India.

"There is no question that tensions between India and Pakistan and communal violence dampen investors' urge to come into the Indian market," US Ambassador to India Robert D Blackwill said at a FICCI meeting on 'US-India Economic Relations: The Missing Piece' in New Delhi.

Communal violence in Gujarat made Americans wary of even visiting India as tourists, he said.

"India is not an attractive destination. For investments to come long period of stability and long-period of no serious communal violence were essential)," he said.

Americans, he said, hesitate to invest in India because of the uncertainty over India's economic reforms. "The divestment debate in the last two months is only the latest example."

Potential US investors feel Indian taxes and tariffs were too high and there was much government interference over business decisions, Blackwill said.

"US pharmaceutical and biotech companies would expand their presence here if India had a modern legal framework to protect product patents," he said, while drawing parallels with China which had forged ahead of India on most economic measures and was an attractive destination for US investors.

ALSO READ:
More Money Headlines