The US wants India to remove obstacles in the way of boosting two-way trade with reforms, more openness of economy, ease of doing business and by giving confidence to investors. US Ambassador Richard Verma Monday said Prime Minister Narendra Modi has made rationalisation of bureaucratic procedure a high priority on his list of reforms and that the US eagerly anticipates substantial progress in this direction.
Addressing students at the Indian School of Business (ISB) here Monday night, he said some of the challenges in improving bilateral trade could be addressed by a high standard bilateral investment treaty. “India continues to be perceived as a tough place to do business. It ranks 142 in the World Bank ranking measuring ease of doing business. Investor confidence is still shaky. Intellectual property enforcement is perceived as weak and many sectors still remain closed to outside investors and businesses,” he said.
The ambassador was speaking on “India and the United States: Building strong and sustainable economies for our people”. His observations are considered significant in the wake of US President Barack Obama’s recent visit to India during which the two countries set a target to take bilateral trade to $500 billion by 2020 from the current $100 billion.
Stating that the two-way trade tripled from $19 to $100 billion in 12 years and the defence sales have gone from zero to $10 billion in a decade, Verma said they have only scratched the surface. Referring to potential spoilers, he said an investment treaty could address some challenges.
“The US remains committed to negotiating a treaty with India. A high standard treaty will give assurance to those people and companies who want to create jobs and invest in India’s future and it could even lead to more comprehensive bilateral trade agreement between two countries,” he said.
The ambassador said a hotel CEO recently mentioned that it takes an average 80 permits to build a single hotel in India while it required only six permits in Singapore. “According to the World Bank, it takes an average nearly four years to resolve commercial disputes here, the third longest average in the world. Creditors wait even longer to recover funds from a company which has become insolvent,” he said.
“Indian courts face a backlog of 30 to 40 million cases nationwide. Companies simply cannot afford to invest in or provide financing for an economy where legal justice comes too late when it comes at all,” he added.
He said while it was for the Indian people to resolve questions of openness of the Indian economy and transparency of government decision-making, the experience shows that economic reforms, legal certainty, enforceability and transparency are hallmarks of successful economic systems with high investor confidence and potential for growth.
Verma said he believes the US and India have common interest in intellectual property. “If India wants best technologies, the newest products and innovations then it must be known for best intellectual property regime,” he said.
Stating that this was a transformative time for the US-India relationship, he said Obama’s visit was more than symbolic. The ambassador said the US was partnering with India in financial inclusion, skills training and clean energy development.
He quoted Obama that India’s rise economically was in the interest of regional and global stability and global economic growth. “If our two economies are growing together, we can be a powerful engine of prosperity across the globe,” he added. (IANS)