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Updated: June 14, 2012 16:33 IST

India’s policy decisions dampen investment climate: U.S.

PTI
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Nancy J. Powell, US Ambassador to India, at a meeting organised by the Indo-American Chamber of Commerce, in Chennai on Monday. Photo: R. Ragu
The Hindu Nancy J. Powell, US Ambassador to India, at a meeting organised by the Indo-American Chamber of Commerce, in Chennai on Monday. Photo: R. Ragu

The United States on Monday said several recent policy decisions by India were discriminatory to foreign companies and have “dampened sentiment” about its investment climate.

“The adoption of manufacturing policies discriminatory to foreign companies and the inclusion of retroactive tax provisions in the Finance Bill are two examples,” U.S. Ambassador to India Nancy J. Powell said.

Voicing concern over challenges to trade and investment between the two nations, she called for a level playing field for US companies doing business with India.

Ms. Powell said she was committed to ensuring that U.S. companies can compete on a level playing field in India and operate in the same open and fair environment that Indian firms enjoy in the U.S.

She was addressing the Indo American Chamber of Commerce (IACC) and American Chamber of Commerce (AMCHAM) members here.

Ms. Powell said she had met US and Indian businessmen in Washington before her arrival and they voiced concerns over high tariff and non-tariff barriers, restrictions on foreign investment, lack of transparency and defence offset requirements.

Recently, U.S. Treasury Secretary Timothy Geithner met Finance Minister Pranab Mukherjee encouraging him to reassure foreign investors that India would continue to welcome foreign capital by “advancing important economic reforms,” she said.

Ms. Powell added that India and the US were “poised to sign an additional eight billion USD in Direct Commercial and Foreign Military Sales”, through which India would assume a larger leadership role in the region and effectively respond to security concerns and humanitarian relief operations.

Noting U.S.-India partnership in the defence sector has experienced one of the highest growth rates in the region, she said, “With the C-17, C-130J sale, we have more than doubled our total Foreign Military Sales and posted sales making India the third largest FMS market for 2011.”

Sanyan, Could you point to a specific instance of retroactive change of rules in US and UK regarding tax or any other policy? A Wikipedia or NYT link will do.

Regarding Indian children needing nutrition: Blame our own government that subsidizes fertilizers, water, electricity inputs to farming, and then lets the grain rot in the open. No need to blame the Americans.
Policies that are manifestly in our own interest need to be forced down our collective throats by the IMF and world bank. This is how it happened in 1991 and will likely happen now.We are so stupid and feckless that we need the alibi of IMF to do what is necessary.
And we are so dishonest as to not admit that we were wrong, and repeat the same mistakes again and again.

from:  Yogesh P
Posted on: May 22, 2012 at 17:11 IST

This is is a counter reaction for Indian Govt moving to the WTO against US Visa fees hike.

from:  M.Sharma
Posted on: May 22, 2012 at 07:51 IST

Retroactive tax provision has been enacted by both US and UK. It's okay when they implement it, but becomes discriminatory when others do it. This is the classic example of US/Western double standards. It'll be in US's interest not to try meddle in India's policy decisions. They will face more hostility if the public mood swings against them. India seeks investment, but that doesn't mean countries like UK, US, Norway dictate us terms. They are welcome to explore other opportunities if they find India unsuitable.

from:  Sayan
Posted on: May 21, 2012 at 23:39 IST

I completely agree with Sachin that when Sukhois and Dassaults ( with Eurofighter lurking in the background) are already feeding nutrious food to the people living on US$0.50 per day ( soon to become
US$0.005 per day ), it is ridiculous on the part of the sole surviving SuperPower( and Imperialist to boot!) to even think about entering the Indian market. As Vinay said it beautifully-- it is the intersection of Policy and Public Sentiment. Maybe PM the FM ( along with MM the PM) should retroactively tax all those migrated to USA from January 26th 1950!

from:  SriniBalan
Posted on: May 21, 2012 at 20:35 IST

The leaders of the country should be proactive and make sure that the economic growth of the country is on right track to meet the demands/aspirations of the people and the country. Polices should be framed so as to give a level playing field for both domestic as well as foriegn companies. But at the same time, interests of the domestic small and medium companies should not be forgotten.

from:  Umesh
Posted on: May 21, 2012 at 20:27 IST

This goverment believes in populism. It didn't learn its lesson in UP.

@Vinay Moorthy

People's mood is sour because inflation is double digit, corruption is
happening in billions and economy is slowing down. Lets not blame the
people for the inefficiency of this govt.

from:  Roperia
Posted on: May 21, 2012 at 20:06 IST

The policy and the public sentiment are both contributing.

from:  Vinay Moorthy
Posted on: May 21, 2012 at 18:30 IST

Indian children need nutrition not military equipment.

from:  sachin
Posted on: May 21, 2012 at 18:18 IST
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