Deep questions surrounding the quality of the investment climate in India and the access that foreign players have to domestic markets appeared to dampen some of the high-level economic talks under way between senior officials of the Indian and United States governments here.
Following a meeting between India's Commerce and Industry Minister Anand Sharma and his U.S. counterpart, Trade Representative Ron Kirk, Mr. Kirk said that while booming bilateral trade and investment flows supported ‘tens of thousands' of critical jobs in both countries, “to continue and grow our successes both India and the U.S. must take concrete steps to resolve long-standing market access and investment concerns.”
There also appeared to be a push on both sides of the negotiating table to get a stagnating Bilateral Investment Treaty (BIS) kick-started, with calls on the U.S. side to “re-invigorate those negotiations by holding such discussions as soon as possible, ideally before the next meeting of the U.S.-India Trade Policy Forum.”
Bilateral trade
While bilateral trade had grown to above $85 billion if both services and merchandise trade were counted, Mr. Sharma said, the discussions with Mr. Kirk also focussed on making the Trade Policy Forum (TPF) “more focussed and effective in taking forward some of the initiatives connected with the identified priority sectors.”
These remarks notwithstanding, Mr. Sharma described the talks on trade and investment in positive terms in a briefing with media here, arguing that there was a “visible interest and enthusiasm on the part of corporate leaders of both the U.S. and India to engage more.”
He noted that the reason that he and Mr. Kirk had spoken of ‘fast-tracking' the BIT discussions was that there were numerous technical aspects to such a treaty and also the U.S. had to first complete its global review of all BITs more generally.
Yet there appeared to be steady progress in resolving some other key outstanding issues. Mr. Sharma took a firm stance, for example, on the issue of reduced visa issuances to Indian IT company workers, arguing that the ostensibly protectionist moves by U.S. immigration authorities were in many cases “initiatives by individual Congressmen but we have taken it up with them.”
The Minister added “Our position, which is unchanged, on that is that we feel there should not be any discriminatory steps which adversely affect operations by services sector companies, especially the IT sector, or the movement of professionals. They are also making a notable contribution to make the U.S. industries globally competitive.”
Similarly there was new cause for optimism on India's prospects for economic growth. In a presentation made to the U.S. government all the economists and analysts who were present were said to have been “unanimous in their view that the Indian economy would become the fastest growing economy in the world in the next few years,” according to officials here.
