India must reduce its tariff and non-tariff barriers and consider lifting restrictions on foreign direct investment (FDI) in several areas to help it secure funds to help fix its infrastructure, U.S. Commerce Secretary Gary Locke said here on Friday.
Addressing a media roundtable here, Mr. Locke said that allowing more FDI in sectors like infrastructure, banking and insurance and even the retail sector would greatly help these sectors get access to more funds and lower their costs. “Only 2 per cent of the roads are paved in India. It is estimated that India requires up to $1.2 trillion between now and 2030 to repair and upgrade its infrastructure which involves an eight-fold increase in per capita spending. That is clearly beyond the capability of India and that is where FDI will help.''
“Besides, higher investments coming in to build food storage facilities will help streamline the supply chain and also lower food prices,'' he said.
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Although India has made progress in opening its markets to U.S. companies, a lot more remains to be done in this direction.
“India has been demanding more help in a whole host of projects — to modernise its defence and security forces, where it is seeking proposals from all over the world, education as well as healthcare. However, it is difficult in a high tariff environment where the tariffs on things like medical devices are very high. If companies are to do more innovation here, there is also a need for stronger intellectual property rights (IPRs).''
Speaking on the hike in the U.S. visa fee, Mr. Locke insisted that it was a temporary measure which applied to only certain size of business. “It is mainly targeted at technology companies with more than half their workers on H1 visas. It is however, only temporary and will expire automatically by 2015.''
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