The United States has advised India to further liberalise its retail, banking, financial services and telecom sectors, strictly enforce protection of patents and data, and do away with the caps on foreign ownership to encourage foreign and internal investments to sustain the country’s spectacular economic growth.
Commerce and industry minister Kamal Nath said the Reserve Bank would consider the US demand for relaxation of branch opening norms for foreign banks in India.
"The RBI has a roadmap and the decision has to be taken after a consensus is reached," Nath told reporters after jointly addressing a FICCI meeting with US Commerce Secretary Carlos M Gutierrez in New Delhi on Tuesday.
Nath said India has also sought a liberal regime that would allow domestic banks to set up branches in the US. "We discussed ways to enhance trade and investment. There were specific issues that we talked about, including Indian banks opening more branches in the US," he added.
Addressing members of industry at the meeting organised by FICCI, Gutierrez said the "challenging regulatory" climate in New Delhi continues to hamper commercial opportunities. "While there are many success stories, there are also stories of failed partnerships and business ventures."
For India to continue its phenomenal growth, it must open all areas of its economy and encourage investment — both foreign and internal, he said.
Guiterrez noted that while progress has been made on intellectual property rights, "India continues to be a major global source of counterfeit medicines. Enforcement is the key. Without protecting patents and data, India will not attract the R&D and innovation necessary for strong growth in sectors such as pharmaceuticals."
The US official said India was alone in the challenges that it faces. "In the US we too are working to keep opening international markets, and ensure access to our markets and choices for our consumers," he said.
"In a growing international market, it is easy for some to suggest that protectionism would create jobs. It won’t. The only way to create and protect jobs is to promote private investment and trade, encourage innovation, expand job training and compete," Guiterrez said.
He added that a crucial area that India and the US were working on was the advancement of the Doha round of trade negotiations. India’s leadership, he said, would be crucial to achieve an agreement, which will expand international markets, help alleviate poverty and boost global development.