India's economic reforms not enough: US official
Expressing concern over the investment and innovation environment in India, a top US trade official has said the recent set of economic reforms initiated by the country were not enough to return to the path of robust growth.business Updated: Jul 12, 2013 11:57 IST
Expressing concern over the investment and innovation environment in India, a top US trade official has said the recent set of economic reforms initiated by the country were not enough to return to the path of robust growth.
"Let me stress that as a friend of India and one of the caretakers of our economic relationship, I am concerned about the investment and innovation environment in India, not just from the perspective of our bilateral relationship, but from the perspective of India's own economic aspirations," US trade representative Mike Froman said on Thursday.
Welcoming the recent reforms initiated by the Indian government or being proposed, Froman said everyone knows they are necessary, but not sufficient to pull in the investment that India needs to return to the path of robust growth.
"After all, in a highly competitive investment environment, investors look for a consistent commitment to, not sporadic outbursts of, reforms.
"Most importantly, they look for the enduring confidence that comes from long-term, sustained, high levels of growth," Froman said, delivering the keynote address to the 38th annual Leadership Summit of the US India Business Council (USIBC), which among others was attended by finance minister P Chidambaram, and commerce and industry minister Anand Sharma.
"The challenges we face are well known to all of you," he said, adding that indeed it is the business community, which has been such an important proponent of deepening US-India ties.
The business community has in recent months become increasingly vocal about certain policies, he said.
"There has been great concern about localisation measures that are meant to stimulate domestic manufacturing and achieve other important domestic policy objectives, including preferences for solar developers who use domestically manufactured solar equipment," Froman said.
Similarly, in the area of intellectual property rights, there has been substantial concern raised about recent actions to impose special rules for the patenting of medicines that otherwise meet the internationally accepted criteria, he said.
Asserting that the US supports India's endeavour to take steps to create jobs, promote domestic manufacturing, mitigate threats to security, and support public health, Froman said: "But we hope to work with India to achieve these ends with policies that enable, rather than thwart, these vital objectives and that do so in a way that brings our economies closer together, rather than distorts trade and investment and discourages innovation".
Both countries, he said, want a vibrant manufacturing sector and the good jobs that come with it.
Rather than the import substitution policies that some have pursued in the past, building uncompetitive industries behind a wall of protectionism, India has the potential to be a key participant in globally competitive value chains, he noted.