U.S. Encourages India To Do More With Less
The U.S. wants India to remove obstacles that stand in the way of increasing two-way trade, boosting investor confidence and dispelling the perception that India is a tough place to do business.
Speaking recently at the Indian School of Business in Hyderabad, U.S. Ambassador Richard Verma said the Indian government has made “great strides” to reduce the complexity of bureaucratic procedure and that the U.S. “eagerly anticipates substantial progress” in other areas as well. According to Verma, who assumed his post last December, some of the challenges in improving bilateral trade could be addressed by a high standard bilateral investment treaty – the kind of bilateral pact discussed during President Barack Obama’s recent three-day visit to the Subcontinent.
A comprehensive trade agreement, Verma said, would go a long way to increasing trade between the two countries from the current $100 billion to $500 billion by 2020, a goal set by Obama in meetings with Indian Prime Minister Narendra Modi.
“The US remains committed to negotiating a treaty with India,” Verma said. “A high standard treaty will give assurance to those people and companies who want to create jobs and invest in India’s future and it could even lead to more comprehensive bilateral trade agreement between two countries.”
Despite the inroads seen under Modi’s government, India currently holds 142nd place in the World Bank’s “Ease of doing business” category with investor confidence still shaky as intellectual property enforcement is perceived as weak and many sectors still remain closed to foreign investors and businesses. During his presentation, the ambassador alluded to comments by the CEO of a major international hotel chain who said it takes an average of 80 permits to build a single hotel in India while the same project requires only six licenses and permits in Singapore.
“According to the World Bank, it takes an average of nearly four years to resolve commercial disputes here, the third longest average in the world. Creditors wait even longer to recover funds from a company which has become insolvent,” said Verma, alluding to the log-jam of 30 to 40 million business- and investment-related cases currently clogging the Indian legal system.
“[Foreign companies] simply cannot afford to invest in or provide financing for an economy where legal justice comes too late when it comes at all. If India wants best technologies, the newest products and innovations then it must be known for a workable and transparent intellectual property regime,” Verma said, adding: “If our two economies are growing together, we can be a powerful engine of prosperity across the globe.”