JOIN USIndia moots new economic pact with US
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After President Obama’s path-breaking visit to India, there is a need to elevate the two-way relationship by taking incremental steps towards arriving at a CECA between the two nations to cover investment, goods and the services trade,” Commerce Minister Anand Sharma said here on Tuesday.
“We have CECA with ASEAN and South Korea. We can have CECA with the US on similar lines,” he said addressing an interactive session on Indo US economic ties organised jointly by Ficci, US India Business Council (USIBC) and AMCHAM India.
The meeting was attended by US Commerce Secretary Gary Locke as well as CEOs of leading US firms. Reacting to Sharma’s proposal, Locke said “US has number of economic agreements with India. Currently we are working on a variety of different economic agreements with India… Everything will have to be done in stages.”
Earlier in his address, Locke significantly articulated the concern of US companies seeking to expand their operations in India and those wishing to do business with this country.
For instance, US firms feel India’s tariff regime is “complex and non-transparent”, that trade between the countries is being hampered by non-tariff barriers and that India’s FDI rules are “complicated and opaque”.
“These barriers to trade and investment will limit the long term potential for business cooperation between the two countries and inhibit the partnership in innovation that the two nations earnestly look forward to,” Locke said.
Innovation partnership
The US seeks “a level playing field” for its companies in India to give a push to innovation partnership in focus areas such as clean energy, medical equipment and products and the services sector, he said.
Referring to the US decision to lift export control on high technology to India Locke said it would benefit space commercialisation and the defence industry.
In response, Sharma said India was against protectionism of any kind. “Protectionism only deepens recession and retards growth. Even when we were facing slowdown we pursued with vigour to conclude Free Trade Agreement with several countries including Asean, South Korea and Japan,” he said.
“We sincerely believe in free trade and investment. We are simplifying and rationalizing our FDI policy and cutting down transaction costs,” Sharma told the visiting CEOs of the U S firms.
“Since 1996, India’s FDI policy has seen changes that have been incremental and progressive. We have brought the entire FDI policy in a single compendium and have a very small negative list of items. FDI is being allowed in most sectors under the automatic route,” he said.