India is worlds greatest market but US companies should not aim for overnight success here, says US ambassador to India David Mulford.
Both countries have identified three critical areas for public-private partnerships energy, infrastructure and agriculture. Among the hurdles of doing business in India are a complicated tax structure and bureaucratic delays, Mr Mulford said.
Two-way trade between India and the US totalled $26.8 billion in 2005 and is growing around 20% annually. The ambassador was addressing about 250 American businessmen from about 180 small and medium-sized US companies at the Indo-US business delegation, part of the largest ever business delegation to visit India.
Pushing for more liberalisation, Franklin Lavin, under secretary for international trade, US department of commerce, said India offers good opportunities but it should allow mutli-brand FDI in retail which will help consumers to access goods at lowest prices.
India should also eliminate foreign equity caps in the financial, banking and insurance sectors, so that US companies can compete in the pension sector. As of 2005, India received $45 billion in FDI with $8 billion coming from the US alone. However, Singapore received more than $186 billion with US contributing $48 billion to their FDI kitty.
Assuring the US delegates quick clearances from the government, Gopal Pillai, secretary, ministry of commerce and industry, said, We will make sure that US companies opening offices here dont have to deal with too many hassles. However, problems will exist because we are a developing economy, he added.
With the Indo-US nuclear deal in its final stage, there is a huge interest in investments in Indian nuclear power. An indication of that interest was the presence of at least 25 US nuclear firms, who were at the summit to explore business opportunities in India after the deal is clinched.
The American government and some nuclear companies from the US will meet on December 1 to decide on the nuclear trade between the two countries. Though we know that several hurdles have to be cleared including the reconciliation process, negotiations with Indians on sections 1,2,3 of the negotiations bill to seek exemption for India which needs amendments in the US Atomic Energy Act, and changes in NSG guidelines and India-specific IAEA safeguards, we think it is important to have dialogue and discussion with the Indian nuclear industry as well as officials of the Atomic Energy Commission to iron out the minute details to proceed faster once the deal comes through, Mr Lavin said. We will be discussing with Atomic Energy Commission chairman Anil Kakodkar and NPCIL officials and also meet the Indian special envoy Shyam Saran in New Delhi, he added.
US firm Thorium Power, which develops non-proliferating nuclear fuel, said it was in talks with the Indian government and energy firms to sell nuclear reactor technology. Confirming that the company was already in advanced negotiations with Indian partners, Dennis K Hays, vice-president Thorium Power, said, Once the legal frame is established we can sign deals.
The company focuses on technologies and services that will benefit from expanded nuclear power generation. Thorium Power designs nuclear fuels, obtains patent protection on these fuels, and co-ordinates fuel development with commercial entities and governments. The company has been working in Russia with Russian nuclear engineers and scientists for over a decade, Mr Hays said.
Ashwini Kumar, minister of state for industries, said that India is growing at 8% and will be able to sustain the growth momentum. The reforms will continue, he added.
TCS CEO S Ramadorai said there was a $320-billion infrastructure opportunity in India over the next five years. He said private equity investment in India had also seen significant growth.
Currently, software exports account for 20.4% of the countrys total exports, and the industry accounts for 4% of Indias GDP. Gartner has ranked TCS as the tenth largest systems integrator serving the American market.
Citigroup India CEO Sanjay Nayar, who spoke on American success stories in India, termed the Indian market as among the most diversified. He identified lack of infrastructure as the biggest roadblock to doing business here. India is a huge and growing market, he said, pointing out the increasing affluence and growth in the middle income segment of the population. Mr Nayar said there was a re-emergence of manufacturing as a growth engine, in addition to sectors such as IT and ITeS.