The Hindu Business Line : `US companies look for investment security'

Good governance (such as honouring of contracts, laying out clear rules of the game and so on), ensuring security of investment and the ease with which a new business can be set up are the three critical factors which have to be addressed upfront to attract fresh US investments into India.

Describing the US as India's largest trade and investment partner, Mr John Fennerty, Deputy Economic Counsellor, US Embassy, New Delhi, said here on Thursday that there was now unprecedented US companies' interest in India, both from MNCs and SMEs, and the State governments should aggressively court these companies.

It may be mentioned here that one of the largest-ever business delegations from the US (comprising nearly 200 companies) is expected to visit India by end December-early January 2007. The American Chamber of Commerce is also holding a two-day SMEs Conference in New Delhi on January 24-25.

Pointing out that huge potential existed for investment in areas such as infrastructure development, retail and agro-processing, he said given the bad experience of US companies in energy sector projects in India, (Dabhol Cogentrix etc), governance was easily the most important factor.

Parallel with China

Drawing a parallel with China, whose economic model he said was vastly different from that of India, especially the banking system, Mr Fennerty said the Indian economy had a huge corporate base with global names, unlike the Chinese companies. He felt India, in terms of attracting FDI, was today in a much stronger position than what China was 25 years ago.

Seeking speedier second-generation economic reforms, he said financial sector reforms, especially a "sophisticated debt market", was a must for smoother cross border investments flow into India.

Asked if the recent nuclear test by North Korea, which has sparked adverse reaction among the developed nations, was likely to have a negative impact on Indo-US economic ties, Mr Fennerty replied in the negative. "I do not expect this to have any effect on India-USA economic relations."

More Stories on : Foreign Direct Investment | Other States | Foreign Trade

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page