The Hindu Business Line : Expert presses for lower trade barriers

India must reduce its trade barriers to become a global player. On one side India wants to become a location of choice for offshored software services, and on the other it is erecting high barriers against foreign firms accessing the local market, according to Dr Robert Atkinson, President, Information Technology and Innovation Foundation (ITIF), Washington DC.

ITIF is a non-profit and non-partisan public policy think-tank focussing on innovation, productivity, and digital economy issues.

"Indian government procurement market is not open to us. If you want to be a global player, it has to work both ways," he said at a session on "The New Economy: Implications for the developing world, including India," organised by the Confederation of Indian Industry.

"You want to do software services to US companies, but do not want to buy Dell or HP product. Around 80 per cent of the software in India and China is not genuine," he said, referring to the high level of piracy in both countries.

Indian weighted average tariff is 28 per cent compared to just 6 per cent in China. India has reduced tariffs significantly, but they are still high, he said.

Quoting an AT Kearney's Foreign Direct Investment Confidence Index, China and India (for the first time) are more attractive for FDI than the US, which is in third place, he said.

More H1B visas

Dr Atkinson advocated an increase in H1B visas by the US government. A number of companies violate US laws by paying wages below the market rates. Increasing H1B Visa is an enforcement issue and solves the violation problem.

India, China and Russia are today's Southeast US — an industrialised region due to its low-cost advantage. Dr Atkinson said that of 1,733 greenfield research and development (R&D) projects reported globally between 2002 and 2004, over half were from companies in developed countries establishing projects in developing nations, mostly in China and India.