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HYDERABAD, Dec. 8

MR Frank G. Wisner, former US Ambassador to India, who is heading the high-level trade delegation currently visiting India, said the US trade bodies were highly bullish on the Indian economy and were looking at stronger trade and business relationships with India.

Talking to newspersons here, Mr Wisner said the American investments in the Indian industry, which were not buoyant in the recent past, were expected to grow significantly during the next year with the US trade bodies expressing satisfaction over the progress in economic reforms being carried out by the Indian Government in various industry segments.

The trade delegation, which met top Government officials during the last couple of days with a multi-point agenda, was convinced that the Indian Government would continue trade reforms and bring down tariff levels further. According to Mr Wisner, lower customs duty would result in availability of products at cost-effective prices and lead to positive competition in India.

Underlining the importance of the reforms that were being carried out in the financial sector, Mr Wisner said the US-based financial industry players along with other foreign companies had already entered the Indian banking and insurance arena and were bullish on the growth of these segments. The US trade bodies were expecting the Indian Government to raise the cap on the foreign holdings in both Indian banking and insurance sectors, he said.

IRDA may hike foreign cap

Some members of the US trade delegation, who met the top brass of the Indian insurance regulator - the Insurance Regulatory and Development Authority (IRDA) - here on Saturday, were given to understand that the regulator was in favour of increasing the cap on foreign equity holding in Indian insurance joint ventures to 49 per cent from the existing level of 26 per cent. "We expect this to immediately result in more foreign direct investments flow into the Indian insurance sector," Mr Wisner said.

Stating that the existing tax system in India was quite complex and heavy, Mr Wisner said the Kelkar Committee recommendations were expected to address the issue and also enable broaden the taxpayer net in the country. He also hoped that the Government would protect the interest of foreign investors by extending the tax holidays for more years.

According to Mr Wisner, the most significant constraint currently being faced by the Indian industry was the absence of adequate infrastructure in the country. However, he appreciated the efforts of the Government in strengthening the infrastructure by taking up major road projects on high priority and continuing the reforms in the power sector through privatisation of State electricity boards.

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