Negotiations on the Bilateral Investment Treaty between India and the US have made “active” progress. A new round of talks will be kicked off soon, said Ms Nancy Powell, US Ambassador to India.
The treaty, aimed at fostering investment opportunities, would “enhance transparency and predictability for investors, and support economic growth and job creation in both countries,” said Ms Powell, on her first visit to Chennai after taking over as Ambassador in April. The US and India have been engaged in technical discussions on the treaty for several months now. “Washington's recent announcement of a new Bilateral Investment Treaty model has contributed to the active advancement of negotiations between India and the US.”
Tariff barriers
In her address to the business community in Chennai, organised by the Indo-American Chamber of Commerce, the Ambassador said that the US is committed to working with the Indian government and the private sector in resolving the challenges to trade and investment. The challenges include high tariff and non-tariff barriers, restrictions on foreign investment, defence offset requirements and policy decisions.
Ms Powell said that the adoption of manufacturing policies discriminatory to foreign companies and the inclusion of retroactive tax provisions in India's Finance Bill are policy decisions that could dampen sentiment about India's investment climate. She also called for the need to reduce barriers to foreign investment.
Bilateral trade
Ms Powell said her primary purpose is to ensure bilateral business ties get a big boost. In 1995, the value of US goods exports to India was just above $3 billion. Last year, it topped $21 billion and this year it is expected to reach $100 billion. In 1995, when Ms Powell left India as Minister-Counselor for Political Affairs in Delhi, the US FDI into India was negligible. Now it is near $30 billion. Indian FDI in the US tops $3 billion.
While software, automobile and healthcare are thriving in India, the emerging opportunities are in the areas of nano-technology, biotechnology and homeland security, said Ms Powell.