Bilateral trade between India and the US has held steady over the past two years despite a sluggish global economy. On the sidelines of the recent visit by US Secretary of State John Kerry, BusinessLine spoke to Ziad Haider, US Special Representative (Commercial and Business Affairs) to discuss the trade opportunities and challenges.

How do you see the business environment for US companies in India?

I think the Modi government has made a lot of progress. For instance, liberalisation of FDI cap, particularly in defence and insurance sectors, was critical. Getting the GST Bill passed is significant. GST is like India signing a free trade agreement with itself. The scale and structure of India has moved to become a single market. Easier movement of goods and services within India is not only important for its own economy but also for companies that want to invest and do business here.

The passage of the bankruptcy law is also important. Setting up of commercial courts and general emphasis is on. As Mr Modi says, minimise government and maximise governance. But there are still issues that companies run into. There are questions on speed in getting clearances, regulatory process and issues on IP protection side. The new National IPR Policy is a very positive step but the enforcement is going to be a question. American companies are very bullish on India’s growth rate.

We hope some of the reforms will continue to help. Some of the companies from our end — like Aecom, a major infrastructure player — are seeing big opportunity.

How can India handle commercial disputes more efficiently?

A positive step is the setting up of commercial courts. As a lawyer who has worked with a commercial dispute settlement court, I feel it is important to strengthen the arbitration side so that you do not have to go to the local court always. It is because the time taken in Indian courts to settle a dispute is very long. So arbitration is an important alternative route.

As part of this we have been discussing with the Government of India a bilateral investment treaty (BIT). The (US) President and (Indian) Prime Minister had discussed the treaty in June and that conversation continues at a technical level.

This is going to very important not just for US companies in India but increasingly for Indian companies in the US. Mahindra is a company that designs in Silicon Valley and manufactures in Michigan, and TCS has a huge presence in the US.

So we think putting in this protection for investors and alternative dispute mechanism beyond going to court where the processes can be very slow is important.

Is the slow process of dispute redressal frustrating US companies?

I think the opportunity is so big and the market so significant that this alone will not divert companies. However, there are some companies that will think very carefully — if it where to run into a problem then what the recourse is. So I think if the Modi government has to attract investment and support initiatives like Make in India, this is something which fits in ideally within that.

Which are the sectors that can attract US investments?

Infrastructure has got to be top of the list. Given the speed of growth in India and speed of urbanisation, two-thirds of India of 2030 is yet to be built. There is so much work to be done. We have identified a number of cities like Vizag, Allahabad and Ajmer. Defence is another area where there is a lot of scope for partnership. Healthcare is another area which can attract good investment.

What are the major challenges CEOs face while investing in India?

It is a broad category. The regulatory issue tops the list. It includes every thing from getting clearance processes and licences. Basically, it involves everything that it takes to get business moving and goods and services to flow into that. The challenges come up in different forms. Some of the issues we were discussing in the entertainment industry are the amount of clearances required to open up a cinema. I was really amazed by the number of cinemas in India versus capacity needed. There are only 9,000 cinemas. The process of getting the capacity to meet the demand is drawn out. I think the Modi government is trying to bring this together for a single window process.

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