P Chidambaram meets US Treasury Secretary Jack Lew

PTI Washington | Updated on March 12, 2018

Finance Minister P Chidambaram exuded confidence that India would soon achieve its potential growth rate.

Finance Minister flags concern over H1B visa issue

Flagging concerns of Indian companies on the H-1B visa issue in the latest US Immigration Bill, Finance Minister P Chidambaram today told his American counterpart Jack Lew that temporary relocation of knowledge workers should not be confused with immigration.

“There are some provisions related to the H-1B and L1 visas, which require a higher visa application fee, if certain threshold is crossed in employing Indians on site. I did flag it in my meeting with Secretary Lew. Just made the point that temporary relocation of knowledge workers should not be confused with immigration,” Chidambaram told a select group of journalists here.

“I hope the point is taken,” he said in response to a question on his meeting with Lew.

During his meeting with Lew, Chidambaram said the two discussed a range of bilateral issues of mutual interests.

They also discussed the possible dates for the next India-US Economic Dialogue.

Chidambaram proposed that the next India-US Economic Dialogue be held in July along with the CEO Forum meeting in Washington on July 11 and 12. The US has not confirmed the dates yet.

“We generally exchanged views on matters of mutual interest,” he told reporters during a news conference.

India an attractive market for investors

Chidambaram is currently in Washington to attend the annual spring meeting of the International Monetary Fund and the World Bank. During his trip, he also held road shows in Toronto, Boston and New York to attract foreign investors to India.

“Message is that we are committed to key issues like fiscal consolidation, containing inflation, improving the supply side, project implementation, independent regulators for critical sectors. It is always useful to talk to foreign investors,” he said.

From the CEOs, he said, he heard, slowness of decision making, obstacles to implementing projects, some ambiguity in tax laws and some ambiguities in policies.

“I think everybody recognises that India is an attractive market. Everybody recognises that India is a market in which you can do business and make reasonable profit,” he said.

“There are some drawbacks in our system, which we need to fix,” he added.

The Finance Minister said the potential growth rate of the country is eight per cent. He exuded confidence that India would soon achieve its potential growth rate.

Meanwhile, speaking at the at the Peterson Institute, the Finance Minister, said that in the long run it is in the interest of India to negotiate a FTA with the US.

“In the long run, I believe, it is in the interest of India to negotiate a Free Trade Agreement (FTA) with the US,” Chidambaram said.

India reviewing its bilateral investment treaties

However, Chidambaram observed that for a rule based worldwide multilateral agreement under the auspicious of the World Trade Organisation (WTO), the fact that so many bilateral, and plurilateral agreements are being entered is an admission of failure that the rules of WTO do not apply to the whole world.

“But absent a WTO regime, I suppose countries would enter into free trade agreements. We have entered into free trade agreements with a number of countries. I see no reason why we should not enter to one with the US, although I am not familiar how much progress is being made,” he said.

Chidambaram said India is reviewing its bilateral investment treaties.

“We need to modify the (current) investment treaties in such a manner wherein the sovereign is not dragged into a commercial disputes and a court judgment does not become a subject matter of arbitration,” he noted.

“Until we get this right, we have decided not to get into any further bilateral investment treaties,” he said.

Noting that the US has completed its review of its bilateral investment protection treaties, he said America has offered to share with India its material and literature that they have been able to collect as part of the review.

“We will complete our review in the next few months,” he said, adding that, once India does that, it will proceed ahead with the process of signing more investment protection agreements.

Manufacturing should be done in India

Responding to concerns of the US industry, the Finance Minister said India, a country of more than 1.2 billion people, needs to have a good manufacturing base, the way China has built it.

“Therefore I do not think anything fundamentally wrong in saying that we must have manufacturing in India of those goods that are bought or consumed in India,” Chidambaram said.

“All I am saying is over a period of time to please manufacture in India. We are not a small market. We are 1.2 billion and a growing market,” he said.

“The main villain for inflation is the fiscal deficit.

“When we fix the fiscal deficit, the inflation will come down.

“The second cause of inflation is supply demand gap. And the third and the most important is removing the clogs in the distribution channels,” Chidambaram said.

“I am confident that inflation will come down. Decision making process in India could be quicker. I want the decision making process to be faster,” he added.

Chidambaram, while speaking at the Charlie Rose Show on PBS channel, said that India must position itself as a force for peace. He said that that India would like to work with Beijing to bring peace in the region and the world.

“India must position itself as a force for peace. We have no extra territorial ambitions. We have no imperial designs.

We must position ourselves as a force for peace and stability in the Asian region. I think we can do that,” Chidambaram said.

Published on April 20, 2013

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