India’s growth needs more opening, foreign funding: Powell

Kolkata, May 21 (IANS) US Ambassador Nancy Powell Tuesday called for greater economic opening and more foreign investments for India’s higher economic growth, saying “there is more yet to do” in the area of reforms to return to 10 percent growth.

Washington’s first woman ambassador to India contended that it was high tariff and non-tariff barriers that were preventing American companies, among others, from “competing” in the country.

“Currently, tariff and non-tariff barriers are too high, preventing India from obtaining the latest and best technology and the most advanced equipment it needs to meet its objectives,” Powell said.

“India loses because American companies do not get a chance to compete, because India does not receive the much-needed capital to grow, and because the best products, technology and prices that the world has to offer remain out of reach,” the envoy said at an event organised by the Bengal Chamber of Commerce and Industry here.

She pitched for more economic reforms, particularly in the foreign investment rules, to push up the country’s GDP growth.

“The road to higher growth will require more economic opening and more foreign investment. Since GDP growth is not an end in its own right, since the ultimate goal is to raise standards of living and to eradicate poverty, opening the economy and bringing in more foreign investments take on a new urgency,” Powell said.

According to her, the growth that had happened in India over the last two decades was enhanced by foreign investment.

“I applaud the efforts of the government to stay true to its commitment to continue with economic reform, particularly in the foreign investment rules. But there is more yet to do. In order for India to return to near 10 percent growth and to lift another generation out of poverty, more is needed,” she said.

While Asian Development Bank (ADB) sees the Indian economy growing at six percent in this financial year, the Reserve Bank of India’s latest growth projection is 5.7 percent for this fiscal.

The diplomat, however, said the US and India shared similar goals to encourage domestic manufacturing and industry.

“I firmly believe that the most effective way to grow India’s manufacturing sector in both the short term and the long run is to make investment in India more attractive, both for domestic and foreign firms alike,” she said.

Describing Indo-US relationship as “vibrant”, Powell said: “The importance of building the economic relationship between the US and India in the immediate future cannot be understated, and I believe we are growing from strength to strength.”

She said since 2000, total bilateral trade between the two countries had increased five-fold to $93 billion in 2012. “I am very enthusiastic about the ever increasing business ties between American and Indian companies and encourage them to foster greater cooperation in sectors ranging from agribusiness to education and energy,” Powell said.

The US ambassador to India, who was on a two-day visit to Kolkata, Monday met West Bengal Chief Minister Mamata Banerjee, who had vehemently opposed the entry of FDI in retail on grounds it would be disastrous for the country’s farmers and small traders.

Interestingly, while speaking at the event at the Bengal Chamber, Powell said it was the infusion of American capital into the economy that led to rise in income of thousands of potato farmers in Bengal.

“I think it is past time to put to rest those outdated notions that India suffers from economic openness or that India suffers from foreign investment,” she averred.

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