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Foreign investors still reluctant to come to India, says US envoy

United States' Ambassador to India Richard Celeste said today that foreign money is still reluctant to come into India.

Doubts among foreign investors eager to invest in the country exist and the government must clarify crucial policy issues speedily, he said.

Every sector of the Indian economy has an underlying capacity to grow and the Gross Domestic Product could exceed eight to nine per cent in coming years, he added.

''After the general elections, this is a very promising and challenging moment. The government must display fiscal restraint and show real privatisation of public sector units if the second generation of economic reforms have to be implemented.''

Celeste made these points while addressing a seminar on ''Indo-US Economic Partnership'' organised in New Delhi by the Confederation of Indian Industry.

Economic reforms are the essence of change required to improve the living standards of people, Celeste said. Business leadership must support the government in taking tough decisions.

Celeste said the United States and India must narrow the intellectual bridge that separates the two countries. Also, there is enormous scope to increase investments and technology transfers in the energy and environment sectors.

On the forthcoming World Trade Organisation ministerial round of talks to be held in Seattle in November-December, Celeste said there is a lot of commonality between the US and India. Agriculture and electronic commerce are two such issues where both countries share the same ground.

The US Ambassador said the growing number of Indian companies waiting to be listed at Nasdaq Stock Market shows that they are willing to be tested against the toughest standards in the world.

He said the ultimate test of Indo-US Economic Partnership will be reflected in the villages and towns of India as much at the Wall Street and cyberspaces.

Earlier, Power Minister P R Kumaramangalam said insurance and financial services are the two areas where maximum Indo-US cooperation is possible. He said knowledge-based industries will drive the economies in the new millennium and India has the right capabilities.

''We have now emerged as a mature and politically conscious industrial power. India has the largest English-speaking trained manpower resource in the world.''

Each arena in the Indo-US trade relations must be looked into specifically as good business relationships are a must for good bilateral relations, Kumaramangalam said.

The minister said the Insurance Regulatory Authority Bill will become law by the budget session as the winter session is less than three weeks away.

Speaking on the occassion, secretary at the Department of Telecommunications, Anil Kumar, said the information technology enabled services are poised to grow in a big way. He hoped fresh foreign investments will pour in the telecom sector as more cellular, basic and domestic long distance services are opened up for private sector.

IRA chairman N Rangachary said the insurance sector will see some possible action in the new financial year 2000-2001. He said the IRA will ensure that the insurance market in India grows on scientific lines.

''We will function in a transparent way and make sure that all existing and future players get a level playing field to operate. Our interference will be only when consumer interests are not being safeguarded.''

Richard Boyd Montgomery, executive vice-president of the $ 6 billion Unocal Corporation, said the Indian government must ensure that information on the energy sector is widely distributed among foreign investors so that they make informed judgements.

Frank Wisner, former US Ambassador to India and now vice-chairman, the American International Group, said foreign direct investment into India will not be dictated by political judgement in future but by business logic.

He said the insurance sector can be a tremendous instrument for raising long-term capital which can be raised for improving infrastructure in the country. Wisner said reforms in the financial and services sectors should rank as top priority in the next stage of economic reforms.

Wisner also called for clear and compelling signals to foreign investors by way of setting up strong regulatory frameworks.

UNI

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