Mumbai, Nov 25: A lack of respect for the sanctity of contracts and the tardy pace of economic reforms in India are the two main obstacles in advancing Indo-U.S. investment ties, says the chief of the leading business forum between the countries. Dean O'Hare, the chairman of the U.S.-India Busines Council (USIBC), said he wanted the Indian government to do "basically two things: continue with reforms, and honour the sanctity of contracts.""We have a lot of concern. If an agreement is reached, it should not be changed," O'Hare, the chief executive officer of Chubb Corp., told India Abroad News Service in an interview after last week's U.S. Investment Summit here.
He said the Indian government had been talking about a "second generation reforms," including key financial sector changes, for some time now. "What is important is the (Atal Behari) Vajpayee government must not just talk of reforms, but go ahead and follow them through."
O'Hare led a 70-member U.S. business delegation to the US InvestmentSummit designed to prepare the ground for the economic component of President Bill Clinton's visit to India expected to take place early next year. He warned that India's stand on foreign investment was self- defeating. "As India seeks to leverage its resources by accessing global capital markets, accelerating knowledge transfer, and growing its industries to world scale, there is tremendous need for the kind of assets that will only be available to India through a more liberal trade and investment regime," O'Hare said.
He was particularly keen that India allow at least 49 per cent foreign investment in the insurance sector, as against the 26 per cent cap proposed by the insurance bill slated for introduction in the winter session of Parliament. "Frankly I see no difference between 26% and 49%. In both, the control will be Indian. The problem will come when the foreign partner would want to invest, but the Indian side may not have that 74 %," O'Hare said.
"If we could choose, that's what we will choose,"O'Hare said, adding, he was nevertheless glad that the sector was at least being opened to private and foreign participation. India and the United States are advancing their ties while trying to resolve differences over the nuclear issue after New Delhi conducted a series of nuclear tests in May 1998.
"I would say the nuclear issue is still important for us, since a nuclear-free world is in everyone's interest," said O'Hare. "But, at this point, what we have been telling our government is that the Indian government is mature and cooperative, and let's view the entire issue in terms of the synergies which we can achieve," he added.
Asked what the synergies were, the business leader said the U.S. was the partner that can "do the most for India."
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