US makes strong pitch for opening up retail

Mumbai, Nov 29 | Updated: Nov 30 2006, 06:59am hrs
Amid the US bashing by Left parties and their strong opposition to the Bharati-Wal Mart tie up, the US under secretary of commerce Franklin L Lavin on Wednesday called upon India to open up its retail sector to foreign multi-brand retailers and eliminateforeign equity caps in the financial services, banking and insurance. He advocated that India should reduce its tariffs which are still high.

Lavin said the creation and enforcement of laws that protect the rights of patent and copyright holders would encourage Indian entrepreneurs and creativity by protecting innovations and brands.

Lifting ownership caps and opening the Indian economy to international participation will bring greater efficiencies and help Indian consumers, said Lavin in his address here in the opening session of Indo-US business summit jointly organised by the Centre, US department of commerce, CII and Ficci.

Lavin called upon India to allow more US investment in broadcasting and telecoms, creation and enforcement of clear, consistent and transparent laws and regulations, elimination of non- tariff barriers to trade in areas such as medical devices and ensure common sense postal reform to allow continued competition from express delivery companies like UPS and FedEx.

On the other hand, US ambassador David C Mulford aksed the US businessmen that challenges of doing business in India, which comprises complicated tax administration laws to labyrinthine bureaucratic processes, can be overcome through long-term commitment and the patience and persistence, the vision and a strategy to succeed.

He, however, did not forget to the tell the visiting US industry-business delegation that India was one of the worlds great markets which offer great opportunities.

Lavin argued that opening of retail sector for foreign multi brand retailers would allow Indian consumers access to the brest products at the lowest prices and would improve supply chain efficiencies. Regardless of newspaper stories today about cracks in the dam on retail access, the fact is that barriers remain, he said. The US under secretary made a strong pitch for the elimination of equity caps in the financial services, banking and insurance sectors and allowing US companies to compete in the pensions sector. This, he added, would let US investment flow where it is needed.

Lavin drew a parallel between India and Singapore and said that due to cap on foreign equity caps, India had received $45 billion in foreign direct investment (FDI) from the US compared with Singapores $186 billion.