- Education And Career
- Companies & Markets
- Gadgets & Technology
- After Hours
- Banking & Finance
- Energy & Infra
- Case Study
- Web Exclusive
- Property Review
- Digital India
- Work Life Balance
- Test category by sumit
‘Open Sectors Have Created Massive Wealth’
Photo Credit :
Why is opening up retail being made out to be so critical by the US firms?
An honest appraisal indicates that the sectors that have been opened have created unprece-dented wealth, whereas sectors that remain closed continue to underperform. We are convinced that it is in India's own self interest to open the multi-brand retail sector.
As much as 40 per cent of India's agricultural harvest goes waste before reaching the market. Productivity and efficiency can be brought to this supply chain by improving the farm-to-fork infrastructure. But this will require massive investment. Such investment will only come via organised retail.
What would give the US investors the confidence to invest in India, particularly FDI, ideally in manufacturing?
The timely execution of Ford's manufacturing facility in Gujarat, with support from both the state and the Centre will send very positive signals to investors. Likewise, Corning's devel-opment of a major fibre optic manufacturing facility in Maharashtra is worthy of state and central support. Leadership provided by the central and state governments to resolve long-pending legacy issues such as the Union Carbide accident would prove helpful. Lastly, it is imperative to make certain that investors can travel in and out of India by readily obtaining multiple-entry visas.
To what extent has the 2G licence cancellation affected the US investors?
On one hand, the cancellation of the 122 second generation (2G) spectrum licences demonstrates that the Indian Supreme Court remains activist, vigilant, and independent. On the other hand, innocent bystanders find-ing themselves without a 2G licence have every reason to scream foul and demand contract sanctity. Wholesale cancellation of all the licences is akin to a nuclear attack when only a surgical strike was needed. Equally unsettling is India's lack of a follow through on 3G alloca-tion. There are bidders who have made their earnest money deposits, but allocation of spectrum is yet to happen. It sends all the wrong signals to foreign investors.
What exactly is the expectation in reviewing FDI caps in defence services?
Foreign Investment Promotion Board chair-men have been unanimous in their view that increasing FDI caps in defence is a sensible idea. This move will spur technology transfer and R&D in India and it will enlist powerful forces on both sides in moving the economies of the United States and India closer together.
US-India Business Council's (USIBC) demand for opening up real estate further pokes at the already precarious real estate bubble...
Urban infrastructure requires massive invest-ment. Such investment can be mobilised by creating debt markets and by allowing foreign investment in existing commercial and certain residential properties. If there were alternative outlets for investment other than real estate, such as a corporate bond market and municipal bond market, real estate prices would be modulated.
How is USIBC trying to address the Indian IT firms' concerns of victimisation?
USIBC in 2012 is forming the Coalition for Jobs and Growth (CJG). USIBC's CJG will showcase the benefits of our open borders, featuring Indian investments in the United States that are creating jobs. In addition, USIBC's CJG will launch a professionally executed study performed by The Peterson Institute that supports our moving forward on clinching an economic cooperation arrang-ement between the United States and India.
How will Software Technology Parks of India programme's continuation help US firms?
To sustain continuing investment flows to its important software industry, India should grandfather tax incentives offered for those software parks earlier identified, and offer fresh incentives to attract new tranches of capital into this vital growth sector.
China has taken a big lead over the US firms in the power sector in India. What are the US firms doing to get back into the reckoning?
India needs at least 350,000 MW of new gen-eration over the next five years. So far, China has sold approximately 10,000 MW of equip-ment. Does India want to be beholden to the Chinese for energy security? Or would it prefer to form collaborations with companies from the United States to take on this energy challe-nge and make this into a great opportunity?
Are companies keen on investing in the insurance sector?
The initial opening of India's insurance market in 1999 led to an explosion of growth in the private sector and an infusion of several billion dollars in investment from foreign companies. Lifting the FDI cap further to 49 per cent will trigger a similar result, while sending positive signals to investors that India is "open for business".
Why is the USIBC opposing mandatory subsidiarisation for foreign banks?
Just imagine the waste of resources and inefficiencies generated by making each and every unit of a business perform like it is an entirely separate company. That's what subsidiarisation does. The cost to the consum-er will be enormous. There are many other more efficient ways to mitigate risk. USIBC strongly urges the Government of India to rethink its demand for subsidiarisation.
|Illustration: Champak Bhattacharjee|
What is the concern around transfer pricing between the US and Indian firms?
The concern is two-fold: Transfer pricing is ad hoc and unpredictable, and, once there is a dispute, resolution is glacial. This is bad for business, period. This festering uncertainty drives companies to other markets.
What is USIBC's concern on the National Payments system?
Erecting a domestic National Payments System that excludes international expertise is retrograde and antithetical to the entire notion of economic liberalisation. It sends a very discouraging signal: that India is not really open to foreign direct investment.
(This story was published in Businessworld Issue Dated 12-03-2012)