We're sovereign and progressive: Sharma to Barack Obama

“Our foreign direct investment (FDI) policy is investor-friendly and, anyway, these are a country’s sovereign right to decide,” was Commerce and Industry Minister Anand Sharma’s response to US President Barack Obama's urging on India's investment climate.

Obama had said the Indian economy wasn’t open enough and reforms in this regard need another push.

Planning Commission Deputy Chairman Montek Singh Ahluwalia, however, said he shared investors' concerns as expressed by Obama. "I think many countries have been expressing concerns on the investment climate...We need to strengthen it (the climate)," he said.

Sharma said,"He (Obama) has every right to convey what his perceptions are but policy-making is a sovereign decision.”

Obama, in an interview to PTI in Washington, noted it was still too hard to invest in India. "In too many sectors, such as retail, India limits or prohibits foreign investment...which is necessary for India to continue to grow," he stated.

Agreeing there had been some problems and delays in approvals, Sharma said there were "Constraints of coalition, which I confess but at the same time we have taken decisions".The government, he said, was putting in place measures for faster approvals and improving the ease of doing business.

Added Sharma, who’s been raising concerns over protectionist measures in the US: "We would rather urge the US to demonstrate leadership in bringing down barriers, encouraging capital flows and trade in the world. The US should take forward the stalled Doha Development Round of the World Trade Organisation to a meaningful conclusion.”

On Obama's concern over India not allowing FDI in multi-brand retail, Sharma said the process of consensus building is underway. In general, he said, “We will ensure that investors' concerns are addressed...we have taken note of his (Obama) observations. There is always a difference between perception and reality."

Sharma said that an Unctad report has ranked India as the third most important destination for FDI. He also noted Obama had paid rich tributes to India and its people.

Ahluwalia said the reform agenda was a continuous process, with India still a low income country. "We should view reform not as a strict partition between a first round and a second round. Reform is the agenda of economic policy of the next five years. That agenda does require a lot of new policy initiatives," he added.

Specifically, on the allegation that India had infringed patent norms norms by issuing a compulsory licence for production here of a generic anti-cancer medicine, Sharma said the country's intellectual property regime was in conformity with all international protocols and treaties. "We are fully compliant when it comes to TRIPS (Trade Related Aspects of Intellectual Property Rights). India has never been in violation," he said. Issuance of such a licence was a flexibility primarily meant for developing countries to ensure the availability of life-saving drugs at affordable prices.

“It’s an Indian generic, a replacement, and they will be giving a royalty as per the law to the original patent holder. It has gone through a process of adjudication; it’s not a arbitrary decision which has been taken," he said.

He said it had brought down the price of a month’s treatment from Rs 2.8 lakh to less than Rs 9,000. "How can this be questioned?” he asked, adding the US had recently placed an order for the manufacture of an anti-cancer drug on an Indian pharmaceutical company..”So, I fail to see any logic in what is being said. Maybe they should clearly look at the agreements, and the compulsory licensing policy, put in place through international negotiations," he added.