India suffers from outdated notions: Nancy Powell

US ambassador to India, Powell pitches hard for further relaxation in FDI norms in India

Pitching hard for further relaxation in foreign direct investment (FDI) norms in India, US ambassador to India Nancy Powell said India still suffered from outdated notions and it was past time to put to rest those notions. Powell, yesterday, had met West Bengal chief minister Mamata Banerjee, the latter is seen as one of the big barriers in easing FDI norms in the various sectors in the country.

Addressing a business gathering here on Tuesday, Powell said, “I think, it is past time to put to rest those outdated notions that India suffers from economic openness or that India suffers from foreign investment. Even the strongest held ideology withers in the face of plain facts: the growth that has happened in India over the last two decades was made possible by economic openness.”

She pointed out that if India is to grow again, support for the policies that are necessary for that growth need to be cultivated.

“Currently, tariff and non tariff barriers are too high, preventing India from obtaining the latest and best technology and the most advanced equipment it needs to meet the objectives. India loses because American companies do not get a chance to compete, because India does not receive the much needed capital to grow, and because the best products, technology and prices that the world has to offer remain out of reach,” added Powell.

The government has raised the FDI limit in multi brand retail and aviation sector to 51 per cent and 49 per cent respectively, and has been trying to do the same in the insurance and defence sectors. During a recent foreign visit in April, finance minister P Chidambaram, too, has expressed centre's keenness to raise FDI caps.

However, when part of the alliance with the Congress, Mamata Banerjee-led Trinamool Congress had been one of the leading forces acting against further relaxation in FDI norms. Since 2000, total bilateral trade between India and US has increased nearly five folds to $ 93 billion in 2012 and the trade balance runs in India’s favour. For example, in 2012, India’s exports to the US were almost double US exports to India.