Invitation not enough for investors;Entry barriers must go: US

Stating that only "invitation" is not sufficient to convince American companies to invest here, the US today said India must remove entry barriers and improve ease of doing business to compete better with other countries.
"The (FDI) numbers are getting better but they are not what they should be," US Ambassador to India Richard Verma said here.
"The invitation is not sufficient," he said in reply to a question on why invitations extended to the US investors by Prime Minister Narendra Modi and Finance Minister Arun Jaitley have not yielded desired results in terms of FDI inflows.
Listing out his "reasons" on why the FDI numbers were not where they should be, Verma said some of the issues "are being addressed, (but) some are not".

"It is the overall ease of doing business umbrella which has a list of factors -- Is there tax certainty? We have made a lot of progress on that front.
"Is there legal certainty in contract sanctity? This is where a bilateral investment treaty can really help," he said during an interactive session organsied by FIEO (Federation of Indian Export Organisations).

"If they (US investors) are looking at other parts of Asia, they might look at Singapore, Vietnam, Thailand, and normally in India also they are looking at different states so it is an exceptionally competitive market and the invitation is not sufficient," he added.

Stating that India has started well, he said the country needs to do more to better compete with other markets.
"It is a great start but you have got to be able to compete just as we (US) have to be able to compete with the other countries in Europe and Asia.... As barriers to market entry come down, you will see a number of American companies and investors (investing in India)," Verma said.
Pointing out that India's trade surplus with the US is USD 28 billion, Verma said the two countries need to do much more to grow their bilateral trade and investments and realize the true untapped potential of their economic relationship.

"In 2014, the US exports to India were 1.6 per cent of our total exports while imports from India to the US were only 2.3 per cent of our total imports. So in the India-US trading relationship the actual percentage is still quite small given the size of our economies," he said.
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Verma said India and US are working diligently to address a variety of factors that hinder the bilateral trade.
"President (Barack) Obama recently said that we will be looking at other ways to improve our trade relationship with India including looking at our export controls to make sure Indian companies have access to American technology as our closest allies," he said.

He further said India was the single largest beneficiary of the Generalised System of Preferences (GSP) programme as Indian exporters received USD 4.4 billion in tariff relief through GSP in 2014 alone.
Responding to a question on concerns that India's textile and labour intensive exports to countries like the US may be hit due to the Trans Pacific Partnership (TPP) accord, Verma admitted there would be a significant decline.
"... Clearly there is going to be a significant reduction. As we said, 40 per cent of the world's economy is caught up in TPP and we are trying to reduce trading barriers and at the same time increase standards.

"That is the direction the US and others are going. But it doesn't mean that we cannot have a healthy robust trading relationship with India".
The US ambassador further said that the trade pact negotiations being pursued by his country with others augment its broader engagement at the World Trade Organisation.
Highlighting the importance of the WTO's trade facilitation agreement, he said the US is "looking forward" to India's ratification.
Noting that the US had issued 1.2 million visas to Indians in 2015, a 20-30 per cent increase over the previous year, Verma said: "We see no signs of that letting up".