Foreign Firms Downsizing Operations: Reid & Priest

In spite of the initial euphoria generated by the two-day long US Investment Summit in Calcutta, most of the foreign firms are believed to be keen on downsizing their Indian plans.

Stating this to Business Standard, Mark J. Riedy from the US law firm Reid & Priest LLP said, In India there is too much talk and little action.

Reid & Priest LLP is the legal advisor to several US firms investing in power, telecom, insurance and refinery projects in India. It has its contractual alliance with the Indian firm, Titus & Radhakrishnan.

In a scale of one to ten, ten being the highest, India at present ranks third in terms of business done; but in terms of potential, India is the best, he said.

According to Riedy, India has a matured legal and a financial system. But the country is losing foreign investors because of slow implementation of policies. India should be more open in framing its policies and more importantly it should wake up. India is a sleeping giant, he said.

There are 44 power projects in India down the pipeline, some of which are joint ventures between the US and India. Reid and Priest has fixed the contracts for 60 per cent of these 44 contracts. While there are about 20 insurance companies in the wings to make an entry into India in the event of the opening up of the insurance sector, some 10 projects are also on the anvil in the telecom sector.

Though this shows an impressive list of prospective projects, still it is believed that foreign firms are shifting their businesses from India to other countries due to bureaucratic hindrances.

Most of the foreign firms are shifting their operations to Latin American countries, said the legal expert.