National
`Indo-U.S. economic ties lagging'
By Our Special Correspondent
NEW DELHI, JAN. 28. The U.S. Ambassador, Robert Blackwill, today criticised the delay in pushing ahead with second generation reforms in this country even as he warned that the Enron dispute could ``spell death to potential investments''. In a wide-ranging address covering the entire gamut of Indo-U.S. economic relations, he specially referred to the Dabhol case and noted that its long term repercussions could be ``profound''.
``The Dabhol dispute feeds chronic misperception among the overseas investing community that India may not be ready yet for big time international investment'', he said. In this context, he said the giants of American business often told him that the ``sanctity of contract'' may now be in doubt here, a concern that could spell death to potential investments.
Mr. Blackwill highlighted the low inflows of foreign direct investment in India which are estimated at $ 4.5 billion in 2000 as against $ 41 billion for China and $ 316 billion for the U.S. He questioned the need for Government approvals for the FDI. ``Is investment a dangerous external threat that must be carefully limited.''
While conceding that some reforms had already been carried out in the area of foreign investment, he maintained that from the foreign investor's perspective, ``innumerable rolls of red tape that stretch to the horizon are a major deterrent.'' For instance, he pointed to the need for 100 additional clearances for a power project even after being approved for investment.
Addressing a meeting organised by the American Chamber of Commerce, the Indo-U.S. Chamber of Commerce and the U.S. Embassy, he highlighted economic ties as the one area of Indo- U.S. relations lagging behind the ``extraordinary advances'' made in political, diplomatic, military and intelligence ties over the past few months.
He compared the ``creeping'' progress in economic reforms to the concepts being voiced about India-Pakistan relations by all Indians whom he met recently - ``words are fine but implementation is what really counts.'' He said this was true in India-Pakistan relations but also true in Indian economic reform.
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