NEW DELHI: US Commerce Secretary Gary Locke Monday said India needed to open up its economy by reducing trade barriers and tariffs to encourage direct international investment and fight poverty. Locke, who is in India on a mission to encourage India-US business links to grow in line with warming political ties, said he was in talks with officials on areas of contention such as market access. India has undergone dramatic economic liberalization over the last 20 years, but international companies are still banned from many potentially lucrative sectors, such as supermarkets for the country's booming consumer classes. "Even though India has made tremendous strides to open up its economy, there are still too many tariffs and too many barriers to foreign participation in the Indian economy," Locke said at a conference in New Delhi "US businesses can help India achieve its goal of providing a better standard of living... but market barriers are restricting them." Locke, who is accompanied by leaders of 24 companies including major players in defense and nuclear power, said "India's market barriers may seem to protect some domestic industries in the short term. But over time, these barriers will limit foreign direct investment." French supermarket giant Carrefour recently opened its first wholesale store in India, but like other multi-brand supermarket retailers it is not allowed to sell direct to consumers. Only single-brand foreign outlets by firms such as Reebok or Marks & Spencer are allowed to operate. Wal-Mart, one of the world's largest retailers, has already opened two wholesale stores and plans to open 10 more within four years. Locke expressed concern Monday over India's restrictive trade policy, saying it impeded investment despite growing economic and security ties between the two nations. Despite its growing global weight, India is still only the 14th biggest trading partner for the United States, and obstacles from outsourcing controversies to the Doha world trade round and market access have put the brakes on faster integration. "Even though India has made tremendous strides to open up its economy, there is much more work that is left to be done," Locke told a conference in New Delhi after a meeting with Indian trade minister Anand Sharma. The two reviewed progress on some thorny issues such as market access and non-tariff barriers. "While many tariffs have come down, others remain. Even when there are not outright tariffs there are non-tariff barriers that limit trade and investment," said Locke, alongside Sharma. The stakes on trade are high as the United States and India need each other to meet ambitious export targets amid a sluggish US economic recovery, yawning trade deficits with China and fears of global imbalances sparking a standoff. As part of its efforts to boost trade with India, the United States has said it would ease restrictions on exports of high-technology goods to India in recognition of stronger economic and national security ties. – Agence France
