Trade ties profit from Clinton's visit

Trade ties profit from Clinton's visit

By Madhu Nainan

BOMBAY (AFP): Indo-U.S. economic ties were the big winner from
President Bill Clinton's state visit to India, with US$4 billion
in business agreements heralding the beginning of a new trade
relationship.

"The number of signings are testament to a new and fresh
initiative in Indo-U.S. commercial and economic relations," U.S.
Commerce Secretary William Daley said prior to Clinton's
departure last Saturday.

Differences between Washington and New Delhi over WTO-related
issues were largely kept in the background during the five-day
visit, as Indian industry, especially the IT sector, pulled out
the stops for the large business delegation accompanying Clinton

"The major story of the visit was the re-affirmation of the
paradigm shift not so much in government relations, but in
people-to-people and business-to business relations," said Sanjay
Baru, a senior economist at the Indian Council for Research in
International Economic Relations .

As well as the business agreements, separate accords were
reached for the U.S. Export-Import Bank to provide $1 billion in
credit lines to help Indian financial institutions fund small-and
medium-sized businesses.

Clinton made a point during his visit of stopping off in the
southern infotech showcase city of Hyderabad, reflecting
increasing U.S. recognition of the IT revolution under way in
India.

Prime Minister Atal Behari Vajpayee's government says India's
IT industry could balloon to $100 billion from the present $5
billion in just a decade.

"Clinton very clearly mentioned that the knowledge economy was
going to change the way we look at the world," said Dewang Mehta,
president of the National Association of Software Companies
(NASSCOM).

"His support is very positive for our business. We expect more
business, more U.S. investments in this sector," Mehta said.

Ramesh Dalal, president of the Indo-American Chamber of
Commerce, hoped Clinton's visit would encourage U.S. businesses
to follow through on their in-principle agreements with Indian
firms.

"We hope the pace of U.S. investments will now be faster.
There should be no reason for U.S. investors not to invest more
money in India now," Dalal said.

According to Indian government figures, the national Foreign
Investment Promotion Board approved U.S. investments worth some
$12.4 billion between 1991 and 1998, of which only $1.6 billion
actually materialized.

The hope among U.S. investors is that Clinton's visit will
push India to further reduce bureaucratic hurdles to setting up
projects here, some of which require up to 40 separate government
approvals.

"Indian Finance Minister Yashwant Sinha assured a U.S.
delegation that New Delhi was in the process of streamlining
policies as much as possible," said Gary Benanav, chief executive
officer of New York Life Insurance.

Vijay Kalantri, president of the All India Association of
Industries, cautioned against expecting too much, too soon in the
wake of Clinton's visit.

"All the deals signed may not materialize immediately, so our
emphasis should be on vigorous implementation," Kalantri said.

"What is more important is that Clinton gave a clear
indication that the United States wants better economic and
political ties with India."

Kalantri also argued that India should use the feel-good
atmosphere created by the visit to push for greater access to
Indian products in U.S. markets.