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.