India policy decisions dampen investment climate: US envoy

Chennai: Several recent policy decisions by India have caused "significant concern" and "dampened sentiment" about its investment climate, US Ambassador to India Nancy J Powell said Monday.

"The adoption of manufacturing policies discriminatory to foreign companies and the inclusion of retroactive tax provisions in the Finance Bill are two examples," Powell said, addressing members of the Indo American Chamber of Commerce (IACC) and American Chamber of Commerce (AMCHAM) here in the south Indian state Tamil Nadu.

Voicing concern over challenges to trade and investment, she also called for a level playing field for US companies doing business with India.

Powell said she was committed to ensuring that US companies can compete on a level playing field in India and operate in the same open and fair environment that Indian firms enjoy in the US.

Powell said she had met US and Indian businessmen in Washington before her arrival, and they voiced their concerns over high tariff and non-tariff barriers, restrictions on foreign investment, lack of transparency and defence offset requirements.

Recently, US Treasury Secretary Timothy Geithner met with India`s Finance Minister Pranab Mukherjee encouraging him to reassure foreign investors that India would continue to welcome foreign capital by "advancing important economic reforms," she said.

On the economic opportunities between the two, Powell said both India and the US were "poised to sign an additional eight billion USD in Direct Commercial and Foreign Military Sales," through which India would assume a larger leadership role in the region and effectively respond to security concerns and humanitarian relief operations.

Noting US-India partnership in the defence sector has experienced one of the highest growth rates in the region, she said, "With the C-17, C-130J sale, we have more than doubled our total Foreign Military Sales and posted sales making India the third largest FMS market for 2011."

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