According to reports, the U.S. remains concerned about barriers to investment in India, particularly in sectors such as financial services and solar-power technology, a senior U.S. Commerce official said Thursday.
Francisco Sanchez, Commerce under secretary for international trade, said ahead of a meeting of the U.S.-India Business Council that such concerns “keep our trade and our investment from reaching significantly higher levels.”
Bill Daley, President Barack Obama’s chief of staff, echoed those concerns in a speech to the group later Thursday, while assuring that improving economic ties with the country’s 12th-largest trading partner is one of the president’s key priorities.
“If India wants to continue to grow as rapidly as it has, it will have to continue reforms that encourage–not hinder–investment in trade in areas that are key to India’s growth,” said Daley, citing agriculture, financial services and infrastructure.
One dispute that has come to the forefront recently is solar power. The two countries have promoted India’s solar power development as a key area for collaboration, but recent regulations restrict local firms from importing foreign-made solar panels.
“It’s in India’s interest to attract the best technology,” said Sanchez. “Any kind of limitations that you place like this inhibit that.”
Sanchez said there are other ways of promoting investment and technology, such as incentives rather than mandates, and that he remains hopeful a resolution can be found.
Investment barriers will also be high on the agenda of next week’s high-level bilateral talks in Washington, led by Treasury Secretary Timothy Geithner and India Finance Minister Pranab Mukherjee. While no major economic accords are expected from the meeting, the U.S. hopes to make progress in efforts to improve the investment climate by developing India’s capital markets and create a more certain and established regulatory and legal structure, a senior U.S. Treasury official said Thursday.