India should open its economy says US

India should open its economy says US

New Delhi:US commerce secretary Gary Locke on 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 liberalisation 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 defence 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.