September 10, 1999
The Ambassador held a meeting today with members of the India Interest Group. A large number of representatives of US companies and business organisations attended the meeting. Senior officials of the Embassy and representatives of FICCI, CII and State Bank of India were also present.
Briefing members on the current political and economic scene in India, the Ambassador mentioned that in spite of the Kargil conflict and the announcement of parliamentary elections, the share market index was up and the economy continued to do well. Most macro-indicators have been favourable in the last few months. Inflation, for example, is at an all-time low and the rising stock market index reflects continued investor confidence in the economy. The reform process did get interrupted in some cases where legislation was involved, like the opening up of insurance sector, but this is likely to be temporary. India would have a new parliament soon and whichever party formed the Government, it was likely to carry forward the programme of liberalisation, the Ambassador emphasised.
Touching on key issues in Indo-US relations, Ambassador mentioned that Senator Brownback and Congressman Gilman have proposed waiver of US sanctions under the Glenn Amendment and the matter would now be decided in conference between the Senate and the House. While these moves are welcome, he said, there are two concerns relating to waiver of sanctions which should be noted. First, there is a strong feeling among the Indian American community here that Pressler Amendment should not be repealed. Most analysts also agree that it would send a very wrong signal so soon after the misadventure in Kargil. Secondly, the entities list issued by the Bureau of Export Administration is so long and wide in its scope that it is a major hurdle in developing a more fruitful economic relationship between our two countries. This had adversely affected US exports to India.
In the interaction that ensued, members of India Interest Group raised issues regarding the likely political scenario after elections in India and its effect on economic policies. Ambassador pointed out that the Indian political situation is undergoing a transformation and all parties appeared to have broadened their perspectives. Two important political groupings have emerged, but on economic issues there is a clear consensus on continuing the policy of liberalisation in the country's best interest.
There was discussion on the entities list issued by the Bureau of Export Administration. Some members stated that they have been pointing out to US Administration that it is disproportionately wide in its scope that hurts business interests on both sides. They felt that there should be an exit policy that enables entities to get off the list and stated that they have been emphasising this need with the US Administration. The Ambassador welcomed these observations and stated that the Embassy and the US corporate sector can work together on this.
Some members representing US telecom and energy companies felt that India should take a more positive line in the WTO negotiations. Given India’s increasingly liberal economic policy at home, the somewhat rigid approach taken in the multilateral trade forums, they felt, reflected a needlessly rigid and narrow approach. Ambassador pointed out that Government of India has been moving quite rapidly in removing trade restrictions and stated that the Embassy would be happy to work with US companies to develop an approach which will be in conformity with India's national interests and include all WTO-related issues, including transnational movement of persons. At the Seattle Conference in November 1999, India's Commerce Minister would be leading the delegation and some positions could be formulated before that meeting.
In his concluding remarks, Mr. Michael Gadbaw, President of India Interest Group, appreciated the initiative of the Ambassador to regularly meet with the US corporate sector. He stated that it provided a very useful forum for exchanging views. He proposed for Ambassador’s consideration that the next meeting be held soon after the formation of the new Government. This was agreed to.