Need for US to engage more deeply with Indian states: Experts

Engaging with emerging regional players is critical to getting their support for refoms

Experts from various fields today told US lawmakers that there is a need for America to engage more deeply with Indian provinces, given the emergence of regional players and their increasing role in the national policy making process.

"We need to engage more deeply with India's state-level leaders. There's a lot of smaller parties in India that actually control their own states and thus want to see development, and at the same time have solid representation in India's parliament," Richard Rossow, director for South Asia, McLarty Associates, told Senators.

Rossow was delivering during a Congressional hearing -- 'Assessing the Investment Climate and Improving Market Access in Financial Services in India' -- chaired by Senator Mark Warner, ahead of US President Barack Obama and Prime Minister Manmohan Singh's meet at the White house tomorrow.

Going to these states, engaging with them, and showing partnership is critical to getting their support for reforms, Rossow said.

Pointing to the insurance industry, he said the insurance regulator is based in Hyderabad. He then explained why no other regulators or government offices are based in Andhra Pradesh.

"Because when the first bill was passed in 1999, they opened the market, a local party in that state had 29 votes. They supported the opening in exchange for getting the regulator located in their state. Those kinds of deals are terrific," he said.

Noted economist Arvind Subramanian told lawmakers that Inidan States are now gaining more economic and political clout.

"The real impetus for change in India including this kind of structural reboot, is actually happening at the level of the States. The way it's happening is that more and more power is now with the states, particularly in the economic," Subramanian said.