India continues to be perceived as a tough place to do business even while there is renewed enthusiasm and confidence in the Indian economy and great potential for US-India business collaboration, the US said Tuesday.
US envoy Richard Verma, addressing the Indian School of Business here, pushed for both sides inking a "high-standard Bilateral Investment Treaty".
He said India ranks at 142 in the World Bank ranking, measuring the ease of doing business. "Investor confidence is still shaky."
India's "intellectual property enforcement is perceived as weak" and "many sectors still remain closed to outside investors and businesses", Verma said.
"We know that the prime minister has made rationalization of bureaucratic procedures a high priority on his list of reforms, and we eagerly anticipate substantive progress in this direction."
About the difficulties in doing business in India, he said one hotel chain CEO recently mentioned that it takes on average 80 permits to build a hotel in India, but only six in Singapore.
"Moreover, according to the World Bank, it takes an average of nearly four years to resolve a commercial dispute here - the third longest average in the world - while creditors wait even longer, 4.3 years, to recover funds from a company that's become insolvent."
"Indian courts face a backlog of 30-40 million cases nationwide, and companies simply cannot afford to invest in or provide financing for an economy where legal justice comes too late, when it comes at all. As they say, justice delayed is very often justice denied," he remarked.
The US envoy said that some of these challenges could be addressed by a high-standard Bilateral Investment Treaty, "and that's why the United States remains committed to negotiating a BIT with India. A high-standard BIT will give assurance to those people and companies who want to create jobs and invest in India's future and it could even lead to a more comprehensive bilateral agreement between our two countries".
On IPR, he said, "And the United States and India have more of a common interest in intellectual property rights than many of you may think.
"If India wants the best technologies, newest products, and innovations, then it must also be known for the best intellectual property protection regime."
Verma said US President Barack Obama's visit to India last month was a "transformative time" in India-US ties and a slew of high-level visits between the two reflect the "excitement" about the deepening friendship and the "good path we are on together".
Stating that he has been travelling around India "and I have been able to see first-hand the renewed enthusiasm and confidence in the economy, the great potential for US/India business collaboration, and the positive spin-off effects that are possible in both countries".
He said that two-way trade has nearly quintupled in the last dozen years from $19 billion to almost $100 billion.
Defense sales have gone from virtually 0 to $10 billion in only a decade. Indian companies now employ tens of thousands of American workers, and US companies employ even more, back here in India.
"But we also know the data shows that we have barely scratched the surface on what is possible," Verma said.
" Only 1 percent of US exports come to India, and only 2 percent of America's imports come from India. That's not enough. And, given the size of our two economies, no one should be satisfied with $100 billion in two-way trade.
The US envoy said that is why President Obama has called for another five-fold increase - to $500 billion in the next dozen years. "We know we can get there and we will try to do so even faster than that."
