US Chamber of Commerce president and chief executive officer Thomas Donohue has said that unilateral sanctions are ineffective and have not worked anywhere. He intends to take up the matter with the Clinton administration to minimise the impact of sanctions in the interest of US business.
Addressing a closed-door meeting of US companies as part of the US-India Business Council's annual general meeting held in Washington last week, Donohue said it was "disturbing" that automatic sanctions were imposed on a non-nuclear country that conducted nuclear tests according to a foreign policy law that had nothing to do with business or industry. He pointed out that the foreign policy law, contained in only one-third of a page, affected US business.
This was the first time that the president and CEO of the US Chamber of Commerce addressed the USIBC AGM.
Donohue further indicated that, as a result of the US sanctions on India, European Union member-countries would take the business generated and fructified by US business and should "legitimately" be with US companies.
He also issued an appeal to the Indian government to open up fresh opportunities for business and strengthen the existing ones.
At separate sessions addressed by Indian finance minister Yashwant Sinha and Planning Commission deputy chairman Jaswant Singh, US companies focused on opening up of India's insurance sector, housing sector and the Broadcast Bill.
The finance minister admitted that there was a need to define a `private Indian company', to which the insurance sector has been opened up. In response to clarifications sought by US companies, he could only say that it includes any company co-registered under the Indian law is a private Indian company. It will have to take partners as under the Indian law.
Sinha further said that his government had always taken the position that monopoly in insurance was not healthy as it restricted competition, hampered market growth and served the consumers poorly.
Sinha was non-committal to the US companies' queries whether foreign direct investment will be allowed in India's housing sector and on foreign equity ceiling in broadcast companies/channels.
Overseas Private Investment Corporation president and chief executive officer George Munoz assured the gathering that all existing contracts will be honoured, but new business will have to wait until a clear interpretation of the sanctions law.
At the AGM, the general mood of US companies was that India was not a rogue country, but a democracy, just like the US, with an open society and a free press. There was an effort on the part of the US companies, which are operating in India, to work out their own strategy to further the growth of US business in India in the light of the sanctions.
OPIC provides political insurance and long-term soft loans to companies inclusive of small and medium enterprises. Munoz pointed out that most of the large companies will find alternative sources of funding and insurance.
Some of the participants at the AGM are US Exim Bank vice-chairperson & CEO Jackie Clegg, Stone & Webster president Edward Walsh, Ford Motor Co vice-chairman W Wayne Booker, former US ambassador to India Frank G Wisner, Enron CEO Joseph Sutton, US treasury department's deputy secretary Lawrence Summers, besides outgoing USIBC chairman Howard Clarke, who is also the vice-chairman of Lehman Brothers, and new USIBC chairman-elect Dean O'Hare, who is also the chairman & CEO of Chubb Corporation.
The Indian delegation was led by US-India Joint Business Council chairman N Sankar and co-chairman Shashi Ruia
