The Hindu : Business : Poor infrastructure a major hurdle: U.S. CEOs

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Saturday, Mar 04, 2006

Business

Business

Poor infrastructure a major hurdle: U.S. CEOs

Special Correspondent

Six priority initiatives for cooperation identified

NEW DELHI: Advocating further liberalisation in financial services and retail trade, U.S. chief executive officers (CEOs) on Friday highlighted India's poor infrastructure and bureaucratic delays as the two major irritants standing in the way of their investments in the country.

Unveiling the report of the US-India CEOs Forum along with his Indian counterpart, Ratan Tata, the JP Morgan Chase & Co. Chairman and Forum co-Chairman William Harrison pointed out that the lack of adequate infrastructure and the bureaucracy were the main reasons for the lack of excitement in U.S. companies about investing in India.

"I think there is lack of excitement about investing here because of factors like poor energy supply, roads, airports, ports, the core infrastructure, bureaucracy... it's hard to get approvals, permits and in the legal system, the process is slow and cumbersome and it takes a long time for settlement of disputes," he said.

The Forum, consisting of select top CEOs from the U.S. and India, has identified six "priority initiatives" for cooperation to be taken up by both governments and the private sector so as to boost investments.

It includes the setting up of a $5-billion infrastructure development fund to make Mumbai a financial hub and facilitate the establishment of large-scale special economic zones (SEZs).

The Indian Government, Mr. Harrison said, should liberalise the financial sector further as U.S. companies were bullish on growth in that area. "India should reduce restrictions on foreign investment, especially in banking, insurance and retail," he said.

Among the other initiatives identified by the forum were the facilitation of increased movement of people between the two countries and stepping up of national coordination of IPR (intellectual property rights) enforcement efforts in India.

Reforms in the power sector along with more institutes of higher learning were the other areas identified for increased cooperation.

The Forum also urged government-to-government efforts for cooperation in civilian nuclear energy and sought faster enactment of the pending legislations in the oil and gas sector.

Indian members in the CEOs' Forum include Bharat Forge Chairman Baba Kalyani, Biocon Chairperson Kiran Mazumdar Shaw, ITC Chairman Y. C. Deveshwar, Reliance Industries Chairman Mukesh Ambani, and Infosys CEO Nandan Nilekani.

The U.S. CEOs in the Forum includes Citigroup Chairman and CEO Charles O. Prince, AES Corporation President Paul Hanrahan, Pepsico Chairman Steven Peinemund, and Visa International President and CEO Christopher Rodrigues.

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