India charges US of blocking trade

Sidhartha / TNN / May 30, 2006, 00:13 IST

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The officials pointed out that SBI's application to open a branch in New York had been pending for a year.

NEW DELHI: India on Monday played back the reforms rhetoric to the United States in what is seen as a signal to the world's largest trader that it was not doing enough to facilitate bilateral trade and investment.
While seeking to defend the policy flexibility in its national interest, India told the visiting delegation - led by deputy US trade representative Karan Bhatia - that ICICI Bank had been waiting for nearly two years to open a branch in New York but there had been no progress.
Similarly, officials present during the trade policy review meeting pointed out, State Bank of India's application to open a branch at Jackson Heights in New York and Bank of Baroda's request for a branch in Houston, Texas, had been pending for 12 months and six months, respectively.
The US position comes at a time when RBI had been more than flexible in allowing foreign banks to open branches in India and had virtually no controls over setting up ATMs. For long, US has been demanding further opening up of the Indian financial services sector, including banking.

"They wanted a comfort on steps to prevent money laundering and we have told them that India has already put in place a law. But they do not have any clear cut policy norms for allowing foreign branches and we have asked them to initiate steps,"said an official.
Sources said it was pointed out that India has often been criticised for red tape and slow processes but things were no different in the US.
In fact, officials said US delegations have often tried to put the blame on another agency while trying to wriggle out of uncomfortable situations.

"You can't have a situation where the USTR tells us that a particular issue is the Federal Reserve or the treasury department's domain, while we are expected to roll out the red carpet and offer single window assistance,” said an official.
During Bhatia's meeting with commerce and industry minister Kamal Nath, it was pointed out that Washington had agreed to allow the import of Indian mangoes but the entire process is going to take 18 months before it is completed.
"Things can be put on the fast track when you want to and it is expected of us all the time but this is not always the case with them,” said an official.
After the meeting, Bhatia, who also sought India's support for further progress in negotiations at WTO, said New Delhi must reduce trade barriers and cut import duties for increasing bilateral trade.
But India seemed in an unrelenting mood on most issues. When the US delegation pointed to India's poor track record on intellectual property rights, New Delhi responded by saying that there was not due recognition of the steps taken, like the new patents law.
"They have decided to remove Pakistan from the special list, just because it suits them politically,” said an official.
Similarly, on wheat imports by India, where the US has sought simplification of the sanitary and phytosanitary norms, which are ostensibly health and food safety standards, to help its players, New Delhi is learnt to have told the US delegation that some of the concerns had been addressed, while in case of some others, there was little scope for alterations since domestic environmental concerns could not be ignored.
The changes in US bonding norms for shrimp export was another thorny issue raised at the talks, with India threatening to approach WTO saying the new rules increased transaction cost. Similar norms for gems and jewellery are also raising costs for exporters.

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