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Tuesday, 11 January, 2000, 16:59 GMT
US presses India on reforms

The move followed a ruling by the WTO

A United States trade delegation has urged India to push forward its economic reform programme, a day after India agreed to lift more than 1,400 trade restrictions against American goods.

Senator Sam Gejdenson, who heads the US delegation to a global business summit in Delhi, said India needed to show political will to step up the reform process.

"Bureaucratic delays, regulatory red tape and cumbersome policies [in India] have inhibited foreign investment," he said.

"Clearly, the US has an enormous interest in India. But for that interest to translate into investments and partnerships, India must not only adopt trade friendly policies, it must also implement them," he added.

US trade representative Charlene Barshefsky said an agreement signed last week would provide market access for US producers in key sectors such as textiles, agriculture, consumer goods and a wide variety of manufactured products.

US Trade Representative Charlene Barshefsky signed the deal US Trade Representative Charlene Barshefsky signed the deal

Tariff restrictions would be lifted on some 1,400 items, half of which would disappear by 1 April, 2000.

The move followed a ruling by the World Trade Organisation last year, which said India had violated its obligations as a WTO member.

India has already signed similar agreements with the European Union, Japan and other countries.

Cautious reaction

The move has been welcomed by some industrialists, who said it would not really hurt domestic industry.

It will increase domestic competition and bring better quality goods to domestic consumers
Analyst Vasudev Joshi

"These [American] goods will be very expensive and will be bought by the rich who anyway have access to them," Rajkumar Pitamber of industrial giant Mahindra and Mahindra said.

"The middle classes, who are the bulk of the consumers, will continue to buy Indian goods, so it will have only a marginal impact on domestic industry," he said.

Analyst Vasudev Joshi of HSBC Securities, an international brokerage firm, said the move could lower inflation in India.

"If a lot of commodities are part of the deal then their import will bring down inflation as global commodity prices are lower than Indian prices," he said.

"It will increase domestic competition and bring better quality goods to domestic consumers," Mr Joshi said.

Trade ties between the United States and India had suffered a setback in May 1998, when Washington imposed economic sanctions because of India's nuclear tests.
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