Free market and an open economy was the mainstay of USA, the American Ambassador in India, David C Mulford, told members of the Indian Chamber of Commerce and the Indo-American Chamber of Commerce in Kolkata on Monday.
He called for opening up of sectors of the economy where private investment was now restricted such as retailing, real estate, food processing, small scale industry and telecommunications.
According to Mulford this would improve rural connectivity and help generate growth and revenue streams necessary to provide positive returns to infrastructure investment.
"It is increasingly understood that India has much to gain from bold initiatives that liberalise its economy and in turn generate broader political support through greater economic prosperity. Such reforms improve living standards in ways the average citizen can feel and understand. Political credit will accrue to those in government with the vision to effect such change," he said.
To substantiate with figures Mulford said, in the first quarter of 2005, US exports to India increased 50 per cent while India's exports to the US increased 15 per cent.
The Ambassador pointed out, two areas that would require concerted action if India were to attract the huge investment required were the creation of true national markets and full protection of intellectual property rights.
"India's ability to implement a national VAT and remove fiscal and regulatory barriers to interstate trade -- a sort of free trade agreement among the states--will create true national markets or a size and scale necessary to clinch business commitments" he said.
The potential of agribusiness was also highlighted. With proper roads, water delivery systems and cold storage chains, the recently liberalised food processing industry, as well as other forms of agribusiness could become important sources of consumer benefit and rural employment.
"This is one area we wish to pursue under the newly inaugurated US-India Agribusiness Initiative aimed at building partnerships among US and Indian agricultural institutions. My impression is that agricultural processing, storage, refrigeration and marketing have received too little private investment in large part because of government disincentives and inefficient infrastructure and marketing networks that reduced returns to such investments," he said.
Earlier in the day, Mulford said the United States was working with the National Aids Control Organisation and private sector representatives to set up a corporate fund aimed at checking the spread of the endemic in India, specially in workplaces."The fund will be managed by a private financial institution that will offer different options to which corporations can make contributions at the national, regional and local levels, thereby reducing the management burden on individual companies," Mulford told a CII national conference on HIV/AIDS.