US terms India 'challenging' for business, urges reduction in red tape

23 Jul '21

2 min read

India ‘remains a challenging place’ to engage in business, the US State Department recently said in its '2021 Investment Climate Statements’ report. The report urged New Delhi to foster an attractive and reliable investment climate by reducing barriers to investment and minimising bureaucratic hurdles. India’s ‘ambitious’ structural economic reforms, including new labour codes and landmark agricultural sector reforms, should help attract private and foreign direct investment, it hoped.

The Indian government continued to actively court foreign investment, the report noted.

In March this year, the Indian parliament further liberalised the insurance sector, increasing the foreign direct investment (FDI) limit to 74 per cent from 49 per cent, though still requiring a majority of the board of directors and management personnel to be Indian nationals, the report said.

“New protectionist measures, including increased tariffs, procurement rules that limit competitive choices, sanitary and phytosanitary measures not based on science, and Indian-specific standards not aligned with international standards, effectively closed off producers from global supply chains and restricted the expansion in bilateral trade," it added.

The report also referred to the removal of the special constitutional status from the state of Jammu and Kashmir (J&K) and the passage of the Citizenship Amendment Act (CAA), terming the two as ‘controversial’ decisions.

Fibre2Fashion News Desk (DS)

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