U.S. pitches India infrastructure push, warns on trade

NEW DELHI Mon Mar 26, 2012 8:26pm IST

1 of 2. A labourer shovels stone chips off a truck at a road construction site in Kolkata April 26, 2010.

Credit: Reuters/Parth Sanyal/Files

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NEW DELHI (Reuters) - Commerce Secretary John Bryson on Monday pitched for U.S. companies to participate in India's massive private sector-driven push in building infrastructure, but warned the south Asian nation's high import tariffs could hurt long-term ties.

U.S. companies should push to invest in sectors such as road building, railways, aviation and energy, Bryson said, as part of India's planned spend of $1 trillion over the next five years in a sector seen as crucial to its long-term prosperity.

"We can find areas where it makes sense for the U.S. and India to collaborate more closely," Bryson told business leaders at a conference in New Delhi.

"There is perhaps no greater opportunity to do so than in building India's infrastructure," he added.

However, he warned that high Indian tariffs on products such as power equipment and fruits were putting the brakes on trade.

India exported $36 billion worth of goods to the U.S. in 2011, while exports from the U.S. to India ballooned to $21 billion last year from less than $4 billion in 2001, he said.

"If India is not able to readily access U.S. products or attract strategic investments from U.S. businesses, our progress together could slow down. In the long term, this could cause significant harm," Bryson said.

Economic losses from poor infrastructure are seen as one of the biggest bottlenecks to India's economic growth, which has slowed to 6.1 percent in the last financial quarter, the weakest annual pace in almost three years.

India wants the private sector to invest hundreds of billions of dollars in infrastructure over the next five years. But bureaucratic red tape, a lack of long-term debt and battles between farmers and industry over land have hit construction and funding targets in the past, hurting industrial growth.

A recent attempt to steer the Indian Railways -- one of the world's largest but most decrepit networks -- away from populism and towards private sector-driven reform, was blocked by a key ally of Prime Minister Manmohan Singh's government.

Commercial ties between India and the United States flourished after India's economic liberalisation in 1991, which also kicked off two decades of rapid growth.

But both sides have accused the other of erecting unfair barriers to trade and investment growth. The Doha round of world trade talks has stuttered. Trade Minister Anand Sharma on Monday again pressed the United States for a more liberal visa regime.

"Our companies are facing problems with high visa fees and increased rejections rates in the face of growth for other countries," he said after their bilateral meeting.

(Reporting by Matthias Williams; editing by Malini Menon)

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