Pranab rails against US protectionism
07 Mar 2009
Acting finance minister Pranab Mukherjee has said the Obama administration's massive stimulus plan will restrict trade and weaken efforts to beat the global slump, as it focuses on protectionist measures.
The US government's $787 billion stimulus package, passed last month, includes a "buy American" clause insisting firms use US-made goods for public works and building projects funded by the stimulus package. Moreover Obama has clearly stated that there would be no tax breaks for firms which outsource jobs.
"The US government's stimulus package imposing restrictions on public procurement or discouraging US firms from outsourcing or restricting hiring of foreign workers is not in keeping with the spirit of global cooperation," Pranab Mukherjee said at a business conference in Mumbai.
"That the biggest economy in the world, the United States, where this global financial tsunami originated, should be resorting to trade-restrictive practices is particularly disturbing," he said.
"This is a negative trend and is likely to have a cascading effect in other major economies and, thereby, undermine the global efforts to overcome the current crisis in the shortest possible time-frame."
Ten per cent of India's exports are to the United States, with software services and outsourcing firms earning more than 50 per cent of their revenues from there. Job prospects for Indian software professionals abroad have also dimmed as recessions in matured economies deepen.
India not investor-friendly, says China
Meanwhile China says that India needs to make its investment climate more friendly, as the complexity of the system, especially in the land acquisition process, is hindering Chinese companies' plans to come to the country.
"The acquisition of land is complicated and sometimes may have problems in the process... So, this to certain extent hinders some investors from coming to India," Chinese Ambassador to India Zhang Yan said on the sidelines of a PHDCCI meet in New Delhi.
"If this (land acquisition system) could be improved I am sure it will help a lot to India to attract investment from China," he said.
Zhang further said India and China are working towards relaxing visa norms. He said at times it takes more than one year for a Chinese to get a working visa. "Although it is a technical issue, it affects those people who want to come to India," Zhang said, adding, "We are working on it (to relax visa norms)...we want to speed up the process".
Several Chinese companies in electronics, IT and hardware manufacturing, including Huawei Technologies, TCL and Haier, are based in India. Besides, many large Chinese government-owned firms in the field of machinery and infrastructure have won projects in India.
