A psychological boost: industry

By Our Special Correspondent

NEW DELHI, SEPT. 23. The Indian industry today welcomed the lifting of sanctions saying it would help technology and product exports from the U.S., besides giving a psychological boost to increasing bilateral trade and investment.

While the sanctions did not materially impact India, the industry felt that its shadow had affected Indo-U.S. relations as well as the sentiment about bilateral trade and investment between the two countries. ``Lifting of sanctions will actually help U.S. companies in their business with India because as long as the sanctions were in place, U.S. companies were inhibited in their investments in India and transfer of technology to Indian companies,'' said the Confederation of Indian Industry (CII) President, Mr. Sanjiv Goenka.

He said that initially, the U.S. Exim Bank and the Overseas Private Investment Corporation(OPIC) were not permitted to finance and underwrite U.S. companies doing business with India. This had impacted on their exports to India as well as investments and technology transfer. Even after the Exim and OPIC were allowed by the Clinton administration to deal with India, this inhibition contributed to limiting exports to India which had been flat.

India, meanwhile, had located alternate sources of products and technology. The removal of sanctions would free the trade environment which could now catch up with the excellent political relationship. The CII would now take new initiatives inspite of the global slowdown to increase trade and investments with the U.S., he added.

Mr. Goenka said Indo-U.S. business partnership had been transformed in the last few years. IT, pharma, insurance, banking and portfolio investments by Indian corporates in the U.S. were now the new backbone of Indo-U.S. links, All these would be reinforced by the lifting of sanctions and traditional trade would gather a new momentum.

The Assocham president, Mr. Raghu Mody, while welcoming the move, felt that it would lead to greater cooperation and collaboration particularly in the fields of space, high technology and research laboratories. ``It will also give tremendous boost to the Indian companies which had not been able to export due to their investments in the defence sector so far,'' he said.

The FICCI secretary general, Dr. Amit Mitra, said ``the move will be a big psychological boost and encourage India to do more business with the U.S. However, the biggest beneficiaries will be the 39 large cutting edge technology companies and research laboratories including BHEL, Godrej and Boyce, Kirloskar Brothers and ECIL who will now be free to import any technology from their partners in the U.S.,'' he added.

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