India - Secretary of Commerce Malcolm Baldrige trip to India

Since he became Prime Minister of Indian in October 1984, rajiv Gandhi has instituted economic and commercial liberalizations with an enthusiams and commitment that have surprised many businessmen and women, both in India and the United States. The resulting optimism regarding the new possibilities for improved Indo-U.S. commercial relations formed the setting for a trip by Secretary of Commerce Malcolm Baldrige to India on May 16-17, where he discussed India's recent economic changes and how the United States might cooperate with India as it pursues its new economic directions.

In his discussions with Prime Minister Gandhi, Secretary Baldrige was able to get a firsthand account of the Prime Minister's new program, which will help lay the foundation for Prime Minister Gandhi's visit to the United States June 11-15. The Secretary conveyed President Reagan's interest in this visit, which is expected to have a strong focus on the commercial aspects of our relationship, particularly in the area of transfer of high technology.

During the Secretary's visit to New Delhi, implementing procedures on the transfer of technology were completed. The purpose of these procedures is to ensure that sensitive technology is not transferred to unauthorized users or diverted to proscribed countries. It is hoped that this agreement will pave the way for increased trade by accelerating the processing of U.S. export license applications for India, as well as permit over a period of time generally higher levels of technology to be made available. The agreement is the culmination of negotiations which have been under way for considerable time. It is an essential first step in a gradual process of permitting higher levels of technology to be transferred to India.

Secretary Baldrige underscored the importance we attach to the new Indian liberalization measures, which are designed to help modernize the Indian economy, give freer rein to the private sector, and make Indian firms more competitive in the international marketplace. Some of the important liberalizations which have been instituted include elimination of production limits in many industries, an easing of the application of India's anti-monopoly legislation, a reduction in corporate income tax, and various other policies affecting the operations of companies in such fields as electronics and computers, and the oil and gas industry.

Discussions with the Prime Minister and other Indian officials centered on opportunities for expanded cooperation between the United States and India. Indian officials recognize that for India to apply the newest production methods, advanced technology and equipment from abroad will be needed. Proposals to organize executive-level trade missions in high technology areas to India were discussed, as well as U.S. participation in modernizing and expanding India's telecommunications network.

While there is a general consensus that the business climate in India has improved in recent years, some problems still remain. The Secretary outlined a number of difficulties perceived by U.S. firms in doing business in India. The secretary, in turn, was afforded a firsthand opportunity to hear Indian officials' ideas on the changes they are making which will allow the Indian economy to rely more heavily on market forces and which will create an environment where business and industry can prosper with less government intervention. The Prime Minister recognized the need to cut back on domestic protection in India which is impeding production and keeping prices too high.

Discussions also focused on the necessity of support for an open world trading system. The Secretary pointed out the huge trade deficit that the United States has suffered in its resistance to protectionist pressures. He encouraged indian officials to participate in a new GATT (General Agreement on Tariffs and Trade) round of trade negotiations that would include services--an area of particular concern to the United States--while noting that it is necessary to take into consideration the special concerns of india and other developing countries in developing an agenda for discussion.

The Secretary's visit was teh first to India of a Commerce Department Secretary since 1978. In addition to senior Commerce Department officials, the Secretary's delegation included officials from the Export-Import Bank, the Department of Agriculture, the State Department, the National Security Council, the Trade and Development Program, the Treasury Department, the Office of the United States Trade Representative, and the Overseas Private investment Corporation.

COPYRIGHT 1985 U.S. Government Printing Office
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