Search the Internet          Tips  Sites: Finance, Investment

US will lift sanctions in its own interest: Sinha

Finance Minister Yashwant Sinha has expressed confidence that the United States will lift the sanctions imposed on India following the May 1998 Pokhran nuclear explosions 'as quickly as possible'.

Sinha said he told the US Treasury Secretary Paul O'Neill during their meeting that things were quite normal (despite the sanctions) in certain areas and "it will be in the interests of both countries if the US Administration could see its way to lifting sanctions with legislative approval."

"Surprisingly he (O'Nell) himself mentioned the issue of sanctions," Sinha told reporters on Monday.

"Our (India's) views have been very clear. We have said right from day one that sanctions hurt US interests more than they hurt ours, and the fact that they are raising it with us is an indication of their, I think, keen desire to be able to do away with it as quickly as possible," he said.

The finance minister said that he and O'Neill discussed issues concerning the US and India and pointed out that the Vision Statement signed by then-US President Bill Clinton and Prime Minister Atal Bihari Vajpayee envisaged a Cabinet level forum to deal with economic and financial matters.

The meeting with O'Neill showed a commitment and involvement of the present US Administration to India in a very substantial measure, Sinha said.

He said that he had also extended an invitation to O'Neill to visit India later this year to attend the next meeting of the forum, adding the invitation was accepted.

Sinha said the performance of Indian economy was recognised by the IMF and added that everyone was very confident that not only would India be able to maintain its growth but improve upon it.

When asked what accounted for India's decision to welcome a new trade round now though it had been opposed by India and other developing countries at Seattle, Sinha said: "Our position has been that we are not against a new trade round, and we have reiterated that position here (Washington). The world community also feels that there should be a new trade round.

"We have our point of view with regard to the agenda for the new trade round. I don't think we have diluted that stand or that position. There was a general feeling that a new trade round, if properly conducted and properly negotiated, could be of great help," he said.

Pointing out that EU is reported to be spending $400 billion a year for agricultural subsidies, which is many times their total overseas development assistance, Sinha said if the agricultural market could be opened to exports from developing countries, including India, they would benefit greatly.

"So there is a general feeling that a new trade round should take place but on the basis of an understanding about what the agenda and the outcome will be. That is something in regard to which developing countries will lay a very important role," he said.

When asked that many people were of the view that the rupee may go down to 50 to the US dollar, Sinha said he had heard that "doomsday scenario" several times before for the last three years and it had not happened. "I don't think we have reason to be despondent on that score."

On NRI investment in India, Sinha said India had a very positive outlook about NRI investment and he had already done a great deal to make it worthwhile for them to invest in India.

Answering a query on the Enron issue, he said that no one had raised that (the issue) with him during his meetings with several ministers and multilateral in Washington, but the general issue of foreign direct investment came up during his meeting with O'Neill and "I myself took the opportunity to point out to him what was happening.

"I explained to him that I had a meeting with the chief minister of Maharashtra a few days before I came here (Washington) in which the power minister of the Union government also joined and we came to the conclusion that the Maharashtra government would set up a negotiating team, which they have done now to renegotiate the power purchase agreement with Enron.

"We agreed that we will nominate a Government of India representative on this negotiating team. We also agreed that neither of the two sides (Enron and Maharashtra) should take any precipitate action and that we should negotiate and find a negotiated solution to this problem," Sinha said.

He said, "I personally feel there is no reason for us to think that because there is some problem with Enron it is going to act as a dampener to FDI in India."

Asked when would FDI in India reach the level in China, he said that the first thing that needed to be done was to implement the budget as soon as possible.

Tell us what you think of this report