What US business wants from India

'Nuclear energy' is sexy; 'long-term economic development' not so -- which probably explains why the newly constituted CEOs' Forum has not drawn a fraction of the ink expended on the nuclear component of the joint statement issued by Prime Minister Manmohan Singh and President George W Bush on Monday.

Yet, says HDFC Chairman and Forum member Deepak Parekh, the Forum could, over time, become a powerful engine in driving economic ties between the two nations.

"It is an example of thinking outside the box," Parekh told rediff.com on Tuesday evening, while waiting for the prime minister's arrival at the Embassy-hosted community banquet. "It is a different approach, a way of approaching the problem from a tangent."

Parekh explained that while government-to-government communication on matters economic was vital, the CEOs' Forum would supplement that by opening up a new line, 'an alternate channel' of communication between the private sectors of both nations.

"The goal of both sides is the same," Parekh pointed out, "which is to increase investment, ramp up FDI (foreign direct investment), spot the roadblocks in the way of rapid economic growth and make informed suggestions on how they could be overcome -- in short, to come up with a wish list beneficial to both sides."

Complete coverage: Manmohan Singh in Washington

The Forum is yet to move into gear, yet such ideation has already begun. Thus, on the eve of the prime minister's arrival, the American CEOs who comprise a forum signed a letter, under the aegis of the US-India Business Council, outlining their concerns.

The letter, addressed to Allan Hubbard -- Assistant to the President for Economic Policy and Director of the National Economic Council, who led the US side at the CEOs' Forum meet at the White House Monday -- listed a preliminary wish-list as outlined by the American CEOs, as under:

• Raise ownership caps for foreign investors in insurance, banking, and the print media;
• Open up closed sectors such as retail and pension fund management;
• Smooth roadblocks erected by VSNL (Videsh Sanchar Nigam Ltd), which the CEOs felt was 'preventing and delaying access to available bandwidth capacity between India and the United States, thus artificially inflating bandwidth prices;
• Modernise India's cyber security through legislation to focus liability and impose stronger penalties for the perpetration of cyber crime;
• Address 'nagging legacy issues' such as Dabhol, AES and such, that in the words of the letter 'continue to discourage investment;'
• Creation of new financing arrangements such as infrastructure bonds and special purpose vehicles with credit enhancements;
• Effective implementation of the Electricity Act of 2003;
• Bring 'anachronistic' labour laws in India in line with international standards, and
• Establish a mechanism to review those Indian taxation policies that are seen as an impediment to US investment and trade.

The far-ranging letter underlines Parekh's point that the CEOs' Forum has no specific brief; and that it has the freedom to examine any and all issues with a view to voicing concerns and seeking solutions.

The Forum is yet to meet formally. "The modalities -- when and where we will meet, and how often -- will be decided soon," Parekh told rediff.com. "We have elected (Tata Group Chairman) Mr Ratan Tata as chair of the Indian side of the Forum; the American side will announce its chair later this week.

"Once that is done, the two chairs will meet to discuss modalities and procedural issues," Parekh said, before the pace of interaction picks up.

Tata was reluctant to expand on the topic, ahead of his first meeting with the American chair. "It is too preliminary for me to make any substantive comment," he told rediff.com.

"We have had some general discussions, we spoke of broad issues but haven't gotten down to specifics."

Tata, like Parekh, said it would take a while for the Forum to figure out its modus operandi, and get down to brass tacks. But, like Parekh, Tata was optimistic that the Forum would be a good instrument of change and progress.

"There is a view that it will create an atmosphere of better understanding," he told rediff.com. "I think the time to make a judgment on the Forum though is after we have a couple of meetings."

No dates, he said, had as yet been set for the first meeting.

NB: The Forum, as comprised, consists of the following CEOs: Paul Hanrahan of AES Corporation; Warren R Staley of Cargill Inc; Charles Prince of Citigroup; William Harrison Jr of JP MorganChase; David M Cote of Honeywell; Harold McGRaw III of the McGraw-Hill Companies; Thomas J O'Neill of Parsons Brinckerhoff; Steven Reinemund of PepsiCo; Christopher Rodrigues of Vias International; Anne M Mulcahy of Xerox on the American side; and Ratan N Tata of Tata Group; Mukesh Ambani of Reliance Industries; Dr Pratap C Reddy of Apollo Hospitals; Baba N Kalyani of Bharat Forge; Kiran Mazumdar-Shaw of Biocon India; Deepak S Parekh of HDFC; Ashok Ganguly of ICICI One Source; Nandan M Nilekani of Infosys; Yogesh C Deveshwar of ITC; and Analjit Singh of Max India.