U.S. Secretary of Commerce Wilbur Ross says changing FDI in e-commerce rules troubling to American firms
U.S. Secretary of Commerce Wilbur Ross said India’s decisions relating to Walmart and Amazon,[ i.e., its FDI in E-commerce policy , announced in December 2018] had caused “a lot of concern” to other companies considering investing in India. Mr Ross’s remarks were made during a discussion in Washington DC at the US India Partnerships Forum’s second annual leadership summit.
Walmart had invested $16 billion in e-commerce company Flipkart in 2018. Mr. Ross described the e-commerce FDI rules as “something of a surprise” to Walmart. He also said Walmart intended to continue to invest in India.
“I don’t mean to suggest that they’re withdrawing, that’s not what they’ve told me,” Mr. Ross said.
He said that investors going into a country need to know that there would be “stability” in regulation, “transparency”, an opportunity to comment on new, pending regulation and that there “wouldn’t be wild changes in policy.”
Praises India’s LNG stance
Mr. Ross praised India’s arrangements for receiving liquefied natural gas (LNG from the US.
“They have been very good and very aggressive about working with us toward making the commercial arrangements for LNG to come in from the U.S.,” Mr. Ross said, adding this was good for India because the U.S., he said, is an “extremely competitive source” of the fuel and it would help reduce the U.S.’s trade deficit with India.
The US was hoping to remedy, over time, the fact that it had a trade deficit in goods as well as services with India, Mr. Ross said, saying that normally it had a deficit in goods but a surplus in services with other countries.
Mr. Ross repeated a message he delivered in Washington DC to the U.S. India Business Council, an industry body, in mid-June: India’s average applied rate of tariffs was high and this was also impacting Indian companies by stifling competition.
He said the US would hope to “get some tariff reductions”.
On agriculture, Mr. Ross said if India increased the scale on which farming is done, it would result in greater productivity and the US could play a “constructive role” in that.
“In an ideal world, India would consolidate farms into bigger farms,” Mr. Ross said, saying this would enable them to take advantage of modern farming techniques since small scale farms are “not terribly well equipped to do that”.
“If they [India] did decide to open it [the farming sector] up ,there probably could be a very constructive role for US industry in that,” Mr Ross said.