India Intelligence Report

US Wants More Economic Reforms


US Treasury Under Secretary Timothy Adams said that more economic structural reforms are necessary for billions of dollars to flood the India and create unprecedented opportunities for the nation.

Among the key areas of reforms, he pointed out that India needs to upgrade its dispute resolution mechanisms for corporate investments, especially those in the infrastructure or energy projects, so "if something were to go wrong, they can adjudicate their demands." He also highlighted that "number of days to enforce a contract" is unacceptable for investors. These are two key areas that China is way ahead of India.

Meanwhile, Asian Development Bank Chief Economist Ifzal Ali said that "After so long, India has become a global player" and that "reservation in the private sector" will drive labor out of India seriously impacting its capacity to sustain the economic momentum. Ironically, this assessment comes at a time when many Indian Information Technology majors have announced new centers in China citing shortage of qualified and employable labor. Reservations in private sector and premier engineering and management schools will seriously exacerbate the issue. If Indian companies them want to leave the company, capital will fly if these retrograde policies go through.

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