India can become global financial hub, says US

New Delhi, May 30: India can become a global financial hub like London, Hong Kong and New York, if New Delhi further opens the financial services sector, top US trade official said here today.

Expressing concern over the restrictions in India in the financial services sector, the US took up this issue at the India-US Trade Policy Forum, the high level institutional set-up between the two countries.

''Restrictions adversely impact the flow capital,'' US Deputy Trade Representative Karan Bhatia told reporters after the meeting of the Forum which he co-chaired along with Commerce Secretary S N Menon. Five focus groups - agriculture, trade, tariff and non-tariff barriers, services, investment and innovation - will thrash out the difficult issues in each of the five areas.

Mr Bhatia said if India aspires to become a financial services hub like London, Hong Kong and New York, New Delhi must do away with the entry norms for the financial services players.

He said the controversial subject of FDI in retail did not come up for discussions.

The level of India-US trade dialogue has come a long way as the two-way trade is close to touching 27 billion dollar from a level of 7.5 billion dollars in 1994. Mr Bhatia said, while the level of the US foreign direct investment (FDI) in India at around six billion dollars is much below the potential, it increased in 2004-05 by 28 per cent and Indian FDI to the US went up by 82.5 per cent at 522 million dollars.

As regards the multilateral talks, Mr Bhatia said he has taken up the issue with Commerce and Industry Minister Kamal Nath and emphasised the need for maintaining the level of ambitions in the ongoing Doha Round of trade negotiations in the World Trade Organisations. Agriculture remains the backbone of the negotiations.

He denied the charge that the US was not forthcoming in giving meaningful offers. ''US offers were the most ambitious aimed at cutting the domestic support but called for market opening,'' Mr Bhatia said.

He said any deal in agriculture which is not ambitious enough would not be ''embraced'' by the US Congress. Mr Bhatia, the second generation Indian who is number two in the US Trade Office said, in agriculture, the US is willing to work with India which has certain political compulsions.

UNI