Press Releases 2004

U.S. Offers Quality Agro Products, Urges India to Open Markets

March 12, 2004

NEW DELHI - U.S. Ambassador David C. Mulford today opened the American pavilion at the Aahar 2004 food exhibition, noting that the high-quality products represented there are now available to the discerning Indian consumer, while pointing out that more needs to be done to balance the agricultural trade between India and the United States.

Ambassador Mulford said that the growth in India's economic status, along with its demographic changes, would lead to changes in the country's retail sector, especially in the large metropolitan areas. "Such change will inevitably lead to greater choice at lower prices for more consumers, including offerings of more food and beverage products from the U.S. and elsewhere. However, this progress was being hampered by the ban on foreign direct investment in the retail sector," he said.

"Removal of this restriction would accelerate the transformation of this up-and-coming sector, the realization of supply chain efficiencies, and would provide impetus to the domestic food-processing sector, as well," the Ambassador noted.

Mr. Mulford stated that the U.S. has been engaging the Indian Government in the WTO framework to further open international markets and to mitigate trade distortions, particularly in agriculture. He said that the U.S. valued India's continued collaboration in these areas.

On market access, the Ambassador said that while the U.S. is one of the world's most open economies, India continued to be one of the most closed. "In agriculture, India enjoyed an $857 million trade surplus with the United States in 2003. Over the past six years, U.S. agricultural exports to India have almost doubled to $309 million in 2003. However, given India's population, growing middleclass, and robust economic growth this figure is too small," he said.

The Ambassador said that the U.S. is willing to eliminate export subsidies and reduce domestic support. "We cannot do it unilaterally, however. Others, who have much higher levels of agricultural subsidies must also do their part. In addition, there must be new market openings from developed and developing countries, especially those like India that are competitive in agriculture and have strong economies," he said.

The Ambassador said that although U.S.-India relations had vastly improved under the leadership of President Bush and Prime Minister Vajpayee, trade and investment were areas that have under-performed and the U.S. government and industry would like to see further progress made on these two fronts. "All of them are eager to be more involved in the Indian market. None would be here if that were not true. Through freer trade and increased private investment, India will accelerate its economic growth and, thus, help improve the lives of its citizens," the Ambassador said.

The Ambassador expressed satisfaction over the fact that the U.S. presence at Ahar has grown steadily over the years, from one booth in 1999 that displayed only catalogues of a few US food businesses, to 11 booths with 12 exhibitors this year.