- The Washington Times - Thursday, February 14, 2002

Trade 'flat as chapati'

Robert Blackwill, the U.S. ambassador to India, ignored diplomatic niceties and told corporate executives in New Delhi that the Indian government is strangling foreign trade with red tape and tariffs as high as 700 percent.

Mr. Blackwill said U.S.-Indian business has become stagnant even as U.S.-Indian relations have soared, especially in anti-terrorist cooperation since September 11.

"U.S. trade flows to India since 1995 have stagnated. The trend in these numbers is as flat as a chapati," he said, referring to the popular Indian flat bread.

Mr. Blackwill faulted Indian government regulations.

"From the perspective of the foreign investor, innumerable rolls of red tape stretching to the horizon are a major deterrent to investment," he said in a recent speech to the American Chamber of Commerce in India and the Indo-American Chamber of Commerce.

"At 30 percent, India's average tariff ranks among the highest in the world and, without question, blunts trade."

Mr. Blackwill said tariffs can run as high as 706 percent on liquor and wine, "levels that have effectively blocked legitimate trade."

Indian exports to the United States have steadily expanded since the mid-1990s, rising to $10.7 billion in 2000 from $5.7 billion in 1995. However, U.S. exports to India have risen only to $3.7 billion from $3.3 billion over the same five-year period.

India accounts for only 0.6 percent of American global trade.

"This is a pitifully small figure given the aspirations we have for the U.S.-India relationship," Mr. Blackwill said.

Foreign investors also confront countless regulatory steps that discourage trade.

Citing a recent study, Mr. Blackwill said: "Acquiring Foreign Investment Promotion Board approval, a land-acquisition permit, pollution clearance, drug license, factory license, electricity connection, Reserve Bank of India approval, sales-tax-deferral notification, water connection and more might take a whopping 3,456 man-days within the Indian government or 10 years of effort for a single person."

Mr. Blackwill said he tried to speak "directly and without diplomatic niceties."

The ambassador, a retired Foreign Service officer and former Harvard professor, said, "It was once said that a bureaucrat's creed is as follows: When in charge, ponder; when in trouble, delegate; when in doubt, mumble.

"I think you will agree that I have not mumbled here today."

No warning in Yemen

State Department officials yesterday were annoyed that the FBI failed to inform them in advance of a terrorist threat to the U.S. Embassy in Yemen.

"We didn't know the FBI was doing its announcement until it was done," one State Department source told the Agence France-Presse news service.

Late Monday, the FBI issued a terrorist alert, warning law-enforcement agencies to be on the lookout for Fawaz Yahya Rabeei, a Yemeni man suspected of planning attacks on U.S. interests in Yemen and in the United States.

The warning also identified several other men of Yemeni, Tunisian or Saudi Arabian nationalities as associates in the suspected plot.

Employees at the embassy in the Yemeni capital, San'a, showed up for work as usual Tuesday morning, with no additional security at the diplomatic compound.

Sources told United Press International that the FBI failed to clear the warning through an interagency committee that includes State Department representatives.

As it turned out, the embassy in Yemen already had intelligence about the suspects but did not realize the FBI was going to raise the information to the status of a worldwide alert.

"In the end, it probably doesn't matter because we had the same information. But it's nice to know when your post is going to be mentioned in a warning that is going out around the world," one official at the embassy said.

Then again, there might have been something to the warning.

A Yemeni man linked to the al Qaeda terrorist network blew himself up yesterday after police cornered him in a suburb of the capital.

Sameer Hada, 25, threatened police with a grenade, which exploded in his hand.

Mr. Hada was not on the FBI's list of suspects, but he drew the suspicion of police after his landlord complained about a rental dispute.

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