US firms seek opportunities in India

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By Karishma Vaswani Business correspondent, BBC News, Mumbai

A record number of US delegates attended the Indian US Business Summit

The Indian US Business Summit comes to a close in Mumbai, the country's financial capital on Thursday.

It is the biggest trade mission from the US to any country in the world, bringing over 250 American firms to India.

At least 25 of these firms are from the civilian nuclear power sector, exploring opportunities with Indian businesses, ahead of the impending Indian-US nuclear deal.

Energy needs

Arriving at Mumbai's international airport after many hours on two international flights from their US base in Virginia, Seth Grae, chief executive of Thorium Power and Dennis Hays, the firm's vice president were quick to brush off any concerns about jet lag.

Thorium is just one of the firms attending the US India Business Summit looking to invest and do business in India.

"We're fine, ready to go", said the boss of the American nuclear technology firm.

"We're here to meet with some high profile Indian power businesses - and hopefully clinch some deals in our sector by early next year, once the civilian nuclear deal between India and the US is signed and sealed."

Mr Grae hopes his firm can benefit from a US Indian nuclear deal

Mr Grae is talking about the civilian nuclear agreement that India and the US have been working on.

The US House of Representatives and the US Senate have endorsed legislation that gives US nuclear firms the permission to sell their technology and fuel to Indian firms.

India is keen to get its hands on clean nuclear technology and equipment - to feed its growing energy needs.

The country imports three quarters of its energy - and has found it difficult to bear the cost of volatile fuel prices in the last year.

India is keen to secure alternatives to feed its fast growing economy - and the nuclear option has seemed an attractive one.

The agreement between the US and India on civilian nuclear energy has been touted as a sign of the closer relationship between two of the world's most important economies.

Pending approval

But it's not a done deal just yet.

"It isn't stitched up just yet, that's true," the US Ambassador to India, David Mulford, told me on the sidelines of the US India business summit.

"The bills need to be merged and approved by both the House and the Senate before the US President signs them."

"If that happens it will [take place] in the next 4-5 days - and that will mean a change in the law. I think that all the important parts of the deal will be in place by May of next year."

But is it that impending deal that has got so many American nuclear firms excited about coming to India.

According to US trade officials between 12 and 20 nuclear companies have attended the India US Business Summit, looking for opportunities in the country.

And a number of other sectors were also represented in the mission - businesses ranging from technology to healthcare. On the guest list are Dow Chemical, Exxon Mobil, Lockheed Martin and IBM.

The India US Business summit comes hot on the heels of an announcement by America's largest retailer Wal-Mart that it is tying up with Bharti, one of India's leading phone firms, to explore retail opportunities in India.

But the tie-up has already run into some trouble - with India's left wing parties crying out that Wal-Mart has entered India through a "backdoor" route.

In a statement to the Indian press, a crucial party within India's coalition government, CPIM, has threatened to launch a nationwide strike against Wal-Mart.

The Indian government has promised to look into the tie up between the American giant and Bharti.

'Frustrating'

These problems are an indication of the frustrations that foreign businesses can face when they try to enter India.

Foreign investment in retail in India is severely restricted, on concerns from the Indian government that freeing up the sector could endanger the jobs of millions of small shopkeepers in the country.

Some 98% of the country's retail sector is disorganised - run by family-owned stores.

"It is frustrating," the head of the India US Business Summit and the Under Secretary for International Trade Frank Lavin told the BBC in an interview.

"Indian consumers deserve the best products and the best price, and companies like Wal-Mart can offer them that. The Indian consumer wants that."

'Patience and persistence'

India is not a journey for the faint hearted, or for those who expect overnight success US Ambassador to India, David Mulford

The Indian consumer may want what American businesses have to offer.

But the enthusiasm of US firms desperate to enter the Indian market, may need to be tempered with a healthy dose of reality about the challenges of doing business here.

"India is not a journey for the faint hearted, or for those who expect overnight success," said the US Ambassador to India, David Mulford in his address to the hundreds of Indian and American delegates at the summit.

"You will need a strategy - a long term view - patience, and persistence. But one of the world's great markets, is here."