Wal-Mart, others seek US govt help on India plans
Washington: Amid growing political opposition in India for easing of foreign investment norms in retail and other sectors, US-based companies like Wal-Mart and Prudential Financial are lobbying hard with their own lawmakers here to garner support for their Indian business expansion plans.
As per their latest lobbying disclosure reports filed with the House of Representatives and the Senate, the US-based companies and industry groups spent millions of dollars since the beginning of this year towards lobbying on issues including FDI in India, changes in Indian taxation framework and various other trade-related matters.
Wal-Mart Stores, which has been trying to set multi-brand shops in India for a long time, spent nearly USD 1.5 million on lobbying in the last quarter ended June 30, 2012 on various issues, including matters "related to FDI in India."
The world's largest retailer's lobbyists presented its case with the Senate, the House of Representatives, the US Trade Representative and the Department of State during the last quarter.
Wal-Mart has been lobbying among the US lawmakers since 2007 to garner support for its plans to enter India and its lobby issue earlier included "enhanced market access for investment" in India."
However, the company's lobbying issues during the first quarter of 2012 did not include India-related matters, presumably because chances had improved at that time for Indian government allowing FDI in multi-brand retail business.
While the government is pushing hard to evolve a political consensus for allowing FDI in multi-brand retail, the opposition has increased manifold in the past few months.
Besides retail sector, the US companies are also lobbying for market access in a host of other businesses. Among these, Dow Chemicals had "Trans Pacific Partnership Market Access - India" as one of its lobbying issues in the last quarter, when it spent more than USD 3.6 million on various lobby issues.
Financial services giant Prudential Financial Inc has spent nearly USD four million so far in 2012 on various lobbying matters, including those "relating to India financial services market access and equity ownership issues".
Other major entities having spent big bucks in the last quarter on issues related to trade with India include Dell Inc, Morgan Stanley, Xerox, Cargill Inc, Aerospace Industries Association of America and Chamber of Commerce of the US.
Besides, Honeywell International is lobbying on "issues related to engine upgrades for Indian military aircraft", and Medtronic lobbied on matters including those "relating to improving medical device regulation in India" during the last quarter.
After FDI, the issue of proposed tax amendments in India has emerged as another major lobbying issue for the US-based entities in the recent months. The US-based Financial Services Forum paid its lobbyist USD 440,000 during the last quarter alone for issues including its opposition to the proposed tax amendments in the India Finance Bill 2012.
"These proposed amendments will have a significant negative effect on our companies, customers and shareholders, and investors in India and may have a detrimental impact on the flow of direct investment into India," the Forum said in its lobbying disclosure report.
Some other entities, such as Securities Industry and Financial Markets Association (SIFMA) and Financial Executives International, have also begun lobbying on matters related to the Indian Finance Bill, among other India-related matters.
Among others, Devas Multimedia has spent USD 120,000 in the first two quarters of 2012 on "foreign direct investment and government procurement issues relating to a satellite communications contract in India."
In the communications space, US-based Qualcomm is also lobbying on "issues related to spectrum licences in India".
Alliance of Automobile Manufactures paid its lobbyist nearly USD four million during the last quarter for various lobbying issues, including "to prohibit the regulation of carbon dioxide emissions in the US until China, India, and Russia implement similar reductions."
A host of other entities, including CenterPoint Energy are also lobbying on this issue of carbon emissions.
Lobbying is a legal activity in the US, but the companies and their lobbyists are required to inform the US Senate about such activities through a quarterly disclosure report detailing the issues, the concerned government departments and institutions and the related expenses.
A host of Indian companies, as also the Indian government, have also been lobbying in the US for many years to present their case with the American lawmakers.
India has emerged as one of the fastest-growing economies in the world, and a host of the companies from across the world, including from the US, are seeking to enter this market or further expand their business here. Despite a global economic slowdown, countries like India and China have managed respectable growth rates.
The average annual growth rate for the lower-middle income countries such as India and China at about 7 percent in past 20 years has been more than three times that of the high-income countries like the US at little over 2 percent, as per the World Bank estimates.
However, the foreign investment ceilings in a host of sectors in India have come in the way of the US companies seeking to expand here, and they are seeking the help from their government to facilitate their expansion plans.