NEW DELHI: The U.S. embassy in New Delhi has issued a report tor ‘American investors, briefing them on the business climate m India in the run-up to general elections due next year, a spokesman said on Monday Nov 21. The spokesman said the internal document, whose contents were reported by the Economic Times on Monday, was meant to help investors make informed judgments about investments in India and not to influence their decisions. It was not available for public circulation.

“The report was an effort on our part to provide American investors sense of the business environment in India in an effort to help them make informed judgments about the timing and substance of their investments” he said.

“It wasn’t meant to, nor did it, attempt to persuade or dissuade American businesses about the type of profile they might wish to adopt, nor did it make recommendations about their marketing strategies,” he added.

The Economic Times reported that the embassy note advised American firms in India to keep a low profile in the highly charged political climate before the general elections expected early next year. ‘The newspaper said the report advised that U.S ,consumer goods firms, especially in the fast food and soft drinks sector, were likely to face a difficult time in the next few months as political parties look for vote winning issues. “The embassy advises companies 1n the consumer goods sector to try and keep a low profile and blend with the Indian scenario as much as possible,” the newspaper said. ‘The Economic Times said the report predicted a slowdown in some infrastructure sectors with high political visibility, especially in fast-track power projects.

It suggested that some ‘companies should wait until elections are over before pushing projects forward and signing final contracts.

Since India began liberalizing, its economy in 1991, direct foreign investment has reached $1.0 billion a year, 10 times more than in 1991.

But nationalists are targeting same foreign projects in a bid for votes Opposition parties have put roadblocks in the way of PepsiCo Inc.’s expansion plans for its Kentucky Fried Chicken restaurants, and have halted construction of a $2.8 billion power plant being built by a U.S. consortium led by Enrcn Corp in the western state of Maharashtra.P.L.11/24/95].

Article extracted from this publication >> December 1, 1995