A creeping reform process begins to look a little like no process at all

Ambassador Robert Blackwill

Speaking to an audience of industrialists in the Indian capital, Mr Blackwill called for a lowering of barriers to trade, elimination of superfluous regulations, and the creation of a globally accepted patent law to protect intellectual property rights.

Although relations between the US and India have warmed considerably since the Cold War - when India sided with the USSR - economic ties have lagged far behind, he said.

"I am convinced that the long-term success of the US-India bilateral transformation will hinge importantly on a parallel invigoration of our economic relationship."

Big projects flounder

India's sluggish bureaucratic process can kill off big foreign investment projects, Mr Blackwill said.

The US and India are not friendly enough, the ambassador worries

He referred to the doomed power project of bankrupt US energy firm Enron in Dabhol in the western state of Maharashtra.

The plant was caught up in a dispute with the state power utility over payments, leading ultimately to the project's closure.

"The Dabhol dispute feeds a chronic perception among the overseas investing community that India may not be ready yet for big-time international investment," Mr Blackwill said.

"The long-term repercussions could be profound."

Signs of hope

But Mr Blackwill was not entirely gloomy.

He praised India's success in building an information technology business, which he said should be a model for the rest of the country's commerce.

Economic reform has not always been easy

He also said India had made significant progress during its decade-long liberalisation drive.

But the country now needed to pick up the pace in such areas as power reform, agriculture, intellectual property rights, labour legislation and fiscal discipline, Mr Blackwill said.

"A creeping reform process begins to look a little like no process at all," he said.

"The reform rabbit can become a turtle, which can become a rock."