US reaction to cola controversy exaggerrated India Inc

 
Published: Friday 15 September 2006

Soon after the cola controversy (see 'Cola controversy', Down To Earth, August 31, 2006) hit news-stands, there have been reactions coming from several states. Kerala has banned the production and sale of soft drinks. Responding to the ban, the US undersecretary for international trade, Franklin Lavin, said, "The cola ban is a setback for the Indian economy." But India Inc thinks otherwise.

Kamal Nath, the Union minister of commerce and industry, says, "Public health is extremely important and the foreign direct investment (FDI) inflows will not be affected in the wake of cola controversy or the subsequent ban." According to a survey carried by the Associated Chamber of Commerce and Industry (ASSOCHAM), 89 per cent of the profit centre heads (chief executives and managing directors) of Indian companies believe that the partial ban would not impact the FDI inflows. It was also brought out that the US claim to the contrary is overstated.The survey found that 76 per cent of the profit centre heads did not agree with Lavin's comment.

Anil Agarwal, president ASSOCHAM, believes India is not the only country in the world to witness a public outcry on food safety issues. And hence drawing a negative conclusion for the whole economy amounts to exaggeration. Almost 91 per cent of the respondents felt it's high time India had a regulatory regime.

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