Bangalore: US Ambassador to India Robert D Blackwill on October 11 said American companies have "serious inhibitions" to invest in India because of high tariffs, red tape and regional instability due to Indo-Pak tension.

"It is a tough sell (to convince American companies to invest in India). They have serious inhibitions," Blackwill said in his address to businessmen at a meeting, organised by the Greater Mysore Chamber of Industry (GMCI) in Bangalore.

Foreign Direct Investment (FDI) from the US to India has been flat for several years, he said, noting that there was enormous business potential that was unrealised.

"American investors are indifferent about how far India had come but want to know what India is compared to China," he said.

Blackwill said American companies already existing in India were doing "quite well", except in power sector which was a disaster, but the problem was in persuading new companies to come to India. "New companies are flooding China, not India."

"Structural issues" concerning high tariff, red tape and regional instability had to be addressed for American investment flow into India, Blackwill said.

Stating that commercial interaction was a crucial part of bilateral relations between India and the US, he said "we need to work together to improve markedly in the period ahead".

On stricter visa procedures to visit the US after the September 11 terrorist attacks, he said India was not being singled out for it and added that, in fact, there was a category of countries, which had to undergo much stricter procedures.

PTI