Page 53 - IACC Newsletter March-April 2014 Issue 03

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There are many interesting new opportunities for the Indo-American partnership that can help grow our economies.
The next five years should see a dramatic increase in bilateral trade between the US and India, helping meet vice-
president Joe Biden’s stated goal of growing our bilateral trade to $500 billion annually. Clearing away some of the
issues that have hindered US-India relationship in the past could boost the confidence of foreign businesses.
Increasing foreign investment caps in key sectors like insurance and defence could allow for deeper partnership in these
areas, and removing local content rules in certain product areas could help restore balance to US-India trade flows,
where India enjoys a two-to-one advantage in goods trade flows. However, as we move forward, much more needs to
be done by both countries so we can truly enjoy the fruits of a robust economic partnership.
We need to collaboratively develop a shared vision of what bilateral economic cooperation might look like 10 years from
now. We have a target of $500 billion in trade, but what will comprise this total? Defence and natural gas trade typically
get a great deal of attention, for good reason. But other industries like agriculture may also see a boost in trade — in
both directions— as Indian food processors and retailers look for new technologies and products, and American grocery
stores see an increasing diversity of Indian food.
There are also important partnership opportunities for Indian firms to help American firms redesign products and
services for the Indian market as well as critical third markets such as sub-Saharan Africa. Such partnership opportunities
should be pursued and augmented. And if India undertakes a major programme to build infrastructure and increase
industrialization, American firms could be a powerful source of capital, intermediate goods, capital equipment — and
ideas.
Both India and the US must also be open to an evolving agenda. The new Government of India will have new priorities,
likely including a dramatic infrastructure build-out, and supporting faster industrial development. The US has much to
offer in both areas — both in terms of capital and expertise. Yet we do not yet have operational joint working groups in
either areas. Similarly, more than 50% of India’s labour force is engaged in basic agriculture.
Fifty years ago, the US played a significant role in supporting India’s initial Green Revolution. Hopefully, we will find new
areas for collaboration in agriculture — both in trade of agriculture products, but also in helping modernize India’s
agriculture sector. We also encourage the new Government of India to actively engage Congress on key issues. India has
a dynamic and articulate ambassador in Washington, and members of Congress also appreciate direct engagement with
foreign leaders to exchange views and develop deeper understandings of policy issues. Just as American firms want to
invest in India, there is also opportunity for Indian investment in the US and Congress needs to be informed about issues
that could deter such investment. The concept of encouraging engagement between the US and Indian states has been
discussed for several years.
We should look for ways to make this concept a reality. Certainly there can be some amount of mismatched
expectations for such meetings — both sides want to primarily focus on exports from their regions, and to attract
incoming investment — but there are complementarities that should be discovered and fostered. Education, skills
development, and fostering entrepreneurship are areas ripe for cooperation as states become “test tubes” for
innovation.
We hope the new Government of India will also revisit a policy issue that has reinforced the sentiments often expressed
by the relationship’s detractors — the Civil Liability for Nuclear Damage Act, 2010. When India passed its Nuclear
Liability Act in August 2010 without putting a limit on possible liability, a great deal of enthusiasm for the strategic
potential of the relationship was lost. Quick action on this issue by the Indian government can help restore American
confidence in the partnership, as well as helping facilitate the further development of this important energy source. The
US and India have enjoyed a healthy and growing relationship and we very much hope to expand on the partnership
moving forward.
A renewed focus on economic growth should help provide new opportunities — and new energy — to allow us to take
the relationship to a new level, and engagement will be critical from both sides.