Now that it is time to maintain trade relationships to grow in order to foster the India-US relationship, the head of a business advocacy organization has stated that bilateral ties are the important factors holding the key to directing the most important challenges that the world is facing.
Nisha Desai Biswal who is the President of US India Business Council told PTI on Tuesday in an interview, “We’re at a phase now where our partnership is no longer characterized by just potential.”
She also stated that, “In many ways, the US- India relationship holds the key to addressing the most important challenges facing the world today— from supply chain restructuring to climate change to security objectives in the Indo-Pacific and world at large. It’s time for the trade relationship to grow in tandem with the centrality of our bilateral relationship.”
Though the trade relation has grown steadily between US and India, from almost USD 16 billion in 1999 to an increase to USD 146 in 2019, there has been long-standing disagreements over important issues and the lack in structural trade agreements between India and US have brought down the understanding of the full potential of the relationship, she stated ahead of the next week’s visit to India of US Trade Representative Katherine Tai.
“We see this as an important moment to think bigger, and the TPF (Trade Police Forum) is the primary opportunity to cement a larger agenda. There is an urgency to this moment, with the supply chain crisis, India’s energy crisis, and the broader need for energy transition, it’s imperative that we expand the commercial relationship so we can make progress on all of these fronts,” as stated by Biswal.
While responding to a question, Biswal stated that, “business-friendly policies can unlock upwards of USD 200 billion in new trade over the next few years, as resolution of regulatory issues for both US and Indian companies opens the door for more expansive growth.”
As leaders all around the globe reconsider their approach to investment and global trade, both countries must do a bit more to achieve the goal of USD 500 billion in two-way trade, she stated.
There has been nearly 10 times growth in the bilateral trade in the last20 years which is a long story of partnership and investment, she even acknowledges that there are some important issues that still prevail.
India has shown much greater interest in a border trade agenda than ever before, but some regulatory policies remain the fact to protect domestic industries instead of creating a sort of investment-friendly area that multinationals will feel comfortable in making long-run investments in, she said.
She also stated that, “Right now, we’re at a stage where both countries are interested in a broader trade relationship, but the US really wants to address those irritants first. India is going to be one of the world’s largest, youngest, and fastest-growing markets soon, so structurally, it’s extremely attractive, and American and multinational firms want to be there.”
Biswal said, “The US government wants an enabling environment for that to happen as it aligns with broader strategic goals, and the Indian government wants this to aid with development. So it’s important to recognize that more than differences, the present is characterized by potential alignment and opportunity. What’s needed at this point is a streamlined, and predictable regulatory, environment on India’s part that can open the path forward.”
Ahead of Tai’s maiden India visit, she called for analysis trade as one of the important strategic issues for the United States, for both the nations. “If the administration wants to prove that democracies can come together at this time of geopolitical flux, strengthening trade and investment with the world’s largest democracy is an important place to start,” she stated.
“Even though the USTR may be going in with the intention of addressing these more specific barriers first, commitment to a larger agenda and holding a trade deal as the goal can encourage the frameworks and mood necessary to make real progress, rather than backsliding into an incrementalist approach which has consistently lagged behind the partnership’s importance,” she stated.
Biswal said that “USIBC, for quite some time, has been advocating for a Free Trade Agreement. To move forward toward an FTA, it’s really important that both countries do address the longstanding barriers, but in the context of a broader strategic frame, rather than in an insulated, piecemeal fashion.”
While responding to a question, she stated that though there are concerns, the mood is optimistic on India.
She noted that, “Again, structurally, India is an extremely attractive market and U.S. companies want to be in the country. Although regulatory predictability remains an issue, and the industry is watching closely for developments in matters like Press Note 3 and guidelines for direct listing on India’s exchanges, the liberalizing orientation of the current administration has been promising and has encouraged businesses to pay greater attention to India.”
The raise in FDI caps and specifically to repeal the retroactive tax as per the government’s recent moves did a good deal to enhance investor confidence and make companies of the US more bullish on India.
Biswal said, “Our members are excited about the overall trajectory; what’s really needed at this point is for the government to follow through with its expressed commitments to a consultative approach- our members want to be in India, and they want to be in the policy conversation. In many ways that’s what we’re devoted to at the U.S.-India Business Council: enhancing the dialogue and expanding the forums for collaboration.”