India-U.S. Relations are key to addressing the most significant challenges facing the world today: Biswal
“We are now in a phase where our partnership is no longer characterized by mere potential,” Nisha Desai Biswal, president of the US India Business Council, told PTI in an interview on Tuesday.
“In many ways, the US-India relationship holds the key to addressing the most significant challenges facing the world today, from supply chain restructuring to climate change to security goals. in the Indo-Pacific and in the world in general. It is time for the trade relationship to grow in tandem with the centrality of our bilateral relationship, ”she said.
Although trade between the United States and India has steadily grown from just $ 16 billion in 1999 to a more robust $ 146 billion in 2019, long-standing disagreements over critical issues and the lack of Structural trade deals between the two countries have slowed attempts to realize the perceived full potential of the relationship, she noted, ahead of US trade representative Katherine Tai’s visit to India next week.
“We see this as an important time to think bigger, and the TPF (Trade Police Forum) is the main opportunity to cement a larger agenda. There is an urgency right now, with the supply chain crisis, India’s energy crisis and the broader need for energy transition, it is imperative that we expand the trade relationship so that we can move forward on all of these fronts, ”Biswal said.
In response to a question, Biswal said business-friendly policies can unlock more than $ 200 billion in new trade over the next few years, as resolving regulatory issues for US and Indian businesses opens the door to a more expansive growth.
As world leaders reconsider their approach to global trade and investment, the two countries can and must do more to meet the common goal of $ 500 billion in bilateral trade, she said.
Observing that bilateral trade has grown almost 10-fold over the past 20 years – a phenomenal history of innovation and partnership, she acknowledged that key issues remain.
India has promisingly shown greater interest than ever in a broader trade agenda, but some tariff and regulatory policies continue to protect domestic industries rather than create the kind of predictable and investment-friendly landscape in which multinationals. feel comfortable making longer term investments, she said.
“Right now we’re at a point where the two countries are interested in a broader trade relationship, but the United States really wants to tackle these irritants first. India will soon be one of the biggest, youngest and fastest growing markets in the world, so structurally it’s extremely attractive and US and multinational companies want to be there, ”she said.
“The US government wants an enabling environment for this to happen as it aligns with broader strategic goals, and the Indian government wants this to help development. It is therefore important to recognize that more than differences, the present is characterized by potential alignment and opportunity. What is needed at this point is a streamlined and predictable regulatory environment from India that can pave the way forward, ”Biswal said.
Before Tai’s first visit to India, she called for seeing trade as a key strategic issue for the United States, for both countries. If the administration is to prove that democracies can come together in this time of geopolitical flux, strengthening trade and investment with the world’s largest democracy is an important place to start, she said.
“While the USTR intends to tackle these more specific barriers first, committing to a larger agenda and having a trade deal as a goal can nurture the necessary frameworks and mood. to make real progress, rather than falling back into a gradual approach that has always lagged behind the importance of partnership, ”she said.
The USIBC has been arguing for a free trade agreement for some time. To move forward towards an FTA, it is really important that both countries tackle long-standing obstacles, but within the context of a larger strategic framework, rather than in isolation and piecemeal, Biswal said. .
“At this point, it is essential to find areas of consensus that can serve as a stepping stone to a bigger deal. There are so many sectors with vast interdependencies where we can set modular agendas, and we need to focus on the areas that we believe will drive growth in the future, such as healthcare and the digital economy ” , she added.
Responding to a question, she said that although there are still concerns, the mood in India is optimistic.
“Once again, structurally, India is an extremely attractive market and American companies want to be present in the country. While regulatory predictability remains an issue, and the industry is closely monitoring developments in areas such as Press Note 3 and the Guidelines for Direct Listing on Indian Stock Exchanges, the administration’s liberal orientation current has been promising and has encouraged companies to pay more attention to India, ”she noted.
Recent government moves to raise FDI ceilings and in particular to repeal the retroactive tax have gone a long way in improving investor confidence and making US businesses more optimistic about India, a- she declared.
“Our members are excited about the global trajectory; what is really needed at this point is for the government to follow through on its expressed commitments to a consultative approach — our members want to be in India and they want to be in the political conversation. In many ways, that’s what we are dedicated to at the US-India Business Council: improving dialogue and expanding forums for collaboration, ”Biswal said.