Source: Business Line
10 Dec 2014
US businesses see positive vibes in the US –India relations as triggers to push forward trade and economic relations in the near term. Defence, energy, infrastructure, insurance could see big investments, according to Richard M Rossow, a Washington based expert on US-India Policy studies.
The four fold increase in FII inflows into India of $40 b ( upto November this year) compared to last year and most of it after June (Modi coming to power) as well as a 24 per cent rise in FDI, are clear indications of this trend, he told Business Line here today.
The recent visit of Indian Prime Minister, Narendra Modi to the US has gone down well with the US Government, Indian diaspora, US-based businesses and the American Youth. His connecting well through the social media is also helping in a big way. The upcoming visit of President Barack Obama (Guest of honour for Republic Day on January 26, 2015) should accelerate relations between the two nations, he felt.
Rossow, who was deputy director of the US-India Business Council during 1998-2008 sees huge opportunities in manufacturing under Modi’s `Make in India’ campaign. With China no longer an attractive destination on cost and labour arbitrage, manufacturing is moving out to Mexico, Indonesia etc. India can get a good pie out of it, if it tweaks its policies, improves IPR and corporate governance issues.
The Barack Obama visit could give an impetus to the Defence Trade & Technology Initiative, whose 10 year framework ends in June 2015. Both Government’s are keen to negotiate and carry forward. There is a strong case to restart the US-India bilateral Investment Treaty. It can bring American private companies to India with more security
Rossow, who holds the Wadhwani Chair at the Centre for Strategic and International Studies however did not see much change on the Indo-nuclear treaty, where the future is less clear. The nuclear liability bill is an issue, while contact groups are working, the progress is slow.
The US is involved in a major way in 3 mega trade agreements—Trans Pacific, Trans-Atlantic Trade Investment and Trade & Services Agreement. In all these the US will have preferential trading status in the countries involved. In the Asian region, India is considered to emerge as the most strategic nation for US in terms of geo-politics, trade and commercial relations.
On India and Pakistan, he said for the US they are not on the same page, except on discussions surrounding Afghanistan. The Indo-US nuclear agreement, India backed for UN Security Council and the visit of President Obama to India are clear indications of how India is considered a key partner, Rossow said.