India has claimed the position of the world's fifth-largest economy, and last year, the United States rose to become its largest trading partner, with both countries crossing a milestone of $191 billion in bilateral trade. However, when considering the vast collective strengths of the US and India, this figure seems relatively modest. Annual trade between America and any of Mexico, Canada, China, or the EU is well over $500 billion annually. Washington and Delhi should aim much higher for the economic partnership between the world's oldest and largest democracies. President Biden himself outlined such a target during his tenure as Vice President: $500 billion in bilateral trade.
In my view, $500 billion is not only eminently attainable but urgently necessary. In these turbulent geostrategic times, we need to reach this target to signal to the world that the future of the global economy will indeed be anchored by democracy and human freedom. So, how can we achieve this target?
Here is a strategic roadmap:
First, we must prioritize the energy transition. During Energy Week in February, Prime Minister Modi underscored the urgent need to meet India’s burgeoning energy needs. India is on track to become the world's largest energy consumer, but given its geography and level of development, it remains vulnerable to climate disruption. To meet its energy demand while spearheading a clean energy transition, India can benefit greatly from U.S. firms' competencies in various energy sectors and their status as leading producers of natural gas. If India secures deals with U.S. companies in these areas, U.S. investors are ready to invest as much as $100 billion immediately, and trade volumes will swell. The success of every other industry and endeavor relies on the U.S. and India implementing a comprehensive energy and climate strategy in coordination with other nations.
Next, we need to expand our ambition on defense industrial cooperation ASAP. Recent geopolitical shifts have hastened a rethink of the U.S.-India defense relationship. Both countries should collaborate to build robust defense and aerospace manufacturing capabilities to ensure we can confront global threats. The state-of-the-art American defense platforms can greatly augment India's capabilities in maritime domain awareness, border security, and overall deterrence to bad actors.
That's why the USIBC (US-India Business Council) has long called for an accelerator of defense startup collaboration, a vision that we’re seeing realized this year. At the behest of the Indian Ministry of Defense and U.S. Department of Defense, we are launching the inaugural INDUS X conference at the Chamber of Commerce later this June to spark a culture of co-development and co-production between our two democracies so they can maintain a free and open Indo-Pacific.
For both the US and India, the proverbial goose that lays the golden egg is leadership in the digital economy. Washington and New Delhi should embrace the principle of “data free flow with trust” to support the innovation and entrepreneurship fueling the digital trade revolution. A digital trade agreement—pursued bilaterally or in the context of the Indo-Pacific Economic Framework—can spur growth and strengthen our nations’ global leadership. With services becoming increasingly digitally tradable, such an agreement would be instrumental in making India the world’s top exporter of digital services, pushing us even closer to our bilateral trade target.
Perhaps the most consequential frontier of our bilateral trade partnership lies in advanced technology. We need to fully leverage the recently launched joint Initiative on Critical and Emerging Technologies (iCET) to break through barriers related to tech releasability and export controls. In doing so, we will accelerate our bilateral trade in strategically vital sectors, ensure access to critical needs like defense technology and semiconductors, and ensure that new capabilities in artificial intelligence and quantum computing serve the interests of democracies and free people everywhere.
The COVID-19 pandemic delivered hard lessons on the need to sustain resilient and secure supply chains for vaccines, diagnostics, and therapeutics. India and the U.S., as leaders in biopharmaceutical research and production, should incentivize R&D. With support from the U.S. Chamber, America has taken impressive steps through the CHIPS and Science Act. In the same vein, India should consider "Research Linked Incentives" to complement its successful Production Linked Incentives. Both India and America should also launch a joint initiative to address systemic barriers to access and ensure their citizens enjoy sustainable access to high-quality health products and services.
Finally, both our countries must fully capitalize on our deep and warm people-to-people ties. Currently, our bureaucracies are not equipped to facilitate the scale of talent exchange that the private sector demands—our leading businesses rely on talent pools in both geographies. Specifically, I've called on the U.S. government to be ambitious on visa reform and for both governments to open new consulates in, for example, Seattle, Bengaluru, and Ahmedabad. In the grand scheme of things, these are but small and necessary steps we need to take to ensure our relevance and economic competitiveness in the 21st century.
Note: The author of this opinion piece is Ambassador Atul Keshap, President of USIBC.
(The views expressed are personal)
(Edited by : Jerome Anthony)
Check out our in-depth Market Coverage, Business News & get real-time Stock Market Updates on CNBC-TV18. Also, Watch our channels CNBC-TV18, CNBC Awaaz and CNBC Bajar Live on-the-go!
BJP holds meeting in Delhi as polling underway for 5th phase
May 20, 2024 4:21 PM
UP Police arrests man after viral videos shows him voting multiple times
May 20, 2024 2:18 PM