Prime Minister Narendra Modi’s State visit to the United States from June 20–24 can be counted amongst the most historic of such visits by any global leader, and marked a new era in US-India relations, embracing new fields with a futuristic vision. Welcomed by President Biden to one of the largest arrival ceremonies ever hosted by the White House, PM Modi was only the third State guest of the Biden Administration and is one of the very few world leaders to have addressed the US Congress twice.
Amid all the ceremonial splendour, the two sides worked hard to line up substantive wins on the economic front. The centrepiece of the visit was prioritising deep technology collaboration based on high mutual trust, symbolising a partnership for the future.
The US-India economic relationship has never been stronger, with bilateral trade crossing $191 billion in 2022. According to CII estimates, with a strong growth rate, a conducive business environment and smooth talent movement on both sides, the goal of $500 billion is entirely achievable by 2030.
PM Modi made it a point to engage intensively with US business leaders to showcase India’s economic opportunities. The visit promises to catalyse private sector cooperation in key areas of trade, investment, technology, clean energy, defence, and talent development, among others. The two leaders emphasised on industry participation in their joint statement.
The first pillar, trade, saw the termination of six outstanding disputes in the World Trade Organization by the US and India. Particularly notable are the exclusions granted by the US to India from duties on steel and aluminium products, which had been impacting industry. As a result, nearly 3,40,000 metric tons of steel and aluminium products have been made eligible to enter the US duty-free from India.
Second, on the investment front, in the last two years alone, US companies have invested $16 billion in India with an FDI stock of more than $45 billion. CII’s study Indian Roots, American Soil shows that 160+ Indian companies have collectively invested $40 billion FDI in the US economy and created over 4,25,000 jobs, demonstrating the emergence of a bilateral economic partnership that is truly “two-way”. The prime minister’s business interactions during the visit would help to add to this relationship, with a downstream impact on jobs and growth in both countries.
Third, the recent initiative on Critical and Emerging Technologies (iCET) sets the foundation for industry collaborations in advanced technologies. The priority areas identified under this pillar include space, semiconductors, pharma and biotech, quantum technology, Artificial Intelligence, and next-gen telecommunications. The industry dialogue process was given a strong impetus by the two leaders during the visit.
Several US companies announced new investments, building a semiconductor centre and accelerating workforce development goals in India. With India becoming a member of the Minerals Security Partnership (MSP), collaborations in diversifying and securing critical mineral supply chains have been initiated. Joint task forces have been launched in advanced telecommunications, where public-private research will be undertaken to reduce costs, increase security, and improve network resiliency. In a landmark development, India has signed the Artemis Accords, which advances a common vision of peaceful, sustainable and transparent cooperation in space exploration for the benefit of humankind.
Fourth, defence cooperation emerged even stronger as a pillar for the overall relationship. As a precursor to the visit, CII partnered with the US-India Business Council for the India-US Defence Acceleration Ecosystem (INDUS-X). This is a network of incubators, universities, corporate, think tank, and private investment stakeholders. This program will facilitate joint innovation on defence technologies and accelerate integration. An agreement to connect defence companies and startups and co-production and co-development of technology was signed between two defence industry associations on both sides. The unprecedented initiative to manufacture jet engines in India represents growing trust between the governments and private sectors and will enable greater technology transfer and co-production.
Fifth, the “Innovation Handshake”, which aims to connect the two startup ecosystems, will help promote job growth in emerging tech as well as highlight opportunities for upskilling.
Sixth, the two sides encouraged the recently relaunched India-US Commercial Dialogue for cooperation in the areas of talent, innovation, and inclusive growth, especially in Tier-2 cities in both countries. It is heartening to see the US and India providing micro, small and medium enterprises (MSMEs) a high-level platform to explore greater cooperation and integration, which has been our ongoing request.
Seventh, in the US-India Joint Statement, the two leaders recognised protecting the interests of cross-border workers and reaffirmed their intent to continue discussions on understanding the requisites to enter into a social security totalisation agreement. Equally important are the wins on the “people-to-people” side, enabling the smooth movement of professionals and skilled workers, students, investors and business travellers between the two nations, and acknowledging the pressing need to expedite the visa processes.
The announcement by the US State Department to launch a pilot program facilitating in-country renewals of certain categories of work visas comes as a welcome relief for the business community. The US further intends to open two new consulates in Bengaluru and Ahmedabad, which will help alleviate the backlog and keep up with the growing demand for travel.
Prime Minister Modi’s visit to the US was rich and outcome-oriented, including for industry, with comprehensive and substantive announcements that set bilateral economic engagement on a new orbit of growth. As PM Modi stated in his historic second-time address to the US Congress, “When our partnership progresses, economic resilience increases, innovation grows, science flourishes, knowledge advances, humanity benefits … the world will be a better place.” From the business community, we will strive to play our part in bringing our industry, academia, innovators and startups closer together to enhance this closely aligned partnership.
This article was first published in The New Indian Express on 21st July 2023