India and the US have built a deep strategic partnership, based on shared values of democracy, pluralism and free enterprise, along with a growing convergence in the current geopolitical scenario. With many commonalities, the bilateral trade and economic relationship enjoys huge potential based on the strategic interests of the two countries.
Trade has been growing at a steady pace and crossed the $100 billion mark for the first time last year, and this may well be merely scratching the surface. CII research forecasts that a compound annual growth rate of around 11% could help trade reach the ambitious $500 billion target by 2030. After declining during the stressed supply chains and disruptions caused by the COVID-19 pandemic in 2020, bilateral trade witnessed a rebound and jumped by 45% in 2021 over the previous year.
What is important to note is that this growth is being propelled without any foundational or framework trade deals in place. While India has successfully negotiated trade deals recently and has finalised agreements with Australia, Japan, Singapore, UK (plus, Canada and EU in process), the dialogue with the US can be infused with energy and enthusiasm.
The contours of the Indo-Pacific Economic Framework (IPEF), therefore, become more significant as they may guide the trade policy and engagement for the future. As of now, India is a part of 3 out of 4 pillars of the IPEF, including supply chains, clean economy and fair economy, but not the fourth pillar, which deals primarily with trade and where discussion on labour, environment and digital trade are still emerging. It is important that India stay engaged in the process and help shape the deliberations on trade.
On the bilateral economic front, the withdrawal of the General System of Preferences by the US for India has hit India’s small businesses. On the investment side, general challenges on work visas and immigration reform persist in the US and now extraordinary delays in securing even B1/ B2 visitor visas are creating disruptions for business travel and planning.
The lack of a totalization or social security agreement between the two countries costs India about US$ 1 billion without any returns, given that there are many professionals who are deputed to the US for only a short-term. India stays on the US Special 301 Priority Watch for intellectual property rights, despite notable progress in its IPR ecosystem. Yes, these are all significant challenges for us– but the challenges tell us that there is huge opportunity and scope to deepen the partnership.
Given the geopolitical scenario with the challenges posed by slowdown in the Chinese economy, the disruptions caused by the Russia-Ukraine war, and the instability in South and Central Asia, the US-India relationship may well be among the most important bilateral partnerships in the world today.
In this context, the CII CEOs Delegation visited Washington DC from 19-21 September 2022 for the first time since the COVID-19 pandemic, reviving its flagship initiative to strengthen US-India economic ties. Coming after a gap of nearly 3 years, the delegation connected with the new US Administration and White House officials, met with members of Congress, engaged with chambers of commerce, interacted with think tanks and experts and relaunched a new office space in the Washington DC area.
The delegation with an exclusive briefing on the India-US strategic and economic partnership with H.E. Taranjit Sandhu, Ambassador of India to the US. He highlighted 5 specific areas to enhance US-India cooperation: defense, healthcare, energy, technology and education, and urged to think of innovative ways to showcase “Brand India” in the US.
The delegation benefitted from a political briefing with Bruce Stokes, Director of the Trans-Atlantic taskforce of the German Marshall Fund, focused on the upcoming midterm elections and potential impact on India-US relations. A conversation with Lisa Curtis and experts at Center for a New American Security (CNAS) outlined the overall architecture of the security and defense relationship, and an interaction with Dr John Hamre, President & CEO, Center for Strategic and International Studies encompassed US foreign policy challenges, global supply chain security, and the shifting center of gravity in Asia’s economic order.
An India Reception hosted by CII brought together stakeholders in the India-US landscape, including US Government officials at the federal and state levels, business leaders and associations, think tanks, experts and others.
The delegation called on senior US Government officials, beginning with David Turk, Deputy Secretary, US Department of Energy to advance US-India Climate and Clean Energy Agenda 2030. The key discussions focused on renewable energy, digitization, green grids and emerging fuels like hydrogen, making evident that the partnership underscores a sustainable development-led growth for the future.
A candid conversation with Amb Sarah Bianchi, Deputy USTR highlighted trade-related challenges, opportunities and areas to collaborate as the two governments deliberate on what a potential trade framework for the future may look like. Dr Brent Neiman from the US Treasury discussed areas of synergy as India prepares for its upcoming G20 Presidency.
Interactions with White House officials including Dr Kurt Campbell, Deputy Assistant to the President and Indo-Pacific coordinator, National Security Council; Anne Neuberger, Deputy National Security Advisor for Cyber and Emerging Technologies; and Neera Tanden, Senior Advisor to the President, laid out the vision and significance for strengthening the US-India partnership. It was a pleasure to engage with our longstanding friends at several business associations, including the US Chamber of Commerce, US India Business Council (USIBC), and US-India Strategic Partnership Forum (USISPF) as well as Indiaspora.
Building on a strong Congressional advocacy agenda to iron out challenges and deepen sector-specific engagement in the US-India trade and economic relationship, the delegation met several members of Congress and Senate, including Representatives Raja Krishnamoorthi, Ami Bera, Pramila Jayapal and Steve Chabot, co-chair of the House Caucus on India and Senator John Hickenlooper. The delegation had an opportunity to raise issues on trade, mobility, immigration, skills and training, and sought to deepen cooperation on the healthcare, clean energy and education fronts.
In every quarter, the discussion revolved around technology. Conversations to further cooperation in ICT, cybersecurity, artificial intelligence, biotechnology, cleantech, fintech, emerging tech and even e-sports and gaming – including introducing e-cricket in the US! – made it increasingly evident that tech is the future of US-India collaboration.
Overall, a great mission helped to refresh industry’s engagement in the US-India partnership and lay out a strategy for future engagement as we look forward to upcoming bilateral and multilateral dialogues in the near future.
This article has been contributed by Shuchita Sonalika, Director and Head – North America, Confederation of Indian Industry (CII).