IGB archive

The Obama-Modi hotline to growth

India Inc. Staff

Dr Mukesh Aghi, CEO of L&T Infotech, is the president of the US-India Business Council (USIBC) with a wealth of experience in the India-US arena. 'India Global Business' caught up with him to get his views on the role of the Indian Diaspora in this relationship and where Indian companies should focus their investments when it comes to the US market. How significant has the role of the Indian diaspora been in defining India-US ties Satya Nadella, Sundar Pichai, Indira Nooyi, Shantanu Narayen, Ajay Banga, Vinod Khosla, Surya Mohapatra, Francisco D'Souza, Ajit Jain, Rashmi Sinha, Padmasree Warrior and many more are all glittering examples of the India-US partnership of progress. Rich Verma becoming the first US ambassador of Indian-origin speaks volumes of the increasing recognition of the contributions of the Indian diaspora in fortifying our relations. The 3 million strong Diaspora and the 100,000 Indian students in the US have been a significant contributor to the US economy as well as the USIndia bilateral relations. Indians today constitute the largest immigrant entrepreneur community in the Silicon Valley. USIBC is excited in the manner in which the strong bilateral ties between the two countries are further strengthening each day. The recent pact signed by the two leaders during President Obama's visit to India holds immense promise of promoting our shared values and we're looking forward to Prime Minister Modi's upcoming visit to the US. Is there still considerable untapped potential within the bilateral relationship Definitely. While both the countries have worked hand-in-hand to almost triple the annual bilateral trade in under a decade, there is still a long way to go and all parties are upbeat about growing it five-fold. Very early discussions have been taking place between governments now that the draft Bilateral Investment Treaty (BIT) by India has been released. At present, yawning gaps exist between the kind of BIT traditionally supported by the US and some of the BITs that India has negotiated in the past. Elements including investor-state arbitration, pre-establishment and national treatment and are essential to a strong and successful agreement. The latest acceptance of the A.P. Shah Committee Report on minimum alternate tax (MAT) will have far reaching implications in boosting business and investor sentiment. Similar review of the arbitration law, totalisation pact and the immigration policies will further foster a positive and mutually beneficial relationship. During his visit to India earlier this year, President Obama has expressed support for India's entry to Asia-Pacific Economic Cooperation (APEC), which will help India adopt globally accepted taxation, foreign the stage for its entry into larger free trade pacts like the Trans-Pacific Partnership (TPP) Agreement. This will have an exponential impact on the US-India economic ties. Which are some of the sectors Indian companies must focus their investments on Apart from creating investment opportunities and more job opportunities, Indian companies are increasingly contributing to the growth and prosperity via the commercial exchanges with the US. Today, Indian companies have presence in all the 50 states in the United States. There has been a 20 per cent growth in FDI to the US by Indian firms between 2008 and 2013. Indian tech industry has created a huge impact on the US economy through job creation. Both the countries are seriously looking at ironing out any bottlenecks to promoting economic ties. Bilateral trade has also grown in the areas such as e-commerce, defence and infrastructure projects. What has been the defining factor of the ties under the Obama administration There have been solid and strategically important strides under the Obama administration, but above all, one defining agreement has been to work towards finding areas of cooperation and scaling them rapidly by resolving any ground-level disagreements instead of getting mired in any confrontational issues. A case in point is the breakthrough in the civil nuclear agreement earlier this year, which had been pending for a decade - even as the finer details are being negotiated, it has already put India in the league of global leaders that have access to strategic high-technology goods and innovations. This resolve to focus on growth is evident also from the newly set up hotline between President Obama and Prime Minister Modi which will quicken decision-making through frequent discussions on key bilateral, regional and global issues. With the renewal of United States- India Trade Policy Forum (TPF), the two governments are already eager to continue their bilateral trade policy dialogue under five categories of agriculture, innovation and creativity, investment, services, and tariff and non-tariff barriers, which will lead to economic growth and job creation in both the countries. The resumption of the cybersecurity dialogue and the agriculture dialogue between both the countries are constructive steps in defining the ties and jointly tackling the evolving and dynamic challenges in cybersecurity, food safety and food security. The US-India relationship has clearly gone beyond the symbolic - the excellent rapport between President Obama and Prime Minister Modi has also sparked off a trickle-down impact on various Indian states, which is further gaining momentum as India moves towards a competitive, cooperative federal structure. USIBC member companies are buoyed with the recent visits by chief ministers of states like Maharashtra and Haryana, and with their level of commitment to domestic reforms, easing regulations and labour reforms. How important are organisations like USIBC in keeping the ties robust Democracies can be complex structures and finding a mutuallyagreeable middle ground that meets expectations on all grounds can be difficult. Over the last 40 years, USIBC has been working very closely with enterprise in India and the US, advocating pro-growth policies and enhancing commercial partnerships in various sectors. USIBC has supported and shown appreciation for reforms in areas of insurance and tax in India. The Council promotes bilateral trade dialogue by being the voice for private sector in both India and the United States and creating substantive interactions between members and influential policymakers in both countries. USIBC is encouraged by the Government of India's commitment to improvement in ease of doing business. In the near future. USIBC will be working on a report in collaboration with the World Bank to rank states on the basis of ease of doing business. The objective is to create competition among the Indian states once the ranking is conducted. This study is important not only from the perspective of enhancing perception, but also improving the business environment within the states by bringing in key infrastructure projects to the states. The Council is also striving for positive policy changes to usher in greater clarity and consistency in India's tax regime and developing a robust intellectual property regime that can have a multiplier effect on the trade relations between the two countries.

Tata Group’s take over of Air India puts the competition on alert

RBI says growth impulses strengthening, inflation trajectory favourable

Gadkari focuses on alternate fuels, EVs in clean transport push

India, UAE march towards Comprehensive Economic Partnership Agreement

India’s new Parliament on track to host 2022 Winter Session