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India-U.S. trade ties enter the fast lane

NewsIndia-U.S. trade ties enter the fast lane

The number of bilateral meetings and visits by the top Indian leadership should be taken as a signal that ‘all is well and India-US diplomacy is on the upswing’.


Washington DC: New Delhi’s diplomatic circles and media are abuzz with speculation on “weakening” India-US relations amidst the former’s stand in the Russia-Ukraine war. Everyone is talking about why India is being needled by the United States on Ukraine. Will that affect the “honeymoon” in India-US relations?
Perhaps that may not be the case, as the picture in the US, which hosted six top Indian leaders in a month, projects a robust India-US diplomacy, inking a strong business in trade, defence and health sectors. Interestingly, even Indian investments are flowing into the US, making it a two-way business relationship.
In the last one month, six ministers have visited the US. India’s External Affairs Minister S. Jaishankar was here for the second time in six months; Finance Minister Nirmala Sitharaman was here to attend the International Monetary Fund (IMF) meetings; Commerce Minister Piyush Goel, and Petroleum and Natural Gas Minister Hardeep Singh Puri too were here. So were Minister of State (Independent charge) Jitendra Singh and MoS External Affairs V. Muraleedharan. So India-US bilateral relations under President Joe Biden, in fact, have strengthened as evident from the top political brass holding bilateral talks from Washington DC to Houston to California and San Francisco region.
India is being talked about and heard more than before, said an insider in the Indian embassy. The number of bilateral meetings and visits by the top Indian leadership should be taken as a signal that “all is well and India-US diplomacy is on the upswing”. There will be definitely some anti-India chorus and that happened even after Article 370 in Jammu and Kashmir was revoked. But India-US relations are not fragile as before, in fact, it is a relationship built on trust and mutual dependency, and not on calculative gains, as External Affairs Minister Jaishankar said in his last visit here to Washington DC.
The top Indian leadership visiting the US at regular intervals is out to build a narrative about India, which has been missing to push New Delhi as an alternative to China in business, trade, investments, health and educational collaborations. After coming in the top five global economies, the need to brand build India overseas is more urgent. Prime Minister Narendra Modi’s thrust is on building the country’s narrative to attract investors and strengthen bilateral diplomacy.
It is learnt that Education and Skills Minister Dharmendra Pradhan is also scheduled to visit the US soon to further strengthen India-US educational collaborations and exchanges of scholars to promote India’s National Educational Policy. Many here in Washington feel that both health and education can be soft, yet effective, drivers of this robust India-US diplomacy. In the education sector, nearly 46 US universities are eyeing to set up campuses and offices in India to attract more students.
India’s digitization drive has caught the attention of the IMF leadership. Pierre-Olivier Gourinchas, Chief Economist of the IMF, said: “Well, India is, I want to say, sort of a bright light.”
On a question about India’s ambitious goal to become a $5 trillion economy, he said, “This is achievable… There is certainly an enormous potential for an economy like India.”
Interacting with students and experts at the School of Advanced International Studies (SAIS) in Johns Hopkins University, Nirmala Sitharaman cited India’s digitization drive as a key factor shaping the country’s economy. “There were times when global benchmarks, global standards were the ones which India had to look up to and say we have to catch up to that level, we will have to learn how to do. There are still a lot of areas where we still have to learn a lot of things and do according to standards set elsewhere,” Sitharaman said. She asserted that the Indian economy was doing well, largely because the confidence in what has happened in the last two years is probably felt by the people.
On the trade and business front too, the flow of foreign investments into India is on the upswing. A veteran on India-US trade and business, Rick Rossow of the Center for Strategic & International Studies (CSIS) says: “Despite the hiccups on both sides due to protectionist agenda, the real commercial relationship is booming. For instance, bilateral goods trade hit $131 billion in the 12 months up to August 2022, a 29% year-on-year increase.” On the state of investments, Rossow told The Sunday Guardian, “India’s total FDI inflows are doing quite well—$62 billion in new FDI equity inflows in the 12 months leading up to July 2022. This is down a bit from last year when some major individual investments in Reliance Jio gave the FDI numbers a temporary bump, but is well ahead of India’s 10-year average, which is around $45 billion in a 12-month period. But, also, still well below the peak FDI totals from other emerging markets like China, Brazil, and even some years in Russia.”
The CSIS expert on India-US affairs also told this newspaper that a lot of Indian investment is also coming into the US. “Around $22 billion in total FDI from Indian firms into the United States has been recorded. This investment is concentrated in Texas, New Jersey, New York, Florida, and Massachusetts. And while we often think of India’s dynamic information technology sector leading the way, about one-quarter of this FDI is from pharmaceutical/life science firms and another 29% from a range of manufacturing industries including automotives.”
Earlier last month, Jaishankar enthused confidence about the diplomatic ties between the two countries saying, “India and the United States, the world’s two largest democracies, do not share a narrow relationship only devoted to bilateral gains, but the one that impacts the rest of the world.” Jaishankar had met his American counterpart Secretary of State Antony Blinken, Defence Secretary Lloyd Austin, Commerce Secretary Gina Raimondo, National Security Advisor, Jake Sullivan; and five lawmakers including Senator Mark Warner and Congressman Ami Bera. Besides, he also had meetings with the American business community. Jaishankar had told reporters during his visit that overall India-US ties were in a good place.

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