India-US ties must be fostered with a renewed energy

  • Ami Bera and Richard Rossow, None
  • Updated: Jun 10, 2014 02:08 IST

Now that the historic elections in the world’s largest democracy are complete and India has ushered in a new leadership, we must keep in mind the importance of the United States-India relationship, and continue to foster it with a renewed energy. Our economic partnership is especially vital.

Business ties, after all, along with a large and active diaspora, have been the bedrock of the US-India relationship over the last two decades.

We are quite encouraged by early signs that the new government in Delhi has chosen to engage the US early in its tenure. Our two nations’ cooperation has progressed irrespective of which party was in power on either side. There is simply too much convergence on key issues — the economy, regional security, and counterterrorism— to allow our bilateral relationship to flounder.

There are many interesting new opportunities for the Indo-American partnership that can help grow our economies.

The next five years should see a dramatic increase in bilateral trade between the US and India, helping meet vice-president Joe Biden’s stated goal of growing our bilateral trade to $500 billion annually.

Clearing away some of the issues that have hindered US-India relationship in the past could boost the confidence of foreign businesses.

Increasing foreign investment caps in key sectors like insurance and defence could allow for deeper partnership in these areas, and removing local content rules in certain product areas could help restore balance to US-India trade flows, where India enjoys a two-to-one advantage in goods trade flows.

However, as we move forward, much more needs to be done by both countries so we can truly enjoy the fruits of a robust economic partnership.

We need to collaboratively develop a shared vision of what bilateral economic cooperation might look like 10 years from now. We have a target of $500 billion in trade, but what will comprise this total? Defence and natural gas trade typically get a great deal of attention, for good reason.

But other industries like agriculture may also see a boost in trade — in both directions— as Indian food processors and retailers look for new technologies and products, and American grocery stores see an increasing diversity of Indian food.

There are also important partnership opportunities for Indian firms to help American firms redesign products and services for the Indian market as well as critical third markets such as sub-Saharan Africa.

Such partnership opportunities should be pursued and augmented. And if India undertakes a major programme to build infrastructure and increase industrialisation, American firms could be a powerful source of capital, intermediate goods, capital equipment — and ideas.

Both India and the US must also be open to an evolving agenda. The new Government of India will have new priorities, likely including a dramatic infrastructure build-out, and supporting faster industrial development.

The US has much to offer in both areas — both in terms of capital and expertise. Yet we do not yet have operational joint working groups in either areas. Similarly, more than 50% of India’s labour force is engaged in basic agriculture.

Fifty years ago, the US played a significant role in supporting India’s initial Green Revolution. Hopefully, we will find new areas for collaboration in agriculture — both in trade of agriculture products, but also in helping modernise India’s agriculture sector.

We also encourage the new Government of India to actively engage Congress on key issues. India has a dynamic and articulate ambassador in Washington, and members of Congress also appreciate direct engagement with foreign leaders to exchange views and develop deeper understandings of policy issues.

Just as American firms want to invest in India, there is also opportunity for Indian investment in the US and Congress needs to be informed about issues that could deter such investment.

The concept of encouraging engagement between the US and Indian states has been discussed for several years.

We should look for ways to make this concept a reality. Certainly there can be some amount of mismatched expectations for such meetings — both sides want to primarily focus on exports from their regions, and to attract incoming investment — but there are complementarities that should be discovered and fostered.

Education, skills development, and fostering entrepreneurship are areas ripe for cooperation as states become “test tubes” for innovation.

We hope the new Government of India will also revisit a policy issue that has reinforced the sentiments often expressed by the relationship’s detractors — the Civil Liability for Nuclear Damage Act, 2010.

When India passed its Nuclear Liability Act in August 2010 without putting a limit on possible liability, a great deal of enthusiasm for the strategic potential of the relationship was lost. Quick action on this issue by the Indian government can help restore American confidence in the partnership, as well as helping facilitate the further development of this important energy source.

The US and India have enjoyed a healthy and growing relationship and we very much hope to expand on the partnership moving forward.

A renewed focus on economic growth should help provide new opportunities — and new energy — to allow us to take the relationship to a new level, and engagement will be critical from both sides.

(Ami Bera is a member of the US House of Representatives and Richard Rossow holds the Wadhwani Chair in US India Policy Studies, Center for Strategic & International Studies. The views expressed by the authors are personal.)

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