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Home / India News / US says Covid-19 crisis gives India chance to become key part of new supply chain

US says Covid-19 crisis gives India chance to become key part of new supply chain

top US diplomat suggested that the Covid-19 crisis and the move by countries to carry out “a little bit of de-globalisation and of onshoring more of the critical production” could present an opportunity for India to become a bigger player in global supply chains.

india Updated: May 20, 2020 23:10 IST
Rezaul H Laskar | Posted by Kanishka Sarkar
Rezaul H Laskar | Posted by Kanishka Sarkar
Hindustan Times, New Delhi
India, as one of the world’s foremost producers of pharmaceuticals, generic drugs and vaccines, the US diplomat said.
India, as one of the world’s foremost producers of pharmaceuticals, generic drugs and vaccines, the US diplomat said. (Mint File Photo )

The Covid-19 crisis has presented an opportunity for India to become a key part of new trusted supply chain relationships but it will have to reduce tariffs and adopt more welcoming policies for foreign players, a top US diplomat said on Wednesday.

Alice Wells, the outgoing head of the state department’s South and Central Asia bureau, said bilateral trade had totalled almost a record $150 billion in 2019 but the US continues to have concerns about India’s “protected market that can be difficult and sometimes not provide a level playing field for foreign companies”.

India and the US had made concerted efforts to finalise a limited trade deal ahead of President Donald Trump’s visit to the country in February but were unable to reach common ground on a range of issues. Before winding up the visit, Trump had held out hope for trade deal by the end of 2020.

During an online briefing for journalists, Wells said she couldn’t predict whether the US Trade Representative and the Indian government would be able to finalise an agreement this year, but noted that the “impetus for achieving a trade deal is very much present”.

Instead, Wells suggested that the Covid-19 crisis and the move by countries to carry out “a little bit of de-globalisation and of onshoring more of the critical production” could present an opportunity for India to become a bigger player in global supply chains.

“I think there’s a very vigorous effort to diversify supply chains. This is a real moment of opportunity for India, by adopting more open and welcoming policies, by reducing tariffs that allow manufacturing companies inside of India to be part of a global supply chain – it’s a real moment of opportunity for us to create trusted supply chain relationships with one another,” she said.

India, as one of the world’s foremost producers of pharmaceuticals, generic drugs and vaccines, can also play a “critically important role in the treatment and health of the world as we move out of the pandemic”, Wells said.

In recent weeks, India has supplied hydroxychloroquine and other drugs to dozens of countries, including the US, both through commercial sales and grants. It has also sent medical rapid response teams to several countries, including the Maldives and Kuwait.

On the other hand, Wells was very critical of China’s Belt and Road Initiative and the China-Pakistan Economic Corridor, saying they were exposing countries such as Pakistan to “predatory loans”. The US is concerned about the lack of transparency in CPEC projects, unfair rates of profits guaranteed to Chinese state-owned organisations and distortions the project has caused in Pakistan’s economy, including a massive imbalance in trade with China, she said.

“I think at a time of crisis like Covid, when the world is reeling from the economic consequences of having shut down parts of the economy, it is really incumbent on China to take steps to alleviate the burden that this predatory, unsustainable and unfair lending is going to cause Pakistan,” she said.

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