US chasing India opportunity
By: Rajeev Sharma
India’s ruling Bharatiya Janata Party (BJP) holds its first strategic dialogue with US in New Delhi on Thursday. This will be the 5th edition of the Indo-US strategic dialogue. Besides several political and security issues, the talks will be conspicuous by its thrust on commercial ties between the two sides, already a strong area with the $100 billion bilateral trade between them.
US Secretary of State John Kerry and Indian External Affairs Minister Sushma Swaraj will be co-chairing the talks. Kerry’s three-day India visit (July 30-Aug. 1) also marks the Obama administration’s first Cabinet-level contact with the new Indian government.
The strategic dialogue series, first launched by the two countries in July 2009, focuses on five pillars of mutual interest: Strategic cooperation; energy and climate change; education and development; economy, trade and agriculture; science and technology, health and innovation. US Commerce Secretary Penny Pritzker, who is scheduled to join Kerry in the talks after her meetings with the top industrialists in Mumbai, gave hints of what the Thursday’s event might entail. “The strategic dialogue will play a key role in advancing the vital commercial relationship between the two countries. As the new Indian government defines its policy agenda to focus on economic growth and job creation, we look forward to identifying opportunities for US companies to engage in the market and create increased prosperity in both of our nations,” she said.
The US thrust on tapping the fast-growing Indian economy for its own good is understandable. The US hopes to dip into the burgeoning Indian markets to get more business and generate jobs back home in various sectors like telecom, civil aviation and IT, to name a few. Consider, for example, the opportunities in the Indian telecom market, as India has become the fastest growing telecommunication market in the world, registering some 10 million cell phones every month.
The civil aviation sector is another sunrise industry, as the growth in this area has been a major boon for American manufacturers. Entire fleets of India’s new private aviation industry rely wholly on US exports and content, “creating literally hundreds of thousands of jobs in the United States,” as per the US-India Business Council (USIBC).
Established in 1975, it is only in the last few years that the efforts of the USIBC have started yielding a rich harvest. The USIBC, the principal facilitator for industry operating in the US and Indian marketplace, is the premier business advocacy organization representing America’s top companies investing in India, joined by global Indian companies, with an aim to deepen trade and strengthen commercial ties.
Business-to-business contacts between India and US are already robust, reflected by the fact that the US firms have made investments in India totaling $28 billion and Indian FDI in the US stands at $9 billion. The US FDI in India has grown by leaps and bounds, propelled by IT, information, technical, professional, scientific and manufacturing sectors. For example, US and other foreign businesses have captured 84 percent of India’s domestic market for IT hardware.
Besides, there are other compelling facts that corroborate American optimism that the Indo-US trade can be quintupled to $500 billion in next five years just as it was quintupled to $100 billion in past 14 years. Ten out of the top 15 tech companies operating in India are American-based. At least a half dozen US companies operating in India today are generating revenues in the $2-3 billion range, and the number of such American success stories is rapidly on the increase.
Besides, the two sides will have a plateful of political and strategic agenda too. The US will be very keen to wean India away from Russia. Washington is seeking to cut Russia down to size and is looking for potential partners to that, though it is highly improbable that India will ever do that.
The Obama administration has stepped in late in engaging with the new Indian government as the Chinese, the Russians, the French and the British have already had high-level meetings with the new political leadership in Delhi.
But once the Americans step in, they engage in intense and substantive engagements. After Kerry, Defense Secretary Chuck Hagel will be in India. The Americans have already sold defense equipment worth $10 billion to India in past few years and have edged past Russia to emerge as India’s biggest defense supplier. More big-ticket defense contracts between the two sides are in the works.
All these Cabinet-level contacts of the Obama administration with the Modi government are prelude to the upcoming big event, the Obama-Modi summit in Washington in September. The attempt of the diplomatic corps of the two sides is to ensure that the world’s most powerful democracy (US) and the world’s largest democracy (India) forge closer ties in mutual interest.
India visits by Kerry and Hagel are only preparatory toward the Obama-Modi summit which will roll out a new action plan and a road map for Indo-US cooperation for the near future.
The writer is a New Delhi-based independent journalist and a political commentator who tweets @Kishkindha.