Do you think that strong healthy relations of India with America are conducive to India's economic development?
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India is one of the few countries in Asia where Trump’s decision to pull the U.S. out of the Trans-Pacific Partnership agreement was greeted with some relief, which presents an opportunity to forge a new trade and investment relationship with India.
Trump and Modi should use their inaugural meeting to initiate small confidence building steps and set aside larger, more intractable issues.
Both leaders seem comfortable pushing investment in infrastructure rather than the more indirect, outcomes that trade agreements deliver. Many of Modi’s economic priorities to grow India’s manufacturing sector and tackle India’s enormous infrastructure needs would benefit from U.S. investment and services exports. For his part, Trump could offer U.S. support for Modi’s goals by promoting U.S. investment in Indian infrastructure and manufacturing. This could be the basis for a broader deal encompassing measures to further streamline India’s recent initiative to reduce foreign investment restrictions.
How to grow jobs is another shared focus for both leaders. According to a McKinsey report, India needs to create 115 million new non-farm jobs by 2022. Both leaders see developing their manufacturing sector as one way forward. These goals are not in conflict, as India is largely focused on developing manufacturing jobs in parts of the supply chain, which is different from the U.S. focus on the domestic manufacturing sector. In addition, India’s growing middle class—which is expected to double to over half a billion people by 2025—will provide a new market for U.S. exports of manufactured products. Both sides can make progress here by improving market access for their respective manufactured goods. Cooperation around skills development in India and tackling certain concerns related to better enforcement of intellectual property rights in India would benefit both countries.
Trump and Modi should establish a joint mechanism to address bilateral trade issues, with regular meetings of senior officials as well as a commitment to ensure new market access outcomes by the end of this year. Agreeing to seek common ground around the recognition of standards might also be a way of reducing trade friction over time.
Deepening the two countries’ bilateral trade and investment relationship will take commitment and time, with inevitable setbacks that will require each side to view the economic relationship in a broader geopolitical context. Ultimately, America’s longer-term strategic goals in Asia will be advanced if the U.S. has the foresight to cultivate a prosperous, confident, and democratic India.
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Trump and Modi should use their inaugural meeting to initiate small confidence building steps and set aside larger, more intractable issues.
Both leaders seem comfortable pushing investment in infrastructure rather than the more indirect, outcomes that trade agreements deliver. Many of Modi’s economic priorities to grow India’s manufacturing sector and tackle India’s enormous infrastructure needs would benefit from U.S. investment and services exports. For his part, Trump could offer U.S. support for Modi’s goals by promoting U.S. investment in Indian infrastructure and manufacturing. This could be the basis for a broader deal encompassing measures to further streamline India’s recent initiative to reduce foreign investment restrictions.
How to grow jobs is another shared focus for both leaders. According to a McKinsey report, India needs to create 115 million new non-farm jobs by 2022. Both leaders see developing their manufacturing sector as one way forward. These goals are not in conflict, as India is largely focused on developing manufacturing jobs in parts of the supply chain, which is different from the U.S. focus on the domestic manufacturing sector. In addition, India’s growing middle class—which is expected to double to over half a billion people by 2025—will provide a new market for U.S. exports of manufactured products. Both sides can make progress here by improving market access for their respective manufactured goods. Cooperation around skills development in India and tackling certain concerns related to better enforcement of intellectual property rights in India would benefit both countries.
Trump and Modi should establish a joint mechanism to address bilateral trade issues, with regular meetings of senior officials as well as a commitment to ensure new market access outcomes by the end of this year. Agreeing to seek common ground around the recognition of standards might also be a way of reducing trade friction over time.
Deepening the two countries’ bilateral trade and investment relationship will take commitment and time, with inevitable setbacks that will require each side to view the economic relationship in a broader geopolitical context. Ultimately, America’s longer-term strategic goals in Asia will be advanced if the U.S. has the foresight to cultivate a prosperous, confident, and democratic India.
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