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Measures  to Strengthen India US economic partnership

 

Synopsis: Strengthening India-U. S economic partnership will help India to become a $5 trillion economy.

Background
  • India and the US have committed to the goal of increasing the bilateral trade in goods and services to $500 billion. Currently, the bilateral trade stands at $146 billion (2019).
  • To achieve this, the Compound annual growth rate (CAGR) needs to be increased to 11.9%. The current CAGR is 7.7% per year.
  • A closer economic partnership will benefit both sides in terms of GDP, employment, and productivity.
  • Confederation of Indian Industries (CII) identifies the following key areas for collaboration to boost India-U. S bilateral trade.
What are the key areas of collaboration as suggested by CII?
  1. First, the need to elevate partnership in Healthcare.
      • India has emerged as the hub of global vaccine distribution. This has led to the establishment of a robust health care supply chain with global countries including the US.
      • Along with this development, India needs to take the following steps:
        • build confidence in the Indian IPR regime,
        • revive the U.S.-India Health Dialogue, and
        • work on mutually recognizing standards and
        • approvals to further co-operation in healthcare.
  2. Second, the need to strengthen existing trade agreements. It can be done by;
      • Reviving the U.S.-India Trade Policy Forum meetings along with a cross-sector track-2 group to look at convergence on issues such as market access.
      • Restoring the Generalised System of Preferences. It will help in increasing Indian exports as a result of lower duties for certain Indian products.
      • Working on Free trade agreement that mutually benefits both.
  3. Third, the need to address concerns related to the mobility of professional labour. It requires the following measures,
      • Strict US immigration rules have impacted labor mobility from India. India needs to push for reforming the US immigration system.
      • The MoU on labour cooperation signed in 2011 needs to be updated in line with India’s recent labour regulatory changes.
      • Both countries should strive to finalize a totalization agreement on social security.
  4. Fourth, strengthening cooperation in defense.
      • Both countries complement each other in defense. India is dependent on the U.S. for technology whereas the US can be benefitted from Indian manufacturing.
      • Initiating a defense dialogue along with the private sectors of both sides will help in co-production and co-development in the defense and aerospace sectors.
  5. Fifth, improving ties between SMEs.
      • A U.S.-India SME CEOs Forum to facilitate engagement of small and medium enterprises (SMEs). It will help US SMEs to find new opportunities for investments and sourcing from India.
  6. Sixth, deepening collaboration in clean energy and climate change.
      • The U.S.-India Strategic Energy Partnership should be channelized to promote joint investments in clean energy. (industrial decarbonization, carbon dioxide removal, and green hydrogen).
      • Further, initiatives such as, Advance Clean Energy Research, Advance Clean Energy Deployment, and Promoting Energy Access through Clean Energy need to be relaunched.
  7. Seventh, Partnership in Digital economy.
      • India needs to take measures to strengthen its IPR regime. It will also enable India to come out of the U.S. Trade Representative IPR priority watchlist.
      • Strengthening IPR will allow India to gain from the US knowledge industry in the fields of robotics, space, AI and electric vehicles etc.

Source: The Hindu

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