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