Regular engagement on both common priorities and bilateral disputes is essential to build and sustain trust and constructive ties between any two countries, and that’s certainly true for the sometimes troubled relationship between India and the United States.
As NAM President and CEO Jay Timmons remarked at a recent event co-hosted by the Weekly Standard, “India and the United States won’t see eye to eye on every issue. That’s not unusual. It must, however, become normal in the U.S.–India relationship to talk about those differences and work through them, not avoid or ignore them.”
That’s why NAM was so pleased to see trade representatives from the United States visiting India this week to prepare for a meeting of the U.S.-India Trade Policy Forum, which has not met since 2010. These talks follow a high profile meeting between Indian Prime Minister Narendra Modi and U.S. Deputy Secretary of State William Burns and precede an expected meeting between President Obama and Prime Minister Modi in September.
There are reasons for optimism. Modi’s government is rightly focused on incentivizing foreign investment to drive growth, create jobs, cut government debt and improve the nation’s infrastructure. In his recent budget speech, Indian Finance Minister Arun Jaitley proposed raising foreign investment caps for defense and insurance to 49 percent and charted a better way forward on difficult tax matters.
Yet it remains to be seen how the Modi regime will deal with prohibitively high tariffs in the auto and textiles sectors and with forced localization policies imposed by the last government that are blocking trade in telecommunications solar power generation equipment. Recent decisions to deny patents and uphold compulsory licensing of cancer medications have the troubling look and feel of business as usual.
Resumption of long-dormant dialogues is an important and long-overdue step in the right direction. But for this partnership to succeed, both the United States and India must not only engage constructively, but also deliver concrete progress and real results toward a more open business climate that promotes competitiveness and values innovation.
With progress and results, manufacturers can contribute importantly to India’s policy goals and to a fresh start for the bilateral commercial partnership. We will be watching to see whether promising talk and early steps achieve outcomes that can grow businesses and jobs in both countries.