Nukes and mangoes on Bush's mind in
India By Indrajit Basu
KOLKATA - Although US President George W
Bush's India visit that officially started on
Thursday is hardly expected to grab headlines in
terms of business and economic deals between the
two countries - rather, the nuclear separation
agreement that the two nations have just announced
will dominate coverage - both are looking forward
to several new initiatives to boost bilateral
commercial ties expected to be announced in the
next few days.
"[The] Indo-US relationship
will [reach a] strategic partnership level now,
which will be underpinned by close trade and
commercial ties," said Indian
Commerce and Industry Minister Kamal Nath on the
eve of Bush's arrival in India on Wednesday
evening. "Today India is actively seeking foreign
direct investment from the US, but India is also
eager to invest in the US."
William Klein,
US consul for political-economic affairs in India,
said the US commitment to develop strong economic
ties had begun well before the presidential visit.
For instance, India and the United States have
finalized a series of agreements to scrap
non-trade barriers in a bid to double bilateral
trade to US$40 billion in three years. The most
significant feature of that agreement is that the
two sides have also resolved the long-pending
dispute over India getting entry into the US
market, particularly its agricultural-commodities
markets.
While the US has agreed to clear
imports of mangoes, for instance, from India, the
Indian side is finalizing plans to address US
farmers' market access concerns on pulses (beans
and peas) and almonds. The Indian step that could
benefit the US the most is a relaxation of India's
specifications for wheat imports. Imports of
fruits and vegetables are also expected to be
cleared during Bush's visit.
For several
years, Indian mangoes have been facing non-trade
barriers such as sanitary and phyto-sanitary
(plant health) measures from the US side. "We are
looking forward [to] Indian mangoes," Bush said in
his public address to the country on Thursday.
The United States says that while US
companies have been demanding liberal market
access for agricultural exports to India for some
time, they could not participate in recent Indian
import tenders since specifications laid down by
the Indian side were "unrealistic".
"[That] issue was resolved at a meeting of
the India-US Trade Policy Forum and US Trade
Representative Rob Portman," said Indian
government sources in an address to the media.
Portman added that "US businessmen are looking at
large investments into India, particularly in
[the] infrastructure and energy sectors". He also
indicated that the trade group was looking into
the issue of the US allowing entry to refurbished
Indian computers, as well as lifting anti-dumping
duties on Indian shrimp.
According to the
Indo-American Chamber of Commerce, even though the
two countries have shared a strong economic and
trade relationship for years, there has been a
transformation in recent years. For example, the
bilateral trade in merchandise goods has increased
to $22 billion in 2004, from $5.6 billion in 1990.
"This represents an impressive 387% [increase] in
a span of 14 years," said K R Chopra, the
secretary general of the chamber.
Indian
merchandise exports to the US grew 19.28% from $13
billion in 2003 to $16 billion in 2004, while US
merchandise exports to India increased from $5
billion in 2003 to $6 billion in 2004 - an
increase of 23%. During 2005 the total bilateral
trade in merchandise goods recorded a growth of
23% to $27 billion compared with 2004's $22
billion.
The Indian investment base in the
US has been expanding as well.
"Just a few
years back India was struggling to meet the
quickly changing demands of the global
marketplace. Today Indian companies are proving
themselves to be credible and lucrative partners
of American enterprises," said Chopra.
The
chamber adds that for US multinationals -
particularly information-technology (IT) companies
- India has moved up in importance, not just as a
source of talent but also out of a US desire tap
the country's burgeoning market fueled by an
economic growth rates of about 8%, one of the
fastest growth rates in the world. International
(mostly US) IT majors, including Microsoft, Intel
and Advanced Micro Devices (AMD), have committed
investments of $10 billion in the past three
months alone.
Experts say India is not
only an important market for US products but is
also important as a partner in opening up the
world markets. That is why, said Nath, "with
contours of India changing on various fronts, US
corporates need to take advantage in terms of
investing and selling in India".
Nath said
that besides IT, there are many opportunities for
US companies to explore in India. These include
infrastructure, energy, health, and other
high-technology areas, and consumer sectors both
in the medium and long term. "The growth is going
to be there simply because there are more
opportunities for US businesses," said the
commerce and industry minister.
Klein
said, "Bush's visit marks a milestone as the
world's two largest cultural democracies reach for
new heights in their relationship.
However, more significant is the fact that
this visit showcases India's emergence as a
potential economic superpower that along with the
US can create "history", said Prime Minister
Manmohan Singh.
Indrajit Basu is
a Kolkata-based equity analyst turned journalist
with more than 12 years of experience in
business/finance and technology journalism.
Besides writing for Asia Times Online, he also
writes for US-based publications, as well as IT
companies.
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