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US-India Trade “Surging” Amid Torrid Times, Global Leaders Tell Summit
Leaders from the world’s two largest and oldest democracies played down talk of “torrid times” over trade at the opening day of the 2019 India Economic Summit in Delhi, instead noting that relations between the two nations are robust and on the up.
“The torrid times in our relations could also be a torrid love affair,” declared Piyush Goyal, Minister of Commerce and Industry and Minister of Railways of India, at the summit. “Relations between the Indian government and US government, at our level and at the people-to-people level are better than ever before.”
Amid rising trade tensions between India’s neighbour, China, and the United States, and the ripple effect of that dynamic on the global economy, Goyal noted that trade between India and the US is robust and growing.
Citing just one example of what Goyal said was “surging” trade between the two nations he said that imports from the US to India have grown by nearly 30%, while exports from India to the US have grown by nearly 20% in the last year.
Responding to criticism that no trade deal resulted from a meeting in September between India and the US, Wilbur Ross, Secretary of Commerce of the United States, said he saw no reason why one could not soon be reached.
“Neither government said there would a trade deal in five minutes,” he noted, “I think that was just speculation. We do think there is no structural reason why there can’t be one pretty quickly … Now that the election has come and gone and Prime Minister Modi has a very clear and strong position in the parliament it should be a lot easier to take decisive action.”
The relationship between India and the US has the potential to be one of the greatest of the 21st century, but global leaders speaking at the summit acknowledged there would be challenges ahead. India has an important role to play in the geopolitics of the region and that positioning will inevitably lead to sensitive questions as to how to develop its relationship with China.
“India will have to decide for themselves their relationship with China in a larger context. India and China are trading partners, they are neighbours and they have a huge population, and all I would say is India will take this advice carefully, but a decision will have to be taken critically by India,” offered Sunil Bharti Mittal, Chairman of Bharti Enterprises, before adding “My view is they should be in play”.
With US companies being encouraged to shift manufacturing outside China, there is an opportunity for a fundamental recasting of global supply chains. Indian industry is ready to take on the challenge to increase its competitiveness, said Vikram Kirloskar, President of the Confederation of Indian Industry (CII) and Vice-Chairman of Toyota Kirloskar Motor, using as an example, the automotive industry, which accounts for almost one-half of manufacturing in India.
“Over the last 20 years we have become part of the global supply chain and to a large extent a lot of our automotive components that are being exported are fairly competitive now,” said Kirloskar. “I think we are ready to increase capacity more, and we need the domestic market to increase as well as exports. For us, regional cooperation is also very important.”
Speaking from the standpoint of neighbouring Bangladesh, Rubana Huq, Chairperson of Mohammadi Group, urged participants to consider the impressive performance of another South Asian nation.
“We are almost the size of Wisconsin with almost 165 million people and with many challenges what is happening in Bangladesh should be an example for the rest of the world, and we have been largely overlooked,” said Huq. “Bangladesh can work together. It need not be a competition in terms of inter-regional connectivity; maybe we should join hands.”