Special Panel to Explore More Trade Possibilities with the United States
Jun. 28 – India has announced that it would establish a special committee that will explore areas for expanding trade with the United States.
The United States is the third biggest foreign investor in India. The country wants more American companies to invest in infrastructure projects. It is estimated that India will need to attract US$1 trillion worth of investment to fully upgrade its infrastructure, of that amount US$250 billion to US$300 billion is forecast to come from American companies.
The committee will work under Planning Commission Deputy Chairman Montek Singh Ahluwalia for an economic roadmap in time for U.S. President Barack Obama’s visit to the country in November.
Finance Minister Pranab Mukherjee said during Indo-U.S. CEOs Forum held in Washington, D.C. that the United States wants India to expedite relevant legislative actions for economic reforms like opening up of insurance, among other sectors.
He said, “We have identified certain issues on which we should work together. And this was the recommendations made jointly by both Indian CEOs and the U.S. counterparts – education, infrastructure, clean energy, bio-tech and health.”
As an indication of improving diplomatic relations between the two, Prime Minister Manmohan Singh became U.S. President Barack Obama’s first state guest last year. India is a promising market for U.S. exports with total bilateral trade amounting to US$24.4 billion from January to August 2009.
American companies mainly export aircraft and aviation-related products, fertilizers, machinery, precious stones and metals, organic chemicals, optical and medical instruments to India. On the other hand, India exports gems and jewelry, textiles, pharmaceuticals, organic chemicals, engineering goods, iron and steel products to the United States.
Chris Devonshire-Ellis of Dezan Shira & Associates tells India Briefing: “India represents a real profit opportunity for U.S. companies in a manner that China has not, as India is not so adverse to FDI in this sector as China has been during its development. China did and in some part continues to place blocks on FDI into its construction and redevelopment industries for foreign companies, and there has been far more state control. ”
“India has a freer market in these and other sectors. If the U.S. and India can agree on bilateral FDI patterns there could well be a massive boom for multinationals looking at providing India with the infrastructure it needs. The Indian investment climate is becoming hot and both India and the United States need each other at this moment – India as a recipient of investment dollars and U.S. corporations for the profit motives,” he adds.
Dezan Shira & Associates advises multinational corporations wanting to enter the Indian market. Please contact firstname.lastname@example.org for business advisory, legal establishment and tax advice in the country.
Doing Business in India (a 156 page full-color guide)