Friday 15 March 2013

India-US Bilateral Trade Likely to Touch $500 Billion in Next 10 Years

The bilateral trade between India and United States (US) is likely to touch the huge $500 billion mark in next 10 years.
India-US Bilateral Trades


                      The bilateral trade between India and United States (US) is likely to touch the huge $500 billion mark in next 10 years. This has been said by the US-India Business Council (USIBC), a business advocacy organization for the US in India that aims to strengthen trade and commercial ties between the two countries.

In the year of 2006 the bilateral trade between India and US was around $25 billion only, and since then it has been increasing continuously with a rock steady manner. Eventually the India-US trade has crossed the $100 billion mark in last year, while the defence trade between the two countries contributed a lot in that figure, as it figure is around $10 billion (for defence only) in the last one decade.

The honorable chairman of USIBC Mr. Ajay Banga said a few things to enlighten the bilateral trade opportunities between US and India. He was talking to some press reporters along with the President of USIBC Ron Somers and CII president Adi Godrej. Mr. Banga, who is also the CEO and President of MasterCard, attended a leadership summit of USIBC and CII. The following is an excerpt of what he said,

"Going by the massive fillip in bilateral trade in recent years, I am hopeful that the two-way trade between the largest and the third largest economies in purchasing power parity terms (US and India respectively), achieving our next target of USD500 billion over the next one decade is possible if both the partners chart out a larger strategy of engagement,"

In his briefing to the press Banga added that the bilateral trade should focus on education, defence, energy and medical care among other important sectors. He also said that the investments should be floated in making of innovative properties and technology. It has to be mentioned here that earlier IMF Predicts India’sFY13 Growth Rate to 5.4% only.

CII President Mr. Adi Godrej said in the next few years India can really play a big role in the US, and that role was getting recognition too by the sates itself. He added that the India’s business and financial communities has all the needed potentialities to reach the higher heights with the help of some strategic collaboration and co-operation. He also highlighted the fact that the involvement of the industry members have been increased a lot over the past few years.

He explained the matter in his own style, and added a few visions of his own in his speech. While discussing on reaching the bilateral trade target of $500 billion he added,

"It can be achieved if both the sides commit against protectionism, create enabling frameworks such as the bilateral investment treaty, recognize the value of labour mobility, focus on enhancing services trade, focus on investments and value addition, and definitely get down to industry-level and state level co-operation."  

Ron Somers, the President of USIBC, also expressed his thoughts on the whole matter. He said that the Pearson Institute will conduct a detailed study on economic co-operation opportunities between the India and United States (US). He added that the USIBC is also working on a financial study to set up India-US comprehensive economic cooperation agreement, which will eventually help both the nations to boost up the amount of bilateral trades.

In past few months the Indian Government especially the finance department had taken quite a few reform measures to boost the Indian economy on global scenario. In fact recently India has signed aDTAA agreement with Bhutan too. Mr. Ajay Banga did not forget to acknowledge that in his speech. He eventually welcomed all the measures, and applauded the government for taking such bold steps to return to the steady growth path. He told that the US industry was looking forward to the increase of FDI cap in defence sector from 26% to 74 percent. As a matter of fact according to Banga the major portion of this $500 billion India-US trade would come from the trades of defence and high-end technology.

The US industry is in favor a bilateral investment with India due to the rising market condition of the country. The trade co-operation treaty between the two nations would benefit both the parties a lot. The US market is keen to build a few more level playing fields in order to make the needed scope for all important two-way FDI flows.

According to Ron Somers, defence was the one of the most important sectors of mutual business co-operation between the two nations. He give a suggestion to include the private sectors more and more in the involvement of the bilateral trades, as it would help to deepen the mutual economic partnership.

According to Adi Godrej, oil and gas could be two most particular fields of business collaborations between India and the US, as many leading American companies have already made great fortune in these two areas.

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