Strengthening Of India-US Trade Relationship
Tags: Trade, USA, Money, India, Economy

1. Pandemic Collaboration

The first area of focus should be a pandemic collaboration because India has already emerged as the hub for vaccine development in production. This is where the United States can complement India’s resources and help Indian companies through efficient supply chain logistics. India should use India's growing profile as the world's pharmacy and as the world's vaccine hub to build confidence about its IP laws in the United States. Because India’s intellectual property regime has often been a source of controversy in the India US trading relationship, but the growing convergence between India and the US and the emergence of India as the vaccine hub should help India to strengthen its image about its IP laws and both countries could further boost cooperation between their pharmaceutical companies and biotech firms by reviving the India US health dialogue. Therefore, the two countries get mutually recognized their standards concerning drugs and clinical trials and concerning approvals of drugs and vaccines to increase the market access for their pharma and biotech sectors.

2. Macro-Trade Architecture

The need to strengthen the macro trade architecture between the two countries. They could do this by reviving the US India Trade Policy Forum to conduct broad trade negotiations that might lead to the signing of a free trade agreement between India and the US. Such trade negotiations and the eventual FTA would also improve market access to both the countries, and India could even use the platform to seek the United States to restore its GSP tag or the Generalised System of Preferences.

Under the GSP mechanism, the United States provides preferential trade treatment or preferential tariffs to certain developing countries for certain select products to help these developing countries boost their exports into the United States. Earlier, India enjoyed the GSP tab and several Indian products; they enjoyed preferential treatment or preferential tariff under the GSP system. But because of the trade war that the previous Trump administration unleashed, India’s GSP tag was withdrawn by the US. It has significantly affected several Indian exports into the US. By seeking a restoration of the GSP tag, India could boost its exports to the US by obtaining preferential treatment for certain product categories.

3. Mobility of Professionals

India and the U.S. will have to work together to promote the free movement of professionals and labour. Such enhanced mobility for professionals will help India because its core strength lies in the services industry, especially in IT. It could even help other service-based industries such as banking, finance, education, legal services, etc. Currently, the United States' immigration laws are stringent, and the restrictions on the issuance of H-1B visa have directly affected Indian professionals and their mobility to the United States. Along with this, India and the US need to update the 2011 MOU (Memorandum of understanding) the head sign on labour cooperation by keeping in mind India's revised labour laws. India’s outdated labour laws was always a point of contention for the United States. Now that India’s labour laws have been updated and brought in line with the Western standards of labour rights and labour laws, these changes will have to be taken into account to update the labour cooperation between the two sites, which will further improve the mobility and the free movement of professionals and workers. Then India and the US could also consider signing a totalization agreement to guarantee a Social Security net for the professionals and the workers.

4. Defence Ties- Private Firms

There is a need to enhance further the participation of Indian private firms in the two countries' defence relationship. They could even consider holding a defence dialogue involving government representatives, representatives of the armed forces, and private defence manufacturers. Such active defence cooperation will lead to a transfer of technology from the U.S. to India. India’s public sector and India’s private sector can tie-up with American defence firms to develop joint development co-production of critical defence technologies and defence equipment.

5. SME’s- CEO’s Forum

Then even the small and medium enterprises deserve greater attention from the two governments. They could jointly host a forum of CEOs representing small and medium enterprises to boost their mutual exports further.

6. Clean Energy and Climate Change

Then another important area of cooperation would be clean energy and climate change because both in India and the US, there is an enhanced focus on renewable forms of energy, and both the governments would do well to complete the programs in the initiatives that were launched under the India U.S. Strategic Energy Partnership.

7. Digital Economy

Then finally, both the government will have to consider the growing adoption of the digital economy. They will have to collaborate in emerging critical technologies such as artificial intelligence, robotics, machine learning, etc. In the field of the rollout of 5G technology, the US can assist India, leading to greater digital economy adoption and further integrating their digital economies. This should also provide an opportunity for India to defend its conservative intellectual property laws, which are not in line with Western standards.

See; currently, the US trade representative has placed India on the priority watch list because, according to the US, Indian IP laws are not according to global standards. This is a longstanding debate between the developed countries and developing countries. It would be unfair for developed countries to expect developing countries like India to adopt higher standards concerning their intellectual property regime.