"By any measure, India is a rising global giant." So said U.S. Assistant Secretary of State for the Bureau of South and Central Asian Affairs Robert Blake on a recent trip to India. India's trillion-dollar-plus economy is the fourth largest in the world by purchasing power parity and its technology industry is thriving.
As India's economy has grown and opened, so has U.S.-India trade. In 2008, India was the United States' 18th largest trading partner. By 2009, it had jumped to 14th. The U.S. would like to see it make the top ten in 2010.
"The United States is the most open market in the world," said Assistant Secretary Blake. The U.S. provides significant duty-free and quota-free access to developing countries. "Our goal," Mr. Blake declared, "is sustainable economic growth that brings home the benefits of trade, including well-paying jobs in the U.S. – while also advancing global recovery."
Just as Americans benefit from an open economy, Indians will benefit from a renewed commitment to making their markets more accessible for outside investors. The key here is reducing barriers to trade, many of them self-imposed, to unleash the entrepreneurial Indian spirit and achieve greater economic growth. In addition, increasing the foreign direct investment cap on multi-brand retail from 0 to 49% would not only help companies provide their goods and services to more people, many of them in rural areas, it will also employ more Indians who will learn modern management techniques. Reducing agricultural import barriers would also provide relief to Indian consumers suffering from high food price inflation and give Indians vendors opportunities to develop niche markets.
There are many other reforms that could help streamline the investment process. Reducing regulatory barriers to business will help bring India's informal economy into the formal economy, thereby helping India realize its true economic potential and continue lifting its citizens out of poverty. It is in India’s interest to reduce its tariff and non-tariff barriers and promote the harmonization of customs standards in order to help spur domestic innovation, greater investment, and advanced industrial development.
The U.S. and India share many values, but shared values, said Mr. Blake, "will only take us so far -- India should continue to increase market access for American businesses, finance, and people, and the United States will do the same."