Transcript Jasmine Revolution

Indo-US
Relations
Nyayapati Gautam
Triumphant Institute of
Management Education P Ltd
www.time4education.com
An Overview –
The Foreign Secy’s perspective
• In the year since President Obama’s visit to
India in November 2010:
– launched new strategic consultations that cover key
regions of the world;
– begun our first trilateral consultation with Japan;
– advanced our cooperation on non-proliferation and
nuclear security;
– deepened counter-terrorism and intelligence
cooperation;
– launched a new Homeland Security Dialogue;
– made steady progress in our partnership on export
controls,
– non-proliferation and nuclear security;
– concluded the largest defence deal yet in our
bilateral relations,
An Overview –
The Foreign Secy’s perspective
– sustained exercises and broadened defence
strategic dialogue;
– taken forward the incipient cooperation for
development in third countries, especially Africa;
– held a very successful Higher Education Summit in
Washington DC; and,
– made innovation driven progress in areas such as
clean energy, food security and healthcare.
– We resumed negotiations on a Bilateral Investment
Treaty and expanded opportunities for economic
cooperation through measures like the Infrastructure
Debt Fund and tariff reductions on products with
potential for bilateral trade.
Issues
• In the US:
– Worries about the commercial implementation of
the civil nuclear agreement
– Lingering disappointment with one major defence
contract;
• In India:
– Wariness that relationship may be turning
transactional
– There is anxiety about protectionist trends in the
U.S., especially in the IT industry that has been the
bridge between our two economies so far.
• US & India:
– Developments in West Asia have raised questions
whether our approaches, if not interests, are
consistent, at least in the immediate future.
Issues
• Defence:
– Our defence procurement in India has to be based
on the best techno-economic choice, in accordance
with procurement guidelines, and it must also meet
the test of Parliamentary scrutiny on procurement
process.
– It also bears repeating that our defence trade has
gone from negligible levels a few years ago to a
cumulative value of USD 9.0 billion in the last fourfive years.
– On both sides, we are making continuous progress
in understanding each other’s procurement and
approval process; extending our engagement from
simple trade to technology transfer and joint
research, development and production.
West Asia
• Surprise developments:
– In our discussions we were all trying to comprehend
the underlying causes and the forces involved.
– Six million Indians live in that region; they constitute
the largest expatriate group and obviously their
welfare is matter of high priority.
– The region is critical for our economy:
• contributing over a 100 billion dollars by way of export
markets,
• Over 40 billion dollars in remittances
• More than two-third of our petroleum imports. This in a
country dependent on imports for 75% of its oil
consumption.
• Peace and stability and a climate of moderation in the
region are absolutely vital for India.
West Asia
• India’s Position:
– We believe that while Iran has rights to peaceful
uses of nuclear energy, it must also fulfill its
international obligations as a non-nuclear weapon
state under the NPT.
– We would like to see the issue resolved peacefully
through negotiations.
– Our relationship with Iran is neither inconsistent with
our non-proliferation objectives, nor is it in
contradiction with the relationships that we have
with our friends in West Asia or with the United
States and Europe.
Economic Partnership
• The flow of trade in goods and services has
grown several times in the past two decades.
– Today we have almost $ 40 bn of US imports, both
goods and services.
– Indian businesses have invested perhaps 26 bn in
the US in 5 years.
– All this has created new job openings in the US.
– It is also natural that as the Indian economy
continues to grow and modernize, as the U.S
economy recovers its momentum and as the global
economic situation improves, our trade and
investment relations will surge to higher levels.
Economic Partnership
• India’s planned infrastructure spending:
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of USD 1.0 trillion in the next five years;
the modernization of our agriculture sector;
our shift to clean energy;
the implementation of the civil nuclear agreement;
the burgeoning defence trade;
cooperation in higher education;
and, the growing ability of the Indian companies to
compete in the U.S. market could take our economic
ties to an entirely new level.
Economic Partnership
• IT Industry:
– NASSCOM estimates that Indian industry employs
over 100,000 in the US (20,000 six years ago).
– It supports 200,000 other jobs, apart from
enhancing the competitiveness of US industries.
– Most Indian companies are setting up development
centers.
– Indian IT industry contributed $ 15 billion in taxes
over the last 5 years.
– Stringent visa regulations which act as a non tariff
barrier.
– Indians paid over $ 200 million in visa fees.
– Perhaps $30-$50 million has been taken from
young Indians whose US visas were rejected. The
pink slip has become a greenback!
Major areas of
cooperation
• A "Strategic Dialogue" was established in
July 2009 during the visit of US Secretary of
State Hillary Clinton to India with the
objective of strengthening bilateral
cooperation across diverse sectors.
Trade and Economic
Relations
• The trade and economic partnership between
the US and India has been a key component
of the bilateral relationship.
– A new US Financial and Economic Partnership to
strengthen bilateral engagement on macroeconomic, financial, and investment-related issues
was launched in New Delhi in April 2010 by the
Finance Minister Mr.Pranab Mukherjee and US
Treasury Secretary Timothy Geithner.
– The Agreement on Framework for Cooperation on
Trade and Investment was signed during the visit of
Minister for Commerce & Industry, Mr. Anand
Sharma to USA in March 2010.
FDI
• Bilateral Investments:
– US is the third largest source of foreign direct
investments into India.
– The cumulative FDI inflows from the US from April
2000 to March 2011 amounted to about $ 9.44
billion constituting nearly 7.28 percent of the total
FDI into India.
– During the financial year 2010-11 the FDI inflows
from US into India were $ 1.17 billion contributing
7% of the total FDI inflow during this period.
– In recent years, growing Indian investments into the
US, estimated by independent studies to be around
US$ 26.5 billion between 2004-2009.
Counter-terrorism
Cooperation
• Cooperation in counter terrorism has seen
considerable progress over the last few years.
– A new India-US Counter-Terrorism Cooperation
Initiative was signed in 2010
• to expand collaboration on counter-terrorism,
• information sharing and capacity building.
– Separately functional level cooperation on counterterrorism is being pursued through a Joint Working
Group (JWG) on Counter Terrorism that was
established in January 2000.
– A new Homeland Security Dialogue was also
announced during President Obama’s visit to India
in November 2010
Defence Cooperation
• The ‘New Framework for India-US Defence
Relationship’ was signed between the two
sides on June 28, 2005.
– Both sides have agreed to pursue mutually
beneficial defence cooperation through the existing
security dialogue, service-level exchanges, defence
exercises and defence trade and technology
transfer and collaboration.
• India’s defence orders from U.S. companies
have reached a cumulative value of over USD
8.0 billion in the last decade.
• Exchanges between each of the Services, with
regular joint exercises.
Defence Cooperation
• To continue and expand their joint activities in
the area of civil space cooperation.
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exchange of scientists;
INSAT3D collaboration;
future mission definition workshops;
nano-satellites;
carbon /ecosystem monitoring and modelling;
international space station;
global navigation satellite systems;
space exploration cooperation;
space debris mediation.
Cooperation in Science &
Technology
• India and the US signed a Science &
Technology Agreement in October 2005
– A $30 million Science & Technology Endowment for
jointly promoting science & technology research,
development and innovation was established in July
2009.
• The bilateral Science and Technology Forum:
– has enabled more than 10,000 scientists,
technologists and students from the US and India to
interact,
– established 24 virtual joint research centers and
– organized more than 30 training programmes and
numerous bilateral conferences.
Cooperation in Science &
Technology
• Collaboration between the Ministry of Earth
Sciences and NOAA has been strengthened:
– by signing of three Implementation Arrangements
for collaboration in October 2010 on
• Tropical Cyclone Research;
• Tsunami Science - detection, analysis, modeling &
forecasting;
• and INSAT 3D satellite data applications.
– In November 2010, a ‘Monsoon Desk’ has been
established in NOAA for enhancing monsoon
forecasting.
– This will also help in building India’s capacity in
developing and using a coupled ocean-atmosphere
modeling system for strengthening the “National
Monsoon Mission”.
Q&A
Indo-US Trade
• From $ 5.6 billion in 1990, the bilateral trade
in merchandise goods has increased to $
48.75 billion in 2010 representing a 771%
growth in a span of 20 years.
– India’s merchandise exports to the U.S. grew by
24.3% from $ 22.14 billion during the period Jan.
– September 2010, to $ 27.52 billion in Jan. –
September 2011.
– US exports of merchandise to India also grew by
12.7% from $ 14.18 billion during Jan. September 2010 to $ 15.99 billion in Jan. –
September 2011. India – US Bilateral Merchandise
Trade stands at $ 43.51 billion during this period.
Major items of export
from India to US
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Textiles (17.7%)
Precious stones & metals (22%)
Mineral fuel, oils (10.9%)
Pharmaceutical products (8.6%)
Organic chemicals (5.1%)
Machinery (4.8%)
Electrical machinery (4%)
Iron & Steel Products (3.4 %)
Major items of export
from US to India
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Precious stones & metals (22.7%)
Machinery (13.5%)
Mineral fuel, Oil, etc. (8.9%)
Electrical machinery (7.1%)
Optical instruments & equipment (5.6%)
Organic chemicals (4.3%)
Fertilizers (4.5%)
Plastic (3.7%)
Bilateral Trade
Thank You
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