Political India: Engaging America

From The Hindu

Reflecting continuing concerns within the Indian industry over tight restrictions on technology exports from the United States to India, the head of the Federation of Indian Chambers of Commerce and Industry (FICCI) expressed hope that the major relaxation of export control restrictions hinted at by the U.S. would become a reality by the time President Obama visits India later this year.

Speaking at a press conference here, Rajan Bharti Mittal, President of the FICCI, said, “It is a little unfortunate that when we have the first Indo-United States Strategic Dialogue on the one side, and then you have, with your own strategic partner you defined, dual technology denials, or entities which are on a list or watched.”

Mr. Mittal added that while the U.S. was, on the one hand, discussing collaboration on space with India, on the other, it was preventing the Indian Space Research Organisation (ISRO) from using U.S. space technology by keeping it on the Entities List.

Also, he said, “While you talk about the most [joint] defence exercises being done between India and the U.S. … you [however] have the Defence Research and Development Organisation… on their banned list.” Thus, there was a need to look at the Indo-U.S. strategic relationship, “in a very different way”, he said.

To a question from The Hindu on when an announcement could be expected with regard to the relaxation of export control restrictions Mr. Mittal said that while the ongoing review of these restrictions by the U.S. was “not processed, it is work in progress”. He added that after his recent visits to Washington, he was “much more hopeful and encouraged by the response that now the needle is moving in the right direction”.

Mr. Mittal then observed that while the political authorities would decide the exact date of the announcement in this matter, “If some substance has to be delivered from [the U.S.’] side when the President visits, I think this could be the one that they would want to get much closer to delivering.”

Boosting Indo-U.S. investment flows

In the wake of the U.S.-India Strategic Dialogue last month, private sector representatives from both sides have engaged in numerous talks, and industry bodies such as FICCI have also been holding discussions with the Deputy U.S. Trade Representative (USTR).

On Monday, FICCI announced that it had signed a Memorandum of Understanding with the Competitiveness Council, an MoU that would spur “innovation and competitiveness in many fields, including energy security, healthcare, education, food, manufacturing in the 21st century and also business processes”, according to Mr. Mittal.

FICCI along with several partners have also come out with a report on ‘How America Benefits from Economic Engagement with India’, a volume that hopes to set at ease concerns within the U.S. that it may be losing jobs to India. According to the report, jointly compiled by FICCI, the U.S. World Affairs Institute and the University of Maryland, India is also the third-fastest growing investor in the U.S.

Among other issues, the report notes that 127 'green field' investments worth $5.5 billion were made by Indian companies in the U.S. between 2004 and 2009. These projects accounted for nearly 17,000 jobs created in the U.S., said Amit Mitra, General Secretary, FICCI. Mr. Mitra added that in addition to the new investments, Indian companies had also made 372 acquisitions worth $21 billion, and these amounted to saving companies and jobs that might have otherwise been lost in the U.S. economy.

Touching upon the need for greater investment flows from the U.S. to India, particularly in the infrastructure sector, both Mr. Mitra said that such investments were needed in airports, railways, ports and roads.

FICCI representative Ranjana Khanna also underscored that the U.S. would also benefit from such investments, for example, the purchase of every Boeing aircraft led to the creation of 10,000 jobs across 15 states in the U.S., she said.

Ms. Khanna added that India and the U.S. were also looking to apply their combined economic potential to other areas, particularly in Africa. To this end FICCI, along with the Carnegie Endowment think tank, would holding discussions on prospects for Indo-U.S. investments in Africa later this week, she added.

Labels: FICCI, Rajan Bharti Mittal, U.S. export control restrictions