Building a smarter future together

The US-India relationship has gathered much needed momentum since Prime Minister Narendra Modi’s very successful visit to the US in September. The visit was followed by overt diplomatic gestures, high-level visits and restarting of several stalled bilateral dialogues. The US-India ties have evolved into one based on friendship and natural partnership that aligns the economic and foreign policies of both the countries in the global arena whether it is in terms of increasing bilateral trade, countering terrorism, balancing stability in Asia or fighting the spread of infectious diseases.

And now for the first time, an American president will be the chief guest at India’s Republic Day. It will also be the first time in history that a sitting American president will have visited India twice. This historic visit is bound to take this partnership to the next level.

In terms of business relations, the India-US trade relationship has grown exponentially over the past decade. Today, India is the US’s 11th largest trade partner, 18th largest export destination and 10th largest source of imports in 2012.

US foreign direct investment in India totalled $12.1 billion between April 2000 and June 2014. The US is the 5th largest source of FDI in the country.

India has emerged as the 8th fastest growing source of FDI into the US. According to a CII survey conducted in 2013, 68 Indian companies have invested $17 billion in the US economy and generated a total of 81,000 jobs.

There exist challenges such as labour mobility issues and the lapse of Generalized System of Preferences, among others, faced by Indian companies in the US, while US companies have raised concerns over intellectual property rights and local sourcing requirements, and preferential market access to name a few.

The two governments are now making efforts to create a mutually beneficial agenda that will broaden and deepen our trade and investment, aligning with India’s ambitious developmental agenda as well as US business economic interests.

The successfully concluded India-US technology summit 2014 organised by the Confederation of Indian Industry (CII), the department of science and technology, and the US department of state provided a stimulating platform for industries, institutions and government agencies creating pathways to boost knowledge intensive trade and investments between India and the US. The summit — a commitment under the joint statement issued after the Prime Minister’s visit to the US — highlighted some areas where the two countries could work together.

First, the recently launched ‘Make in India’ campaign translates Modi’s goal to make India a manufacturing hub and provide jobs to tens of millions of low-skilled unemployed youth. The US can be a great partner in reinventing technology driven manufacturing with American know-how. With the new government rapidly simplifying the bureaucratic procedures, instituting long-overdue market reforms and implementing fair, effective, and transparent processes to attract foreign investments, US cooperation and investment in building India will create a win-win situation for both.

Second, the Digital India programme launched by the Centre has set the target of providing broadband connectivity to 2.5 lakh villages and providing wi-fi to an equal number of schools by 2019. India with its large population, strong youth demographics and a supportive telecommunications ecosystem, the data generation explosion creates a challenge and an opportunity for both industry and end-user alike. US-India collaboration in this space will help create viable and scalable business models for digital infrastructure, including e-governance and e-services.

Third, to accelerate India’s journey to a knowledge-driven economy it is essential to foster a knowledge ecosystem through public-private partnerships and stronger industry-institute collaborations. The recently concluded US-India Higher Education Dialogue emphasised the importance of increasing collaboration in the field of skills development, student and scholar mobility, faculty collaborations between the two countries, including ongoing collaboration on community colleges, improvement of workforce training, expansion of research and teaching exchanges, collaboration on education technology and innovation, and industry-academia linkages in higher education.

Fourth, the Swachh Bharat mission is an ambitious programme of the new government that aims to solve the problem of waste management, and ensure hygiene and cleanliness across the country by 2019. American companies can contribute and leverage with private and civil society innovation, expertise and technology to improve sanitation and hygiene throughout India.

Fifth, the government has launched an ambitious plan to build 100 smart cities including an initial investment of $1.1 billion to address the question of India’s overcrowded urban environment. US companies can play a leading role in providing expertise and supporting sustainable infrastructure development in Ajmer, Allahabad and Vizag.

Sixth, the role of renewable sources in enhancing energy security has received significant attention in India. Although the shale gas revolution in the US presents a huge potential for Indo-US partnerships, making cities energy smart will also open up opportunities in market development across several areas including energy efficient appliances, storage technologies, off-grid solutions, smart grids and renewable technology solutions.

As the US-India relationship expands and matures, our economies will become further intertwined. In order to reach its potential we need to embrace strong, inclusive and sustainable economic growth, one where the private sector leads economic development in India’s rise in and integration with the global economy.

The writer is the director-general of CII