One way to remove irritants from India-US relationship is to get rid of tariffs: USISPF CEO and president Mukesh Aghi
The US-India Strategic Partnership Forum (USISPF) is an organisation that for years has played an important role in creating a strong strategic partnership between the two countries
The India-US relationship defined in terms of strategic ties and trade has become an important part of India's foreign policy. The US-India Strategic Partnership Forum (USISPF) has played an important role in creating a strong strategic partnership between the two countries. While its central focus remains on promoting bilateral trade between the two countries, the realm of its advocacy does not stop here.
In an interview, Mukesh Aghi, president and chief executive officer (CEO) of USISPF explained how his organisation played an important role in having India as an exception under the recently passed Countering America's Adversaries through Sanctions Act (CAATSA) by the US government.
Talking about his organisation and the most recent example of his organisation's advocacy that resulted in a very positive outcome for India, Aghi said, "We are the only independent organisation that is focusing on the India-US relationship and we are not-for-profit. The objective is to look at the relationship from geopolitical, economic, innovation and technology perspectives, to name a few. To give you an example of our success, The US Senate passed the CAATSA and we had a major campaign to make India an exception."
He added, "Our board members had reached out to several Senators and Congressmen. We had lobbied the White House as well and the end result was that we managed to get India added as an exception."
"If you allow a process through which India becomes collateral damage, it damages the relationship for the next 20 years. We were conscious of that and worked really hard," Aghi said.
Speaking of the rising investment in India, Aghi said, "Member companies in the past three years have invested $27 billion in India, so we focus on ensuring that the investment continues. The routes to investment continue to improve the ease of doing business in India. We advise the government about the issues and are working on them. India is the number one destination for FDI now."
When asked about the sort of change in perceptions that has been created in the US vis-a-vis India in light of the economic reforms initiated in the past four years, Aghi said, "This government is absolutely proactive in encouraging investment in the country and Prime Minister Narendra Modi is the biggest cheerleader for that. Every time he visits any country, the FDI from that country goes up. So, if you look at it from the ease of doing business perspective, investments are not made in Delhi alone, but at the state level too. We worked with the company looking for places in which it is easier to do business and to go and invest. Some of the easiest places to work are some are the states where the BJP is in power."
He added, "Trade between the two nations has went up by 12 percent between 2017 and 2018 and it was $126 billion last year. We see the trend moving forward. It is going to be up for multiple reasons and a couple of the reasons for this are defence and energy."
How will the US-China trade war impact India? "India will benefit. What we can see China is taking a softer stand towards India. China is realising if the war continues with the US then it has to have local partners and India is definitely a neighbour with a big market," Aghi replied.
On current irritants between India and the US in terms of trade, the USISPF CEO and president said, "Our position is that any kind of tariffs put in place by either India or the US is not good for business, not good for consumers. So, we strongly believe that there should not be a tariff. Currently, the irritant is you have price control over medical devices in India; in the US we have GSP towards India. There is an issue on the tariff side on steel and aluminium and renewable exports from India. I think there are irritants on both sides and our recommendation is the removal of tariffs."
Commenting on the reforms initiated by the current government and the impact they will have on trade and investment, Aghi said, "The US sees the Indian government in a very positive way in two broad areas: Defence and economic reform. Further, India has been projecting a very consistent foreign policy. If you look at the Modi administration, in terms of economic reform India has consistently brought in measures like GST, RERA and the bankruptcy code. So, investors are quite patient and also positive about this government as it seems to be moving in the right direction. For example, there are no major corruption scandals, which is something that gives us a lot of encouragement."
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