Hug will do: India is viewed as a reliable partner that can be taken for granted.

Jayshree Sengupta

PRESIDENT Trump is going to China on November 8 for three days but will not come to India.  Undoubtedly, the US and China are the two biggest economic powers today.  The one agenda driving the Trump administration is ‘America first’ and ‘Jobs for Americans’. Accompanied by 29 chief executives, Trump hopes to win a big contract from the Chinese state-run oil giant Sinopec for at least $7 billion into areas devastated by hurricanes Harvey and Irma. He also wants to reduce the huge US-China trade deficit ($347 billion in 2016) by trying to gain access to the Chinese agricultural market. India, on the other hand, has been a reliable partner which can be taken for granted. The overtures Modi made in Washington for furthering the US-India trade, investment and strategic ties last summer, in his meeting with Trump, made this amply clear. Modi wants to accelerate India-US trade to $500 billion. Currently, the US buys more from India than it exports. US exports were at $42 billion (2016) whereas imports from India were at $72.8 billion. The US has a trade deficit with India of around $24 billion. India’s big export of IT services and temporary movement of personnel to the US is determined by the H-1B and L-1 visas. Recently, the US administration has made the renewal of H-1B visas more difficult. The US Citizen and Immigration Services,  however, have resumed the premium processing for such visas for a fee of $1,225 in only 15 days. Indian IT workers utilise 70 per cent of the visa quotas every year. The move reflects that only highly qualified IT personnel will be able to work in the US on H-1B visas.Just as Trump wants to protect jobs, India is keen on investment from the US to create jobs. It seems both countries are guided by the same need for job creation. Both leaders came to power promising jobs. Trump was voted to power by the many jobless Mid- West Americans and Modi by the teeming job-seeking youth. Both have to live up to their promises of providing jobs. Trump should be pleased that Indian investment in the IT sector in the Silicon Valley created 52,000 jobs in 2016. Also, Boeing is going to get a huge order from India for civilian planes. Indian Airlines, Spicejet and Jet Airways have ordered 300 planes which should lead to job creation in the US. India has signed energy deals with the US, with Gail signing a 20-year supply agreement to buy 5 to 8 tonnes of US liquified natural gas with Cheniere Energy. India has already taken delivery of one commissioning cargo of gas from the US. India has also started buying crude oil from the US.India is wooing US investment for the ‘Make in India’ initiative. A number of glitches have to be smoothened before American investors choose India as their favoured investment destination. They want freer trade and less regulation. Trump has often said it is greater access to foreign markets what he seeks because the US market is open to all and is the marketplace of the world. One of the recent irritants has been the price regulation that the Indian Government has imposed on heart medical devices called stents. It is considered to be an anti-trade measure by the US. The American companies supplying them have been hit by the nearly 80 per cent cut in prices by the Modi government. Since these stents are now widely used by ordinary people, the government felt it was important to make it more affordable.  India is now also controlling prices of other medical devices like knee implants. But the US government has strongly objected to this regulatory practice and 18 members of the US Congress appealed against such control. Recently, the Government of India has agreed to review the whole business of stent pricing in February 2018. Commerce Minister Suresh Prabhu has asked American companies to make stents in India to reduce costs!The US, just like the EU, wants access to the agricultural sector in India. The dispute in the WTO regarding India banning chicken legs imports was lost by India. US agricultural productivity is much higher than India’s due to the huge direct subsidies the farmers receive from the government. India is not in a position to compete with farm products from the US and will resist opening up. India, however, wants the US to import Indian mangoes and pomegranates.The US business is also very uncomfortable about the Intellectual Property Rights infringements taking place in India. The US business wants strong enforcement of IP protection which can only be achieved through fast-track judicial processes. To be able to win the confidence of American investors, infringement in the digital environment has to be checked. India’s score in the IP Index is at the bottom — 43rd out of 45 countries. The Indian Copyright Act of 1957 was amended in 2012 and monetary and criminal sanctions can be used against those circumventing digital rights. But to do more business with the US companies, greater attention to IPR protection is needed on the ground.Lack of compliance of standards in generic drugs is another problem that the US has, though India exports $4 billion of drugs to the US. The perception of American doctors is somewhat coloured by the notion that Indian drugs are substandard and hence they refrain from prescribing drugs made in India.In ease of doing business, China is ahead of India even though we have achieved the 100th rank recently because of GST and 20 other reforms in the last three years. The fact remains that the US investment in China is huge compared to India. The US business manufactures products in China which are exported back to the US and are part of the global value chain. China is the third most significant market for the US. China’s GDP is a $11.8 trillion economy compared to India’s $2.4 trillion. China is also the largest lender to the US and holds $1.2 trillion of US treasury bonds. Trump’s stakes in alienating China are very high and that is why the rhetoric against China from his election campaign has been dropped in view of the leverage China has over the US, especially regarding the dollar. Next year, Trump will come to India surely!