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Time for a Reality Check on India

As we prepare for Indian Prime Minister Singh’s meeting with President Obama at the end of the month, AFTI’s Co-Chair, Linda Dempsey of the National Association of Manufacturers participated in a panel discussion this week hosted by the Center for Strategic & International Studies’ (CSIS). The panel provided a timely reality check on India’s recent economic challenges and what’s needed to turn around a critical bilateral trade and investment relationship.

Kicking off the event, Former U.S. Trade Representative Charlene Barshefsky focused on the value of a fair trade relationship between India and the United States and the critical need to strengthen that economic relationship for the future.

In her comments, she noted that after India opened its markets in the early 1990’s, the trade environment between the U.S. and India quickly became a productive two way street for both countries and grew from less than $6 billion in 1992 to over $57 billion in 2012. Unfortunately, the several one-sided and discriminatory trade policies the Government of India (GOI) has recently implemented are now creating significant market barriers for U.S. companies and increasing concern among foreign investors.

During the panel discussion, Linda Dempsey pointed out the three reasons for India’s stumbling economy: bad policies, lost trust, and indecision. And the evidence is mounting as steel, retail,  insurance and other companies are pulling back from India and reconsidering their options.  The U.S. business community is also losing trust in India’s ability to protect intellectual property rights after the government denied, revoked and compulsory licensed patents for more than a dozen innovative medications. Ironically, these protectionist and discriminatory policies that are meant to help build India’s economy are doing quite the opposite.

As we outlined last week ahead of the G20 Summit, India now ranks 132 out of 185 in the World Bank’s ease of doing business index, meaning it is now easier to do business in countries like Russia, Nigeria, and China than in India. Given India’s long-standing position as a vital U.S. ally on many fronts, Members of Congress and the Administration are joining U.S. businesses in vocalizing their serious concerns for the future of this relationship. But it is time to see more action.

Washington and the U.S. business community are united and in agreement that extensive trade policy reforms must be enacted in India.  Now more than ever, it is critical that the President address these concerns directly with Prime Minister Singh and demonstrate his commitment to protecting American jobs and intellectual property.

To view the full panel discussion, click here