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In a significant move, India and the United States on Sunday decided to resume talks on bilateral investment treaty during discussions between Prime Minister Narendra Modi and US President Barack Obama, who lauded reforms being undertaken by the new government.
The two nations also agreed to resume talks on long pending 'Totalization Agreement' that will benefit millions of Indians working in the US with regard to social security taxes. As per estimates, Indian IT professionals in the US pay over $1 billion annually towards social taxes.
The Bilateral Investment Agreement (BIT) aims at protecting investments in each other's country. The two nations have been discussing the pact since 2008.
Addressing a joint press conference with Modi after the meeting, Obama said: "In the last few years, trade between our two countries increased by some 60 per cent, total record of $100 billion. We want to trade even more."
The US President is on a three-day visit to India. He will be chief guest at Republic Day celebrations on Monday.
"...(we) welcome the reforms that the Prime Minister is pursuing to make it easier to do business here in India," Obama said, adding the trade and economic partnership must focus on improving the daily lives of "our people".
Modi said India and the US will "restart" discussions on the Social Security Agreement and resume talks on BIT.
"President Obama and I agree that a strong and growing economic relationship is vital for the success of our strategic partnership. Economic growth in our two countries is becoming stronger. Our business climate is improving. This gives me great optimism about our economic ties," he said.
He also said the two countries have established a number of effective bilateral mechanisms to identify opportunities and also help their businesses trade and invest more.
"We will also resume our dialogue on Bilateral Investment Treaty. We will also restart discussions on a Social Security Agreement that is so important for the hundreds of thousands of Indian professionals working in the United States," Modi said.
Obama further said Modi also described his efforts to empower more Indians with bank accounts and to ensure clean water and clean air for Indian people and "we want to be partners in these efforts".
The Modi-government has taken a slew of measures to attract foreign investments, including further liberalisation of FDI norms in the defence and insurance sectors. The government is also taking steps toward making it easier to do business in India.
Pacts on social security (Totalization Agreement) and investment, when concluded, is expected to further boost bilateral trade and investment between the countries.