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We stand to gain by knitting together our two nations in a web of healthy economic interconnections.
Underpinning our partnership is the US-India economic relationship. Since the wave of economic reforms initiated by then Finance Minister Manmohan Singh's tenure in the early 1990s, Americans have looked to India as the next great opportunity and Indian companies and entrepreneurs have responded with equal vigour. We both stand to gain by knitting together our two nations in a dense web of healthy economic interconnections.
Our economic ties have expanded dramatically in the last decade - our bilateral trade is growing over 20 per cent a year and has doubled to $32 billion since 2002. The US is India's largest investor, with over $6 billion of portfolio and foreign direct investment, and India has an estimated cumulative investment of over $2 billion in this country.
However, with every billion dollar increase in trade and investment, new commercial disputes are created. To some extent, this is inevitable - new economic opportunities, reforms, and growth are reshaping Indian society.
The Indian government's challenge is to mediate these changes, ensuring that this growth provides an equitable rise in the incomes of the average Indian. The Indian government must also ensure that new regulations or old red tape do not impede growth, and that foreign companies have a clear path to settling commercial disputes when they arise.
The Indian government should continue the economic reforms that have been the basis of India's economic boom so far.
Our focus is on facilitating and promoting foreign direct investment, enhancing bilateral consultations on reducing tariff and non-tariff barriers to trade in industrial goods, services and agriculture, preventing the illicit use of the financial system and strengthening India's regime for intellectual property rights.
A key driver of our economic relationship has been the CEO Forum, which has brought to the table 20 top Indian and US CEOs representing over a trillion dollars of capital.
These CEOs provided a detailed set of policy and economic reform recommendations to President Bush and Prime Minister Singh, which, if implemented, will greatly increase our bilateral trade and investment flows.
At the CEO Forum Summit in New York last October, the US government made progress in implementing these recommendations. We also heightened our engagement with India on issues on the expansion of banking services in both countries.
We pledged to implement an expedited licence process for trade in dual-use items, known as the "Trusted Customer" programme. Finally, we will hold extensive consultations with the Indian government and industry on data privacy standards to develop a framework of common practices in electronic commerce.
For its part, the Indian government announced initiatives to attract infrastructure investment in India. At the meeting, Citigroup and Blackstone agreed to launch a $5 billion infrastructure investment fund in partnership with the Indian government.
The Indian government also renewed its commitment to resolve some legacy commercial disputes. And, we achieved an important symbolic breakthrough in a long-festering trade dispute. After 18 years, we have begun importing Indian mangoes into the US.
This speaks volumes about our deepening trade ties. Let us hope this is a harbinger of similar progress on our overall trade ties in the future.
Excerpts from US Under Secretary for Political Affairs R Nicholas Burns's remarks to the Heritage Foundation, Washington DC, May 23, 2007
