US and India need to turn on the trillion-dollar tap, says Mumbai thin


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Jun 17, 2009
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US and India need to turn on the trillion-dollar tap, says Mumbai thinktank

WASHINGTON: A billion here and a billion there and pretty soon we are talking real money, a famous US Senator (Everett Dirksen) is believed to have joked at a time (1950s) a billion was big bucks even in the United States. A trillion is the number thrown out in the 21st century. Only a few countries (15) have trillion dollar economies (India's joined the ranks in 2007), and certainly no company, not even Apple, had hit that landmark. The world's largest TRADE relationship, between US and Canada, rolls over $650 billion annually, followed by US-China at around $600 billion.

But in an audacious projection, a report from the thinktank Gateway House released on the eve of Prime Minister Narendra Modi's visit to US is forecasting a $1 trillion partnership between the two countries by 2030, a ten-fold increase from the $100 billion mark that has just been reached. It's double the $500 billion target set by Vice-President Joe Biden during his visit to India in July last year, and given the business boondoggles that have blighted the ties so far, it might well be a pie in the sky.

Not so, maintains Nish Acharya, a former Obama administration official who authored the report for the Mumbai thinktank that aims to bridge the gap between business and foreign policy. Acknowledging that the short-term relations between the two countries have never been aligned, Acharya paraphrases President Kennedy to argue that the United States and India must strive to create a trillion dollar economic relationship "not because it is easy, because it is hard." It is also natural, Acharya said in an interview on Sunday, because the two countries have complementary strengths, primarily the systems thinking and deep knowledge of the US, and process innovation and human capital of India.

READ ALSO: PM Narendra Modi to meet Obama on Sept 29-30

(PM Narendra Modi with US secretary of state John Kerry during a meeting in New Delhi. File Photo)

And which areas will the two countries generate a trillion dollar TRADE? Acharya's paper cites a raft of examples and opportunities from healthcare and pharma industry to transportation, education, agriculture, and tourism. All these are well-known and well-worn areas that are flogged frequently at business meetings organized by the likes of CII, FICCI, and USIBC, but Acharya says for bilateral TRADE to ramp up to a trillion dollars, the US-India relationship has to look like the ties Washington has with Mexico, South Korea, and Israel — countries that are not part of the G-7 but have deep seated economic ties with US and "a consistency in policy and collaboration that the US and India should strive for."

That hardly looks to be on the cards despite the build-up to the first Modi-Obama meeting later this month, which some critics are already panning for being more about summitry than substance. "Few people are talking about the big-picture $3 trillion (the amount US spends on health care) opportunity," agrees Manjeet Kripalani, Gateway House's executive director who reported extensively for US business magazines from India during her years as a journalist.

In fact, considering that an 8 per cent growth will push India's $2 trillion economy to $10 trillion in 2030, the Gateway's projected bilateral trade will constitute 10 per cent of India's economic activity. But the report cites numerous specific opportunities in various sectors for both sides that can realize the trillion target — from the "surge" that India needs to address its infrastructure, energy and agriculture, to America's own, and largely unrecognized, need to adopt lessons in innovation and scaling from India.

But to ramp things up to a trillion, says the Gateway report, the two sides need to get over mutual doubts and distrust: Indian politicians, media, and managers must acknowledge that Americans need to build their business when they come to India, and not assume they are there to exploit and pillage India. Indians should also acknowledge they don't know what they don't know (the know-it-all obstinacy is a frequent gripe of Americans). On their part, Americans must recognize that they have to walk lockstep with the global economy, and Indians are not out to steal their job. Consequently, Washington must maintain an open door policy and made movement of people and services easier.

What India can do to ramp-up bilateral TRADE to $1 trillion

*Create a "surge" in areas like infrastructure, healthcare, energy, agriculture.

*Strive to create a "Silicon Swadesh" — a culture of homegrown innovation and entrepreneurship across cities.

*Take advantage of next generation technologies from America.

What America can do to ramp up bilateral TRADE

*Allow Indian companies to bring relevant business models to US, especially in healthcare where Americans pay through their nose.

*Collaborate with India in next-gen and disruptive technologies such as 3-D printing, cloud computing, and synthetic biology.

* Help India further food security with collaboration in modern agricultural practices.

US and India need to turn on the trillion-dollar tap, says Mumbai thinktank - The Times of India

Trade deals and investment season is on the roll :thumb:

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