India, U.S. eye states to boost trade ties

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Mains Paper 2: IR | Bilateral, regional and global groupings and agreements involving India and/or affecting India’s interests

From UPSC perspective, the following things are important:

Prelims level: Particulars of the USIBC

Mains level: Both the US and India can increase their bilateral trade. It will be beneficial for both the countries, in rapidly changing strategic relationships in the world.


News

Efforts to increase bilateral trade and investment ties

  1. India and the U.S. are working on establishing a state-level engagement mechanism to widen and deepen bilateral trade and investment ties
  2. The U.S.-India Business Council (USIBC), will unveil a ‘State Engagement Task force’ (SET)
  3. Why: to ensure American and Indian companies align their interests with the priorities of the State governments of both the countries

Priorities of the Bilateral Trade and Investment

  1.  Priority sectors will be defence and energy
  2.  While the focus in defence would include Lockheed Martin’s proposal to make F-16 fighter jets in India
  3. The proposed sale of General Atomics Aeronautical Systems Inc. or GA-ASI’s ‘Guardian Remotely Piloted Aircraft’ to India
  4. Energy ties would cover exports of U.S. natural gas, transfer of U.S. technology on oil and gas refining
  5. Also, the conclusion of pacts between Nuclear Power Corp. and Westinghouse Electric for six nuclear reactors in India and related project financing
  6. Other priority areas would be
    (1) smart cities (including Ajmer, Allahabad and Visakhapatnam)
    (2) regional airport development in India through public private partnership
    (3) e-commerce?
    (4) digital payments
    (5) medical devices

Current status of India, as a state(of US) trade partner

  1. According to the American Enterprise Institute, China was the ‘top import country’ for 23 U.S. States in 2016, followed by Canada (14)
  2. India was neither a ‘top import country’ nor a ‘top export country’ for any U.S. State

What about other issues?

  1. Issues like the U.S. concern over its trade deficit and India’s worries on U.S. visa ‘curbs’ would be solved after the more important issue related to bilateral trade
  2. Once the two countries explore ways to solve the ‘larger issue’ of increasing bilateral goods and services trade to $500 billion, from $115 billion in 2016, both countries will talk about the other issues
Foreign Policy Watch: India-United States
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