Foreign Policy Watch: India-United States

[op-ed snap] US and India must work on economic ties


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: The United States-India Science Technology and Endowment Fund

Mains level: Different areas of bilateral cooperation that can significantly increase economic growth in both the countries.


India and the US are facing similar economic challenges

  1. Both countries need to rapidly create new jobs, move people into the middle class and keep them there,
  2. and take advantage of the opportunities that globalization can bring while mitigating its challenges to sustainable domestic growth and strong and equitable democratic societies
  3. Contending with these challenges will require effective domestic economic policies that address not just interest rates and investment, but also healthcare and education

The US-India economic relationship has a strong foundation

  1. Bilateral trade has more than doubled since 2006, reaching $115 billion in 2016
  2. The same year, there was $32.9 billion US foreign direct investment (FDI) in India, and in 2015 there was $12.1 billion Indian FDI in the US
  3. Through a coordinated strategy of investment and innovation, a smart US-India economic partnership can help each country improve the condition of its people

Three areas of bilateral cooperation in particular that can boost economic growth in both countries
FIRST: The two countries must invest in infrastructure

  1. According to finance ministry, India needs to invest $1.5 trillion over the next 10 years to meet its infrastructure needs,
  2. while the US department of transportation estimates that an additional $800 billion is needed in the US for bridges and roads alone
  3. To this end, the US department of treasury has been providing technical assistance to help the Pune municipal corporation issue municipal bonds
  4. By expanding this programme, more cities around India could fund their infrastructure needs
  5. Both countries should hold institutional investor summits to facilitate private sector investment in each other’s infrastructure
  6. This focus can boost long-term economic growth and job creation in both countries

SECOND: Need of innovative ways to contend  the changing landscape of employment

  1. As the nature of work changes, creating jobs requires innovation in addition to investment
  2. By holding a bilateral dialogue focused on the future of work, policymakers, entrepreneurs, technology experts, and community leaders can address employment trends
  3. and community needs to refine policy solutions that leverage the changing nature of work to create stable, well-paying jobs and empower citizens
    The United States-India Science Technology and Endowment Fund
  4. The two countries should also expand this fund
  5. It funds research on supporting healthy individuals or empowering citizens through technology conducted by US-Indian teams, with an emphasis on the marketability of the research outcomes
  6. This research can be the basis of building the digital infrastructure necessary to help people find jobs and skills training

THIRD: Importance of subnational(state-to-state) cooperation

  1. While the Indian ministry of external affairs already has an office focused on subnational issues, the US department of state should re-establish and strengthen the office it once had focused on subnational cooperation
  2. In addition, large states and cities should create their own offices of international affairs,
  3. and work with the foreign ministries to connect one another with technical training, capacity building, and best practices
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