Date & Time: 10 November, 2021 at 5:00 PM

Webinar: Discussion on U.S. – India Trade Relations – To the next level.

Proceeding’s report

About the Event: The webinar was on US-India Trade Relations- to the next level which was jointly organized by CPPR and the U.S. Consulate General Chennai and Indo-American Chamber of Commerce.

Key Speakers:

Mark Linscott: Mark Linscott is a former Assistant U.S. Trade Representative for South and Central Asia and for WTO and Multilateral Affairs. He is currently a Senior Fellow at the Atlantic Council and a Senior Advisor at the Asia Group in Washington, D.C.

Rupa Chanda: Rupa Chanda has been a Professor of Economics at IIM Bangalore since 1997. Prior to joining IIMB, she was an economist at the International Monetary Fund in Washington, DC. She briefly served as the Head, UNESCAP Sub-regional Office for South and South-West Asia in New Delhi, while on leave from IIMB.

Opening Remarks:

Manoj Desai: Principal Commercial Officer, U.S. Consulate General Chennai

Concluding Remarks:

Dr. C. Manohar: Regional President, Indo-American Chamber of Commerce (South)


Purvaja Modak: Research Fellow (International Relations – Geoeconomics), C.P.P.R

Webinar Summary:

Purvaja Modak introduced the speakers, welcomed the participants and thanked the partners. She introduced Manoj Desai, Principal Commercial Officer, U.S. Consulate General Chennai.

Manoj Desai commenced the session with his opening remarks with the belief that it is indeed an opportune time to discuss U.S-India relations today. He urged the esteemed panelists Dr. Rupa Chanda and Mark Linscott to give ensure that the conversations on the topic be thought provoking and a stimulating. He stated that the U.S is committed to growing the bilateral commercial/trade relations with increasing its government engagements with forums such as U.S- India CEO forum and the commercial dialogues. These bring together U.S and Indian business executives at the highest levels to meet with the cabinet level officials of the U.S and Indian Governments and present recommendations on advancing U.S and Indian commercial ties. The commercial dialogue facilitates Government to Government discussions on issues related to the Ease of Doing Business, including standards, business climate, investments and Travel & Tourism. There has been a significant dip in these activities for the past year but the strong fundamentals of U.S-India relationships continue to keep the potential alive and well. 

Professor Rupa Chanda began her presentation saying that the two nations have had a long and multifaceted relationship and they definitely do have a shared values, shared interests and trade and investment is an important aspect of this bilateral relationship. Taking forward the point put forth by our earlier speaker Manoj Desai on the untapped potential in this relationship, she identified an asymmetry in the U.S-India relationship in terms of relative dependence of two countries. India was 10th largest source of imports to the U.S., its 9th largest trading partner and 13th largest export market accounting for a very small percentage of U.S exports. Data shows that while the US may be important for India both for sourcing imports and for the exports market, the same is not true for the US/ Thus, India stands to be an important strategic partner, with trade and investments flushing from the U.S to India in the coming years but reverse is more important to achieve our larger shared goals.

She explained how India’s trade basket bifurcation is. It is dominated by goods but there is a shift towards services, the share of which has grown from 25% of total trade in 2000 to 40% in recent years, simply because of the IT sector in India. She pointed the positive aspects of the US India bilateral relationship: US energy exports in recent years and opportunities for India, strong people to people ties and a strong Indian diaspora in the US, bilateral cooperation for higher education etc. Bringing up the labour mobility issue, she discussed the importance of receiving skill category visas like H1B for Indians. She also noted that the recent relaxation on FDI restrictions and sourcing rules such as single brand retailing has opened up prospects for US companies to enter the Indian market.  like Apple Inc. So the two countries must take advantage of the low hanging fruit in the relationship to reinvigorate their bilateral dialogue and also facilitate a structured mechanism to enable in parallel and long term dialogue on the existing irritants.

Mark Linscott, said that the relationship has underperformed for many years despite growth and positive trend line and there are many compelling arguments for India to be a bigger trade partner both in terms of engagement between two Governments and in the value of Goods and Services trade. The first is the “size” of the economy with the US being number one in terms of GDP, and India being number six, slowly rising to reach the third position. The second compelling argument that he put forth was the existence of a significant strategic relationship between the two nations, with a 2+2 dialogue, a shared interest in building the Indo-Pacific alliance, an increase attention to the QUAD 2.0 with Japan and Australia. However, a strong trade relationship that will complement this strategic engagement is needed.

He said that the US faces challenges in sustaining trade in the Indian market because of trade restrictions and import bans, bureaucratic challenges associated with import licensing, technical barriers to trade, etc. He noted that the trade policies and approach towards India seems to be the same as the one under the Trump Administration. He said that the current US administration is certainly looking forward towards re-defining trade agreements, with a clear focus on domestic recovery, responding to Covid-19. He ended by saying that future dialogues between the two nations should be include issues like such as data localisation, treatment of personal data, transborder movement and storage of data, etc.

Purvaja Modak asked the two speakers to discuss the challenging factors or the ‘irritants’ hampering the shared goals and how they can be countered.

Rupa Chanda stated that services sector has more potential and is of mutual interest on both sides, particularly in people-to-people engagements in Healthcare and Science and Technology Research. The US-India trade relations hold a lot of promise and there are huge opportunities in sectors such as defence, aerospace, energy, transport, e-commerce, digital economy, robotics, AI, electrical vehicles etc, along with traditional ones like Infrastructure, textiles, machinery and gems. She stated three ways in which services trade can be furthered: 1. Focusing on mobility of people and the resolving of the H1B visas issue; 2. Fostering more dialogue on digital issues, digitalization and data protectionism; 3. An understanding of the sensitivities in FDI policies and rethinking of the FDI mechanism. She highlighted that the two countries do not see eye to eye on various multilateral trade issues.  

Mark also reiterated Rupa’s inputs on the irritants and the need for the two countries to foster future dialogues on digital issues.

On the US India FTA, Mark said that there have been no discussions on an FTA between the US and India and discussions have bene limited to discrete outcomes on goods, pricing for medical devices, market access for dairy products, etc.

On the question on whether India could capitalize on the focus on the China Plus One strategy after the US China trade war, Rupa said that many companies chose not to relocate their operations away from China merely because of the scale and capacity that China promotes. While researchers and scholars gave a comparative advantage to India, countries like Vietnam and Malaysia actually were successful in capturing those firms that actually moved out of China. Mark said that India-U. S trade has a huge potential in terms of market scale but the shifting of supply chain and manufacturing can disincentivize the potential, bringing up difficulties with ease of doing business, tariffs and the use of inputs that could be counter-productive.

The discussion ended with the two speakers summarizing their inputs laying out a three-point agenda for the US President Biden and Indian Prime Minister Modi to consider as a first step to reinvigorating their trade relationship

  1. Addressing the immediate irritants that are holding the relationship back
  2. Creating institutionalized mechanisms to address the more difficult concerns
  3. Identifying emerging sectors and opportunities and synergies between the two countries

Dr. C. Manohar, Regional President, Indo-American Chamber of Commerce (South) delivered the closing remarks by thanking the speakers for bringing their analysis and expertise to the table. He reiterated on how trade can transform the U.S-India relationship. He explained the role of the Indo American Chamber of Commerce in furthering the trade relations between the two countries. He made a call for chambers of commerce, businesses, think tanks and civil society organizations to work with the Indian government to help India realize this untapped relationship.

Purvaja Modak thanked the speakers, the partners and supporters and closed the proceedings of the webinar.

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