US, India should deepen economic relationss, says lawmaker

Amidst fear of an emerging trade war between India and the US, a key Indian-American lawmaker and an influential former diplomat have said that the policymakers of the two countries need to target on the prize of unleashing the full potential of economic relationship.
"While addressing current difficulties in bilateral trade relations is always important (and indeed a normal part of any trade relationship), US and Indian policymakers need to keep their eye on the prize of unleashing the full potential of our economic relations. In this, we've only just started," Congressman Ami Bera and former US diplomat Karl F Inderfurth wrote in a joint op-ed in the Roll Call yesterday.

In working through these current disputes, both sides should not lose perspective of the rapid expansion and future trajectory of the full bilateral trade and investment ties. The goal should be to facilitate, not complicate, this key pillar of the deepening US-India partnership, they said days after Vice President Joe Biden returned from a trip to India.
Noting that the overall US-India economic and trade relationship is steadily growing, Bera and Inderfurth said business ties have already achieved a nearly fivefold increase in bilateral trade since 2000.
"In 2009 alone, California's farm exports to Asia topped USD 3 billion, with more than USD 275 million going to India. Annual two-way trade is nearly USD 100 billion," they wrote.

Equally important is the growth of two-way investment, they asserted. While Indian authorities must tackle the mounting concerns of international investors in their country - the subject of a recent hearing before the House Ways and Means Committee - US policymakers should also encourage the rapid growth of investments that Indian-based companies are making on American soil, the two said in their op-ed.

India is now the third-fastest-growing source of foreign direct investment in the US, and the US is among the top five of India's preferred FDI destinations.
FDI plays an important role in the growth and vibrancy of the US economy. Foreign-based companies directly employ 5.6 million US workers, they wrote.

"However, from 2000 to 2011 the US' share of global FDI has decreased from roughly 37 per cent to just over 17 per cent. The US needs more companies from partner countries like India to set up shop in our cities and towns," they added.
Asserting that the growing flow of capital from India has brought many benefits to the US economy, they said Indian investment in the US recently touched USD 11 billion and has helped create 100,000 jobs.