US trade representative Ron Kirk and India's minister of commerce and industry Anand Sharma on Wednesday signed a framework for cooperation on trade and investment to strengthen bilateral cooperation and build on the recent exponential growth in US-India trade.
Over the past five years, US-India trade has more than doubled and the US continues to be India's largest trading partner -- if goods and services are counted -- a total bilateral trade standing at $65.9 billion in 2009.
The US is one of the leading foreign direct investors in India and some of the leading Fortune 500 American conglomerates already doing business in India have announced major expansion plans in India, even as they have increased their competitive edge and innovation through strategic plans through their operations in India.
India companies, not to be outdone, have also invested heavily in the US, generating several thousands of jobs in America and there has been a steady investment in the US by Indian industry and manufacturing giants since 2007 when their investment was in excess of $13 billion.
In a tangible manifestation of the Framework signed by Kirk and Sharma, both announced the launch of an initiative, Integrating US and Indian Small Businesses into the Global Supply Chain.
It envisages an expansion of trade and job-creating opportunities for US and Indian companies -- big, small and medium -- and will directly support both US President Barrack Obama's National Export Initiative and Indian Prime Minister Manmohan Singh's recently-introduced budget objectives.
In brief remarks after the signing ceremony, Kirk said 'there is almost limitless potential for growth in trade between our two countries, and that can contribute to economic recovery and job creation in the United States and continued economic growth in India.'
He predicted that 'we can realise that potential by working together toward the goals set forth in the Framework agreement, such as developing and enforcingpolicies that encourage technological innovation, increasing agriculture, services, and industrial goods, and increasing investment flows."
Kirk also said that 'closer collaboration with entrepreneurs and private sector leaders in both our countries will enhance our work.'
Echoing similar sentiments, Sharma spoke of how 'the trade and investment between our two countries has been growing steadily and is broadly balanced,' and consequently has been of immense mutual benefit.
But he bemoaned that 'the numerous synergies which link our two economies have not been tapped fully as yet,' and said that this Framework agreement was specifically targeted to 'create the right environment to ensure that the relationship brings maximum benefit to the maximum number of people.'
Sharma declared that 'we will do so by promoting inclusive growth,' and added, 'we also intend to use this Framework to encourage the development and deployment of clean energy and environmental technologies as well as to support India's infrastructure growth.'
"Further, we have recognized the contribution and potential of small and medium enterprises in our trade and investment agenda by adopting the SME initiative to create fresh opportunities for small and medium enterprises in both the countries and help integrating them in the global supply chain."
Kirk and Sharma had pledged their intent to finalise this framework agreement when they co-chaired the US-India Trade Policy Forum meeting in New Delhi on October 26.
The two governments had agreed to work together to support greater involvement by and small and medium-sized enterprises in each other's markets, and to pursue initiatives in the further development of India's infrastructure, and collaboration on clean energy and environmental services, information and communications technologies, and other key sectors.
Under the guidelines of the Framework agreement signed by Kirk and Sharma, Washington and New Delhi have committed themselves to meet the objectives of developing and enforcing trade policies and fostering a trade-enhancing environment by undertaking initiatives to help both countries meet those goals.
Examples of such strategies, include increasing opportunities for private sector partnerships in infrastructure projects; enhancing intellectual property rights awareness and enforcement; promoting increasing bilateral cooperation in the healthcare, education, information technology, energy and environmental services industries; working to empower women and disadvantaged groups; creating greater mutual understanding of respective approaches to government procurement, and SME development.
The hope is that the Integrating US and Indian Small Businesses into the Global Supply Chain initiative could be a catalyst in creating new opportunities for US and Indian SMEs as well as large firms in the burgeoning US-India commercial space through greater public awareness, enhanced public-private collaboration, and a sharper focus on the benefits of large company and SME collaboration.
Image: Anand Sharma
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