'India will soon have the world's largest and youngest population -- just imagine what tomorrow's citizens of India will be able to accomplish, given the right education, training, and opportunity.'
US Assistant Secretary of State Nisha Biswal outlines the United States' expectations from the Indian economy. Aziz Haniffa/Rediff.com reports from Washington, DC.
"For India to achieve its goal of sustainable growth and development, it must assure global markets and international investors that it is open for business," said Nisha Desai Biswal, United States Assistant Secretary of State for South Asian Affairs.
"Efforts to simplify its tax code and increase the ease of doing business will pay huge dividends," she added.
Biswal was speaking at the Peterson Institute for International Economics at the launch of a new report, India's Rise: A Strategy for Trade-Led Growth by Fred Bergsten, Senior Fellow and Director Emeritus and the Peterson Institute's founding director.
"Most of us have watched intently as the Indian government pursued market reforms, sought to enhance competitiveness and increase trade-led growth," Biswal added.
While acknowledging that "some progress has been made," she noted, "Anyone familiar with our legislative process knows sometimes getting big things done is more difficult in vibrant democracies."
But, she argued, "In the meantime, the Modi government can send signals to show its commitment to reform, such as strengthening Intellectual Property Rights."
"That's an issue we raise often with the Indians, because we know that a strong IPR regime is absolutely critical to a competitive economy -- it's what underpins our economic success and, while our system isn't perfect, it does attract some of the best companies from all over the world."
"India will soon transition from being a net user of technology to a net producer," Biswal said, adding, "To innovate, attract investment, and compete, the Indian firms creating those new technologies will need strong IPR protections."
"There are several other steps India should take, but today I'd like to focus on one very important opportunity -- a US-India Bilateral Investment Treaty," she said.
"If India could complete a BIT with the United States it would become India's highest-standard investment agreement," she added.
"It would demonstrate to international investors -- especially those from the United States -- that India is open for business."
"And it will attract much-needed capital for a variety of sectors, including infrastructure, energy, health, education, and many more."
"A high standard BIT with the United States would lock-in reforms for the long-term, it would give investors the confidence they need to make the long-term investments that India needs" Biswal said.
"What's more, by signing a BIT with the United States, India would show that it is willing and able to join other high-standard investment agreements, making it even more competitive and integrated into the global economy."
"India has already completed bilateral deals, like the investment chapter of their economic partnership agreement with Japan, that provide strong investor protections," Biswal pointed out.
"If India were to commit to those same standards with the United States, our two countries could greatly accelerate the negotiation of a BIT," she said.
"It would require a lot of hard work, but it would unlock huge dividends," she added.
"The bottom line is that we want more Indian firms to invest in the United States, and US companies want to build on their almost $28 billion investments in India," she said.
"We want to see the expansion of sectors like the digital economy, renewable energy, and especially manufacturing, which could help integrate India more deeply into global supply chains and markets."
"The United States knows well that few can match the innovative and entrepreneurial spirit of the Indians -- some 15 per cent of start-ups in Silicon Valley have been founded by Indians and Indian Americans -- a community that makes up just 1 per cent of the US population."
"India will soon have the world's largest and youngest population -- just imagine what tomorrow's citizens of India will be able to accomplish, given the right education, training, and opportunity."
"To take full advantage of that demographic dividend, India needs to create about one million jobs every month for the next 20 years -- and provide skills training for a 400 million-strong workforce," Biswal said.
The Indian government's ambitious 'Make in India' initiative is to create millions of new jobs in the manufacturing sector, she said, adding, this will require the Indian economy to be better integrated into global supply chains, markets and trade.