The United States and India are experiencing the largest bilateral trade and investment flows ever recorded in the two nations' relationship. The U.S. is India’s third largest trading partner, and India is the U.S.'s 13th largest trading partner. Consequently, the trade relationship fits into the greater bilateral liaison, which, over the past 20 years, has seen an enhancement of relations between the world’s largest and oldest democracies.
However, even with these favorable indicators, the U.S. remains ambiguous when pressed for a specific time frame it will enter into a Bilateral Investment Treaty (BIT) with India. While trying to promote a patient profile towards the U.S.’s opacity, India continually makes the case for quicker action on the long-pending BIT with the United States, expressing hope that the ministerial Trade Policy Forum talks between the two sides is not delayed any longer.
The latest attempt to call the United States out of apprehension occurred on March 15th at the Center for Strategic International Studies in Washington DC, with a feature speech by Indian Ambassador to the U.S. Nirupama Rao. Without beating around the obvious desires of her homeland, she stated that the U.S. and India “need to move consciously and with momentum on the Bilateral Investment Treaty, as also train our sights on the exploration of the advantages, or otherwise, of any future bilateral economic partnership arrangement.”
She reiterated two main arguments both U.S. and India government officials have been stressing to push this treaty forward.
First, India is not standing still. The Indian economy has grown at an average of 8 percent per annum over the last five years and is projected to achieve a growth rate of over 8 percent per annum over the next five years. Ambassador Roa also suggested that recent months “have witnessed a flurry of measures designed to further open the economy, with FDI reforms having taken place in single and multi-brand retail, civil aviation, and power exchanges.”
Second, a BIT could have a productive effect on U.S.-India commercial relations. Ambassador Roa argued that not only has U.S.-India trade grown rapidly, but so too has bilateral investment. In her opinion U.S. firms would welcome significant legal changes, as well as the symbolic implications of such a treaty for further, subsequent liberalization in India. A treaty would establish safeguards, and an independent adjudication process, from which both countries could benefit.
While emphasizing the progress India has made to welcome a BIT, she also addressed issues bound to arise-such as U.S. disillusionment from India's new proposal to restrict imports of an array of high-tech products as the two countries' commercial and trade relationship deepen. Instead of letting these concerns plague any hope for negotiations, Ambassador Rao argued that these can be overcome by “ensuring regular meetings and working together to structure constructive outcomes.“ She also assured that India was flexible to modification of trade agreements suggesting that “in order to negotiate the global economic terrain better, India and the U.S perhaps also need to explore new trade and economic cooperation arrangements.”
The time for circumspection is coming to end. As Ambassador Roa keenly pointed out in her closing remarks, it is imperative that these two mcountries “need to remain committed and engaged at all levels, continuously and without pause, overcoming any challenges that may exist. I am very optimistic about the future, and of the firm view that the economic relationship between our two democracies can only become stronger with the passage of time.”
Photo: Ragesh Vasudevan (cc).
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Ambassador Nirupama Rao Makes a Case for the BIT
March 21, 2013
The United States and India are experiencing the largest bilateral trade and investment flows ever recorded in the two nations' relationship. The U.S. is India’s third largest trading partner, and India is the U.S.'s 13th largest trading partner. Consequently, the trade relationship fits into the greater bilateral liaison, which, over the past 20 years, has seen an enhancement of relations between the world’s largest and oldest democracies.
However, even with these favorable indicators, the U.S. remains ambiguous when pressed for a specific time frame it will enter into a Bilateral Investment Treaty (BIT) with India. While trying to promote a patient profile towards the U.S.’s opacity, India continually makes the case for quicker action on the long-pending BIT with the United States, expressing hope that the ministerial Trade Policy Forum talks between the two sides is not delayed any longer.
The latest attempt to call the United States out of apprehension occurred on March 15th at the Center for Strategic International Studies in Washington DC, with a feature speech by Indian Ambassador to the U.S. Nirupama Rao. Without beating around the obvious desires of her homeland, she stated that the U.S. and India “need to move consciously and with momentum on the Bilateral Investment Treaty, as also train our sights on the exploration of the advantages, or otherwise, of any future bilateral economic partnership arrangement.”
She reiterated two main arguments both U.S. and India government officials have been stressing to push this treaty forward.
First, India is not standing still. The Indian economy has grown at an average of 8 percent per annum over the last five years and is projected to achieve a growth rate of over 8 percent per annum over the next five years. Ambassador Roa also suggested that recent months “have witnessed a flurry of measures designed to further open the economy, with FDI reforms having taken place in single and multi-brand retail, civil aviation, and power exchanges.”
Second, a BIT could have a productive effect on U.S.-India commercial relations. Ambassador Roa argued that not only has U.S.-India trade grown rapidly, but so too has bilateral investment. In her opinion U.S. firms would welcome significant legal changes, as well as the symbolic implications of such a treaty for further, subsequent liberalization in India. A treaty would establish safeguards, and an independent adjudication process, from which both countries could benefit.
While emphasizing the progress India has made to welcome a BIT, she also addressed issues bound to arise-such as U.S. disillusionment from India's new proposal to restrict imports of an array of high-tech products as the two countries' commercial and trade relationship deepen. Instead of letting these concerns plague any hope for negotiations, Ambassador Rao argued that these can be overcome by “ensuring regular meetings and working together to structure constructive outcomes.“ She also assured that India was flexible to modification of trade agreements suggesting that “in order to negotiate the global economic terrain better, India and the U.S perhaps also need to explore new trade and economic cooperation arrangements.”
The time for circumspection is coming to end. As Ambassador Roa keenly pointed out in her closing remarks, it is imperative that these two mcountries “need to remain committed and engaged at all levels, continuously and without pause, overcoming any challenges that may exist. I am very optimistic about the future, and of the firm view that the economic relationship between our two democracies can only become stronger with the passage of time.”
Photo: Ragesh Vasudevan (cc).
