While expressing their optimism about the first few steps taken by the new government under its reform agenda to ease business and facilitate trade, they have called on the Modi government to follow through on its promise of second-generation reform.
“If India’s new leadership is serious about opening their economy for business, manufacturers in the United States stand ready to work with them,” said Linda Dempsey, Vice President of International Economic Affairs of the National Association of Manufacturers (NAM) in a statement.
“Manufacturers remain hopeful that positive progress can be achieved. As Prime Minister Modi prepares to visit the US later this month, manufacturers urge him to take concrete steps to level the playing field and make bilateral trade and investment a two-way street.”
Dempsey emphasised that manufacturers were hopeful that Modi will reenergise economic relations with the US, and expressed hope that the new government will break down trade and investment barriers and strengthen intellectual property protections.
“Prime Minister Modi quickly declared India ‘open for business’ and promised to ‘give the world a favorable opportunity’ to manufacture in India.”
“He outlined a bold series of economic reforms and challenged his ministers to implement an aggressive 100-day agenda. In his July budget speech, his Finance Minister, Arun Jaitley, spoke of incentivizing overseas investment and announced plans to raise foreign investment caps,” said Dempsey.
However, she was critical of the government’s decision to block the implementation of a global trade facilitation agreement, a deal meant to regularise customs rules — the first global business reform in over two decades.
Dempsey added that the government has unfavourably raised tariffs, imposed new, onerous testing requirements for imports, and taken very little action to strengthen the weak intellectual property or eliminate barriers to US exports.
“But actions speak louder than words, and, so far, India is pursuing business as usual. Since May, it has blocked implementation of a global trade facilitation deal that would have contributed USD 1 trillion to the world economy by cutting unnecessary red tape at the border.”
The issue of IPR is expected to come up during discussions between US President Barack Obama and Modi when they meet at White House on September 29 and 30, the first meeting between the two leaders.
India’s intellectual property regime has been a major cause of contention for US companies. Previously, US Secretary of State John Kerry too had urged India to improve its IPR to enhance bilateral trade.
“If India’s government delivers on its plans to support greater space for private initiative, if it creates greater openness to capital flows, it if limits subsidies and strive for competition, and provides strong intellectual property rights, believe me even more American companies will come to India.”
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