India and the US are targetting a four-fold jump in bilateral trade to $500 billion in the near future, US Ambassador to India Richard R Verma said on Monday, exuding confidence that the goal will be met.
“For the years ahead, we have set a very ambitious goal of $500 billion in two-way trade and investment. Given the size of our respective economies, and the trajectories we are on, I’m confident we can get there. “But we can do much more to accelerate the pace, to continue to liberalise markets and to improve investor confidence,” he said at the Atlantic Council US-India Trade Initiative Workshop here.
With its 7.5 per cent growth rate, Prime Minister Narendra Modi envisions a democratic India as a driver of the global economy, he said, adding that pivotal to this vision is the country's economic relationship with the United States.
“Thankfully, our bilateral trade continues to grow, reaching a record $107 billion in 2015. This is more than three times bigger than it was only 10 years ago,” he said. Moreover, US bilateral investment to India has grown from a mere $8.5 billion in 2005 to over $35 billion last year, he added.
last week, the Government announced major FDI reforms aimed at boosting greater investment flows in to the country. Under the new rules, 100 per cent FDI is allowed in civil aviation, defence and e-commerce. Noting that the reforms India is undertaking are not going unnoticed by the US firms, he said American member companies of the US-India Business Council announced plans to invest $45 billion over the next two to three years. He also said the number of Indian companies operating in the US stands at an all-time high and they have invested some $15.3 billion. Citing an example of Aurobindo Pharma setting up a facility in Durham, North Carolina, he said the top 100 investments now employ some 91,000 American workers.
“Both Governments have also taken important steps to help facilitate greater economic growth and investment. For example, we elevated our economic ties by holding our first-ever Strategic and Commercial Dialogue last year. This year’s Dialogue will be held here in New Delhi at the end of August, and our delegation will be led by Secretary Kerry and Secretary Pritzker,” he said.
In an effort to identify and support the best innovators in both the US and India, the two countries also agreed to co-host next year’s Global Entrepreneurship Summit, he added. With regard to ease of doing business, he said India has made good progress on taxes. “We appreciate what the Prime Minister and Finance Minister have said about the end of retroactive taxation – it was an important message,” he said.
The US also has been able to resolve dozens of old tax cases with the Finance Ministry, and recently entered into an advanced pricing agreement with the Government, which allows for even greater certainty and predictability from a tax perspective for companies entering India, he said.