The United States has got its own high expectations from the new government that takes office in New Delhi next month after a hard-fought election. A senior Obama administration official asserts that a big reform push will not only stimulate India’s growth, but also transform its economic relations with the US, catapulting bilateral trade five-fold to $500 billion a year.
Terming India the growth engine for the whole of South Asia, US Assistant Secretary for South and Central Asia Nisha Desai Biswal argues that New Delhi must do away with policies inhibiting foreign investment at a time when India is looking for $1 trillion in infrastructure investment over the next five years.
Biswal, speaking on US foreign policy for South Asian prosperity and security at Harvard University’s Kennedy School of Government, said that for all its potential, India was far from being business-friendly, slotted 134 out of 189 in a ranking of countries hospitable to invest and start a new business.
Her pointed comments are in line with Corporate America’s strong push against Indian economic policies over the past year, leading to a unilateral probe by the US International Trade Commission at the bidding of the US Congress. Business groups have gone on to demand designation of India as a “Priority Foreign Country” for its alleged trade discrimination.
While conceding that India has to decide its own path to the future, Biswal maintained made the case for redesigning investment and tax policies that will attract capital flows. “Timely regulatory approvals and contract enforcement must be embraced; and protection of intellectual property must be enforced,” she said.
“We know that India has the potential to exceed all of our expectations, and it has done so in the past,” Biswal said as she spoke of the US commitment to grow bilateral trade and investment, touching on the much-touted Bilateral Investment Treaty that has remained an idea for many years. She also expressed the hope that after the elections, India and Pakistan would be able to make progress on their trade relations. Stating that the current barriers between the two countries are the biggest constraint to boosting trade and energy flows, Biswal spoke of “positive murmurings in Islamabad and Delhi”. “Successful elections in Pakistan, Afghanistan, and India - all in the span of a year - create real opportunities for regional stability,” she said, while focusing on the security situation for the region. She admitted that the challenges posed by the drawdown of NATO forces and the transition in Afghanistan cannot be ignored.
Focusing on the US-India strategic partnership, she said Washington’s security engagement with New Delhi remains central to this effort. In the security realm, a strong and influential India can contribute to the stability of the Indian Ocean region, she said adding the US remains committed to working with India in developing a joint approach security in the Indo-Pacific.