Ahead of the inaugural US-India Strategic and Commercial Dialogue, beginning here on Monday, the Obama administration is pushing New Delhi for the early conclusion of a Bilateral Investment Treaty (BIT) in order to attract US capital in major sectors including infrastructure, energy, health and education.
Highlighting some of the themes that Corporate America has been clamouring about for long, US Assistant Secretary of State for South and Central Asia Nisha Desai Biswal has also called for early action by New Delhi on tax simplification and strengthening of intellectual property rights as part of steps to improve the ease of doing business in India. “If India could complete a BIT with the US it would become India's highest-standard investment pact. It would demonstrate to international investors - especially those from the US - that India is open for business,” Biswal said in remarks at the Peterson Institute of International Economics here.
While commending PM Narendra Modi's ambitious ‘Make in India’ initiative, Biswal said the plan will require better integration of India's economy. Backing the newly-released Peterson Institute report that prescribes a wide range of measures to fuel a trade-led growth strategy for India, Biswal said New Delhi ‘must assure global markets and international investors that it is open for business’.
At the bilateral level, she noted that the upcoming dialogue will enable top officials of both Governments to export how to improve connectivity, enhance investment and make doing business easier as part of the Obama-Modi commitment to expand India-US trade five-fold to $500 billion.
The Modi Government, as Biswal put it, has made “some progress" in its pursuit of market reforms to enhance competitiveness and growth. She conceded that the US is aware from the experience of its own legislative process that "getting big things done is more difficult in vibrant democracies.” As for BIT, she said its conclusion would help "lock-in reforms for the long-term", giving investors the confidence they need to make the long-term investments that India needs.
Noting that India has already completed bilateral deals providing stronger investor protections, such as the investment chapter in its economic partnership agreement with Japan, Biswal said if India commits to the same standards with the US, it could accelerate the BIT negotiations.
“It would require a lot of hard work, but it would unlock huge dividends,” she said and spoke of the likely expansion in its wake of sectors like manufacturing, digital economy and renewable energy.