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Indo-US Relations

Indo-US Relations. Nyayapati Gautam. An Overview – The Foreign Secy’s perspective. In the year since President Obama’s visit to India in November 2010: launched new strategic consultations that cover key regions of the world; begun our first trilateral consultation with Japan;

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Indo-US Relations

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  1. Indo-US Relations NyayapatiGautam Triumphant Institute of Management Education P Ltd

  2. An Overview – The Foreign Secy’s perspective • In the year since President Obama’s visit to India in November 2010: • launched new strategic consultations that cover key regions of the world; • begun our first trilateral consultation with Japan; • advanced our cooperation on non-proliferation and nuclear security; • deepened counter-terrorism and intelligence cooperation; • launched a new Homeland Security Dialogue; • made steady progress in our partnership on export controls, • non-proliferation and nuclear security; • concluded the largest defence deal yet in our bilateral relations,

  3. An Overview – The Foreign Secy’s perspective • sustained exercises and broadened defence strategic dialogue; • taken forward the incipient cooperation for development in third countries, especially Africa; • held a very successful Higher Education Summit in Washington DC; and, • made innovation driven progress in areas such as clean energy, food security and healthcare. • We resumed negotiations on a Bilateral Investment Treaty and expanded opportunities for economic cooperation through measures like the Infrastructure Debt Fund and tariff reductions on products with potential for bilateral trade.

  4. Issues • In the US: • Worries about the commercial implementation of the civil nuclear agreement • Lingering disappointment with one major defence contract; • In India: • Wariness that relationship may be turning transactional • There is anxiety about protectionist trends in the U.S., especially in the IT industry that has been the bridge between our two economies so far. • US & India: • Developments in West Asia have raised questions whether our approaches, if not interests, are consistent, at least in the immediate future.

  5. Issues • Defence: • Our defence procurement in India has to be based on the best techno-economic choice, in accordance with procurement guidelines, and it must also meet the test of Parliamentary scrutiny on procurement process. • It also bears repeating that our defence trade has gone from negligible levels a few years ago to a cumulative value of USD 9.0 billion in the last four-five years. • On both sides, we are making continuous progress in understanding each other’s procurement and approval process; extending our engagement from simple trade to technology transfer and joint research, development and production.

  6. West Asia • Surprise developments: • In our discussions we were all trying to comprehend the underlying causes and the forces involved. • Six million Indians live in that region; they constitute the largest expatriate group and obviously their welfare is matter of high priority. • The region is critical for our economy: • contributing over a 100 billion dollars by way of export markets, • Over 40 billion dollars in remittances • More than two-third of our petroleum imports. This in a country dependent on imports for 75% of its oil consumption. • Peace and stability and a climate of moderation in the region are absolutely vital for India.

  7. West Asia • India’s Position: • We believe that while Iran has rights to peaceful uses of nuclear energy, it must also fulfill its international obligations as a non-nuclear weapon state under the NPT. • We would like to see the issue resolved peacefully through negotiations. • Our relationship with Iran is neither inconsistent with our non-proliferation objectives, nor is it in contradiction with the relationships that we have with our friends in West Asia or with the United States and Europe.

  8. Economic Partnership • The flow of trade in goods and services has grown several times in the past two decades. • Today we have almost $ 40 bnof US imports, both goods and services. • Indian businesses have invested perhaps 26 bn in the US in 5 years. • All this has created new job openings in the US. • It is also natural that as the Indian economy continues to grow and modernize, as the U.S economy recovers its momentum and as the global economic situation improves, our trade and investment relations will surge to higher levels.

  9. Economic Partnership • India’s planned infrastructure spending: • of USD 1.0 trillion in the next five years; • the modernization of our agriculture sector; • our shift to clean energy; • the implementation of the civil nuclear agreement; • the burgeoning defence trade; • cooperation in higher education; • and, the growing ability of the Indian companies to compete in the U.S. market could take our economic ties to an entirely new level.

  10. Economic Partnership • IT Industry: • NASSCOM estimates that Indian industry employs over 100,000 in the US (20,000 six years ago). • It supports 200,000 other jobs, apart from enhancing the competitiveness of US industries. • Most Indian companies are setting up development centers. • Indian IT industry contributed $ 15 billion in taxes over the last 5 years. • Stringent visa regulations which act as a non tariff barrier. • Indians paid over $ 200 million in visa fees. • Perhaps $30-$50 million has been taken from young Indians whose US visas were rejected. The pink slip has become a greenback!

  11. Major areas of cooperation • A "Strategic Dialogue" was established in July 2009 during the visit of US Secretary of State Hillary Clinton to India with the objective of strengthening bilateral cooperation across diverse sectors.

  12. Trade and Economic Relations • The trade and economic partnership between the US and India has been a key component of the bilateral relationship. • A new US Financial and Economic Partnership to strengthen bilateral engagement on macro-economic, financial, and investment-related issues was launched in New Delhi in April 2010 by the Finance Minister Mr.PranabMukherjee and US Treasury Secretary Timothy Geithner. • The Agreement on Framework for Cooperation on Trade and Investment was signed during the visit of Minister for Commerce & Industry, Mr. Anand Sharma to USA in March 2010.

  13. FDI • Bilateral Investments: • US is the third largest source of foreign direct investments into India. • The cumulative FDI inflows from the US from April 2000 to March 2011 amounted to about $ 9.44 billion constituting nearly 7.28 percent of the total FDI into India. • During the financial year 2010-11 the FDI inflows from US into India were $ 1.17 billion contributing 7% of the total FDI inflow during this period. • In recent years, growing Indian investments into the US, estimated by independent studies to be around US$ 26.5 billion between 2004-2009.

  14. Counter-terrorism Cooperation • Cooperation in counter terrorism has seen considerable progress over the last few years. • A new India-US Counter-Terrorism Cooperation Initiative was signed in 2010 • to expand collaboration on counter-terrorism, • information sharing and capacity building. • Separately functional level cooperation on counter-terrorism is being pursued through a Joint Working Group (JWG) on Counter Terrorism that was established in January 2000. • A new Homeland Security Dialogue was also announced during President Obama’s visit to India in November 2010

  15. Defence Cooperation • The ‘New Framework for India-US Defence Relationship’ was signed between the two sides on June 28, 2005. • Both sides have agreed to pursue mutually beneficial defence cooperation through the existing security dialogue, service-level exchanges, defence exercises and defence trade and technology transfer and collaboration. • India’s defence orders from U.S. companies have reached a cumulative value of over USD 8.0 billion in the last decade. • Exchanges between each of the Services, with regular joint exercises.

  16. Defence Cooperation • To continue and expand their joint activities in the area of civil space cooperation. • Major areas include: • exchange of scientists; • INSAT3D collaboration; • future mission definition workshops; • nano-satellites; • carbon /ecosystem monitoring and modelling; • international space station; • global navigation satellite systems; • space exploration cooperation; • space debris mediation.

  17. Cooperation in Science & Technology • India and the US signed a Science & Technology Agreement in October 2005 • A $30 million Science & Technology Endowment for jointly promoting science & technology research, development and innovation was established in July 2009. • The bilateral Science and Technology Forum: • has enabled more than 10,000 scientists, technologists and students from the US and India to interact, • established 24 virtual joint research centers and • organized more than 30 training programmes and numerous bilateral conferences.

  18. Cooperation in Science & Technology • Collaboration between the Ministry of Earth Sciences and NOAA has been strengthened: • by signing of three Implementation Arrangements for collaboration in October 2010 on • Tropical Cyclone Research; • Tsunami Science - detection, analysis, modeling & forecasting; • and INSAT 3D satellite data applications. • In November 2010, a ‘Monsoon Desk’ has been established in NOAA for enhancing monsoon forecasting. • This will also help in building India’s capacity in developing and using a coupled ocean-atmosphere modeling system for strengthening the “National Monsoon Mission”.

  19. Q & A

  20. Indo-US Trade • From $ 5.6 billion in 1990, the bilateral trade in merchandise goods has increased to $ 48.75 billion in 2010 representing a 771% growth in a span of 20 years. • India’s merchandise exports to the U.S. grew by 24.3% from $ 22.14 billion during the period Jan. – September 2010, to $ 27.52 billion in Jan. – September 2011. • US exports of merchandise to India also grew by 12.7% from $ 14.18 billion during Jan. - September 2010 to $ 15.99 billion in Jan. – September 2011. India – US Bilateral Merchandise Trade stands at $ 43.51 billion during this period.

  21. Major items of export from India to US • Textiles (17.7%) • Precious stones & metals (22%) • Mineral fuel, oils (10.9%) • Pharmaceutical products (8.6%) • Organic chemicals (5.1%) • Machinery (4.8%) • Electrical machinery (4%) • Iron & Steel Products (3.4 %)

  22. Major items of export from US to India • Precious stones & metals (22.7%) • Machinery (13.5%) • Mineral fuel, Oil, etc. (8.9%) • Electrical machinery (7.1%) • Optical instruments & equipment (5.6%) • Organic chemicals (4.3%) • Fertilizers (4.5%) • Plastic (3.7%)

  23. Bilateral Trade

  24. Thank You nyayapati.gautam@time4education.com

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