Modi-Obama meet: will it help iron out differences?

Prime Minister Narendra Modi will carry a heavy baggage of pending issues affecting Indian businesses across sectors when he visits Washington later this year.

Continued visa restrictions for IT professionals, increased crackdown on Indian pharmaceutical companies and the looming threat of the US action against India's intellectual property regime are some concerns that would top Modi’s list when he meets US President Barack Obama in September.

Modi will also have to be prepared to take tough questions on India’s taxation regime, protectionism in solar manufacturing and the lack of transparency in policy on retail FDI, while making a pitch for attracting big-ticket investments in infrastructure.

“The PM’s trip to the US will have a well-meditated agenda that will focus on core issues, particularly meant to deepen economic ties. Infrastructure, energy, generation next technology, IT sector and transportation will be prominently taken up,” Narendra Taneja, National Convener-Energy Cell and Member of the Economic Committee of the ruling Bharatiya Janata Party, told Business Line .

The US is India’s second largest trading partner after China accounting for exports worth $39.16 billion and imports worth $22.32 billion in 2013-14.

Modi and Obama are expected to set the agenda on key issues to be taken forward by other Ministers and bureaucrats of the two countries. The US Trade Representative Mike Froman and India’s Commerce Minister (Independent Charge) Nirmala Sitharaman are scheduled to meet in October.

The Commerce Ministry is already in consultations with the Ministry of External Affairs, which is finalising the list of issues that Modi would want to discuss with the US President, a Commerce Ministry official said.

The US Immigration Bill, which proposes higher visa fees for Indian IT professionals and requires firms to dilute their visa-dependent workforce over the next few years, is of great concern to the Indian industry.

Modi is expected to reiterate India’s demand that “unfriendly” provisions in the Bill be diluted as the Indian IT industry contributes significantly to the US economy.

Pharmaceutical is another area likely to be taken up by Modi. “India is already taking care of quality concerns pointed out by the US FDA (Food and Drug Administration) with the help of US officials. We have a strong defence in terms of our position on intellectual property regime, which is totally compliant with WTO (World Trade Organization) norms,” an official from the Health Ministry said.

The PM will have to make a convincing case of the validity of India’s IP regime to stop the US from black-listing it as a ‘priority country’ which could lead to unilateral sanctions from the US Government.

Apart from outlining concerns, Modi’s visit would focus on attracting more investments from the US, especially in the infrastructure sector including roads and highways and the railways.

The US, on its part, is likely to press Modi for early action to sort out “aggressive” tax positions by Indian tax authorities, especially in the sphere of transfer pricing and retrospective amendments in tax laws.

Obama may also push for the early conclusion of the Bilateral Investment Treaty to promote investments from both sides which have been languishing over the last few years. .

Concerns on the BJP’s position on allowing FDI in multi-brand retail and the proposed anti-dumping duties on solar panel and cell suppliers from the US are also likely to be flagged by the US.

(With inputs from Aesha Datta, KR Srivats, Mamuni Das and Richa Mishra)

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